**EXHIBIT 10.59****SERVICE AGREEMENT**This (“Agreement”) is entered into as of May 1, 2007 by and between Tower Risk ManagementCorp.(“TRM”), a company domiciled in New York with offices located at 120 Broadway, New York, N.Y.10271 and CastlePoint Management Corp. (“CPM”), a Delaware corporation with offices located at 120Broadway, New York, N.Y. 10271.RECITALS     WHEREAS, TRM plans to underwrite and manage certain business on behalf of CastlePointInsurance Company (“CPIC”) pursuant to a Management Agreement between TRM and CPIC;     WHEREAS, CPM plans to underwrite and manage certain business on behalf of Tower Group, Inc.’sinsurance subsidiaries; and     WHEREAS, TRM and CPM are desirous of entering into an agreement whereby TRM and CPM provideservices to each other at each other’s request as well as sharing any profits and losses fromrendering services to third parties; and     NOW THEREFORE, in consideration of the mutual agreements described in this Agreement, TRM andCPM agree as follows:ARTICLE 1 – PERFORMANCE OF SERVICES    1.01 TRM and CPM agree to provide to each other, at each other’s request, various insurancecompanies services (as may be set forth in the attached schedules) at terms and conditions setforth herein.ARTICLE 2 – COMPENSATION    2.01 Any compensation paid by CPM to TRM and by TRM to CPM for services rendered hereunder shallbe as agreed by the parties on a case by case basis. CPM and TRM agree that such compensationor fees shall be competitive with prevailing local market rates.   2.02 With respect to claims services, to the extent such services are provided by either companyto the other, each agrees to pay for the allocated loss adjustment expenses incurred by theservicing company in adjusting and defending claims on the hourly billing rate to beestablished by the companies. TRM and CPM agree to utilize the same billing rate or method ofpayment established to allocate or assign unallocated expenses to adjust and defend claims.   2.03 Settlement of Accounts     Each company shall submit to the other within thirty (30) days of the end of each calendarquarter a detailed written estimate of the amount owed for services and the use offacilities pursuant to this Agreement in that calendar month, and each company shall pay tothe other within fifteen (15) days following receipt of such estimate the amount set forthin the estimate.
 

 
   2.04 Profit Sharing   Where CPM and TRM both participated in providing services to thirdparties, CPM and TRM agree to share any profits and losses realizedin proportion to their respective participation.ARTICLE 3 – TERM, INDEPENDENCE AND TERMINATION   3.01 Term     The term of this Agreement will begin on the date of this Agreement and will continue untilterminated by one of parties.   3.02 Independence     Services and facilities shall be provided to CPM by TRM at the request of CPM and to TRM byCPM at the request of TRM, but the requested party shall provide such services andfacilities only to the extent that such arrangements do not impede either company’s businessor operations.     TRM and CPM shall act hereunder so as to assure the separateness of their respectiveoperating identities. Books and records shall be maintained separately for each party forservices provided by this Service Agreement.   3.03 Termination (a) This Agreement may be terminated at any time by the mutual agreement of theparties, or by either party for any of the following reasons: (1) Immediately by either party in the event of bankruptcy, insolvency,liquidation or assignment for the benefit of creditors by the other party;  (2) Upon sixty (60) days written notice by either party in the event ofany material change in the ownership or control of the other party;  (3) Immediately by either party in the event any law or regulation of afederal, state or local government has rendered this Agreement illegal, but onlyinsofar as that law or regulation applies to this Agreement;  (4) Immediately by either party in the event of fraud, abandonment,gross or willful misconduct, insolvency, or lack of legal capacity to act on thepart of either party;  (5) Upon sixty (60) days written notice by either party in theevent of default in any material term of this Agreement, unless the default iscured prior to the end of the end of the sixty (60) day period. (b) In the event of termination of this Agreement: (1) TRM and CPM shall promptly cease performing any services beingprovided under this agreement;   (2) Neither party shall have any claim against the other for loss ofprospective profits or fees or damage to business arising there from;   (3) Notwithstanding the termination of this Agreement, TRM and CPMshall continue to perform such services under this Agreement in settlement ofaccounts
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   or winding up of affairs between TRM and CPM if so requested by either party.  (4) Notwithstanding the termination of this Agreement, TRM or CPM shallcontinue to provide the claims and legal defense under this Agreement withrespect to all claims reported to either prior to the effective date of anytermination in accordance with the terms of this Agreement. In consideration forperforming its services as set forth herein, CPM and TRM will continue tocompensate each other in the manner set forth in Article 2 of this Agreement. Inthe event either company assumes the handling of their own claims aftertermination, each party agrees to cooperate with and instruct its respectiveemployees to cooperate in such transition.ARTICLE 4 – MAINTENANCE CONTROL AND OWNERSHIP OF RECORDS   4.01  Maintenance of Records     TRM and CPM will each maintain all appropriate records, files, ledgers and reports so as toaccurately reflect at all times the financial transactions with one another.   4.02 Ownership of Records (a) All books, records, and files established and maintained by TRM or CPM byreason of its performance under this Agreement which, absent this Agreement, would havebeen held by TRM or CPM respectively shall (i) be deemed the joint property of eachparty, (ii) be maintained in accordance with all other applicable law and regulationand (iii) be subject to examination at all times by CPM or TRM and persons authorizedby it or any governmental agency having jurisdiction over CPM or TRM, if any.  (b) Except s set forth in (a) above, each party is the owner of all records relatedto its company regardless of in whose possession those records may be at any time.ARTICLE 5 – GENERAL REQUIREMENTS   5.01 TRM’s and CPM’s General Duties  TRM and CPM are responsible to perform the duties assumed under this Agreement in accordancewith standard procedures for the performance of such duties, which exist in the insuranceindustry in the United States.ARTICLE 6 – MISCELLANEOUS    6.01 Notices  All notice requirements and other communications indicated shall be deemed given whenpersonally delivered or on the third succeeding business day after being mailed byregistered or certified mail, return receipt requested, to the appropriate party at itsaddress below or at such other address as shall be specified by notice given hereunder.          CPM: CastlePoint Management Corp.    120 Broadway, 30th Floor    New York, NY 10271    Attn: General Counsel
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       TRM: Tower Risk Management Corp.    120 Broadway, 31st Floor    New York, NY 10271    Attn: General Counsel   6.02 Binding Effect and Assignment     This Agreement shall be binding upon and inure to the benefit of the parties hereto andtheir respective heirs, representatives, successors and assigns. This Agreement may not beassigned without mutual consent of the parties.   6.03 Amendment     This Agreement may not be amended, altered or modified except in writing signed by the partyagainst whom enforcement or any waiver, change, discharge, alternation or modification issought.   6.04 Invalidity     The invalidity of any provision of this Agreement shall not affect the validity of theremainder of any such provision or the remaining provisions of this Agreement.   6.05 Interpretation     The article, section and paragraph headings included in this Agreement have been used solelyfor convenience and shall not be used in the interpretation of this Agreement. References toarticles, sections and paragraphs shall refer to such provisions in this Agreement unlessotherwise stated.   6.06 Waiver     The failure of either party at any time to require performance by the other party of anyprovision of this Agreement shall not be deemed a continuing waiver of that provision or awaiver of any other provision of this Agreement and shall in no way affect the full right torequire such performance from the other party at any time thereafter.   6.07 Severability     This Agreement and the transaction contemplated herein constitute one transaction and shallnot be divisible in any manner. A breach of any portion of this Agreement shall be deemed abreach of the whole Agreement.   6.08 Counterparts     If photocopies or duplicates of the original of this Agreement are signed by both parties,then each such originally signed document shall be deemed to be an original of thisAgreement.   6.09 Indemnification     Each of CPM and TRM shall hold harmless and defend and indemnify the other party against anyexpenses, damages, liability, action, cost or other claims, including attorney fees arisingout of the other party’s material breach of any duty or obligation hereunder or any claimsmade against a party relating to, or arising out of, the other party’s willful misconduct orgross negligence in
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     performing, or in failing to perform, services hereunder.   6.10 Arbitration     Any dispute or difference between CPM and TRM relating to the interpretation or performanceof this Agreement, including its formation or validity, or any transaction under thisAgreement, whether arising before or after termination, shall be submitted to arbitration.     Upon written request of any party, each party shall choose an arbitrator and the two chosenshall select a third arbitrator. If either party refuses or neglects to appoint anarbitrator within 30 days after receipt of the written request for arbitration, therequesting party may appoint a second arbitrator. If the two arbitrators fail to agree onthe selection of a third arbitrator within 30 days of their appointment, each of them shallnominate three individuals, of whom the other shall decline two. The third arbitrator shallbe chosen by lots from the two remaining nominees.     The parties hereby waive all objections to the selection of the arbitrators, provided theyare selecting in conformity with this paragraph 6.10.     All arbitrators shall be active or retired officers of insurance or reinsurance companies,or Lloyd’s of London underwriters, and disinterested in the outcome of the arbitration. Eachparty shall submit its case to the arbitrators within 30 days of the appointment of thethird arbitrator.     The arbitrators shall have the power to determine all procedural rules for the holding ofthe arbitration including but not limited to inspection of documents, examination ofwitnesses and any other matter relating to the conduct of the arbitration. The arbitratorsshall interpret this Agreement as an honorable engagement and not as merely a legalobligation; they are relieved of all judicial formalities and may abstain from following thestrict rules of law. The arbitrators may award interest and costs. Each party shall bear theexpense of its own arbitrator and shall share equally with the other party the expense ofthe third arbitrator and of the arbitration.   6.11 Governing Law     This Agreement shall be interpreted according to the laws of the state of Delaware,excluding its conflict of laws provisions.[Signature page follows]
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**IN WITNESS WHEREOF**, the parties have caused this Agreement to be executed as of the day and yearfirst above written.         Tower Risk Management Corp.           By: /s/ Francis Colalucci       Francis Colalucci, SVP and CFO           CastlePoint Management Corp.           By: /s/ Joel Weiner       Joel Weiner, SVP and CFO  
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