Document:

Exhibit 10.11

                                 Addendum No. 2

                      Attaching to and forming part of the

                   COMMERCIAL AND PRIVATE PASSENGER AUTOMOBILE
                               QUOTA SHARE TREATY
                  (hereinafter referred to as the "Agreement")

                                    issued to

                      FEDERATED NATIONAL INSURANCE COMPANY
                               Plantation, Florida
                   (hereinafter referred to as the "Company")

                                       by

                        TRANSATLANTIC REINSURANCE COMPANY
                               New York, New York
                  (hereinafter referred to as the "Reinsurer")

IT IS HEREBY MUTUALLY AGREED by the parties that effective 12:01 a.m., Eastern
Standard Time, December 31, 2000, Article 2- Cover of this Agreement, paragraph
A, as amended by Addendum No. 1, will be deleted and replaced in its entirety
with:

A. The Company will cede, and the Reinsurer will accept as reinsurance, a 50%
share of all business reinsured (Sections A and B) hereunder subject to the
maximum Policy limits stated below:

IT IS ALSO MUTUALLY AGREED by the parties that effective 12:01 a.m., Eastern
Standard Time, January 1, 2001, Article 2- Cover of this Agreement, will be
amended by the addition of paragraph E:

E.   The maximum limit of liability of the Reinsurer in any one Agreement Year
     as respects Excess of Policy Limits or Extra Contractual Obligations only,
     shall be $1,500,000.

IT IS ALSO MUTUALLY AGREED by the parties that effective 12:01 a.m., Eastern
Standard Time, January 1, 2001, Article 7- Reports and Remittances, the
concluding sentence as added by Addendum No. 1, will be deleted and replaced in
its entirety with:

Effective December 31, 2000 the Reinsurer's share of the incoming unearned
premium reserve shall be 50%.

ALL OTHER TERMS AND CONDITIONS SHALL REMAIN UNCHANGED.

<PAGE>

IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives
have executed this ADDENDUM NO. 2 in duplicate, as of the dates undermentioned.

Signed in Plantation, Florida on this 15 day of January 2001.

                                            FEDERATED NATIONAL INSURANCE COMPANY

                                            /s/ Richard A. Widdicombe

and in New York, New York on this 9th day of January 2001.

                                            TRANSATLANTIC REINSURANCE COMPANY

                                            /s/ Suzanne A. SpantidosExhibit 10.14

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                          SALE AND ASSIGNMENT AGREEMENT

                                     between

                         FEDERATED PREMIUM FINANCE, INC.

                                       and

                                    FPF, INC.

                         ------------------------------
                         Dated as of September 30, 2001
                         ------------------------------

--------------------------------------------------------------------------------

<PAGE>

                                -----------------
                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----
Section 1.           Definitions.............................................. 1
Section 2.           Sale of Conveyed Property................................ 5
Section 3.           Termination.............................................. 7
Section 4.           Purchase Price and Payment Terms for Conveyed Property/
                     Right of Set-Off......................................... 7
Section 5.           Notification of Sale..................................... 7
Section 6.           Repurchase of Conveyed Property.......................... 8
Section 7.           Delivery to FPF of Proceeds; Power of Attorney........... 8
Section 8.           Verification, Notification and Collection of Premium
                     Receivables.............................................. 8
Section 9.           Financial Statements and Books and Records............... 8
Section 10.          Seller's General Representations and Warranties.......... 8
Section 11.          Seller's Representations and Warranties With Respect
                     to the Conveyed Property.................................10
Section 12.          Additional Covenants of Seller...........................13
Section 13.          Taxes....................................................14
Section 14.          Further Assurances and Substituted Performance...........14
Section 15.          Indemnification..........................................15
Section 16.          Default..................................................15
Section 17.          Remedies.................................................15
Section 18.          Waiver...................................................16
Section 19.          Counterparts/Facsimiles..................................16
Section 20.          Essence of Time..........................................17
Section 21.          Assignment...............................................17
Section 22.          Standard of Care.........................................17
Section 23.          Costs and Expenses/Attorneys Fees........................17
Section 24.          Notices..................................................17
Section 25.          Successors and Assigns...................................17
Section 26.          Severability.............................................17
Section 27.          Force Majeure............................................18
Section 28.          Governing Law............................................18
Section 29.          Jurisdiction and Waiver of Certain Damages...............18
Section 30.          Entire Agreement.........................................18
Section 31.          Waiver of Jury Trial.....................................18

<PAGE>

                          SALE AND ASSIGNMENT AGREEMENT

         This Sale and Assignment Agreement is dated as of the 30 day of
September, 2001 by Federated Premium Finance, Inc.("Seller"), whose address is
4161 NW 5th Street, Plantation, FL 33317 and FPF, Inc. ("FPF"), whose address is
600 Seventeenth Street, Suite 1900S, Denver, Colorado 80202.

                                    RECITALS:

         A    Seller originated and/or owns Premium Receivables evidenced by
Premium Finance Agreements to finance payments by Obligors of premiums for the
purchase of insurance policies and, in connection therewith, Seller has a
security interest arising under statutory authority or otherwise in unearned
premiums, dividends and loss payments with respect to such insurance policies
and in state or industry guaranty funds for the reimbursement of unearned
premiums from cancelled insurance policies and failed insurance companies; and

         B    Seller wishes to sell from time to time during the Term of this
Agreement and FPF wishes to purchase all of Seller's Eligible Premium
Receivables and related interests under the terms and conditions described in
this Agreement.

         NOW, THEREFORE, in consideration of the foregoing and the covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         Section 1. Definitions. The following terms shall be defined in this
Agreement:

         "Additional Provisions" means the Additional Provisions of this
Agreement as set forth in Schedule A attached hereto.

         "Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

         "Agent" means any Person licensed and qualified to sell or arrange for
the sale of insurance in the state in which any Premium Receivable is
originated.

         "Agreement" means this Agreement together with all schedules, and all
amendments, modifications, replacements or substitutions thereto and together
with all documents and instruments contemplated to be executed pursuant to this
Agreement.

         "Amount Financed" means, with respect to each Premium Receivable Sold
to FPF, an amount equal to 100% of the premium and other financeable amounts
relating to the insurance policy that gives rise to the Premium Receivable less
any down payment made at the inception of the Premium Finance Agreement.

         "AVIC" means American Vehicle Insurance Company

         "Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banking institutions in Denver, Colorado are authorized
or obligated by law or executive order to be closed.

         "Cancelled Premium Receivable" means each Premium Receivable for which
a request for cancellation has been sent to the Issuing Insurance Company, and
for which a reinstatement notice has not been received by the Servicer from such
insurance company.

<PAGE>

         "Capital Charge" means the charges, if any, described in Schedule A
attached hereto.

         "Closing Fee and Due Diligence" means the fee described in Schedule A
attached hereto.

         "Collections" shall mean all amounts received daily by FPF, or the
Servicer on behalf of FPF, on all Premium Receivables Sold under this Agreement
including, but not limited to: (a) payments from Obligors, (b) return of
unearned commission from agents, (c) return of unearned premium from Issuing
Insurance Companies, and (d) amounts received from a guaranty fund or other
amounts paid by or on behalf of the Obligor, agent or Issuing Insurance Company.
The amounts referred to as "Collections" shall exclude Obligor's down payment
amounts, correction amounts or amounts not lawfully eligible under applicable
law to be applied to the payment of amounts due under the Premium Receivables.

         "Concentration Limits" means the Premium Receivable concentration
limits set forth in Schedule B attached hereto.

         "Conveyed Property" means all of the Seller's right, title and interest
in, to and under the Premium Receivables Sold pursuant to this Agreement, all
related Premium Finance Agreements and all related documents including, without
limitation, all loan documents and servicer documents, and all of the Seller's
rights to any payment from the Obligors and any and all rights against any
Obligor with respect to such Premium Receivables, all collateral and guaranties
with respect to such Premium Receivables, all other related rights and assets,
and all proceeds of the foregoing.

         "Default" shall have the meaning specified in Section 16 of this
Agreement.

         "Default Rate" shall mean the annual rate of interest as set forth in
Schedule A attached hereto.

         "Defaulted Premium Receivable" means (without duplication) any Premium
Receivable which (a) has an amount due and unpaid for 120 days, or (b) is a
Cancelled Premium Receivable and has an unpaid principal balance after
application of all expected unearned premium received by or on behalf of the
Issuing Insurance Company, or (c) has been written off by the Servicer.

         "Down Payment Requirement" shall have the meaning set forth in Schedule
A attached hereto.

         "Effective Date" shall have the meaning set forth in Schedule A
attached hereto.

         "Eligible Insurance Company" means (a) an insurance company which is
licensed and in good standing to do business in the state in which the policy to
which a Premium Receivable relates is issued by such insurance company, (b) a
joint underwriting organization, intercompany insurance pool or intercompany
reinsurance pool which is licensed or otherwise permitted to do business in the
state in which the policy to which a Premium Receivable relates is issued by
such joint underwriting organization or intercompany insurance pool, (c) a
foreign or alien insurance company which is authorized or approved to issue
insurance on a nonadmitted basis, through a licensed surplus or excess lines
broker, in the state in which the policy to which a Premium Receivable relates
is issued by such foreign or alien insurance company. No such insurer may be an
Eligible Insurance Company (i) if such insurer is the subject of a
rehabilitation or liquidation proceeding commenced by a state or foreign
insurance regulatory authority, or (ii) if such insurer is not, in the judgment
of FPF, a creditworthy Person which FPF has full expectations will return, on a
timely basis, unearned premiums on Cancelled Premium Receivables.

         "Eligible Premium Receivable" has the meaning defined in Section 11.

         "Endorsement Refunds" means all funds returned by an insurance company
to the Seller or any other Person arising out of a reduction in the premium
payable under an insurance policy relating to a change in the coverage thereof.

         "Existing Documents" means The documents entered into relative to the
1997 funding arrangement between FPF and Seller, including the Agreement of
Definitions dated September 24, 1997, Premium Receivable Servicing Agreement
dated September 24, 1997, Residual Purchase and Funding Agreement dated
September 24, 1997,

                                       2

<PAGE>

Security Agreement dated September 24, 1997, and Sale and Assignment Agreement
dated September 24, 1997, together with all amendments and modification
agreements.

         "FNIC" means Federated National Insurance Company.

         "FPF Concentration Limits" means the limits to the Premium Receivables
as described in Schedule B.

         "FPF Principal Balance" means for any day of determination, the sum of
the Up-front Purchase Price paid by FPF for the Premium Receivables under this
Agreement, less the sum of (a) all Collections received by FPF representing
principal payments, and (b) the principal amount of repurchases of Premium
Receivables by the Seller under Section 6 of this Agreement.

         "GAAP" means generally accepted accounting principles applied in the
United States of America in effect from time to time which are recognized by the
American Institute of Certified Public Accountants.

         "Guarantor" means each guarantor of Seller's repurchase obligations as
described in Section 6(b) of this Agreement listed in Schedule A attached
hereto, if any.

         "Independent Public Accountants" means any firm of public accountants
acceptable to FPF; provided, that such firm is independent with respect to the
Seller and FPF within the meaning of the Securities Act of 1933, as amended.

         "Interest Rate" means the rate of interest set forth in Schedule A
attached hereto.

         "Issuing Insurance Company" means, with respect to any Premium
Receivable, the insurance company which issued the insurance policy related to
such Premium Receivable.

         "Lien" means any statutory, judicial, contractual or other lien,
security interest, encumbrance or claim of any kind.

         "Loss" shall mean (i) with respect to Defaulted Premium Receivables, an
amount equal to the outstanding principal balance on such Defaulted Premium
Receivable, and (ii) with respect to any Repurchase Property not reacquired by
Seller, an amount equal to the Repurchase Price.

         "Low Rated Insurance Companies" means any Issuing Insurance Company
whose published rating from the A.M. Best & Co., for any time a related Premium
Receivable is outstanding, is "B" or lower (including all categories of "not
rated" as defined by A.M. Best & Co.).

         "Low Rated Insurance Company Ratio" means the percentage ratio
calculated on the Seller's portfolio of Premium Receivables included under this
Agreement whereby (a) the numerator is the principal balance of the Seller's
Premium Receivables which relates to Low Rated Insurance Companies and (b) the
denominator is the principal balance of all of the Seller's Premium Receivables
included under this Agreement.

         "Material Adverse Change" shall mean any material and adverse change,
either individually or in the aggregate, in the business, prospects, management,
financial position, results of operations or general condition of Seller or any
of its Affiliates as determined by FPF in its reasonable discretion.

         "Maximum Purchase Commitment" means the maximum outstanding principal
balance of the Eligible Premium Receivables Sold under this Agreement, at the
time of calculation, not to exceed the amount set forth in Schedule A attached
hereto.

         "Minimum Yield Trigger" shall have the meaning set forth in Schedule A
attached hereto.
                                       3

<PAGE>

         "Obligor" means, with respect to any Premium Finance Agreement, the
obligor or account debtor thereunder.

         "Person" means an individual, partnership, limited liability company,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

         "Premium Finance Agreement" means the premium finance agreement or
agreements which evidence a Premium Receivable in the form prescribed under
applicable law. The Premium Finance Agreements shall be in form and substance
acceptable to FPF in its sole discretion.

         "Premium Receivable" means the entire interest in a Premium Finance
Agreement, all security interests relating thereto, all moneys due or to become
due thereon subsequent to the Sale of such Premium Receivable to FPF, all
related Realization Provisions, all related Endorsement Refunds, all Allowable
Endorsement Additions relating thereto which have been acquired by FPF pursuant
to this Agreement and any related documents and the proceeds of any and all of
the foregoing.

         "Prohibited Agent" means any Agent that has been identified by written
notice from FPF to the Seller as being prohibited from producing insurance
policies financed by Premium Receivables that are subject to purchase by FPF
pursuant to this Agreement.

         "Purchase Premium" means the portion of the Purchase Price as set forth
in Schedule A attached hereto.

         "Purchase Price" means the price paid by FPF for each Eligible Premium
Receivable equal to the sum of the (a) Up-front Purchase Price plus (b) the
Purchase Premium.

         "Realization Provisions" means, with respect to any Premium Receivable,
collectively: (a) the security interest granted or assigned by an Obligor,
pursuant to the terms of the documents creating and evidencing the respective
Premium Receivable at the time of execution thereof to the originator of such
Premium Receivable, in all unearned premiums, dividends, and loss payments which
reduce the unearned premiums under the respective insurance policy or policies,
(b) any interest arising under a state guaranty fund for all unearned premiums
from the cancelled policy or policies in the event the Issuing Insurance Company
becomes insolvent, (c) Endorsement Refunds with respect to such Premium
Receivable, (d) if applicable to such Premium Receivable, all broker or agent
guarantee agreements with respect thereto, and (e) if applicable to such Premium
Receivable, any interest thereof in a cash collateral account established with
respect to such Premium Receivable.

         "Repurchase Price" shall have the meaning set forth in Schedule A
attached hereto.

         "Repurchase Property" shall have the meaning defined in Section 6(a).

         "Required Documents" means the original signed Premium Finance
Agreement, evidence satisfaction ot FPF of funding of financing each policy
listed on the Premium Finance Agreement the check or draft relating thereto, the
signed power of attorney of the insured (if a power of attorney signed by the
insured is not included in the Premium Finance Agreement, and all other
documents necessary for the legal origination of the Premium Finance Agreement.

         "Sale" or "Sell" or "Sold" means to absolutely sell, transfer, assign
or otherwise convey property.

         "Servicer" means the servicer of the Premium Receivables described in
Schedule C attached hereto.

         "Servicing Agreement" means the Premium Receivable Servicing Agreement
in the form attached hereto in Schedule C

         "Servicing Fee" means the fee to be paid to the Servicer pursuant to
the Servicing Agreement.

                                       4
<PAGE>

         "Static Pool Cancellation Rate" means the applicable rate set forth in
Schedule A attached hereto.

         "Static Pool Cancellation Rate Trugger" means the rate trigger as set
forth in Schedule A

         "Tangible Net Worth" shall mean the tangible net worth, determined in
accordance with GAAP, to be maintained by Seller in the amount set forth in
Schedule A attached hereto. For purposes of this definition (i) Tangible Net
Worth may be in the form of common or preferred equity or unsecured debt, the
terms and conditions of which shall be satisfactory to FPF in its sole
discretion ("Subordinated Debt"), and (ii) tangible assets used to calculate net
worth shall exclude all intangible assets, goodwill and intercompany or
Affiliate indebtedness of any nature.

         "Term" means the term of this Agreement as defined in Schedule A
attached hereto.

         "Termination Fee" means the fee to be paid by Seller as provided under
Section 3 of this Agreement and as set forth in Schedule A attached hereto.

         "Up-front Purchase Price" means the portion of the Purchase Price paid
by FPF for a Premium Receivable as set forth in Schedule A attached hereto.

         Section 2.  Sale of Conveyed Property.

                  (a) During the Term of this Agreement, Seller irrevocably
         agrees to Sell to FPF all of the Eligible Premium Receivables
         originated, acquired or otherwise owned by Seller and FPF agrees to
         purchase up to the amount of the Maximum Purchase Commitment all of
         Seller's Eligible Premium Receivables in accordance with the terms and
         conditions of this Agreement. Seller shall Sell Eligible Premium
         Receivables to FPF no less frequently than weekly as originated, unless
         otherwise agreed by FPF in writing. The parties agree that FPF shall
         have the exclusive right, during the Term of this Agreement, to
         purchase all Eligible Premium Receivables originated, acquired or
         otherwise owned by Seller.

                  (b) FPF's obligation to be bound by the terms of this
         Agreement is subject to the satisfaction of each of the following
         conditions by evidence in form and substance satisfactory to FPF in its
         reasonable discretion:

                     (i) Seller shall provide evidence that it has the necessary
              authority and has secured any required consents to execute and
              deliver this Agreement and to enter into the transactions
              contemplated by this Agreement, which evidence shall include, at a
              minimum, good standing certificate of Seller and any Guarantor (if
              not an individual), officers' certificates regarding (together
              with copies of) the articles and bylaws of Seller (or other
              organizational documents as may be applicable) and any amendments
              thereto, UCC searches regarding the Seller, proof of Seller's
              license to originate the Premium Finance Agreements, the form of
              the Premium Finance Agreements to be originated by Seller, and
              such other evidence as FPF may require in its reasonable
              discretion including, without limitation, any legal opinions that
              FPF may require regarding Seller and Seller's ability to enter
              into and perform under this Agreement;

                     (ii) FPF shall have completed its due diligence of the
              Seller and determined that the findings of such due diligence,
              including the hardware and software for the Seller's data
              processing system, are acceptable to FPF in its sole discretion;

                     (iii) The Closing and Due Diligence Fee has been paid in
              full by Seller to FPF;

                     (iv) Seller shall have provided evidence that there are no
              prior Liens or existing Uniform Commercial Code financing
              Statements granting to any party a security interest in any of
              Seller's Premium Receivables or other Conveyed Property; and

                                       5
<PAGE>

                     (v) Seller shall have provided to FPF Uniform Commercial
              Code financing statements in form and substance acceptable to FPF
              establishing a first priority ownership interest in favor of FPF
              in the Premium Receivable and related Conveyed Property.

                  (c) Each Sale of a Premium Receivable hereunder is subject to
         the satisfaction to FPF of each of the following conditions at Seller's
         sole cost and expense:

                     (i) All covenants and conditions of this Agreement have
              been complied with by Seller and no default (or event which, with
              the passage of time or notice or both would constitute a default)
              exists hereunder or under the Servicing Agreement;

                     (ii) No Material Adverse Change has occurred;

                     (iii) Each of the Minimum Yield Trigger, Static Pool
              Cancellation Rate Trigger, and Maximum Purchase Commitment shall
              not be exceeded;

                     (iv) The availability to FPF of funding from FPF's funding
              source for the transactions contemplated hereby;

                     (v) The Concentration Limits established in Schedule B,
              with respect to concentrations with Issuing Insurance Companies or
              Agents shall not be exceeded;

                     (vi) The Premium Receivables shall be Eligible Premium
              Receivables; provided, however, that any Premium Receivable Sold
              on the Effective Date may include Premium Receivables with respect
              to which any payment has been due and unpaid for more than 30 days
              and for which a cancellation notice has been delivered to the
              Obligor and to the Issuing Insurance Company; and

                     (vii) Seller shall provide such additional evidence,
              documents and instruments as FPF may reasonably request to
              consummate the Sale of the Conveyed Property in accordance with
              the terms and provisions of this Agreement.

                  (d) In connection with the Sale of each Premium Receivable
         hereunder, Seller shall timely deliver to FPF the Required Documents
         relating to each Premium Finance Agreement, which delivery shall be
         made by the later of (A) the twentieth (20th) day following funding of
         the premium financed by such Premium Finance Agreement, or (B)
         twentieth (20th) day following receipt by Servicer of the Premium
         Finance Agreement.

                  (e) The Sale of any Conveyed Property shall be effective (i)
         with respect to the Conveyed Property Sold to FPF on the Effective
         Date, upon delivery to FPF of an assignment in form and substance
         acceptable to FPF or by other method of transfer as may be directed by
         FPF, and (ii) with respect to all Conveyed Property Sold after the
         Effective Date, upon the origination or acquisition by the Seller of
         each Premium Finance Agreement giving rise to the Premium Receivable
         and other Conveyed Property without the need for execution and delivery
         of any further assignments or instruments of transfer unless
         specifically requested in writing by FPF. The Seller shall cooperate
         with FPF and the Servicer in immediately supplying to the Servicer the
         Premium Receivable data needed to enter the Premium Receivables on the
         Servicer's data processing system. All Sales shall be deemed to take
         place at the offices of FPF described on the first page of this
         Agreement or such other location as Seller and FPF may agree in
         writing.

                  (f) Seller and FPF intend and agree that each purchase and
         Sale hereunder shall be treated as a true and absolute Sale of all of
         Seller's right, title and interest in, to and under the Conveyed
         Property and not a transfer intended as a security interest. However,
         if, notwithstanding such intention, a determination is made by a court
         or other body with appropriate jurisdiction over the matter that such
         transfer shall not be treated as a

                                       6
<PAGE>

         true and absolute Sale, this Agreement shall be deemed to constitute a
         security agreement and the transaction effected hereby shall be deemed
         to constitute a secured financing, and Seller hereby pledges and grants
         to FPF a first priority Lien on, and security interest in, to and
         under, all of Seller's right, title and interest in, to and under the
         Premium Receivables and all other related Conveyed Property as
         collateral for and as security for all amounts paid and to be paid by
         FPF to Seller in connection with the Conveyed Property and for all
         amounts due and owing and all obligations arising under this Agreement.

         Section 3. Termination. Seller shall have the right to terminate this
Agreement upon sixty (60) days prior written notice to FPF and payment to FPF of
the Termination Fee. Upon termination by Seller as provided herein, FPF shall
continue to own all Premium Receivables acquired by FPF to the date of
termination and the Servicer shall service the portfolio of Conveyed Property in
the normal course of its business and, in connection therewith, all provisions
of this Agreement or any Servicing Agreement with respect to such existing
portfolio shall remain in full force and effect and shall survive the
termination of this Agreement under this Section 3, including, without
limitation, the repurchase obligations of Seller or Guarantor relating to such
existing portfolio.

         Section 4. Purchase Price and Payment Terms for Conveyed Property/Right
of Set-Off. FPF shall pay Seller the Purchase Price for the Conveyed Property
pursuant to the terms and conditions set forth in this Agreement. The Up-front
Purchase Price shall be paid to Seller or a third party acceptable to FPF upon
satisfaction of the conditions set forth in Section 2(c). The Purchase Premium,
if any, shall be paid to Seller monthly in arrears, not later than the eighth
Business Day of each month. FPF shall have a right to off-set from such Purchase
Price amounts due to Seller any amounts due FPF from Seller or Guarantor under
this Agreement including, without limitation, any Repurchase Price amounts due
under Section 6 [and any Agent Statement Unpaid Balance amounts].

         Section 5. Notification of Sale. FPF shall send or cause to be sent
notice of the Sale of the Premium Receivables to FPF, (i) to each Obligor to the
effect that the Premium Receivables have been Sold to FPF and that all payments
with respect thereto are required to be made payable as specified in such
notice, and (ii) to each Issuing Insurance Company to the effect that the
Premium Receivables have been Sold to FPF and that all payments with respect
thereto are required to be paid to the Servicer as specified in such notice. The
Seller shall promptly respond to reasonable inquiries from FPF or third parties
confirming the Sale of the Conveyed Property hereunder.

         Section 6.  Repurchase of Conveyed Property.

                  (a) Not later than five (5) Business Days after notice from
         FPF, Seller shall repurchase from FPF any Premium Receivables and other
         related Conveyed Property (collectively, the "Repurchase Property") (i)
         that does not comply in all respects with Seller's representations and
         warranties described in Section 11 of this Agreement or (ii) for which
         the Required Documents have not been timely delivered to FPF. The
         amount payable by Seller to FPF for the Repurchase Property shall be
         equal to the Repurchase Price. Upon its receipt of the Repurchase
         Price, FPF shall convey to Seller all of its right, title and interest
         in such Repurchase Property on an "AS IS, WHERE IS" basis without
         recourse and without any warranties, written or oral, express or
         implied, of any kind including, but not limited to, warranties of
         TITLE; MERCHANTABILITY OR ABSENCE FROM LIENS.

                  (b) Each Guarantor (jointly and severally, if more than one
         Guarantor) hereby agrees to repurchase (i) the Repurchase Property
         referred to in Section 6(a) upon the failure of Seller to do so, and
         (ii) any Premium Receivable originated in a fraudulent manner. Upon its
         receipt of all of the amounts due under this Section, FPF shall convey
         to Guarantor all of its right, title and interest in such Repurchase
         Property on an "AS IS, WHERE IS" basis without recourse and without any
         warranties, written or oral, express or implied, of any kind including,
         but not limited to, warranties of TITLE; MERCHANTABILITY OR ABSENCE
         FROM LIENS.

         Section 7. Delivery to FPF of Proceeds; Power of Attorney. FPF shall be
the owner of any Conveyed Property including any proceeds thereof. Following the
Sale of any Conveyed Property, if any proceeds of such Conveyed Property are
received by Seller, Seller shall hold such proceeds in trust for FPF separate
and apart from its

                                       7
<PAGE>

own property and, at its own cost, immediately endorse (if necessary) and
deliver such proceeds, as FPF directs. Seller hereby constitutes and appoints
FPF as its true and lawful attorney with the power to endorse the name of Seller
upon any instrument or other document pertaining to the Conveyed Property and
any related proceeds. This power is coupled with an interest and is irrevocable.

         Section 8. Verification, Notification and Collection of Premium
Receivables. FPF shall be entitled, in its own or any other name and in form
determined by FPF, to contact any Obligor or any other Person and verify the
payment of or inquire about any other issue pertaining to any Conveyed Property
that has been or is to be Sold to FPF. Upon the Sale of any Conveyed Property,
FPF shall be entitled to notify and, upon the request of FPF, Seller shall
notify the Obligors, insurance companies and any other Persons that FPF is the
owner of such Conveyed Property and direct such Persons to pay FPF any amounts
owing with respect to such Conveyed Property.

         FPF, as the owner of the Conveyed Property, shall be entitled to amend,
compromise, modify, release or settle the indebtedness and obligations of the
Obligors with respect to the Conveyed Property that is Sold to FPF hereunder,
and to take any legal action to collect any amounts owing with respect to such
Conveyed Property and to take or refrain from taking any additional action with
respect to such Conveyed Property in good faith, without notice to or the
consent of Seller and without affecting any obligation of Seller to repurchase
such Conveyed Property as may be required by FPF under this Agreement. Seller,
at its own cost, shall execute and deliver to FPF any documents and take any
actions deemed necessary or desirable by FPF to assist FPF in exercising any
right or remedy pertaining to the Conveyed Property.

         Section 9. Financial Statements and Books and Records. Seller shall
keep accurate and complete books and financial records pertaining to the
Conveyed Property in accordance with GAAP and shall disclose the Sale of any
Conveyed Property to FPF and the respective date of such Sale in Seller's books
and records. FPF or its designated representative shall have the right, upon
written notice to Seller and during regular business hours, to inspect, audit
and copy Seller's books and records relating to the Conveyed Property.

         Section 10. Seller's General Representations and Warranties. Seller
hereby represents and warrants to and for the benefit of FPF on the date of this
Agreement and on any date of Sale of Premium Receivables hereunder that:

                  (a) Seller is duly organized and is validly existing as a
         corporation in good standing under the laws of the state of its
         organization with full power and authority to execute and deliver this
         Agreement and to Sell the Conveyed Property to FPF and otherwise to
         perform the terms and provisions thereof;

                  (b) Seller is duly qualified to do business as a domestic or
         foreign business entity in good standing, and has obtained all required
         licenses and approvals, if any, in all jurisdictions in which the
         conduct of its business requires such qualifications, and has complied
         with all federal, state and local laws and regulations in connection
         with the origination of the Premium Receivables and the Sale of the
         Conveyed Property under this Agreement;

                  (c) The execution and delivery by Seller of this Agreement and
         Seller's performance of the terms and conditions thereof have been duly
         authorized by all necessary action of Seller, do not require any
         approval or consent of any governmental agency or authority or any
         other Person, and do not and will not conflict with or result in a
         breach or (with or without notice or lapse of time) a default under any
         agreement, law or governmental regulation binding upon or applicable to
         Seller or the Conveyed Property;

                  (d) No litigation or administrative proceeding of or before
         any court, tribunal or governmental body is presently pending or
         threatened, against Seller or its properties which have not been
         previously disclosed in writing to FPF;

                  (e) This Agreement and any related documents to which Seller
         or any Guarantor is a party constitute valid, legal and binding
         obligations of Seller and any such Guarantor, enforceable against
         Seller and any such Guarantor in accordance with the terms thereof,
         subject to applicable bankruptcy, insolvency,

                                       8
<PAGE>

         reorganization, moratorium and other laws affecting the enforcement of
         creditor's rights generally and to general principles of equity,
         regardless of whether such enforcement is considered in a proceeding in
         equity or at law;

                  (f) Seller does not have material liabilities or obligations
         other than those previously disclosed in writing to FPF;

                  (g) No information, certificate, statement or report furnished
         by or on behalf of Seller or any Guarantor to FPF contains any untrue
         statement of a material fact or omits a material fact necessary to make
         such information, certificate, statement or report not misleading.
         There is no fact peculiar to Seller or any Affiliate of Seller or, to
         its knowledge, any Conveyed Property or Obligor, which it has not
         disclosed to FPF in writing which could adversely affect Seller's
         ability to perform the transactions contemplated by this Agreement and
         any related documents to which Seller is a party;

                  (h) All tax returns required to be filed by Seller, any of its
         Affiliates, subsidiaries or any Guarantor in any jurisdiction have in
         fact been filed, and all taxes, assessments, fees, claims and other
         governmental charges upon Seller, such Affiliate or subsidiary, such
         Guarantor or any of their respective properties, income or franchises,
         shown to be due and payable on such returns have been paid; provided,
         that neither Seller nor such Affiliate or subsidiary or Guarantor shall
         be required to pay or discharge any such tax, assessment, fee, claim or
         other charge which is being contested in good faith and by proper
         proceedings and as to which appropriate reserves are being maintained
         in accordance with GAAP. To the best of Seller's knowledge, all such
         tax returns were true and correct and Seller does not know of any
         contemplated or proposed additional tax assessment against Seller or
         any of its subsidiaries in any material amount or of any basis
         therefor;

                  (i) The provisions for taxes on Seller's and its subsidiaries'
         books are in accordance with GAAP;

                  (j) At the close of any Sale of Conveyed Property, Seller met
         the Tangible Net Worth Requirement

                  (k) The principal executive office of Seller is located at the
         address described on the first page of this Agreement, and has been
         located at such address for a period of not less than four months
         preceding the date of this Agreement or since its formation;

                  (l) "FEDERATED PREMIUM FINANCE, INC." is the only legal name
         under which Seller is operating its business upon the execution of this
         Agreement. Seller has not changed its name in the last six years (or
         such shorter period of time during which Seller was in existence) and
         does not have any other trade names, fictitious names, assumed names or
         "doing business as" names other than those that have been previously
         disclosed in writing to FPF;

                  (m) The transactions contemplated by this Agreement are in the
         ordinary course of Seller's business and Seller has valid business
         reasons for selling the related Conveyed Property rather than obtaining
         a secured loan with the Conveyed Property as collateral. At the time of
         each Sale: (i) Seller Sold the related Conveyed Property to FPF without
         any intent to hinder, delay or defraud any current or future creditor
         of Seller; (ii) Seller was not insolvent or did not become insolvent as
         a result of any Sale; (iii) Seller was not engaged and was not about to
         engage in any business or transaction for which any property remaining
         with Seller would constitute unreasonably small capital or for which
         the remaining assets of Seller are unreasonably small in relation to
         the business of Seller or the transaction; (iv) Seller did not intend
         to incur, and did not believe or reasonably should not have believed,
         that it would incur, debts beyond its ability to pay as they become
         due; and (v) the consideration paid by FPF to Seller for the Conveyed
         Property was equivalent to the fair market value of such Conveyed
         Property;

                                       9
<PAGE>

                  (n) No Material Adverse Change has occurred since the previous
         Sale of Conveyed Property;

                  (o) Each Sale of Conveyed Property contemplated by this
         Agreement and any related documents constitutes a true sale and not a
         pledge of collateral in connection with a financing and such Conveyed
         Property shall not be part of Seller's property for any purpose under
         state or federal law;

                  (p) Each Sale of Conveyed Property (including all payments due
         or to become due thereunder) by Seller pursuant to this Agreement to
         the best of Seller's knowledge is not subject to and will not result in
         any tax, fee or governmental charge payable by Seller or FPF to any
         federal, state or local government;

                  (q) The consideration to be received by Seller in exchange for
         each Sale of Conveyed Property (including the right to receive all
         payments due or to become due thereunder) (i) is fair consideration
         having value equivalent to or in excess of the fair market value of the
         Conveyed Property and, except with respect to the Purchase Premium (ii)
         is or will be paid in full to Seller upon the consummation of each Sale
         thereof, and (iii) no provision exists whereby the consideration will
         be modified after the date of such Sale.

                  The foregoing representations and warranties shall be
         continuing in nature and shall survive the termination of this
         Agreement.

         Section 11. Seller's Representations and Warranties With Respect to the
Conveyed Property. Upon each Sale of Conveyed Property, each Premium Receivable
Sold to FPF shall have all of the following characteristics as of the date of
Sale (such Premium Receivables having all of such characteristics shall be
referred to herein as "Eligible Premium Receivables"):

                  (a) Each Premium Receivable represents the genuine, legal,
         valid and binding payment obligation in writing of the Obligor thereon,
         enforceable by the holder thereof in accordance with its terms;

                  (b) Each Premium Receivable arises under a Premium Finance
         Agreement which contains customary and enforceable provisions such that
         the rights and remedies of the holder thereof are adequate to enforce
         the Realization Provisions;

                  (c) Each Premium Receivable is not subject to any proceedings
         or investigations pending or threatened, before any court, regulatory
         body, administrative agency or other governmental instrumentality
         having jurisdiction over Seller or its properties: (i) asserting the
         invalidity of such Premium Receivable; (ii) seeking to prevent the
         enforcement of such Premium Receivable; or (iii) seeking any
         determination or ruling that may adversely affect the payment on or
         enforceability of such Premium Receivable;

                  (d) Each Premium Receivable was originated in a state where
         Seller is licensed (if required to be licensed) to do business as an
         insurance premium finance company;

                  (e) Each Premium Receivable does not (and did not at the time
         of origination) contravene any federal, state or local laws, rules or
         regulations applicable thereto or contract between Seller and FPF
         applicable thereto, and no party to any such contract is in
         contravention of any such law, rule or regulation;

                  (f) Each Premium Receivable was originated in the United
         States of America by Seller or purchased by Seller from another premium
         finance company in the ordinary course of Seller's business of
         financing insurance premiums written through affiliated and independent
         insurance agents and brokers or insurance companies directly, in either
         case, through the application of and consistent with Seller's standard
         procedures in a fashion not less stringent taken as a whole than those
         other Premium Receivables owned by Seller;

                  (g) Each Premium Receivable is payable in U.S. Dollars by an
         Obligor who at time of policy origination is located within the United
         States of America;

                                       10
<PAGE>

                  (h) Each Premium Receivable is evidenced by only one original
         contract, in the form of a Premium Finance Agreement, properly
         completed and executed without variations, with notation of the Sale to
         FPF, on or before the Sale of such Premium Receivable;

                  (i) Each Premium Receivable provides, according to its
         original or modified terms, that the amount payable thereunder will be
         paid in consecutive equal monthly payments that fully amortize such
         Premium Receivable by its stated terms and which amount will be paid in
         a maximum of eleven (11) payments (if financing an annual policy), and
         a maximum of five (5) payments (if financing a six-month policy) with
         the first payment due not later than 31 days following the inception
         date of the related insurance policy;

                  (j) Each Premium Receivable relates to an insurance policy
         issued by an Eligible Insurance Company;

                  (k) Each Premium Receivable relates to an insurance policy for
         which the insured has paid a down payment amount of not less than the
         Down Payment Requirement;

                  (l) Each Premium Receivable is evidenced by proof of payment
         to the Issuing Insurance Company or its designated general Agent equal
         to an amount not less than the original principal amount of such
         Premium Receivable and the related down payment due under the Premium
         Finance Agreement has been paid in full by, or on behalf of, the
         related Obligor;

                  (m) The information and related documents regarding the
         Premium Receivables being Sold to FPF is true and correct in all
         material respects as of the opening of business on the date of Sale and
         no selection procedures believed to be adverse to FPF have been
         utilized in selecting the Premium Receivables for inclusion therein;

                  (n) Except for Premium Receivables Sold on the Effective Date,
         no Premium Receivable or related Premium Finance Agreement has been
         satisfied, terminated or is more than 30 days past due or is subject to
         a right of rescission, setoff, counterclaim, subordination, recoupment
         or defense which has been asserted or threatened with respect to such
         Premium Receivable nor have the Realization Provisions securing such
         Premium Receivable been released from the Lien granted by the Obligor;

                  (o) Except for assignments or pledges to lenders who have
         provided financing to Seller and which assignments and pledges have
         been released prior to the Sale of the Premium Receivables to FPF, no
         Premium Receivable has been Sold or pledged by Seller to any Person
         other than FPF; immediately prior to any Sale contemplated by this
         Agreement Seller had good title to the Premium Receivable sold to FPF
         free and clear of all Liens and, immediately upon any Sale of the
         Premium Receivables contemplated by this Agreement, FPF will have good
         title to the Premium Receivables Sold to FPF free and clear of all
         Liens;

                  (p) No Premium Receivable has terms which have been extended
         or modified other than through Allowable Endorsement Additions, the
         originals of which have been included in the Premium Finance Agreement
         loan documents delivered to FPF;

                  (q) No Premium Receivable has any Liens or claims which have
         been filed or claims that would be Liens prior to or equal to the
         Realization Provisions granted by the Obligor pursuant to such Premium
         Receivable;

                  (r) At the time of Sale of any Premium Receivable which
         finances a commercial line insurance policy, to the best of Seller's
         knowledge, the Obligor with respect to such Premium Receivable is not
         subject to any bankruptcy or insolvency proceeding;

                  (s) No Premium Receivable relates to an insurance policy which
         is deemed fully earned in the

                                       11
<PAGE>

         case of a claim;

                  (t) No Premium Receivable has been originated by a Prohibited
         Agent; and

                  (u) No Premium Receivable has been originated in, nor is
         subject to the laws of, any jurisdiction under which the Sale of such
         Premium Receivable would be unlawful, void or voidable.

         The foregoing and any additional representations, warranties and
covenants contained in this Agreement shall be continuing in nature and shall
survive the termination of this Agreement.

         Section 12. Additional Covenants of Seller. During the Term of this
Agreement,

                  (a) Seller shall at its expense cause all Uniform Commercial
         Code termination statements, satisfactions, releases or partial
         releases, as the case may be, with respect to Liens on the Conveyed
         Property to be filed on the date of Sale of the Conveyed Property.

                  (b) Seller shall cause all Uniform Commercial Code financing
         statements, continuation statements and any other documents, reasonably
         requested by FPF, establishing the right, title and interest of FPF, to
         and under the Conveyed Property, to be promptly executed and filed by
         Seller, and shall deliver to FPF or its designee file-stamped, complete
         copies of, or filing receipts for, any document recorded, registered or
         filed as provided above, as soon as available but in any event not
         later than thirty (30) days following such recordation, registration or
         filing.

                  (c) At least thirty (30) days prior to Seller making any
         change in its name, identity or organizational structure which would
         make any termination statement, financing statement or continuation
         statement filed by FPF or Seller seriously misleading within the
         applicable provisions of the Uniform Commercial Code or any title
         statute, Seller shall give FPF notice of any such change and shall
         execute and file such financing statements or amendments as may be
         necessary or reasonably required by FPF to continue the perfection of
         the respective interests of FPF in the Conveyed Property.

                  (d) Except for the Sale to FPF of the Conveyed Property and
         Liens granted or caused by FPF in such Conveyed Property, Seller shall
         not Sell to any other Person, or grant, incur, assume or suffer to
         exist any Lien on such Conveyed Property or on any interest therein,
         and Seller shall defend the right, title and interest of FPF in, to and
         under such Conveyed Property against all claims of third parties
         claiming through or under Seller.

                  (e) Seller shall not impair FPF's right, title and interest
         in, to and under any of the Conveyed Property.

                  (f) Seller shall maintain Tangible Net Worth of not less than
         the amount set forth in Schedule A attached hereto.

                  (g) Seller shall furnish to FPF:

                             (i) within forty-five (45) days after the end of
                  each of the first three fiscal quarters of Seller (commencing
                  with the first fiscal quarter ending after the date hereof) an
                  unaudited balance sheet and income statement (prepared in
                  accordance with GAAP without accompanying notes) for Seller
                  and its subsidiaries and any affiliated Insurance companies
                  covering the preceding quarter, in each case certified by the
                  president or principal financial officer of Seller to be true,
                  accurate and complete copies of such financial statements;

                            (ii) on the earlier of (A) ninety (90) days after
                  the end of each fiscal year of Seller beginning at the end of
                  the first fiscal year after the date hereof or (B) if
                  financial statements are

                                       12
<PAGE>

                  prepared by an Independent Public Accountant, fifteen (15)
                  days after delivery by an Independent Public Accountant, a
                  balance sheet and income statement (prepared in accordance
                  with GAAP) for Seller and its subsidiaries and any affiliated
                  Insurance companies covering the preceding fiscal year, in
                  each case certified by the president or principal financial
                  officer of Seller to be true, accurate and complete copies of
                  such financial statements;

                           (iii) such other information respecting the condition
                  or operations, financial or otherwise, of Seller, any of its
                  subsidiaries and any Guarantor as FPF may from time to time
                  reasonably request; and

                            (iv) prompt notice to FPF (but in no event more than
                  three (3) Business Days following) of any Material Adverse
                  Change.

                  (h)      Seller shall provide prompt written notice to FPF if:

                           (i) Seller ceases to be managed and controlled by the
                  Person or Persons who manage and control Seller as of the date
                  of this Agreement;

                           (ii) any such Person which is a corporation,
                  partnership, trust or other entity is dissolved or liquidated
                  or merged with or into any other Person or for any period of
                  more than ten (10) days ceases to exist in its present form
                  and (where applicable) in good standing and duly qualified
                  under the laws of the jurisdiction of its incorporation or
                  formation and any jurisdiction in which such standing or
                  qualification is necessary or advisable in connection with the
                  conduct of business; or

                           (iii) Seller commences a sale of all or substantially
                  all of its assets, except for the Sale of Conveyed Property by
                  Seller to FPF under this Agreement and any related documents.

                  (i) Seller shall not dissolve or liquidate in whole or in
         part.

                  (j) Seller shall not voluntarily institute any proceedings to
         adjudicate Seller or any of its Affiliates bankrupt or insolvent,
         consent to the institution of bankruptcy or insolvency proceedings
         against Seller or any of its Affiliates, file a petition seeking or
         consenting to reorganization or relief under any applicable federal or
         state law relating to bankruptcy, consent to the appointment of a
         receiver, liquidator, assignee, trustee (or other similar official) of
         Seller or any of its Affiliates or a substantial part of its or their
         property or admit its or their inability to pay its or their debts
         generally as they become due or authorize any of the foregoing to be
         done or taken on behalf of Seller or any of its Affiliates.

                  (k) Seller shall maintain at its own expense, a blanket
         fidelity bond or an errors and omissions insurance policy, in form and
         content and in amounts acceptable to FPF and naming FPF as an
         additional loss payee or beneficiary thereunder.

                  (l) Seller shall comply with all Additional Provisions set
         forth in Schedule A, if any.

         Section 13. Taxes. Seller shall pay when due all present and future
income taxes, withholding taxes, worker's compensation premiums, sales taxes,
use taxes, excise taxes, personal property taxes and all assessments and other
amounts levied by or required to be paid to any governmental or
quasi-governmental authority and pertaining to Seller, its business operations,
its assets or the Conveyed Property (except for FPF's income taxes) and provide
FPF with written proof of such payment upon the request of the latter party.

         Section 14. Further Assurances and Substituted Performance. Seller
shall take or cause any third party to take any actions and execute or cause any
third party to execute any additional documents (including, but not limited to,
Uniform Commercial Code filings) deemed necessary or desirable by FPF to carry
out the intent or purposes of this

                                       13
<PAGE>

Agreement and any related documents. FPF shall be entitled, but not required, to
take any action and execute any document that was required to be, but not, taken
or executed by Seller under this Agreement and any related documents. This power
is coupled with an interest and is irrevocable. Upon demand, Seller shall
reimburse FPF for any amounts, attorneys' fees, expenses and costs paid by FPF
in connection with such actions together with interest thereon at the Interest
Rate from the date of payment until the date of reimbursement. No action taken
by FPF shall be deemed to relieve Seller's obligation to take such action or
cure Seller's default under this Agreement.

         Section 15. Indemnification. Seller shall indemnify and hold FPF and
its Affiliates harmless from all claims, defenses, offsets, counterclaims, loss,
costs, damages, liabilities, causes of action, actions and suits (including, but
not limited to, attorneys' fees, expenses and costs) arising from (i) Seller's
breach of any representation, warranty or covenant contained in this Agreement
or any related documents, (ii) the unauthorized use of drafts provided by FPF to
Seller for the funding of Premium Finance Agreements, or (iii) the failure of
the Premium Receivables Sold hereunder to be originated in compliance with all
requirements of law. These indemnity provisions are in addition to any other
obligations that the Seller may otherwise have hereunder and shall survive the
termination of this Agreement.

         Section 16. Default. Seller shall be deemed in default (a "Default")
under this Agreement upon the occurrence of any one or more of the following:

                  (a) Seller fails to pay any indebtedness, fails to perform any
         obligation, or breaches any covenant, representation or warranty (other
         than a breach of any representation or warranty under Section 11 of
         this Agreement) to FPF under this Agreement and/or any related
         documents and any other present or future agreement with FPF;

                  (b) Seller breaches any representation or warranty by Seller
         under Section 11 of this Agreement pertaining to Conveyed Property and
         Seller fails to repurchase such Conveyed Property within five (5)
         Business Days from the date of written notification by FPF of such
         breach in accordance with the terms and conditions of Section 6 of this
         Agreement;

                  (c) Seller defaults under any of the Existing Documents

                  (d) Seller permits the entry or service of any garnishment,
         judgment, tax levy, attachment or lien against it or any of its
         property;

                  (e) Seller or any Guarantor becomes insolvent or unable to pay
         its debts in a timely manner;

                  (f) Seller or any Guarantor makes a general assignment for the
         benefit of its creditors, a receiver or trustee is appointed for all or
         a substantial portion of Seller's or Guarantor's respective assets, or
         a bankruptcy, insolvency, liquidation or reorganization proceeding is
         commenced by or against Seller or Guarantor in any state or federal
         court;

                  (g) Seller challenges the validity of the true Sale of the
         Premium Receivables hereunder or the priority, validity or
         enforceability of any ownership interest granted by Seller in the
         Conveyed Property to FPF;

                  (h) Seller ceases to operate its business, or is dissolved or
         terminated for any reason;

                  (i) Any Guarantor dies or any Guarantor fails to perform any
         obligation to FPF under this Agreement or challenges the validity of
         its guaranty provision of this Agreement or provides FPF with notice of
         its intent to terminate any guaranty provision of this Agreement to FPF
         or its future obligations under such guaranty provisions for any
         reason; or

                  (j) FPF, in good faith, believes that Seller's or any
         Guarantor's ability to pay and perform any of the obligations described
         in this Agreement or any related documents is or shall be impaired or
         otherwise deems itself insecure for any reason and provides written
         notice thereof to Seller, or;

                                       14
<PAGE>

                  (k) An event of default by the Servicer under the provisions
         of the Servicing Agreement.

         Section 17. Remedies. In the event of Seller's default under this
Agreement, FPF may exercise one or more of the following cumulative remedies
without notice or demand of any kind:

                  (a) terminate immediately any of its remaining obligations
         under this Agreement;

                  (b) collect all amounts due from Seller to FPF under this
         Agreement or any other agreement, together with interest thereon at the
         Default Rate until paid, with or without resorting to legal process;

                  (c) in the event FPF terminates this Agreement, collect, in
         addition to the amounts set forth in (b) above, liquidated damages in
         the amount of the maximum Termination Fee that would be collectible in
         the event of termination hereunder, it being agreed by the parties that
         damages would be difficult to assess under this Agreement and that
         liquidated damages in addition to collection of the amounts set forth
         in (b) above shall be due to FPF to compensate FPF for the default by
         Seller or any Guarantor and the termination of this Agreement by FPF as
         a result thereof;

                  (d) change Seller's mailing address, and as it relates to the
         Conveyed Properly only, open Seller's mail, endorse Seller's name on
         checks, bills of exchange, notes, acceptances, money orders, drafts or
         other documents or forms of payment and retain any proceeds of the
         Conveyed Property;

                  (e) terminate any Servicing Agreement or lock box agreement
         pertaining to the Conveyed Property and change such servicers and lock
         box arrangements;

                  (f) notify Obligors to make payment on Premium Receivables
         Sold under this Agreement to FPF or its designee;

                  (g) enter Seller or any Affiliate's premises during normal
         business hours and take possession of any Conveyed Property;

                  (h) require Seller, at its expense, to deliver and make
         available to FPF any Conveyed Property Sold to FPF at a place
         reasonably convenient to FPF;

                  (i) commence a suit for the turnover or replevin of the
         Conveyed Property;

                  (j) collect, compromise, settle, sell or otherwise dispose of
         any Conveyed Property that Seller was required to, but did not,
         repurchase from FPF;

                  (k) set-off Seller's and any Guarantor's obligations owing to
         FPF under this Agreement, any other written agreement or by operation
         of law against any amounts owed by FPF to such Persons under this
         Agreement or any related documents, respectively, including, but not
         limited to, moneys, instruments and other property deposited or
         maintained with FPF or any third party for the benefit of FPF; and

                  (l) exercise all other rights available to FPF under any other
         present or future agreement or applicable law.

         FPF's rights and remedies are cumulative and may be exercised together,
separately and in any order.

         Section 18. Waiver. FPF shall not be deemed to have waived any right or
remedy described in this Agreement unless FPF has executed and delivered to
Seller a written waiver thereof. A waiver of a right or remedy on one occasion
shall not act as a waiver of that or any other right or remedy on a future
occasion. Without limiting the foregoing, FPF's delay in exercising any right or
remedy shall not constitute a waiver of that or any other right or remedy
described in this Agreement.

                                       15
<PAGE>

         Section 19. Counterparts/Facsimiles. This Agreement may be executed by
facsimile signature and in one or more counterparts, each of which when taken
together shall constitute one complete Agreement.

         Section 20. Essence of Time. Seller and FPF agree that time is of the
essence.

         Section 21. Assignment. FPF shall be entitled to assign or grant a Lien
on its interests hereunder, and the obligations, rights and remedies under this
Agreement to any Person in its sole discretion. Such Persons shall be deemed to
be third party beneficiaries hereunder and shall be entitled to rely on the
provisions hereof for the benefit of FPF including, without limitation, the
indemnification provisions of Section 15. Any assignee or designee of FPF shall
be entitled to enforce the provisions of this Agreement against Seller. Seller
shall not be entitled to assign or grant a security interest in any of its
obligations, rights or remedies under this Agreement to any Person without the
prior written consent of FPF, or its assignees or designees, which consent may
be withheld in the sole discretion of FPF. No person shall be deemed a third
party beneficiary of Seller.

         Section 22. Standard of Care. FPF shall not be liable to Seller for any
action taken or not taken by FPF in good faith in connection with this
Agreement. FPF shall not be deemed a fiduciary of Seller or be required to
perform any of Seller's obligations to FPF or any third party under any
circumstances.

         Section 23.  Costs and Expenses/Attorneys Fees.

                  (a) Seller shall pay all costs and expenses incident to the
         performance of its obligations under this Agreement;

                  (b) Seller shall pay on demand FPF's attorneys' fees and other
         costs and expenses incurred before trial, at trial and on appeal in the
         enforcement (whether through negotiations, legal proceedings or
         otherwise) of this Agreement, including without limitation, all costs,
         expenses and attorneys fees incurred by FPF in connection with any
         bankruptcy or insolvency proceeding involving the Seller.

         Section 24. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered personally
or mailed by first-class registered and certified mail, postage prepaid, or by
telephonic facsimile transmission, electronic mail or overnight delivery
service, postage prepaid, to the parties at the following addresses or such
other addresses that they may provide each other with written notice of in the
future:

         If to Seller:              Federated Premium Finance, Inc.
                                    4161 NW 5th Street
                                    Plantation, Florida  33317
                                    Attn: Chief Executive Officer
                                    Facsimile: (954) 584-5330

         If to FPF, Inc.:           600 Seventeenth Street, Suite 1900S
                                    Denver, Colorado 80202
                                    Attn:  Chief Executive Officer
                                    Facsimile: (303) 571-1811

Such notices shall be effective upon the earlier of (i) receipt or (ii) two (2)
Business Days after the confirmed delivery by overnight delivery service.

         Section 25. Successors and Assigns. Except as provided in Section 21
hereof limiting assignments by Seller, this Agreement shall inure to the benefit
of and be binding upon the successors, assigns, trustees, receivers, heirs and
personal representatives of the parties hereto.

                                       16
<PAGE>

         Section 26. Severability. Any part, provision, agreement,
representation, warranty or covenant of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties waive any provision of law which
prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, agreement, representation, warranty or
covenant of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate in good
faith to develop a structure the economic effect of which is as nearly as
possible the same as the economic effect of the transactions contemplated
hereunder without regard to such invalidity.

         Section 27. Force Majeure. Neither party shall be liable for damages
due to delay or failure to perform any obligation under this Agreement if such
delay or failure results directly or indirectly from circumstances beyond the
control of such party. Such circumstances shall include, but shall not be
limited to, acts of God, acts of war, civil commotions, riots, strikes,
lockouts, acts of the government, disruption of telecommunications transmissions
accident, fire, water damages, flood, earthquake or other natural catastrophes.

         Section 28. Governing Law. THIS AGREEMENT AND ANY RELATED DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF
THE STATE OF COLORADO WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS.

         Section 29. Jurisdiction and Waiver of Certain Damages. THE PARTIES
HERETO HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF COLORADO AND THE UNITED STATES DISTRICT COURT OF COLORADO IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
PARTIES HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS. THE PARTIES HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING AND
IRREVOCABLY CONSENT TO THE SERVICE OF ANY SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS BY THE MAILING OF COPIES OF SUCH PROCESS TO THEM AT THEIR RESPECTIVE
ADDRESSES AS SPECIFIED IN THIS AGREEMENT. THE PARTIES HEREBY AGREE THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF FPF TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR PRECLUDE THE ENFORCEMENT
OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION
UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR
JURISDICTION. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, NO CLAIM MAY BE MADE BY THE SELLER AGAINST FPF OR ANY OF ITS
AFFILIATES FOR ANY LOST PROFITS, OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL
DAMAGES IN RESPECT TO ANY BREACH OR WRONGFUL CONDUCT (OTHER THAN WILLFUL
MISCONDUCT CONSTITUTING FRAUD) ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREUNDER.

         Section 30. Entire Agreement. This Agreement (including any Servicing
Agreement between Seller and FPF ) contains the complete and integrated
understanding and agreement between the parties and their respective Affiliates
pertaining to the subject matter hereof, and all other prior and contemporaneous
discussions, negotiations, agreements and proposal letters, written or oral,
express or implied shall be of no force and effect.

         Section 31. Waiver of Jury Trial. EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

                                       17
<PAGE>

                            [SIGNATURE PAGE FOLLOWS]

                                       18
<PAGE>

         IN WITNESS WHEREOF, the undersigned duly authorized officers of the
parties have executed this Agreement as of the day first stated above.

                                      FEDERATED PREMIUM FINANCE, INC:

                                      By:      /s/ Stephen C. Young
                                               -------------------------------
                                      Name:        Stephen C. Young
                                               -------------------------------
                                      Title:       President
                                               -------------------------------

                                      FPF, INC.

                                      By:      /s/ Bruce  I. Lundy
                                               -------------------------------
                                      Name:        Bruce I. Lundy
                                               -------------------------------
                                      Title:       President
                                               -------------------------------

AGREED TO WITH RESPECT TO SECTION 6(b):

21ST CENTURY HOLDINGS CORP.

By:      /s/ Edward J. Lawson
         -----------------------------------------
Name:        Edward J. Lawson
         -----------------------------------------
Title:       President
         -----------------------------------------

                                       19
<PAGE>

                                   Schedule A
                                   ----------

This Schedule A forms a part of the Sale and Assignment Agreement ("Agreement")
to which it is attached and is incorporated therein.

         Section A-1. Definitions. The following definitions shall have the
following meanings:

         "Additional Charges" shall mean for amounts advanced by FPF, which are
determined by FPF to be ineligible upon Default, the sum (a) the additional
interest due for amounts advanced by FPF, which are determined by FPF to be
ineligible upon Default, equal to the FPF Principal Balance multiplied by the
difference between the Default Rate and the Interest Rate, (b) all other
expenses due from the Seller under this Agreement, (c) the Termination Fee, as
applicable, (d) repurchase obligations, if any, under Section 6 of this
Agreement and (e) the costs and expenses set forth in Section 23 of this
Agreement.

         "Advance Rate" Federated will be eligible to receive advances equal to
the LOWER of 92.50% of each Eligible Premium Receivable principal balance, or an
Eligible Premium Receivable principal balance less the Reserves applicable to
such Eligible Premium Receivable. Advances will be available as frequently as
daily.

         "Capital Charge" shall mean the sum of:

                  (a)      The FPF Principal Balance multiplied by 1/360th of
                           the Interest Rate, plus;

                  (b)      Any unpaid Capital Charge due for any prior day or
                           accounting period, plus;

                  (c)      The Commitment Fee, plus

                  (d)      Additional Charges.

         "Closing and Due Diligence Fee" Federated shall pay FPF a due diligence
fee of $7,500; $2,500 of which has been previously paid and $5,000 due at the
time of closing.

         "Commitment Fee" means a commitment fee payable by FPF to the Lender in
accordance with Section 1.03(b) of the Revolving Loan Agreement in an amount
equal to the product of (a) the Unused Portion and (b) (i) if such Unused
Portion is equal to or greater than 0.25% of the Maximum Funding Commitment,
0.25% per annum and (ii) if such Unused Portion is less than 0.25% of the
Maximum Funding Commitment, 0% per annum. No Commitment Fee shall be due and
owed for the first 180 days following the effective date.

         "Default Rate shall be the higher of 18% or Prime + 10.0%.

         "Guarantor" means, 21st Century Holding Corp. whose addresses is 4161
NW 5th Street, Plantation, FL 33317.

                                       20
<PAGE>

         "Interest Rate" A floating rate of interest equal to the Prime Rate
plus a spread ("Spread") determined as follows:

         Low Rated Insurance Company Ratio        Resulting Spread Over Prime
         ---------------------------------        ---------------------------

         15.0% or less                                       1.25%

         Above 15.0% and Below 25.0%                         1.50%

         Above 25.0% and Below 50.0%                         1.75%

         Above 50.0% and Below 65.0%                         2.00%

         Above 65.0%                                         2.75%

         The Low Rated Insurance Company Ratio shall be calculated by FPF not
later than three (3) business days prior to the end of each calendar month, and
the applicable ratio shall apply for the next month immediately following the
date of calculation. The Low Rated Insurance Company Ratio and resulting spread
over Prime shall be communicated to Seller by notice via mail, overnight
delivery, facsimile, or other electronic means.

         "Maximum Purchase Commitment" Flatiron will provide a continuous
funding facility in a maximum outstanding amount equal to $7,000,000 (the
"Maximum Funding Commitment"). The Maximum Funding Commitment may be increased
at the sole discretion of Flatiron, upon the request and consent of Federated.

         "Minimum Yield Trigger" shall mean, for any monthly period, the failure
of FPF to receive payment in full of the Capital Charge.

         "Parity Shortfall" means for each Premium Receivable (including each
Premium Receivable in any current Sale), the amount by which the outstanding
principal balance of the applicable Premium Finance Agreement exceeds the
expected return premium due from the Issuing Insurance Company in the actual or
prospective event of a cancellation of such Premium Receivable. If the expected
return premium due from the Issuing Insurance Company exceeds such outstanding
principal balance, then no parity shortfall exists.

         "Parity Shortfall Amount" means for all outstanding Premium
Receivables, the sum of (a) for Cancelled Premium Receivables, the total Parity
Shortfall on such Cancelled Premium Receivables, plus (b) for all other Premium
Receivables not in a cancelled status, the total Parity Shortfall for such
Premium Receivables calculated as if the next payment due date is missed, times
125% of the projected lifetime Static Pool Cancellation Rate for the portfolio
of Premium Receivables as determined by FPF, plus (c) the outstanding principal
balance of all Defaulted Premium Receivables.

         "Prime Rate" shall be the rate published in the Money Section of The
Wall Street Journal. If more than one rate is published, then the highest rate
published shall apply. For any day The Wall Street Journal

                                       21
<PAGE>

is not published, the previous published rate shall apply.

         "Purchase Premium" shall be equal to the Collections (but not including
any unearned commissions from Agents) due the Seller as provided herein.
Collections shall be allocated in the following order:

                  (a) Principal payments received shall be allocated to FPF
         until the FPF Principal Balance is reduced to zero.

                  (b) FPF shall retain all Collections until the unpaid Capital
         Charge is paid in full.

                  (c) If Seller is in Default, then FPF shall retain all
         Collections until all amounts payable to FPF pursuant to Section 17 of
         this Agreement are paid in full.

                  (e) Remaining Collections, if any, will be paid to the Seller
         as a Purchase Premium.

         "Repurchase Price" means (a) the lesser of (i) the Up-front Purchase
Price paid to Seller by FPF for the Premium Receivables and other related
Conveyed Property or (ii) the current outstanding balance due on the Premium
Receivable at the time of repurchase under the applicable Premium Finance
Agreement(s) with respect to the Repurchase Property, plus (b) interest on the
amount payable by Seller to FPF under (a) above at the Interest Rate from the
date that FPF advanced funds to purchase the Premium Receivables and other
related Conveyed Property to the date of payment by Seller of the Repurchase
Price reduced by any payments previously received by FPF and allocated to
interest, plus (c) the Purchase Premium paid to Seller, if any.

         "Reserve Percentage" means for all outstanding Premium Receivables
(including each Premium Receivable in any current Sale) the percentage resulting
from dividing (a) the total Parity Shortfall Amount plus the total outstanding
principal balance of Premium Receivables in excess of the FPF Concentration
Limits plus the outstanding principal balance or Premium Receivables not
received by FPF pursuant to Section 2(d); by (b) the outstanding principal
balance of all Eligible Premium Receivables at the time of calculation.

         "Rule of 78's" means the method by which interest income will be
allocated on Premium Receivable payments and calculated for any payment as a
fraction, the numerator being the number of payments or days remaining under the
original payment schedule for such Premium Receivable and the denominator being
the sum of the digits for the number of all scheduled payments or days
remaining. Example: A 10 monthly payment receivable will recognize 10/55ths of
the total expected lifetime interest in month one and 9/55ths of the total
interest in month two and so forth.

         "Static Pool Cancellation Rate" means for each monthly period, the
percentage resulting from dividing (a) the total number of Premium Receivables
Sold in such month that are or become Cancelled Premium Receivables, by (b) the
total number of Premium Receivables Sold in such month. EXAMPLE: 100 Premium
Receivables are originated in January 2001 and in a calculation on July 30,
2001, 32 of these January Originated Premium Receivables had been cancelled
since their origination. The Static Pool Cancellation Rate for such January 2001
Premium Receivables would be 32% as of July 30, 2001.

         "Static Pool Cancellation Rate Trigger" shall be sixty percent (60%).

         "Tangible Net Worth Requirement" shall not be less than $2,000,000.

                                       22
<PAGE>

         "Term" means the Term of this Agreement commencing on the Effective
Date and, if not earlier terminated as provided in this Agreement, terminating
on September 30, 2004.

         "Termination Fee" shall be the amount shown in the following schedule
if Seller terminates this Agreement pursuant to Section 3:

------------------------------------ -------------------------------------------
         Date of Termination                Prepayment Penalty (as a % of
                                      Maximum Purchase Commitment then in effect
------------------------------------ -------------------------------------------
       Up to October 19, 2001                             0%
------------------------------------ -------------------------------------------
 October 20, 2001 - January 31, 2002                    0.25%
------------------------------------ -------------------------------------------
   February 1 - September 30, 2002                      1.50%
------------------------------------ -------------------------------------------
October 1, 2002 - September 30, 2003                    1.00%
------------------------------------ -------------------------------------------
   October 1, 2003 and Thereafter                         0%
------------------------------------ -------------------------------------------

         "Unused Portion" means, as of each day of calculation, an amount equal
to (a) the Maximum Purchase Commitment, less (b) the average FPF Principal
Balance during the period of calculation.

         "Up-front Purchase Price" shall mean the Amount Financed for all
outstanding Eligible Premium Receivables Sold by Seller to FPF multiplied by the
Advance Rate.

         Section A-2. Additional Provision. The following Additional Provisions
shall be a part of this Agreement.

                  A-2(i) . Identification of Collections. Collections shall be
         identified for application against each Premium Receivable balance and
         applied against the unpaid Premium Receivable balance as follows:

                  (1)      First, to any earned-at-writing Premium Finance
                           Agreement fees; then

                  (2)      Principal calculated in accordance with the
                           applicable amortization schedule; then

                  (3)      Interest or finance charge at the applicable annual
                           percentage rate determined in accordance with the
                           Rule of 78's (or determined as may otherwise be
                           required under applicable state law for the state in
                           which the Premium Receivables were originated); then

                  (4)      Any late fees, cancellation fees and other allowable
                           charges; then

                  (5)      From any remaining amounts, any amount required to be
                           paid to the Obligor as the insured party in
                           accordance with applicable state law governing the
                           Premium Receivables.

                                       23

<PAGE>

                                   Schedule B
                                   ----------

                              Concentration Limits

1. Cancelled Premium Receivables.

Canceled Premium Receivables for which all expected return premium has not been
received after being aged 120 days following the first missed due contract
payment date shall be limited to zero (-0-).

2.     Insurance Company Concentration Limits.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Insurance                                                 Eligible Premium
Companies                                              Receivable Advance Rate         Maximum % of Eligible
Concentration                  Insurance              per Eligible  Insurance         Contracts Outstanding
Limits and                     Company's                 Company (based on          (factored at Advance Rate)
Advance Rates:             A.M. Best Rating                Rating Category                  per Carrier
--------------             ----------------                ---------------                  -----------
<S>                         <C>                                <C>                           <C>
Admitted Insurance          "A-" or better                       100%                          no limit
Companies:
                                 "B++"                            95%                           50.0%

                                  "B+"                            85%                           40.0%

                                  "B"                             75%                           25.0%

                             "B-" or lower                        65%                          15.00%
                          (including any N.R.)

Non-Admitted                 "A-" or better                      100%                             15%
Companies
                                 "B++"                            85%                            7.5%

                               All Others                          0%                              0%

--------------------------------------------------------------------------------------------------------------
</TABLE>

         a) EXCEPTION FOR FEDERATED NATIONAL: So long as FNIC is rated "B" by
A.M. Best & Co. then FNIC shall be allowed a net amount of Eligible Portfolio
Balance (using a Company Advance Rate of 75%) of up to 40% of the Eligible
Balance of the Portfolio. If FNIC falls to a "B-" rating, then at such time the
applicable maximum concentration of 25% shall apply, and on the first day of the
month following such rating change, FNIC allowable concentration percentage will
reduce by 5.0% per month for the immediately following 3 months until a 25%
level is achieved.

If Federated rating falls to a A.M. Best & Co. "C" rating or lower (including
any "+" modification) and including any "N.R." rating designation, then
immediately following such rating change Federated will not be considered an
Eligible Insurance Company.

                                       B-1
<PAGE>

         b) Insurance Companies not eligible: Any company with (i) a "C" rating
(without regard to any "+" or "-"), (ii) any company declared insolvent or in
default by any regulatory basis, or (iii) any company which fails to pay return
premium due on a valid cancellation within 150 days of a cancel date, shall be
deemed an ineligible. The above definition shall also apply to FNIC and American
Vehicle Insurance Company ("AVIC").

         c) New Companies added to Portfolio: No Insurance Company which, at the
time of entry into the Portfolio, is rated "B" or less by A.M. Best & Co. shall
be eligible without the prior written approval of Flatiron. This requirement
shall not apply to any company which exists in the Federated Portfolio at time
of closing.

AVIC is approved to be added to the program, and will be subject to the
eligibility category, based on its rating (at any point in time) of A.M. Best.

                                       B-2

<PAGE>

                                   Schedule C
                                   ----------

                               Servicing Agreement

                                      C-1

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