E. W. BLANCH CO.
R:\98R\16342.DOC                             Reinsurance Services
                                                           Page 3
               Entertainment Coded Excess of Loss
                      Reinsurance Contract
                    Effective:  March 1, 1998

                            issued to

           Associated International Insurance Company
                   Woodland Hills, California
                    Calvert Insurance Company
                       Hoboken, New Jersey
                               and
         any additional company established or acquired
by Associated International Insurance Company, Calvert Insurance
                             Company
         or Gryphon Holdings, Inc., New York, New York,
                    to be included hereunder






















                        E. W. Blanch Co.

                      Reinsurance Services

                      3500 West 80th Street

                  Minneapolis, Minnesota  55431

                        Table of Contents

Article                                                      Page

     I    Classes of Business Reinsured                        3
    II    Term                                                 3
   III    Territory (BRMA 51D)                                 4
    IV    Exclusions                                           4
     V    Retention and Limit                                  5
    VI    Other Reinsurance                                    6
   VII    Definitions                                          6
  VIII    Claims                                               9
    IX    Salvage and Subrogation                              9
     X    Commission (BRMA 10A)                               10
    XI    Premium                                             10
   XII    Late Payments                                       10
  XIII    Offset (BRMA 36C)                                   12
   XIV    Access to Records (BRMA 1D)                         12
    XV    Liability of the Reinsurer                          12
   XVI    Net Retained Lines (BRMA 32E)                       12
  XVII    Errors and Omissions (BRMA 14F)                     12
 XVIII    Currency (BRMA 12A)                                 13
   XIX    Taxes (BRMA 50C)                                    13
    XX    Federal Excise Tax (BRMA 17A)                       13
   XXI    Unauthorized Reinsurers                             13
   XXI    Insolvency                                          15
  XXII    Arbitration                                         16
 XXIII    Service of Suit (BRMA 49C)                          17
  XXIV    Agency Agreement                                    17
   XXV    Intermediary (BRMA 23A)  17


                           Schedule A


               Entertainment Coded Excess of Loss
                      Reinsurance Contract
                    Effective:  March 1, 1998

                            issued to

           Associated International Insurance Company
                   Woodland Hills, California
                    Calvert Insurance Company
                       Hoboken, New Jersey
                               and
         any additional company established or acquired
by Associated International Insurance Company, Calvert Insurance
                             Company
         or Gryphon Holdings, Inc., New York, New York,
                    to be included hereunder
     (hereinafter referred to collectively as the "Company")

                               by

           The Subscribing Reinsurer(s) Executing the
             Interests and Liabilities Agreement(s)
                         Attached Hereto
          (hereinafter referred to as the "Reinsurer")



Article I - Classes of Business Reinsured

By this Contract the Reinsurer agrees to reinsure the excess
liability which may accrue to the Company under its policies,
contracts and binders of insurance or reinsurance (hereinafter
called "policies") issued or renewed on or after the effective
date hereof, and classified by the Company as Entertainment
Industry Insurance, including but not limited to Negative Film,
Faulty Stock/Camera, Props, Sets and Wardrobe, Producers
Liability, Third Party Property Damage, Extra Expense and Broad
Form All Risks Extra Expense, Office Contents, Automobile
Physical Damage, Money and Securities, Miscellaneous Equipment,
all types of Cast Insurance, Event Cancellation, Non-Appearance
and Other Contingency Coverages, and Other Property Floater
Coverages, subject to the terms, conditions and limitations
hereinafter set forth.


Article II - Commencement and Termination

A. This Contract shall become effective on March 1, 1998, with
   respect to occurrences arising out of loss events commencing
   on or after that date, and shall continue in force thereafter
   until terminated.  In the event renewal negotiations are not
   completed by any June 30, at the Company's option, this
   Contract shall continue in force through the following
   September 30, and any notices of cancellation issued by either
   the Company or Reinsurer shall also be extended through that
   following September 30.

B. Either party may terminate this Contract on any June 30 by
   giving the other party not less than 90 days prior notice by
   certified mail.

C. Except as provided in paragraph D below, reinsurance hereunder
   on business in force on the effective date of termination
   shall remain in full force and effect until termination,
   cancellation or next premium anniversary of such business,
   whichever first occurs, following the effective date of
   termination.  However, these limitations shall not apply to
   any Extended Discovery Endorsement provisions or policies.

D. Notwithstanding the provisions of paragraph C above, the
   Company shall have the option of reassuming the unexpired
   liability of the Reinsurer hereunder on business in force on
   the effective date of termination, in which event the
   Reinsurer shall not be liable for claims made or losses
   arising out of loss events commencing after that date.  As
   respects policies providing an aggregate limit of liability
   which are in force on the effective date of termination, the
   Reinsurer shall be liable for the entire aggregate loss under
   such policies if the inception date of the policy period falls
   on or before the effective date of termination, as respects
   policies written on an occurrence basis, or if the first claim
   is made on or before the effective date of termination as
   respects policies written on a claims made basis.

E. If this Contract is terminated while a loss event covered
   hereunder is in progress, the Reinsurer's liability hereunder
   shall, subject to the other terms and conditions of this
   Contract, be determined as if the entire loss event had
   occurred prior to the termination of this Contract, provided
   that no part of such loss event is claimed against any renewal
   or replacement of this Contract.


Article III - Territory (BRMA 51D)

This Contract shall be worldwide in its geographical scope.


Article IV - Exclusions

This Contract does not apply to and specifically excludes the
following:

      1.  Financial guarantee and insolvency.

      2.  War as set out below:

          a.   In those cases where the original policy contains
          a standard "War Exclusion Clause," this Contract shall
          follow the wording of the original policy.

          b.   In those cases where the original policy does not
          contain a standard "War Exclusion Clause" no liability
          shall attach hereto in respect of any loss or damage
          which is occasioned by war, invasion, hostilities, acts
          of foreign enemies, civil war, rebellion, insurrection,
          military or usurped power, or martial law, or
          confiscation by order of any government or public
          authority, but such exclusion shall not apply to
          business classified by the Company as Third Party
          Property Damage.  Nevertheless, this clause shall not
          be construed to apply to loss or damage occasioned by
          riots, strikes, civil commotion, vandalism or malicious
          damage, or to acts committed by agents of any
          government, party or faction engaged in war,
          hostilities or other warlike operations, provided such
          agents are acting secretly and not in connection with
          any operations of armed forces (whether military, naval
          or air forces) in the country where the interests
          insured are situated.

      3.   Nuclear risks as defined in the "Nuclear Incident
      Exclusion Clause - Physical Damage - Reinsurance
      (U.S.A.)," the "Nuclear Incident Exclusion Clause -
      Physical Damage - Reinsurance (Canada)," the "Nuclear
      Incident Exclusion Clause - Liability - Reinsurance
      (U.S.A.)" and the "Nuclear Incident Exclusion Clause -
      Liability - Reinsurance (Canada)" attached to and forming
      part of this Contract.

      4.   Nuclear Energy Risks as defined in the "Nuclear
      Energy Risks Exclusion Clause (Liability and Physical
      Damage) (Reinsurance) (1994) (Worldwide excluding U.S.A. &
      Canada) - NMA 1975a" attached to and forming part of this
      Contract.

      5.   All liability of the Company arising, by contract,
      operation of law, or otherwise, from its participation or
      membership, whether voluntary or involuntary, in any
      insolvency fund.  "Insolvency Fund" includes any guaranty
      fund, insolvency fund, plan, pool, association, fund or
      other arrangement, howsoever denominated, established or
      governed, which provides for any assessment of or payment
      or assumption by the Company of part or all of any claim,
      debt, charge, fee, or other obligation of an insurer, or
      its successors or assigns, which has been declared by any
      competent authority to be insolvent, or which is otherwise
      deemed unable to meet any claim, debt, charge, fee or
      other obligation in whole or in part.

      6.   Loss or liability excluded under the provisions of
      the "Pools, Associations and Syndicates Exclusion Clause"
      attached to and forming part of this Contract.

      7.   Seepage and pollution as per the original policies
      where legal, approved and applicable.


Article V - Retention and Limit

The Company shall retain and be liable for the first $10,000,000
of ultimate net loss as respects any one loss event.  The
Reinsurer shall then be liable for the amount by which such
ultimate net loss exceeds the Company's retention, but the
liability of the Reinsurer shall not exceed $40,000,000 as
respects any one loss event.


Article VI - Other Reinsurance

The Company shall be permitted, but not required, to purchase
other pro rata reinsurance on business subject to this Contract.
Premiums ceded by the Company for reinsurance which inures to the
benefit of this Contract or increases the Company's available
capacity shall be deducted in determining subject premium
hereunder.


Article VII - Definitions

A. "Ultimate net loss" as used herein is defined as the sum or
   sums (including loss in excess of policy limits, extra
   contractual obligations, prejudgment interest if included as
   part of an award or judgment and any loss adjustment expense,
   as hereinafter defined) paid or payable by the Company in
   settlement of claims and in satisfaction of judgments rendered
   on account of such claims, after deduction of all savage, all
   recoveries and all claims on inuring insurance or reinsurance,
   whether collectible or not.  Nothing herein shall be construed
   to mean that losses under this Contract are not recoverable
   until the Company's ultimate net loss has been ascertained.

B. "Loss in excess of policy limits" and "extra contractual
   obligations" as used herein shall mean:

     1.   "Loss in excess of policy limits" shall mean 90% of any
     amount paid or payable by the Company under a policy ceded
     to this Contract in excess of its policy limits, but
     otherwise within the terms of its policy, as a result of an
     action against it by its insured or its insured's assignee
     to recover damages the insured is legally obligated to pay
     to a third party claimant because of the Company's alleged
     or actual negligence or bad faith in rejecting a settlement
     within policy limits, or in discharging its duty to defend
     or prepare the defense in the trial of an action against its
     insured, or in discharging its duty to prepare or prosecute
     an appeal consequent upon such an action.

     2.   "Extra contractual obligations" shall mean 90% of any
     punitive, exemplary, compensatory or consequential damages,
     other than loss in excess of policy limits, paid or payable
     by the Company under a policy ceded to this Contract as a
     result of an action against it by its insured, its insured's
     assignee or a third party claimant, which action alleges
     negligence or bad faith on the part of the Company in
     handling a claim under a policy subject to this Contract.

   Any loss in excess of policy limits or extra contractual
   obligation shall be deemed to have occurred on the same date
   as the loss covered or alleged to be covered under the policy.

   Notwithstanding anything stated herein, this Contract shall
   not apply to any loss incurred by the Company as a result of
   any fraudulent and/or criminal act by any officer or director
   of the Company acting individually or collectively or in
   collusion with an individual or corporation or any other
   organization or party involved in the presentation, defense or
   settlement of any claim covered hereunder.

C. "Loss adjustment expense" shall mean expenses assignable to
   the investigation, defense and/or settlement of specific
   claims, regardless of how such expenses are classified for
   statutory reporting purposes.  Loss adjustment expense shall
   include 1) prejudgment interest, unless included as part of
   the award or judgment; 2) post-judgment interest; and
   3) declaratory judgment expenses or other legal expenses and
   costs incurred in connection with coverage questions and legal
   actions connected thereto.  Loss adjustment expense shall not
   include office expenses or salaries of the Company's regular
   employees, except that assigned outside costs of the Company's
   salaried adjusters shall be included.

   With respect to legal expenses and costs incurred in direct
   connection with declaratory judgment actions brought to
   resolve policy language coverage disputes between the Company
   and its insured, such loss adjustment expense shall, for
   purposes of this Contract, not exceed an amount equal to the
   applicable limit of the policy or policies involved unless
   agreed to by the Reinsurer.

D. The term "loss event" as used herein shall mean an accident,
   occurrence, claim made, loss discovered or any other
   circumstance that triggers coverage as provided, defined, or
   interpreted in the Company's original policies, however:

      1.   Where the Company's policy provides for an aggregate
      limit of liability, the term "loss event" shall mean all
      losses subject to that aggregate limit, each aggregate
      period.  For purposes of this Contract, the date of loss
      for purposes of this reinsurance will be the inception
      date of each aggregate period, as respects policies
      written on an occurrence basis and the date the first
      claim is made as respects policies written on a claims
      made basis.  Nevertheless, the Company may extract from
      any aggregate "loss event" a single loss so it may be
      combined with losses from other policies and submitted as
      a single "loss event."

           In the event the Company's losses arising out of a
      single "loss event" involve policies providing different
      types of coverage such as an occurrence and a claims made
      policy, all losses can be combined and submitted as a
      single "loss event" utilizing the occurrence date of loss
      for the purpose of reinsurance coverage.  In the event the
      Company's losses arising out of a single "loss event"
      involve multiple claims made policies, all losses can be
      combined and submitted as a single "loss event" utilizing
      the date the first claim is made for the purpose of
      reinsurance coverage.

      2.   As respects policies written on a claims made basis,
      the date of loss shall be the date the claim is made under
      the original policy.  As respects any extended reporting
      or discovery period provisions under a claims made policy
      subject hereto, it is understood and agreed that the
      following shall apply:

          a.   Claims made against and/or reported to the Company
          during the extended reporting discovery period shall be
          deemed to have occurred on the last full day of the
          applicable policy period;

          b.   If the Company issues a separate policy and/or
          reinstates the aggregate limit provided under a policy,
          premium and losses during the period to which said
          separate policy and/or reinstated limit applies may, at
          the time of issuance and at the Company's option, be
          allocated to (i) the reinsurance contract which is in
          effect at the effective date of said separate policy
          and/or at the beginning of the period to which the
          reinstated limit applies, or (ii) the reinsurance
          contract which was in effect at the effective date of
          the original policy.  If the Company elects (i), said
          losses shall be subject to a separate retention and
          limit (as specified in the Article) from that of the
          original policy period.

      3.   As respects property losses subject hereto, all
      individual losses directly occasioned by any one disaster,
      occurrence or loss or series of disasters, occurrences or
      losses arising out of one occurrence which occurs anywhere
      in the world, but limited in the United States of America
      and Canada to the United States or province of Canada and
      states or provinces contiguous thereto and to one another.
      However, the duration and extent of any one "loss event"
      shall be limited to all individual losses sustained by the
      Company occurring during any period of 168 consecutive
      hours arising out of and directly occasioned by the same
      loss event, except that the term "loss event" shall be
      further defined as follows:

          a.   As regards windstorm, hail, tornado, hurricane,
          cyclone, including ensuing collapse and water damage,
          all individual losses sustained by the Company
          occurring during any period of 72 consecutive hours
          arising out of and directly occasioned by the same loss
          event.  However, the loss event need not be limited to
          one state or province or states or provinces contiguous
          thereto.

          b.   As regards riot, riot attending a strike, civil
          commotion, vandalism and malicious mischief, all
          individual losses sustained by the Company occurring
          during any period of 72 consecutive hours within the
          area of one municipality or county and the
          municipalities or counties contiguous thereto arising
          out of and directly occasioned by the same loss event.
          The maximum duration of 72 consecutive hours may be
          extended in respect of individual losses which occur
          beyond such 72 consecutive hours during the continued
          occupation of an assured's premises by strikers,
          provided such occupation commenced during the aforesaid
          period.

          c.   As regards earthquake (the epicenter of which need
          not necessarily be within the territorial confines
          referred to above) and fire following directly
          occasioned by the earthquake, only those individual
          fire losses which commence during the period of 168
          consecutive hours may be included in the Company's
          "loss event."

          d.   As regards "freeze," only individual losses
          directly occasioned by collapse, breakage of glass and
          water damage (caused by bursting frozen pipes and tanks
          and melting snow) may be included in the Company's
          "loss event."

           Except for those "loss events" referred to in
      subparagraphs a and b above, the Company may choose the
      date and time when any such period of consecutive hours
      commences, provided that it is not earlier than the date
      and time of the occurrence of the first recorded
      individual loss sustained by the Company arising out of
      that disaster, occurrence or loss, and provided that only
      one such period of 168 consecutive hours shall apply with
      respect to one loss event.

           However, as respects those "loss events" referred to
      in subparagraphs a and b above, if the disaster,
      occurrence or loss occasioned by the occurrence is of
      greater duration than 72 consecutive hours, then the
      Company may divide that disaster, occurrence or loss into
      two or more "loss events," provided that no two periods
      overlap and no individual loss is included in more than
      one such period, and provided that no period commences
      earlier than the date and time of the occurrence of the
      first recorded individual loss sustained by the Company
      arising out of that disaster, occurrence or loss.

           It is understood that losses arising from a
      combination of two or more perils as a result of the same
      occurrence shall be considered as having arisen from one
      "loss event."  Notwithstanding the foregoing, the hourly
      limitations as stated above shall not be exceeded as
      respects the applicable perils and no single "loss event"
      shall encompass a time period greater than 168 consecutive
      hours.

   Notwithstanding the foregoing, it is understood that the
   Company shall be the sole judge of what constitutes a single
   "loss event."



Article VIII - Claims

A. Whenever a loss sustained by the Company appears likely to
   result in a claim hereunder, the Company shall notify the
   Reinsurer, and the Reinsurer shall have the right to
   participate in the adjustment of the loss at its own expense.

B. All loss settlements made by the Company, provided they are
   within the terms of this Contract, shall be binding upon the
   Reinsurer, and the Reinsurer agrees to pay all amounts for
   which it may be liable upon receipt of reasonable evidence of
   the amount paid (or scheduled to be paid) by the Company.


Article IX - Salvage and Subrogation

The Reinsurer shall be credited with salvage (i.e., reimbursement
obtained or recovery made by the Company, less the actual cost,
excluding salaries of officials and employees of the Company and
sums paid to attorneys as retainer, of obtaining such
reimbursement or making such recovery) on account of claims and
settlements involving reinsurance hereunder. Salvage thereon
shall always be used to reimburse the excess carriers in the
reverse order of their priority according to their participation
before being used in any way to reimburse the Company for its
primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss
was sustained by the Reinsurer, and to prosecute all claims
arising out of such rights.


Article X - Commission (BRMA 10A)

A. The Reinsurer shall allow the Company a 35.0% commission on
   all premiums ceded to the Reinsurer hereunder.  The Company
   shall allow the Reinsurer return commission on return premiums
   at the same rate.

B. It is expressly agreed that the ceding commission allowed the
   Company includes provision for all dividends, commissions,
   taxes, assessments, and all other expenses of whatever nature,
   except loss adjustment expense.


Article XI - Premium

A. As premium for the reinsurance provided hereunder, the Company
   shall pay the Reinsurer a portion of its net written premium,
   determined at the applicable reinsurance rates set forth in
   Schedule A attached to and forming part of this Contract, less
   commission allowed thereon.

B. Within 45 days after the end of each contract quarter, the
   Company shall report its net written premium for the quarter.
   The premium due the Reinsurer for the quarter, determined in
   accordance with paragraph A above, shall be paid by the
   Company with its report.

C. Within 45 days after the end of each contract quarter, the
   Company shall calculate and report the unearned reinsurance
   premium as of the end of the quarter.

D. "Net written premium" as used herein is defined as gross
   written premium of the Company for the classes of business
   reinsured hereunder, less cancellations and return premiums,
   and less premiums ceded by the Company for reinsurance which
   inures to the benefit of this Contract or increases the
   Company's available capacity.

E. "Contract quarter" as used herein shall mean the period from
   March 1, 1998, to June 30, 1998, both days inclusive, and each
   respective twelve-month period thereafter that this Contract
   continues in force.


Article XII - Late Payments

A. The provisions of this Article shall not be implemented unless
   specifically invoked, in writing, by one of the parties to
   this Contract.

B. In the event any premium, loss or other payment due either
   party is not received by the intermediary named in
   Article XXVI (hereinafter referred to as the "Intermediary")
   by the payment due date, the party to whom payment is due may,
   by notifying the Intermediary in writing, require the debtor
   party to pay, and the debtor party agrees to pay, an interest
   penalty on the amount past due calculated for each such
   payment on the last business day of each month as follows:

      1.   The number of full days which have expired since the
      due date or the last monthly calculation, whichever the
      lesser; times

      2.   1/365th of the six-month (or nearest thereto) U.S.
      Treasury Bill rate, as quoted in The Wall Street Journal
      on the first business day of the month for which the
      calculation is being made; times

      3.   The amount past due, including accrued interest.

   It is agreed that interest shall accumulate until payment of
   the original amount due plus interest penalties have been
   received by the Intermediary.

C. The establishment of the due date shall, for purposes of this
   Article, be determined as follows:

      1.   As respects any routine payment, adjustment or return
      due either party, the due date shall be as provided for in
      the applicable section of this Contract.  In the event a
      due date is not specifically stated for a given payment,
      it shall be deemed due 45 days after the date of
      transmittal by the Intermediary of the initial billing for
      each such payment.

      2.   As respects any payment, adjustment or return due
      either party not otherwise provided for in subparagraphs 1
      and 2 of paragraph C above, the due date shall be deemed
      as 10 business days following transmittal of written
      notification that the provisions of this Article have been
      invoked.

   For purposes of interest calculations only, amounts due
   hereunder shall be deemed paid upon receipt by the
   Intermediary.

D. Nothing herein shall be construed as limiting or prohibiting
   1) a Subscribing Reinsurer from contesting the validity of any
   claim, or from participating in the defense or control of any
   claim or suit; or 2) either party from contesting the validity
   of any payment, or from initiating any arbitration or other
   proceeding in accordance with the provisions of this Contract.
   If the debtor party prevails in an arbitration or other
   proceeding, then any interest penalties due hereunder on the
   amount in dispute shall be null and void.  If the debtor party
   loses in such proceeding, then the interest penalty on the
   amount determined to be due hereunder shall be calculated in
   accordance with the provisions set forth above unless
   otherwise determined by such proceedings.  If a debtor party
   advances payment of any amount it is contesting, and proves to
   be correct in its contestation, either in whole or in part,
   the other party shall reimburse the debtor party for any such
   excess payment made plus interest on the excess amount
   calculated in accordance with this Article.

E. Interest penalties arising out of the application of this
   Article that are $100 or less from any party shall be waived
   unless there is a pattern of late payments consisting of three
   or more items over the course of any 12-month period.


Article XIII - Offset (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any
balance or amounts due from one party to the other under the
terms of this Contract. The party asserting the right of offset
may exercise such right any time whether the balances due are on
account of premiums or losses or otherwise.


Article XIV - Access to Records (BRMA 1D)

The Reinsurer or its designated representatives shall have access
at any reasonable time to all records of the Company which
pertain in any way to this reinsurance.


Article XV - Liability of the Reinsurer

A. The liability of the Reinsurer shall follow that of the
   Company in every case and be subject in all respects to all
   the general and specific stipulations, clauses, waivers and
   modifications of the Company's policies and any endorsements
   thereon. However, in no event shall this be construed in any
   way to provide coverage outside the terms and conditions set
   forth in this Contract.

B. Nothing herein shall in any manner create any obligations or
   establish any rights against the Reinsurer in favor of any
   third party or any persons not parties to this Contract.


Article XVI - Net Retained Lines (BRMA 32E)

A. This Contract applies only to that portion of any policy which
   the Company retains net for its own account (prior to
   deduction of any underlying reinsurance specifically permitted
   in this Contract), and in calculating the amount of any loss
   hereunder and also in computing the amount or amounts in
   excess of which this Contract attaches, only loss or losses in
   respect of that portion of any policy which the Company
   retains net for its own account shall be included.

B. The amount of the Reinsurer's liability hereunder in respect
   of any loss or losses shall not be increased by reason of the
   inability of the Company to collect from any other
   reinsurer(s), whether specific or general, any amounts which
   may have become due from such reinsurer(s), whether such
   inability arises from the insolvency of such other
   reinsurer(s) or otherwise.


Article XVII - Errors and Omissions (BRMA 14F)

Inadvertent delays, errors or omissions made in connection with
this Contract or any transaction hereunder shall not relieve
either party from any liability which would have attached had
such delay, error or omission not occurred, provided always that
such error or omission is rectified as soon as possible after
discovery.


Article XVIII - Currency (BRMA 12A)

A. Whenever the word "Dollars" or the "$" sign appears in this
   Contract, they shall be construed to mean United States
   Dollars and all transactions under this Contract shall be in
   United States Dollars.

B. Amounts paid or received by the Company in any other currency
   shall be converted to United States Dollars at the rate of
   exchange at the date such transaction is entered on the books
   of the Company.


Article XIX - Taxes (BRMA 50C)

In consideration of the terms under which this Contract is
issued, the Company will not claim a deduction in respect of the
premium hereon when making tax returns, other than income or
profits tax returns, to any state or territory of the United
States of America, the District of Columbia or Canada.


Article XX - Federal Excise Tax (BRMA 17A)

(Applicable to those reinsurers, excepting Underwriters at
Lloyd's London and other reinsurers exempt from Federal Excise
Tax, who are domiciled outside the United States of America.)

A. The Reinsurer has agreed to allow for the purpose of paying
   the Federal Excise Tax the applicable percentage of the
   premium payable hereon (as imposed under Section 4371 of the
   Internal Revenue Code) to the extent such premium is subject
   to the Federal Excise Tax.

B. In the event of any return of premium becoming due hereunder
   the Reinsurer will deduct the applicable percentage from the
   return premium payable hereon and the Company or its agent
   should take steps to recover the tax from the United States
   Government.


Article XXI - Unauthorized Reinsurers

A. If the Reinsurer is unauthorized in any state of the United
   States of America or the District of Columbia, the Reinsurer
   agrees to fund its share of the Company's ceded United States
   unearned premium and outstanding loss and loss adjustment
   expense reserves (including incurred but not reported loss
   reserves) by:

      1.   Clean, irrevocable and unconditional letters of
      credit issued and confirmed, if confirmation is required
      by the insurance regulatory authorities involved, by a
      bank or banks meeting the NAIC Securities Valuation Office
      credit standards for issuers of letters of credit and
      acceptable to said insurance regulatory authorities;
      and/or

      2.   Escrow accounts for the benefit of the Company;
      and/or

      3.   Cash advances;

   if, without such funding, a penalty would accrue to the
   Company on any financial statement it is required to file with
   the insurance regulatory authorities involved.  The Reinsurer,
   at its sole option, may fund in other than cash if its method
   and form of funding are acceptable to the insurance regulatory
   authorities involved.

B. If the Reinsurer is unauthorized in any province or
   jurisdiction of Canada, the Reinsurer agrees to fund 115% of
   its share of the Company's ceded Canadian unearned premium and
   outstanding loss and loss adjustment expense reserves
   (including incurred but not reported loss reserves) by:

      1.   A clean, irrevocable and unconditional letter of
      credit issued and confirmed, if confirmation is required
      by the insurance regulatory authorities involved, by a
      Canadian bank or banks meeting the NAIC Securities
      Valuation Office credit standards for issuers of letters
      of credit and acceptable to said insurance regulatory
      authorities, for no more than 15/115ths of the total
      funding required; and/or

      2.   Cash advances for the remaining balance of the
      funding required;

   if, without such funding, a penalty would accrue to the
   Company on any financial statement it is required to file with
   the insurance regulatory authorities involved.

C. With regard to funding in whole or in part by letters of
   credit, it is agreed that each letter of credit will be in a
   form acceptable to insurance regulatory authorities involved,
   will be issued for a term of at least one year and will
   include an "evergreen clause," which automatically extends the
   term for at least one additional year at each expiration date
   unless written notice of non-renewal is given to the Company
   not less than 30 days prior to said expiration date.  The
   Company and the Reinsurer further agree, notwithstanding
   anything to the contrary in this Contract, that said letters
   of credit may be drawn upon by the Company or its successors
   in interest at any time, without diminution because of the
   insolvency of the Company or the Reinsurer, but only for one
   or more of the following purposes:

      1.   To reimburse itself for the Reinsurer's share of
      unearned premiums returned to insureds on account of
      policy cancellations, unless paid in cash by the
      Reinsurer;

      2.   To reimburse itself for the Reinsurer's share of
      losses and/or loss adjustment expense paid under the terms
      of policies reinsured hereunder, unless paid in cash by
      the Reinsurer;

      3.   To reimburse itself for the Reinsurer's share of any
      other amounts claimed to be due hereunder, unless paid in
      cash by the Reinsurer;

      4.   To fund a cash account in an amount equal to the
      Reinsurer's share of any ceded unearned premium and/or
      outstanding loss and loss adjustment expense reserves
      (including incurred but not reported loss reserves) funded
      by means of a letter of credit which is under non-renewal
      notice, if said letter of credit has not been renewed or
      replaced by the Reinsurer 10 days prior to its expiration
      date;

      5.   To refund to the Reinsurer any sum in excess of the
      actual amount required to fund the Reinsurer's share of
      the Company's ceded unearned premium and/or outstanding
      loss and loss adjustment expense reserves (including
      incurred but not reported loss reserves), if so requested
      by the Reinsurer.

   In the event the amount drawn by the Company on any letter of
   credit is in excess of the actual amount required for C(1),
   C(2) or C(4), or in the case of C(3), the actual amount
   determined to be due, the Company shall promptly return to the
   Reinsurer the excess amount so drawn.


Article XXII - Insolvency

A. In the event of the insolvency of one or more of the reinsured
   companies, this reinsurance shall be payable directly to the
   company or to its liquidator, receiver, conservator or
   statutory successor immediately upon demand, with reasonable
   provision for verification, on the basis of the liability of
   the company without diminution because of the insolvency of
   the company or because the liquidator, receiver, conservator
   or statutory successor of the company has failed to pay all or
   a portion of any claim. It is agreed, however, that the
   liquidator, receiver, conservator or statutory successor of
   the company shall give written notice to the Reinsurer of the
   pendency of a claim against the company indicating the policy
   or bond reinsured which claim would involve a possible
   liability on the part of the Reinsurer within a reasonable
   time after such claim is filed in the conservation or
   liquidation proceeding or in the receivership, and that during
   the pendency of such claim, the Reinsurer may investigate such
   claim and interpose, at its own expense, in the proceeding
   where such claim is to be adjudicated, any defense or defenses
   that it may deem available to the company or its liquidator,
   receiver, conservator or statutory successor. The expense thus
   incurred by the Reinsurer shall be chargeable, subject to the
   approval of the Court, against the company as part of the
   expense of conservation or liquidation to the extent of a pro
   rata share of the benefit which may accrue to the company
   solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim
   and a majority in interest elect to interpose defense to such
   claim, the expense shall be apportioned in accordance with the
   terms of this Contract as though such expense had been
   incurred by the company.

C. It is further understood and agreed that, in the event of the
   insolvency of one or more of the reinsured companies, the
   reinsurance under this Contract shall be payable directly by
   the Reinsurer to the company or to its liquidator, receiver or
   statutory successor, except as provided by Section 4118(a) of
   the New York Insurance Law or except (1) where this Contract
   specifically provides another payee of such reinsurance in the
   event of the insolvency of the company or (2) where the
   Reinsurer with the consent of the direct insured or insureds
   has assumed such policy obligations of the company as direct
   obligations of the Reinsurer to the payees under such policies
   and in substitution for the obligations of the company to such
   payees.


Article XXIII - Arbitration

A. As a condition precedent to any right of action hereunder, in
   the event of any dispute or difference of opinion hereafter
   arising with respect to this Contract, it is hereby mutually
   agreed that such dispute or difference of opinion shall be
   submitted to arbitration.  One Arbiter shall be chosen by the
   Company, the other by the Reinsurer, and an Umpire shall be
   chosen by the two Arbiters before they enter upon arbitration,
   all of whom shall be active or retired disinterested executive
   officers of insurance or reinsurance companies or Lloyd's
   London Underwriters.  In the event that either party should
   fail to choose an Arbiter within 30 days following a written
   request by the other party to do so, the requesting party may
   choose two Arbiters who shall in turn choose an Umpire before
   entering upon arbitration.  If the two Arbiters fail to agree
   upon the selection of an Umpire within 30 days following their
   appointment, each Arbiter shall nominate three candidates
   within 10 days thereafter, two of whom the other shall
   decline, and the decision shall be made by drawing lots.

B. Each party shall present its case to the Arbiters within
   30 days following the date of appointment of the Umpire.  The
   Arbiters shall consider this Contract as an honorable
   engagement rather than merely as a legal obligation and they
   are relieved of all judicial formalities and may abstain from
   following the strict rules of law.  The decision of the
   Arbiters shall be final and binding on both parties; but
   failing to agree, they shall call in the Umpire and the
   decision of the majority shall be final and binding upon both
   parties.  Judgment upon the final decision of the Arbiters may
   be entered in any court of competent jurisdiction.

C. If more than one reinsurer is involved in the same dispute,
   all such reinsurers shall constitute and act as one party for
   purposes of this Article and communications shall be made by
   the Company to each of the reinsurers constituting one party,
   provided, however, that nothing herein shall impair the rights
   of such reinsurers to assert several, rather than joint,
   defenses or claims, nor be construed as changing the liability
   of the reinsurers participating under the terms of this
   Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and
   shall jointly and equally bear with the other the expense of
   the Umpire and of the arbitration.  In the event that the two
   Arbiters are chosen by one party, as above provided, the
   expense of the Arbiters, the Umpire and the arbitration shall
   be equally divided between the two parties.

E. Any arbitration proceedings shall take place at Woodland
   Hills, California, unless otherwise mutually agreed.

F. It is agreed that the jurisdiction of the Arbiters to make or
   render any decision or award shall be limited by the limit of
   liability expressly hereinbefore set forth, and that the
   Arbiters shall have no jurisdiction to make any decision or
   render any award exceeding such expressly stated limit of
   liability of the Reinsurer, nor do they have the jurisdiction
   to authorize any punitive, exemplary or consequential damage
   awards between the parties hereto.


Article XXIV - Service of Suit (BRMA 49C)

(Applicable if the Reinsurer is not domiciled in the United
States of America, and/or is not authorized in any State,
Territory or District of the United States where authorization is
required by insurance regulatory authorities)

A. It is agreed that in the event the Reinsurer fails to pay any
   amount claimed to be due hereunder, the Reinsurer, at the
   request of the Company, will submit to the jurisdiction of a
   court of competent jurisdiction within the United States.
   Nothing in this Article constitutes or should be understood to
   constitute a waiver of the Reinsurer's rights to commence an
   action in any court of competent jurisdiction in the United
   States, to remove an action to a United States District Court,
   or to seek a transfer of a case to another court as permitted
   by the laws of the United States or of any state in the United
   States.

B. Further, pursuant to any statute of any state, territory or
   district of the United States which makes provision therefor,
   the Reinsurer hereby designates the party named in its
   Interests and Liabilities Agreement, or if no party is named
   therein, the Superintendent, Commissioner or Director of
   Insurance or other officer specified for that purpose in the
   statute, or his successor or successors in office, as its true
   and lawful attorney upon whom may be served any lawful process
   in any action, suit or proceeding instituted by or on behalf
   of the Company or any beneficiary hereunder arising out of
   this Contract.


Article XXV - Agency Agreement

Associated International Insurance Company shall be deemed the
agent of the other reinsured companies for purposes of sending or
receiving notices required by the terms and conditions of this
Contract, and for purposes of remitting or receiving any monies
due any party.


Article XXVI - Intermediary (BRMA 23A)

E. W. Blanch Co. is hereby recognized as the Intermediary
negotiating this Contract for all business hereunder. All
communications (including but not limited to notices, statements,
premium, return premium, commissions, taxes, losses, loss
adjustment expense, salvages and loss settlements) relating
thereto shall be transmitted to the Company or the Reinsurer
through E. W. Blanch Co., Reinsurance Services, 3500 West 80th
Street, Minneapolis, Minnesota 55431. Payments by the Company to
the Intermediary shall be deemed to constitute payment to the
Reinsurer. Payments by the Reinsurer to the Intermediary shall be
deemed to constitute payment to the Company only to the extent
that such payments are actually received by the Company.


In Witness Whereof, the Company by its duly authorized
representative has executed this Contract as of the date
undermentioned at:

Woodland Hills, California,this _______ day of _____________199___.

                __________________________________________________
                Associated International Insurance Company
                Calvert Insurance Company

                           Schedule A

                             to the

               Entertainment Coded Excess of Loss
                      Reinsurance Contract
                    Effective:  March 1, 1998

                            issued to

           Associated International Insurance Company
                   Woodland Hills, California
                    Calvert Insurance Company
                       Hoboken, New Jersey
                               and
         any additional company established or acquired
by Associated International Insurance Company, Calvert Insurance
                             Company
         or Gryphon Holdings, Inc., New York, New York,
                    to be included hereunder



                          Rating Table

           Policy Limits                 Reinsurance Rate

             0 to $10,000,000                    0%
   $10,000,001 to $20,000,000                 18.0%
   $20,000,001 to $30,000,000                 33.0%
   $30,000,001 to $40,000,000                 40.0%
   $40,000,001 and above                      44.0%