Document:

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                                                                   EXHIBIT 10.36

                                   WRAP-AROUND

            MULTILINE QUOTA SHARE REINSURANCE AGREEMENT - VSC2004/73

         THIS AGREEMENT is made and entered into by and between VIRGINIA SURETY
COMPANY, INC., an Illinois corporation, (hereinafter called the "Company") of
the one part, and TOWER INSURANCE COMPANY OF NEW YORK (hereinafter called the
"Reinsurer") of the other part.

         The parties hereto agree as hereinbelow, in consideration of the mutual
covenants contained in the following Articles and upon the terms and conditions
set forth herein:
                                    ARTICLE I
COVERAGE

         The Company is obligated to cede to the Reinsurer, and the Reinsurer is
obligated to accept, a 100% quota share participation of the Company's net line
on each risk, in respect to any loss or losses occurring on all policies written
and all policies renewed in connection with the authority granted to the
Company's Agent under the Managing General Agency Agreement, reference number
VSC2004/72 with effective dates during the term of this Agreement and classified
by the Company as Multiple Line Program.

                                   ARTICLE II
LIABILITY

           The Reinsurer's liability will begin obligatorily and simultaneously
with that of the Company and all reinsurance ceded hereunder will be subject to
the same terms, rates, conditions, interpretations, waivers, modifications, and
alterations as the respective policies of the Company insofar as they relate to
the business covered hereunder. The Reinsurer will be liable for all business
risks and security risks arising under this Agreement. Further, the obligations
of the Reinsurer will extend to any policy coverage required of the Company by
any legislative, regulatory, or judicial body. The intent of this Agreement
being that the Reinsurer will follow the fortunes of the Company on the policies
to which this Agreement applies.

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                                   ARTICLE III
TERM AND CANCELLATION

         This Agreement will apply to all liability of the Company associated
with all policies written and all policies renewed with effective dates during
the term of this Agreement. This Agreement will take effect on December 1, 2004,
12:01 a.m. standard time (as set forth in the Company's policies) and will
remain in force and effect for one (1) year expiring on December 31, 2005,12:00
p.m. standard time.

         At the expiration of this Agreement, the Reinsurer will remain liable
for all policies in force until their natural expiration or renewal dates,
whichever come first.

         Either party may cancel this Agreement at any time by giving at least
thirty (30) days notice in writing via electronic, certified, or registered
mail, stating therein the date on which termination will become effective. If
the Reinsurer's participation is so canceled, it will remain liable for all
policies in force until their expiration, termination, or first anniversary
date, whichever comes first.

         Additionally, the Company may cancel the Reinsurer's participation
hereon immediately by giving notice in writing by electronic, certified, or
registered mail to the Reinsurer in the event of one of the following
circumstances:

         A.       The Reinsurer ceases underwriting operations;

         B.       The State Insurance Department, or other legal authority,
                  orders the Reinsurer to cease writing business;

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         C.       The Reinsurer has become insolvent or has been placed into
                  liquidation or receivership (whether voluntary or
                  involuntary), or there has been instituted against it
                  proceedings for the appointment of a receiver, liquidator,
                  rehabilitator, conservator, or trustee in bankruptcy, or other
                  agents known by whatever name, to take possession of its
                  assets or control of its operations;

         D.       The Reinsurer's surplus has been reduced by twenty percent
                  (20%) or the Reinsurer has lost any part of, or has reduced
                  its paid-up capital after the inception of this Agreement. As
                  of June 30, 2004, the Reinsurer's surplus was $34,675,000and
                  its paid-up capital is $23,230,000

         E.       The Reinsurer has merged with or has become acquired or
                  controlled by any company, corporation, or individual(s) not
                  controlling the Reinsurer's operations previously;

         F.       The Reinsurer has reinsured its entire liability under this
                  Agreement without the Company's prior written consent;

         G.       The Reinsurer is deemed by the Company as potentially unable
                  to meet its financial obligations under this Agreement due to
                  three or more of its NAIC IRIS ratio tests falling outside the
                  normal range as determined by the NAIC;

         H.       The Reinsurer's A.M. Best rating is downgraded after the
                  inception of this Agreement. As of June 30, 2004, the
                  Reinsurer's A.M. Best Rating was B++;

         I.       The Reinsurer's ratio of net premiums written to
                  policyholders' surplus exceeds three (3) to one (1).

                  If the Reinsurer's participation is so canceled, it will
                  remain liable for all policies in force until their
                  expiration, termination, or first anniversary date, whichever
                  comes first.

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         Alternatively, the Company may elect to cancel the Reinsurer's
liability on a cut-off basis as of the date of cancellation, and the Reinsurer
will not be liable for any losses occurring on or after the cancellation date
and will return immediately to the Company any unearned reinsurance premium as
of that date, computed on a monthly pro rata basis.

         During any such aforementioned period of notice, the Reinsurer will
remain bound by the terms of this Agreement.

         Notwithstanding the other provisions in this Article, in the event the
Company's policies are written in a jurisdiction where cancellation, renewal, or
nonrenewal is regulated by the insurance authorities, and the Company is bound
for a period longer than the original policy period by such regulations and
statutes of said jurisdiction or by a judicial decision, the Reinsurer will
remain liable for any such policies in force at the expiration or cancellation
date of this Agreement until the date each expires or until the first renewal
date when the Company can lawfully nonrenew said policies, whichever occurs
first.

         Should this Agreement expire or be canceled while a loss is in
progress, the Reinsurer will be responsible for its proportion of the entire
loss or damage caused by such loss, subject to the other conditions of this
Agreement.

         Notwithstanding the expiration or cancellation of this Agreement as
hereinabove provided, the provisions of this Agreement will continue to apply to
all obligations and liabilities of the parties incurred hereunder to the end
that all such obligations and liabilities will be fully performed and
discharged.

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                                   ARTICLE IV
TERRITORY

         The territorial scope of this Agreement will follow that of the
Company's policies.

                                    ARTICLE V
DEFINITIONS

         The following terms, wherever used in this Agreement, will have the
meanings set forth in this Article, and will be deemed to refer to the singular
or plural as the context requires:

         "Business risk" means any liability of the Company in connection with
the policies reinsured hereunder which is not included in loss, loss expense and
security risk as defined in this Article.

         "Coverage dispute expense" means all expenses (including, but not
limited to, attorneys' fees, arbitration costs, and court costs) the Company has
paid, or has become liable to pay, in connection with any coverage disputes
regarding the policies, including, but not limited to, declaratory judgment
actions and arbitration proceedings brought to determine the Company's
obligations attributable to the policies. Coverage dispute expense will be
deemed to have been incurred by the Company on the date the loss was suffered,
or allegedly suffered, under the policy.

         "Gross written premium" means all the written premium of the Company
for the classes of business reinsured hereunder, less returned premium and
cancellations.

         "Loss" means the amount paid by the Company, or for which the Company
has become liable to pay, under the policies reinsured hereunder (including, but
not limited to, amounts in settlement of claims and suits and in satisfaction of
judgments, and interest accrued prior to final judgment if such interest is
included as part of loss under the policies reinsured hereunder) after the
deduction of all recoveries, salvages, subrogation and recovered inuring
reinsurance. Loss will include 100% of any Extra Contractual Obligations and/or
100% of any Excess Limits Liability. Loss will not include loss expense unless
loss expense is included within the limit of liability of policies reinsured
hereunder.

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         "Loss expense" means all expenses paid by the Company, or for which the
Company has become liable to pay, in the investigation, appraisal, adjustment,
settlement, litigation, appeal, and/or defense of claims under the policies
reinsured hereunder (including, but not limited to: Steven G. Fauth fees in
accordance with the fee structure set forth in Exhibit D of the Managing General
Agency Agreement, reference number VSC2004/72, in-house adjusters, defense
attorneys and other claims personnel of Tower Claims Services (TCS, court costs;
interest accrued prior to and after final judgment; and salaries and expenses of
employees of the Company who have been diverted from their normal and customary
duties and assigned to the handling of claims on policies reinsured hereunder if
Agent is unable to perform its duties in accordance with the Managing General
Agency Agreement, reference number VSC2004/72). Loss expense will also include
coverage dispute expense and monitoring expense. The Reinsurer will bear all
loss expense in addition to its liability hereunder unless such loss expense is
included as part of loss under the policies and will benefit accordingly in all
salvages, subrogation, discounts, and other recoveries. Loss expense excludes
internal office expenses, salaries, per diem, and other remuneration of Company
employees who have not been diverted from their normal and customary duties and
assigned to the handling of claims on policies reinsured hereunder this
Agreement.

         "Monitoring expense" means all expenses the Company has paid, or has
become liable to pay, in connection with claims under this Agreement, including,
but not limited to, attorneys' fees and all other legal expenses, when such
expenses were incurred by directly assisting in the handling of claims or by
acting in a supervisory, reviewing, or advisory capacity. Monitoring expense
will be deemed to have been incurred by the Company on the date the loss was
suffered, or allegedly suffered, under the policy.

         "Net line" will mean the gross loss and loss adjustment expense
applicable to each policy reinsured hereunder as specified in the Coverage
Article, less all collected reinsurance recoverable under treaty and facultative
reinsurance agreements applicable to such policies plus any business risk and
security risk.

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         "Net written premium" means the gross written premium of the Company
for the policies reinsured hereunder as specified in the Coverage Article, less
premium for other treaty and facultative reinsurance agreements.

         "Policy" means each policy, contract, binder, endorsement, certificate,
agreement or evidence of insurance, whether written or oral.

         "Security risk" means amounts not recovered by the Company under other
treaty or facultative reinsurance agreements applicable to policies reinsured
hereunder. Treaty and facultative reinsurance agreements applicable to policies
reinsured hereunder are set forth in Exhibit A attached hereto.

                                   ARTICLE VI
REINSURANCE PREMIUM

         The Agent on behalf of the Company will pay the Reinsurer 2% of the
collected gross written premium within 30 days after the close of each month.

         The Agent on behalf of the Company will collect and remit to the
Company taxes, fees and assessments imposed by law or regulation which are
billed directly to insureds (hereinafter "insured paid assessments"). Such
insured paid assessments shall be paid 100% to the Company on a monthly basis,
30 days after the close of each month.

          In addition, the Company shall pay the Reinsurer any interest income
earned under the terms of the Multiple Line Quota Share Reinsurance Agreement,
AR15935 (attached as Exhibit A).

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                                   ARTICLE VII
REPORTS
         Within thirty (30) days after the close of each month, the Agent on
behalf of the Company will furnish the Reinsurer with a report detailing the
gross written premium, net written premium, losses and loss expense paid, losses
and loss expense outstanding, monies recovered and reserves for incurred but not
reported losses (IBNR). The Company and the Reinsurer will use these reports to
determine the funding required in Article IX - Trust Account.

                                  ARTICLE VIII
TRUST ACCOUNT

         If one of the events as defined in this Article occurs, the Reinsurer,
the Company, and a qualified financial institution acting as trustee thereunder
will immediately enter into a Trust Agreement under which the Reinsurer will
create a Trust Account for the benefit of the Company and will deposit the funds
equal to its obligations as defined in this Article into the Trust Account
WITHIN FIVE WORKING DAYS AFTER THE REINSURER IS REQUESTED TO DO SO BY THE
COMPANY. Trust Account means the funds and other assets held by the trustee from
time to time under the Trust Agreement. The Trust Agreement will comply with,
and the financial institution acting as trustee thereunder will be qualified to
act as trustee pursuant to, the applicable laws and regulations of Illinois and
New York, and those of each other applicable jurisdiction.

         Assets deposited in the Trust Account shall consist only of (i) cash
(United States legal tender), (ii) direct obligations of the United States or of
any agency or instrumentality of the United States, or in certificates of
deposit issued by a financial institution organized under the laws of the United
States or any state to the extent guaranteed or insured as to the payment of
principal and interest, or to the payment of principal only, by the United
States or an agency or instrumentality of the United States, provided such
obligation or certificate of deposit shall have a maturity date of ten years or
less from the date of purchase; and (iii) other investments for which the
Company shall first have given its written consent (which may be given subject
to conditions) from among those which are eligible investments for the Company
pursuant to both Article VIII of the Illinois Insurance Code and Paragraphs (1),
(2), (3), (8) and (10) of subsection (a) of Section 1404 of the New York
Insurance Law; provided that such investments are issued by an institution that
is not the parent, subsidiary, or affiliate of either the Company or the
Reinsurer.

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         Notwithstanding any other provisions of this Agreement, the Company or
its successors in interest may draw upon the Trust Account at any time, without
diminution because of insolvency of the Company or of the Reinsurer, for one or
more of the following purposes only:

         A. To pay or reimburse the Company for the Reinsurer's share under this
         Agreement regarding: (i) any losses and loss expenses paid by the
         Company but not recovered from the Reinsurer; (ii) for unearned
         premiums due to the Company, if not otherwise paid by the Reinsurer in
         accordance with the terms of this Agreement (iii) for any reasonable
         expenses incurred by the Company if the Company is required to carry
         out the Agent's duties in accordance with the authority granted to the
         Agent under Managing General Agency Agreement, reference number
         VSC2004/72 (iv) or for any business risk as defined in this Agreement;

         B. To make payment to the Reinsurer of any amounts held in the Trust
         Account that exceeds one hundred and two percent (102%) of the actual
         amount required to fund the Reinsurer's entire obligations (as defined
         below) under this Agreement;

         C. Where the Company has received notification of termination of the
         Trust Account, and where the Reinsurer's entire obligations under this
         Agreement remain unliquidated and undischarged ten (10) days prior to
         such termination date, to withdraw amounts equal to such obligations
         and deposit such amounts in a separate account, in the name of the
         Company, in any United States bank or trust company, apart from its
         general assets, in trust for such uses and purposes as specified in
         subparagraphs A. and B. above as may remain executory after such
         withdrawal and for any period after such termination date. "Event" is
         defined as a loss that occurs to the company due to any policy issued
         in accordance with the authority granted to the Company's Agent under
         the Managing General Agency Agreement, reference number VSC2004/72. An
         event is further defined but not limited to the following:

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1.       The Reisurer has become financially impaired. Financially impaired for
         purposes of this Article means the Reisurer's surplus has been reduced
         by ten percent (10%) or the Reinsurer has lost any part of, or has
         reduced its paid-up capital after the inception of this Agreement.

2.       The loss ratio under the Multiple Line Quota Share Reinsurance
         Agreement, AR15935, effective 12/1/2004 with Tokio Millennium Re Ltd.,
         Hannover Reinsurance (Ireland) Limited and E+S Reinsurance (Ireland)
         Limited is equal to or exceeds 63% at any point in time; 3. Upon
         knowledge of any ECO/XPL claim whether or not there is coverage under
         any other any other reinsurance agreement set forth in Exhibit A;

4.       When any reinsurer participating in the reinsurance agreements set
         forth in Exhibit A become financially impaired. Financially impaired
         for purposes of this Article means the reinsurer's surplus has been
         reduced by twenty percent (20%) or has lost any part of, or has reduced
         its paid-up capital since the inception of this Agreement;

5.       Upon knowledge of any potential arbitration or mediation with any other
         reinsurer participating in the reinsurance agreements set forth in
         exhibit A;

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6.       Any other loss, loss adjustment expense and/or business risk on
         policies reinsured hereunder that is net and unreinsured by the
         Company.

         "Obligations" of the Reinsurer is defined as the amount of loss the
Company may incur as a result of any of the "events" defined above and will be
equal to the greater of $1,000,000 or the actual reserve the Company will have
to report on its statutory financial statement.

     IF AN EVENT OCCURS PURSUANT TO THIS ARTICLE, THE COMPANY AND THE REINSURER
MAY MUTUALLY AGREE TO WAIVE THE REQUIREMENT THAT THE REINSURER FUND ITS
OBLIGATIONS. IF THE COMPANY DOES NOT AGREE TO WAIVE THIS REQUIREMENT, THE
REINSURER WILL IMMEDIATELY FUND ITS OBLIGATIONS IN ACCORDANCE WITH THIS ARTICLE.

         The issuing bank will have no responsibility whatsoever in connection
with the propriety of withdrawals made by the Company or the disposition of
funds withdrawn, except to ensure that withdrawals are made only upon the order
of properly authorized representatives of the Company.

         Once the Trust Account has been established, the Agent on behalf of the
Company will prepare and forward to the Reinsurer a monthly statement to reflect
the Reinsurer's obligations under this Agreement. If the statement shows that
the Reinsurer's share of such obligations exceeds the balance available through
the Trust Account, then the Reinsurer will, within five (5) days after receipt
of notice of such excess, make an adjustment to increase the amount available.
If the statement shows that the Reinsurer's share of such obligations is less
than the balance available through the Trust Account as of the statement date,
then the Company will, within ten (10) days after receipt of written request
from the Reinsurer, release such excess by making the appropriate adjustment.
However the balance in the Trust Account will never be less than $1,000,000.

         In event the Company and the Reinsurer cannot agree on the value of the
Reinsurer's obligations, they will mutually appoint an independent actuary
and/or appraiser to assess such obligations. Any expenses associated with the
appointment of an independent actuary and/or appraiser will be paid by the
Reinsurer.

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         When all known loss reserves have been settled or closed and incurred
but not reported loss reserves are reduced to zero, the Company and the
Reinsurer will mutually agree to terminate the Trust Account.

                                   ARTICLE IX
LOSS NOTICES AND SETTLEMENTS

         The Reinsurer agrees to abide by all disposition of claims, including
any ex gratia settlements, directed by the Company, the Agent on behalf of the
Company, or directed or amended by enactment or interpretation by any
legislative, regulatory, or judicial body.

         When so requested, however, the Company will afford the Reinsurer, at
the Reinsurer's own expense, an opportunity to be associated with the Company in
the defense of any claim, suit, or proceeding involving this Agreement, and the
Company and the Reinsurer will cooperate in every respect in such defense.

                                    ARTICLE X

EXTRA CONTRACTUAL OBLIGATIONS AND EXCESS LIMITS LIABILITY

         This Agreement will extend to cover 100% of any losses arising from
extra contractual obligations and/or excess limits liability.

         "Extra contractual obligations" means those liabilities not covered
under any other provision of this Agreement, including, but not limited to, any
punitive, exemplary, compensatory, or consequential damages, which arise from
business covered hereunder.

         "Excess limits liability" means any amount for which the Company would
have been contractually liable to pay had it not been for the limits of the
reinsured policy.

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                                   ARTICLE XI
INSOLVENCY

         In the event of the Company's insolvency, the reinsurance afforded by
this Agreement will be payable by the Reinsurer on the basis of the Company's
liability under the policies reinsured without diminution because of the
Company's insolvency or because its liquidator, receiver, conservator, or
statutory successor has failed to pay all or a portion of any claims, subject
however to the right of the Reinsurer to offset against such funds due
hereunder, any sums that may be payable to it by said insolvent Company in
accordance with the Offset Article. The reinsurance will be payable by the
Reinsurer directly to the Company or to its liquidator, receiver, conservator,
or statutory successor except (a) where this Agreement specifically provides
another payee of such reinsurance in the event of the Company's insolvency or
(b) where the Reinsurer, with the consent of the direct insured or insureds, has
assumed such policy obligations of the Company as direct obligations of itself
to the payees under such policies in substitution for the Company's obligation
to such payees.

         The Company's liquidator, receiver, conservator, or statutory successor
will give written notice of the pendency of a claim against the Company under
the policies reinsured within a reasonable time after such claim is filed in the
insolvency proceeding. During the pendency of such claim, the Reinsurer may
investigate said claim and interpose in the proceeding where the claim is to be
adjudicated, at its own expense, any defense that it may deem available to the
Company or to its liquidator, receiver, conservator, or statutory successor. The
expense thus incurred by the Reinsurer will be chargeable against the Company,
subject to court approval, as part of the expense of conservation or liquidation
to the extent that such proportionate share of the benefit will accrue to the
Company solely as a result of the defense undertaken by the Reinsurer. Where two
or more reinsurers are involved in the same claim, and a majority in interest
elect to interpose defense to such claim, the expense will be apportioned in
accordance with the terms of this Agreement as though such expense had been
incurred by the Company.

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         In the event of the receivership, conservatorship or insolvency of the
Reinsurer, the Company may immediately exercise its rights under Article VIII,
Trust Account.

         In the event of insolvency of the Company, the Reinsurer will have all
rights, as more fully set forth in Section 173 of the Illinois Insurance Code,
as amended.

                                   ARTICLE XII
MEDIATION AND ARBITRATION

         If any dispute arises between the Company and the Reinsurer with
reference to the interpretation, performance, or breach of this Agreement
(whether the dispute arises before or after termination of this Agreement), such
dispute, if not resolved by the parties, must be submitted to nonbinding
mediation. If such dispute is not resolved by nonbinding mediation within sixty
(60) days it will then be submitted for decision to a panel of three
arbitrators. Notice requesting arbitration will be in writing and sent certified
or registered mail, return receipt requested.

         One arbitrator will be chosen by each party and the two arbitrators
shall, before instituting the hearing, choose an impartial third arbitrator who
will preside at the hearing. If either party fails for any reason to appoint its
arbitrator within thirty (30) days after being requested to do so by the other
party, the latter, after ten (10) days notice by certified or registered mail of
its intention to do so, may appoint the second arbitrator. If the two
arbitrators are unable to agree upon the third arbitrator within thirty (30)
days of their appointment, the third arbitrator will be selected from a list of
six individuals (three named by each arbitrator) by a judge of the United States
District Court having jurisdiction over the geographical area in which the
arbitration is to take place, or if that court declines to act, the state court
having general jurisdiction in such area.

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         All arbitrators will be active or retired disinterested officials of
insurance or reinsurance companies, not under the control or management of
either party to this Agreement and will not have personal or financial interests
in the result of the arbitration.

         Within thirty (30) days after notice of appointment of all arbitrators,
the panel will meet and determine timely periods for briefs, discovery
procedures and schedules for hearings.

         The panel will be relieved of all judicial formality and will not be
bound by the strict rules of procedure and evidence. Unless the panel agrees
otherwise, arbitration will take place in Chicago, Illinois, but the venue may
be changed when deemed by the panel to be in the best interest of the
arbitration proceeding. Insofar as the arbitration panel looks to substantive
law, it will consider the law of the State of Illinois. The decision of any two
arbitrators when rendered in writing will be final and binding. The panel is
empowered to grant interim relief, as it may deem appropriate.

         The panel will interpret this Agreement as an honorable engagement
rather than merely a legal obligation and will make its decision considering the
custom and practice of the applicable insurance and reinsurance businesses
within sixty (60) days following the termination of the hearing unless the
parties consent to an extension. Judgement upon the award may be entered in any
court having jurisdiction thereof.

         Punitive damages will not be awarded. The arbitrators may, however, at
their discretion award such other costs and expenses as they deem appropriate,
including but not limited to attorneys' fees, the cost of arbitration, and
arbitrators' fees to the extent permitted by law.

         The Reinsurer agrees to hold harmless and fully indemnify the Company
in respect all costs and expenses, of whatsoever nature, incurred or suffered by
the Company in the event arbitration proceedings are initiated between the
Reinsurer and the Agent that involve no dispute of substance between the Company
and the Reinsurer.

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                                  ARTICLE XIII
SERVICE OF SUIT

         (This Article applies if the Reinsurer is unauthorized in any state,
territory, or district of the United States of America that has jurisdiction
over the Company and in which a subject suit has been instituted. This Article
is not intended to conflict with or override the parties' obligation to
arbitrate their disputes in accordance with Article XII, Mediation and
Arbitration.)

         In the event the Reinsurer fails to pay any amount claimed due
hereunder, the Reinsurer, at the request of the Company, will submit to the
jurisdiction of any court of competent jurisdiction within the United States and
will comply with all requirements necessary to give that court jurisdiction.
Nothing in this Article constitutes or should be understood to constitute a
waiver of the Reinsurer's right to commence an action in any court of competent
jurisdiction in the United States, to remove an action to a United States
District Court, or to seek a transfer of a case to another court as permitted by
the laws of the United States or of any state in the United States. Service of
process in such suit may be made upon ___________________ Attention:___________.

         In any suit instituted against it upon this Agreement, the Reinsurer
will abide by the final decision of such court or of any appellate court in the
event of an appeal.

         The above named are authorized and directed to accept service of
process on behalf of the Reinsurer in any such suit and/or upon the request of
the Company to give a written undertaking to the Company that they will enter a
general appearance upon the Reinsurer's behalf in the event such a suit is
instituted.

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         Further, pursuant to any statute of any state, territory, or district
of the United States that makes provision therefor, the Reinsurer hereby
designates the Superintendent, Commissioner, or Director of Insurance or other
officer specified for that purpose in the statute (or his successor or
successors in office) as its true and lawful attorney upon whom may be served
any lawful process in any action, suit, or proceeding instituted by or on behalf
of the Company or any beneficiary hereunder arising out of this Agreement, and
hereby designates the above named as the person to whom the said officer is
authorized to mail such process or a true copy thereof.

                                   ARTICLE XIV
INTEREST PENALTY

         The interest amounts provided for in this Article will apply to the
Reinsurer or to the Company in the following circumstances:

         A.       Loss payments owed by the Reinsurer to the Company will have a
                  due date to the Company as specified in Article VII, Reports
                  and Remittances, of this Agreement.

         B.       Payment of any premium will be due to the Reinsurer will have
                  a due date as specified in Article VII, Reports and
                  Remittances, of this Agreement.

         C.       Payment on return of premium, or any amounts not provided in
                  subparagraphs A. or B. above, will have the due date as
                  specified in this Agreement. If no due date is specified, the
                  due date will be ninety (90) days following the date of
                  billing.

         D.       Failure by the Reinsurer or the Company to comply with their
                  respective payment obligations within the time periods as
                  herein provided will result in a compound interest payment
                  payable at a rate equal to the 90-day Treasury Bill ask yield
                  as published in the Money Rate Section or any successor
                  section in the Midwest Edition of The Wall Street Journal on
                  the first business day following the date a remittance becomes
                  due, plus 1% per annum, to be compounded and adjusted
                  quarterly. Any interest which occurs pursuant to this Article
                  will be calculated by the party to which it is owed. The
                  accumulation of the number of days that any payment is past
                  due will stop on the date that the payment is received.

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         E.       The validity of any claim or payment may be contested under
                  the provisions of this Agreement. If the debtor party prevails
                  in an arbitration or any other proceeding, there will be no
                  interest payment due. Otherwise, any interest will be
                  calculated and be due as outlined above.

         F.       The Reinsurer will advance payment of any claim it is
                  contesting. Should the Reinsurer prevail in the contest, the
                  Company will return such payment plus pay interest on same,
                  calculated from the date the Company received the advanced
                  payment as per the provisions of this Article.

         G.       Any interest which occurs pursuant to this Article may be
                  waived by the party to which it is owed. Further, any interest
                  which is calculated pursuant to this Article that is one
                  hundred dollars ($100) or less will be waived. Waiver of such
                  interest, however, will not affect the waiving party's rights
                  to similar interest for any other failure by the other party
                  to make payment when due under this Article.

         H.       Nothing in this Article will diminish any legal remedies that
                  either party may have against the other.

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                                   ARTICLE XV
                                  AGENT DEFAULT

         In the event the Underwriting Manager or any agent or general agent
(hereinafter called "Required Agent") appointed by the Company at the request of
the Underwriting Manager shall, whether by reason of bankruptcy or any other
cause, intentionally or unintentionally commit an act either of "Premium
Default" or of "Payment Default" as those terms are hereinafter defined), then
the consequences and remedies hereinafter provided in this Article shall apply.
"Premium Default" shall mean failure by a Required Agent to transmit to the
Company all or any portion of any premium for the placement of any policy or
coverage under any policy. "Payment Default" shall mean any misappropriation of
any of the Company's funds or the Reinsurer's funds, where such funds have been
under the control of the Required Agent.

         In the event of any Premium Default, Company shall be relieved of any
liability to remit to Reinsurer the corresponding reinsurance premium until such
time, if ever, as the amount of such Premium Default is received by the Company.
Also until such time, the insurance corresponding to such Premium Default shall
be deemed to have been ceded to the Reinsurer pursuant to this Agreement.
Notwithstanding such Premium, with respect to such premiums receivable by the
Company, the Company shall be entitled to payment of ceding commission, loss and
loss expenses and reimbursement for premium taxes, fees, assessments or residual
market loads of any kind imposed upon the Company pursuant to any law or
regulation as a result of policies reinsured hereunder.

         In the event of any Payment Default, the Company is relieved of any
liability to Reinsurer for any funds of Reinsurer which may have been
misappropriated, and the Reinsurer shall reimburse the Company for any funds of
the Company which have been misappropriated.

                                       19
<PAGE>

                                   ARTICLE XVI
COMMUTATION

         If mutually agreed by the Company and the Reinsurer, at the expiration
of this Agreement, or at any time thereafter, the Company may discharge the
Reinsurer from all further liability under the policies attaching during the
term of this Agreement. In event the Company and the Reinsurer cannot agree on
the capitalized value of the Reinsurer's liability on such policies, they will
mutually appoint an actuary and/or appraiser to assess such liability. The
payment by the Reinsurer of the amount so ascertained will constitute a complete
and final release of the Reinsurer in respect to its liability on such policies.
Any expenses associated with the appointment of an actuary and/or appraiser will
be paid by the Reinsurer.

                                  ARTICLE XVII
ACCESS TO RECORDS

         The Agent on behalf of the Company will place at the disposal of the
Reinsurer, at all reasonable times, and the Reinsurer, through its designated
representatives, will have the right to inspect, all books, records, and papers
of the Company in connection with this Agreement. At the conclusions of the
inspection, the Reinsurer will meet with and discuss the review with the Company
and will provide a written report of its findings within a reasonable time. The
Reinsurer, except with the express prior written consent of the Company, will
not directly or indirectly communicate, disclose, or divulge to any third party,
any knowledge or information that may be acquired either directly or indirectly
as a result of the inspection of the Company's books, records, and papers. The
restrictions as outlined in this Article will not apply to communications or
disclosures that the Reinsurer is required to make to its statutory auditors,
retrocessionaires, legal counsel, arbitrators involved in any arbitration
procedures under this Agreement, or disclosures required upon subpoena or other
duly-issued order of a court or other governmental agency or regulatory
authority. Expenses connected with any such inspection and any reproduction of
such records will be borne by the Reinsurer.

                                       20
<PAGE>

                                  ARTICLE XVIII
OFFSET
         The Agent on behalf of the Company and the Reinsurer hereunder will be
entitled to deduct from amounts due the other party under this Agreement any
amounts due itself from the other party under this Agreement only. In the event
of the insolvency of either party hereto, offset will only be allowed in
accordance with applicable law in the State of Illinois.

                                   ARTICLE XIX
CURRENCY

         All payments made by either party hereunder will be in United States
dollars.

                                   ARTICLE XX
ERRORS AND OMISSIONS

         Inadvertent delays, errors, or omissions made in connection with this
Agreement or any transaction hereunder will not relieve either party from any
liability that would have attached had such delay, error, or omission not
occurred.

                                   ARTICLE XXI
SALVAGE AND SUBROGATION

         The Reinsurer will be credited with its share of salvage or subrogation
recoveries (i.e. reimbursement obtained or recovery made by the Agent of behalf
of the Company, less the actual cost, excluding salaries of officials and
employees of the Company, of obtaining such reimbursement or making such
recovery) on account of claims and settlements involving policies reinsured
hereunder. If the recovery expense exceeds the amount recovered, the amount
recovered (if any) will be applied to the reimbursement of recovery expense and
the remaining expense will be borne by the Reinsurer.

                                       21
<PAGE>

                                  ARTICLE XXII
AMENDMENTS

         This Agreement may be altered or amended in any of its terms and
conditions by mutual consent of the Company and the Reinsurer by addenda hereto
or by an exchange of letters requesting acceptance of revised pages, special
acceptances, or changes in underwriting information pertaining to this
Agreement. Such addenda or letters will then constitute a part of this
Agreement.

                                  ARTICLE XXIII
GOVERNING LAW

         This Agreement will be governed and construed in accordance with the
laws of the State of Illinois.

                                  ARTICLE XXIV
ASSIGNMENT

         Neither party may assign its rights or responsibilities under this
Agreement without the prior written consent of the other party, which consent
will not be unreasonably withheld.

                                   ARTICLE XXV
SEVERABILITY

         If any provisions of this Agreement will be rendered invalid, illegal,
or unenforceable by the laws, regulations, or public policy of any state, such
provisions will be considered void in such state, but this will not affect the
validity, legality or enforceability of any other provisions of this Agreement
in that state, nor the validity, legality, or enforceability of such provisions
in any other jurisdiction.

                                       22
<PAGE>

                                  ARTICLE XXVI
FINANCIAL STATEMENTS

         The Reinsurer will provide quarterly financial statements to the
Company within thirty (30) days after it is required to file such statements in
accordance with applicable regulatory requirements.

                                  ARTICLE XXVII
HEADINGS

         The Article headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.

                                       23
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized representatives.

Signed at Chicago, Illinois, this 1st  day of    March       2005
                                 ------      ----------------
VIRGINIA SURETY COMPANY, INC.
Signature:       /s/ Oriana Bakka
          ---------------------------------------------------
Title:           Senior Vice President
      -------------------------------------------------------
Attest:
       ------------------------------------------------------

FEIN Number: 36-3186541

NAIC Number: 40827

Signed at New York, New York, this  2nd  day of  March        2005
                                  -------      ---------------
TOWER INSURANCE COMPANY OF NEW YORK
Signature:       /s/ Marina Contiero
          ----------------------------------------------------
Title:           Vice President
      --------------------------------------------------------
Attest:
       -------------------------------------------------------

FEIN Number: 13-3548249

NAIC Number: 44300

                                       24
<PAGE>

                                    EXHIBIT A

Quota Share Reinsurance Agreement with Tokio Millennium Re Ltd., Hannover
Reinsurance (Ireland) Limited and E+S Reinsurance (Ireland) Limited,reference
numberAR15511, effective December 1, 2004 to December 31, 2005 12:01 a.m.
standard time.

                                       25<PAGE>

                                                                   EXHIBIT 10.37

                              MULTIPLE LINE PROGRAM
                 MANAGING GENERAL AGENCY AGREEMENT - VSC2004/72

         This Agreement, entered into on the 1st day of December 1, 2004 (the
"Agreement") by and between VIRGINIA SURETY COMPANY, INC., an Illinois
corporation ("Company") and TOWER RISK MANAGEMENT CORPORATION, a New York
corporation ("Agent").

                                    PREAMBLE

         WHEREAS, Company desires to appoint Agent as its agent for performing
responsibilities set forth in this Agreement; and

         WHEREAS, Agent desires to perform such responsibilities;

         NOW, THEREFORE, Company and Agent, in consideration of the mutual
promises herein contained and for other good and valuable consideration, the
receipt and sufficiency whereof is hereby acknowledged, agree as follows:

         1. APPOINTMENT.

         1.1 APPOINTMENT. Company does hereby nominate, constitute, and appoint
Agent as its agent for: (i) the soliciting, underwriting, quoting, binding,
issuing, and servicing of Company's insurance policies classified in the
schedule attached hereto as Exhibit A (such insurance and any policies,
contracts, binders, endorsements, certificates, agreements, or evidence of
insurance, individually and collectively, will be referred to as "Policy" or
"Policies" hereunder); and (ii) for the servicing of the Reinsurance Agreements
("Reinsurance Agreements"), in accordance with Exhibit C attached hereto,
between Company and its Reinsurers.

         1.2 AUTHORITY. Agent is authorized to:

              1.2.1 Issue Policies subject to: (i) the scope and limits granted
in Exhibit A attached hereto; (ii) the terms and conditions (including
exclusions) of any Policies issued, underwritten, or serviced pursuant to this
Agreement; (iii) the terms and conditions of the Reinsurance Agreements in
effect at the inception of this Agreement; (iv) applicable state insurance laws,
rules, and regulations; (v) the underwriting policies, rules, and guidelines of
Company as set forth in Exhibit B or as otherwise provided from time to time by
Company; (vi) Company's ultimate right to veto the solicitation, underwriting,
quoting, binding, and issuing of any Policy by Agent; (vii) Company's ultimate
right to cancel any Policy subject to applicable governmental regulatory
requirements for cancellation and non-renewal; (viii) Company's ultimate right
to veto the appointment by Agent of any agent or broker, and the ultimate power
of Company to cancel any such agency pursuant to Section 1.2.7; (ix) Company's
right to approve all advertising with respect to the Policies in which Company's
name is used.

                                       1
<PAGE>

              1.2.2 Collect, account, receipt for, and pay premiums on Policies
Agent writes on behalf of Company in accordance with Sections 1.2.3, 4, and 7,
and, as full compensation, to retain commissions out of premiums so collected in
amounts as specified in Exhibit A attached hereto. Agent agrees to pay all costs
and expenses of collection from insureds where premium to be received by the
Agent pursuant to this Agreement are not paid in full by the insured. Agent
agrees that all premiums, including return premiums received by Agent, are
Company's property.

              1.2.3 Hold all premiums, including return premiums received by
Agent, in a fiduciary capacity for Company in accordance with Section 4.1.15.

              1.2.4 Exercise Agent's authority through authorized employees of
Agent or its affiliates.

              1.2.5 Represent other companies.

              1.2.6 Exercise exclusive and independent control of Agent's time
and conduct.

              1.2.7 To secure or obtain agents and producers to produce
business. Company appointments will follow upon Agent providing evidence that
the agents and producers are lawfully licensed to transact this type of
insurance, are not serving on Company's or Agent's board of directors and
complete the Company's appointment process. The agents and producers must meet
the applicable compliance regulations for licensure.

              1.2.8 Terminate agents and producers.

              1.2.9 Investigate and settle claims as provided in Section 5 below
and establish reserves for such claims.

         1.3 PERFORMANCE. Agent hereby accepts the foregoing appointment and
agrees faithfully to perform the duties thereof in a professional manner as an
agent of Company and to obey promptly such reasonable instructions as it may
receive from time to time from Company in accordance with this Agreement.

                                       2
<PAGE>

         1.4 FAILURE OF PERFORMANCE. If Agent breaches this Agreement, Company
may, as one remedy but not as an exclusive remedy, require its own employees or
designated representatives to carry out Agent's duties hereunder. Agent shall
reimburse Company for Company's reasonable expenses, including salaries,
incurred for having Company's employees or representatives perform such duties,
or, at Company's option, shall pay such employees or representatives directly.
Such reimbursement or direct payments shall be made by Agent within five (5)
days after Agent's receipt of invoices of such expenses.

         2. TERRITORY.

         Agent's authority to solicit, quote, underwrite, bind, issue, or
service Policies extends only to insureds or prospective insureds located in the
states specified in Exhibit A attached hereto, subject to: (i) the applicable
licensing authority of Company, Company having made and received approval of all
necessary regulatory filings and (ii) Agent obtaining licenses wherever required
for activities conducted by Agent pursuant to this Agreement. Agent hereby
agrees to obtain such licenses and Company at its sole discretion may revoke
Agent's authority as regards any particular insured or prospective insured.

         3.       REPRESENTATIONS AND WARRANTIES.

         3.1 REPRESENTATIONS AND WARRANTIES OF AGENT. On the effective date
hereof, during the term of this Agreement, and for any period described in
Section 10.5, Agent hereby represents and warrants to Company as follows:

              3.1.1 LAWS AND LICENSES. Agent has complied and will comply with
all applicable laws, rules, and regulations. Agent shall provide current copies
of Agent's license, which will be maintained in Company's records. Company will
appoint Agent in all applicable states. Prior to processing Company's
appointment, Company will conduct a background report on Agent. If the
background report is satisfactory, the appointment will be processed
accordingly. Agent will obtain and maintain at its own expense all licenses
required for it to perform this Agreement.

              3.1.2 NO BREACH. This Agreement is a valid and binding obligation
of Agent. The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein will not breach or conflict with Agent's
by-laws or articles of incorporation, nor with any agreement, covenant, or
understanding (oral or written) to which Agent is bound, and will not adversely
affect the application for issuance or the validity of any license of Agent.

                                       3
<PAGE>

              3.1.3 STATUS. Agent is a duly organized and validly existing
corporation in the State of New York.

              3.1.4 AUTHORIZATION. The execution, delivery, and performance of
this Agreement by Agent has been duly and properly authorized by it.

              3.2 REPRESENTATIONS AND WARRANTIES OF COMPANY. On the effective
date hereof, during the term of this Agreement, and for any period described in
Section 10.5, Company hereby represents and warrants to Agent as follows:

              3.2.1 LAWS AND LICENSES. Company has complied and will comply with
all applicable laws, rules and regulations and shall, whenever necessary, obtain
and maintain at its own expense all licenses required for it to perform this
Agreement.

              3.2.2 NO BREACH. This Agreement is a valid and binding obligation
of Company. The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein will not breach or conflict with Company's
by-laws or articles of incorporation, nor with any agreement, covenant, or
understanding (oral or written) to which Company is bound, and will not
adversely affect the application for issuance or the validity of any license of
Company.

              3.2.3 STATUS. Company is a duly organized and validly existing
corporation in the State of Illinois.

              3.2.4 AUTHORIZATION. The execution, delivery, and performance of
this Agreement by Company has been duly and properly authorized by it.

         4. DUTIES AND RESPONSIBILITIES.

         4.1 GENERAL. Subject to Company's supervision and instructions, Agent
agrees to perform the following duties and services in addition to those
otherwise enumerated in this Agreement:

              4.1.1 Agent acknowledges that Company intends for each Policy
issued hereunder to be reinsured under the Reinsurance Agreements or any renewal
thereof, which may have different or additional participants provided that
Company has given its approval for any such different or additional
participants. If, as of the effective date of this Agreement first written
above, or any time thereafter, reinsurance as required by the terms of this
Section is not available to Company, it is understood and agreed that Agent will
not bind any Policy on behalf of Company to take effect at or after said date.
Agent shall have no authority to commit Company to participate in insurance or
reinsurance syndicates.

                                       4
<PAGE>

              4.1.2 Process payment of reinsurance premiums to and collections
from the Reinsurers, with copies to Company, pursuant to the terms and
conditions of the Reinsurance Agreements.

              4.1.3 Solicit, underwrite, quote, bind, issue, secure proper
countersignature when required by applicable laws, and service Policies on
behalf of Company.

              4.1.4 Cancel Policies issued or underwritten by Agent in
accordance with the terms of the Policies and applicable state regulations.

              4.1.5 Issue Policies only on forms approved by Company and filed
with and approved by regulatory authorities wherever such filing and approval is
required, unless such forms are modified with the prior written consent of
Company.

              4.1.6 Underwrite and issue Policies in accordance with the premium
rates and underwriting criteria and guidelines as defined in Exhibit B hereto
(or as may be modified from time to time as agreed upon by Company and Agent).

              4.1.7 Investigate and settle claims as provided in Section 5 below
and establish reserves for such claims.

              4.1.8 Maintain at Agent's expense data processing systems and
equipment, an office or offices and a staff of employees sufficient in number
and qualifications to perform the duties set forth in this Agreement.

              4.1.9 Perform Agent's responsibilities under Section 7 of this
Agreement.

              4.1.10 Pay to Company a policy-issuing fee of 8% on the first
$10,000,000 of collected gross net written premium, 7% on collected gross net
written premium from $10,000,001 to $20,000,000 and 6% on $20,000,001 to
$30,000,000 of the collected gross net written premiums, as defined in Exhibit A
attached hereto, on all Policies issued under the terms hereof. The Agent shall
also remit to the Company a deposit of 3% of collected gross net written
premiums for all premium taxes, local, county or municipal taxes or fees,
assessments, guaranty funds, second injury funds, pooling assessments, residual
market loads and all other fees, expenses or charges of any kind, (hereinafter
called "Taxes, Fees, and Assessments"), imposed upon Company pursuant to any law
or regulation as a result of the Policies issued under the terms of this
Agreement.. Such deposit shall be reconciled by Agent and Company on an annual
basis to actual assessed Taxes, Fees, and Assessments. Further, the Agent will
collect and remit to the Company taxes, fees and assessments imposed by law or
regulation which are billed directly to insureds (hereinafter "insured paid
assessments") as a result of the Policies issued under the terms of this
Agreement

                                       5
<PAGE>

              4.1.11 Pay to Company any fines imposed by regulatory authorities,
taxation authorities, and their agents for data collection and advisory
organizations, due to late filing or poor quality of data provided by Agent in
accordance with Section 7.3.2.

              4.1.12 Pay to Company any fines imposed by regulatory authorities
upon Company due to the use of unapproved forms or rates by Agent or due to
other market conduct violations caused by Agent's conduct.

              4.1.13 Maintain separately for Company and each other insurer with
which Agent does business, complete and current records and accounts, including
underwriting files, which Agent shall retain in accordance with Section 8 and
any applicable laws.

              4.1.14 Refund within sixty (60) days of the end of each calendar
month, return commissions on Policy cancellations or premium reduction, in each
case at the same rate at which such commissions were originally retained.

              4.1.15 Hold all monies, including premiums, return premiums, and
reinsurance monies received by Agent, in a fiduciary capacity for Company.
Except as otherwise authorized by this Agreement, Agent shall maintain such
monies in a separate and segregated bank account in a bank that is a member of
the Federal Reserve System and is insured by the Federal Deposit Insurance
Corporation. This account shall not be used for any purpose other than payments
to or on behalf of Company. Any investment income produced from this bank
account shall vest and become the property of Agent.

              4.1.16 Comply with all regulatory requirements including, but not
limited to, the cancellation, non-renewal, or conditional renewal of policies.

              4.1.17 Return upon demand after termination of this Agreement, all
unused Policies, forms, and other property furnished to Agent by Company. Such
items remain the property of Company. Agent shall fully cooperate with and
assist Company in recovering such items from third parties, if any.

                                       6
<PAGE>

         5. CLAIM SETTLEMENT AUTHORITY

         5.1 CLAIMS. Agent shall investigate, negotiate, and settle all Policy
claims or losses on behalf of Company; however, Agent shall obtain the prior
approval of Company before handling and settling any Policy claim or loss which
is in excess of Two Hundred Fifty Thousand Dollars ($250,000) gross incurred
loss. Agent shall determine coverage for claims; however, Agent shall obtain the
prior written approval of Company for the handling of claims in which Company is
named as a defendant or claims in which Agent seeks declaratory relief on behalf
of Company. All claims or losses shall be reported in monthly statements
pursuant to Section 7 below. In addition, Agent shall immediately notify Company
in writing of any claim or loss of the following kind, provide the amount of the
reserve for such claim or loss as established by Agent, the facts and
circumstance of the claim or loss, Agent's analysis of the insured's liability
for the claim or loss, Agent's analysis of damages resulting from the claim or
loss, Agent's analysis of the applicability of coverage for the claim or loss,
and such other information and records concerning such claim or loss as Company
requests upon receiving notice or knowledge of: (i) any Policy claim or loss in
excess of Two Hundred Fifty Thousand Dollars ($250,000) gross incurred loss; or
(ii) any loss regardless of incurred dollar amount involving the following:
fatalities; brain stem/brain damage injuries; spinal cord injuries; heart
attacks; severe, non-accumulative hearing loss; severe, non-accumulative vision
loss; amputation of major body part; paraplegia; quadriplegia; serious burns
(i.e. second or third degree and/or burns over 50% of the body); non-union,
compound, comminuted, serious fractures; injury to the spine or pervasive nerve
damage; class action suits; allegations of criminal conduct by an insured or
allegations of criminal conduct on the insured's premises; bad faith claims or
suits; demands in excess of policy limits; actual or alleged violations of the
Deceptive Trade Practices Act; actual or alleged violations of the applicable
State Insurance Codes; actual or alleged violation of law by Agent; or
litigation naming Company as a defendant. These individually reported claims or
losses should be updated semi-annually and more frequently upon the occurrence
of any material change in any claim or loss or any information previously
reported to Company. Company shall be immediately notified if Agent is closing a
file on a reported claim or loss and of the reason for this file closure.
Failure to promptly notify Company of claims under this Section 5.1 shall be
considered a material breach of this Agreement and subject to all the remedies
provided herewith.

                                       7
<PAGE>

         5.2 LEGAL COUNSEL AND ALLOCATED CLAIM COSTS. Whenever Agent shall deem
it prudent to engage legal counsel or loss adjusters to protect Company's
interest regarding claims or losses, such services shall be provided only by
qualified attorneys-at-law and/or licensed loss adjusters selected by Agent, who
have substantial experience in the handling of claims litigation of the type
involved. Upon execution of this Agreement, Agent shall submit to Company for
approval a list of the attorneys and loss adjusters it intends to use. Such list
shall be considered approved unless Company objects to any of such firms or
individuals within 14 days after receipt of such list. Any provision hereof to
the contrary notwithstanding, it is agreed that, with respect to any claim or
loss of any amount, Agent shall promptly furnish Company, or its designee, any
additional claim or loss information requested by Company with respect to a
claim or loss pertaining to any Policy covered by this Agreement, and it is
further agreed with respect to any claim or loss of any amount as follows:

         A)       Company may assign an attorney of its own choice to be
                  associated in the defense of any claim or loss reported to
                  Company and, in the event an attorney has already been
                  employed by Agent, the service of such attorney which has
                  already been employed by Agent shall be terminated by Agent
                  forthwith and Agent shall waive any conflict of interest that
                  may have been created by such attorney's employment by Agent.

         B)       In the event that Company is named as a defendant in any
                  lawsuit, Agent shall, as soon as it has notice or knowledge of
                  such lawsuit, immediately give written notice thereof to
                  Company accompanied by a copy of the complaint and any court
                  papers related to such lawsuit.

         5.3 UNALLOCATED COSTS. Company shall reimburse Agent for the salaries,
office expenses or other expenses incurred by or on behalf of Agent (including
overhead) in the handling of Company's claims or losses. Company shall reimburse
Agent for fees to attorneys, and service providers who are employees of, or on
permanent retainers to, Agent. Company hereby agrees to pay for the claims
adjustment services rendered by Agent as well as legal defense services rendered
by the law offices of Steven G. Fauth in accordance with the fee structure set
forth in Exhibit D. Company's obligation to pay for such unallocated costs is
contingent upon recovery of such costs from the reinsurer. Company shall have no
obligation to pay any unallocated costs if such costs are not received from the
reinsurer.

                                       8
<PAGE>

         5.4 CLAIM FUND. During the course of any calendar month, paid claims,
allocated loss adjustment expenses and unallocated costs shall be deducted from
the collected gross net written premium. If during the course of any calendar
month, paid claims, allocated loss adjustment expenses and unallocated costs
exceed the collected gross net written premium Agent agrees to fund payment of
the claims, allocated loss adjustment expenses and unallocated costs and seek
recovery from Reinsurers in accordance with the terms and conditions of the
Reinsurance Agreements and Section 7.2 of this Agreement.

         6. EXPENSES.

         6.1 Agent shall pay from its own monies (and not seek reimbursement
from Company for) all commissions to any agents, sub-agents, brokers, and
sub-producers, all inspection fees, expenses of examinations of Agent, and other
governmental expenses in connection therewith, all refunds of unearned
commissions owed to Company on canceled policies, all costs to print and
inventory Policy forms, all costs to service claims as stated in Section 5.3
above, and all costs to collect premiums in regard to Policies issued,
underwritten, or serviced pursuant to this Agreement.

         6.2 In the event Company is notified by a regulatory authority of the
need for an independent actuarial, accounting, and/or legal opinion not
originally contemplated by this Agreement, Company shall notify Agent who will
in turn reimburse any expenses incurred by Company.

         7. ACCOUNTING AND REPORTING PROCEDURES.

         Agent shall:

         7.1 Within thirty (30) days after the end of each month, remit to
Company the policy-issuing fee and deposit for taxes, fees, and assessments, in
accordance with Section 4.1.10, on all Policies issued under the terms of this
Agreement and 100% of any insured paid assessments. Agent may not offset
balances due to Company hereunder against balances due Agent under any other
contract with Company;

         7.2 On behalf of Company supply accounting, underwriting, and claim
bordereaux and pay the reinsurance premium to and make collections from the
Reinsurance Agreements, with copies to Company, pursuant to their terms and
conditions;

                                       9
<PAGE>

         7.3 With regard to business placed by Agent with Company hereunder,
furnish to Company, in electronic format:

         7.3.1 Within 30 days after the end of each month: (i) a bank statement
and bank reconciliation report for the accounts as described in Section 4.1.15
and Section 5.4; and (ii) a report of: written, earned, and unearned premiums;
losses and loss adjustment expenses paid and outstanding; loss and loss
adjustment expenses incurred; commissions earned by Agent; Reinsurance
Agreements earned and unearned premiums, commissions, and losses (including
losses and loss adjustment expenses paid and outstanding) ceded; all of the
foregoing in the following format: (a) monthly transactions; (b)
inception-to-date statutory amounts, by state, by line of business; (c)
inception-to-date amounts actually transacted, by state, by line of business;
and (d) such other information as may be reasonably requested by Company, which
information Company shall maintain on file and shall make available to insurance
regulatory authorities for review;

         7.3.2 Provide detail and summary reports, in an electronic or printed
medium, as are required to meet all reporting requirements of state regulatory
or taxation authorities, their agents for data collection, and advisory
organizations including but not limited to:

                  a.       Within 30 days of the close of the calendar quarter:
                           direct premiums (written and earned); in force
                           premiums; policy counts (written and in force);
                           direct losses and loss adjustment expenses including
                           subrogation (paid and reserved); number of claims
                           open, closed with payment, and closed without
                           payment; as prescribed by state regulatory
                           authorities.

                  b.       Within 30 days of the close of the calendar
                           quarter: direct written premium, losses, and loss
                           adjustment expense including subrogation (paid and
                           reserved) transaction data as prescribed by advisory
                           organizations providing loss cost and policy forms.

                  c.       30 days prior to the prescribed deadline: the reports
                           of direct premiums (written and earned), losses, and
                           loss adjustment expenses including salvage and
                           subrogation (paid and reserved) as required by state
                           regulatory data collection agents, including but not
                           limited to financial calls, unit statistical data,
                           summary statistical data, and detailed claim
                           information for National Council on Compensation
                           Insurance (NCCI), Insurance Services Office (ISO),
                           and National Association of Independent Insurers
                           (NAII), and various state-specific reporting
                           requirements as necessary.

                                       10
<PAGE>

         7.4 By the first business day of February of each year, Agent shall
provide Company with any information Company may require in order to complete
its statutory financial statements.

         7.5 Failure by the Agent to comply with its payment obligations within
the time periods as herein provided will result in a compound interest payment
payable at a rate equal to the 90-day Treasury Bill ask yield as published in
the Money Rate Section or any successor section in the Midwest Edition of The
Wall Street Journal on the first business day following the date a remittance
becomes due, plus 1% per annum, to be compounded and adjusted quarterly. Any
interest that occurs shall be calculated by the Agent and agreed to by the
Company. The accumulation of the number of days that any payment is past due
shall stop on the date that the Company receives payment. Any interest that
occurs may be waived by the Company. Waiver of such interest, however, shall not
affect the Company's rights to similar interest for any other failure by the
Agent to make payment when due.

         8. BOOKS AND RECORDS.

              Agent shall at its own expense keep such books and records as may
be (i) reasonably requested by Company; or (ii) required by law, rulings, or
orders of the insurance departments of the states having jurisdiction over: (a)
Agent or Agent's business; (b) any Policies; or (c) the Reinsurance Agreements
connected with this Agreement. Agent shall make such books and records available
for examination, audit, and copying by the insurance departments of such states
and by Company, or by their authorized representatives. Company and the
Reinsurers shall have the right to examine and review at any reasonable time all
books, records, files, and papers, including, but not by way of limitation,
claim files and underwriting files maintained and kept by Agent which relate to
this Agreement, the Policies, and the Reinsurance Agreements. Agent shall
institute and maintain retention and disposal systems for claim files and
underwriting files in accordance with procedures and requirements as prescribed
by law. All books and records of Agent shall be maintained at the principal
place of business of Agent and shall be complete, accurate, and up-to-date, and
shall reflect all monies paid or received by Agent and all transactions of Agent
pursuant to this Agreement. Anything to the contrary notwithstanding, all of the
books, records, files, and papers maintained and kept by Agent relating to
underwriting and claims matters involving this Agreement or the Policies, shall
be and remain the sole and exclusive property of Company except that upon
termination of this Agreement, all right, title, and interest in and to all
Policy renewals or expirations and all records with respect to renewals and
expirations shall automatically and irrevocably transfer to and vest in Agent
provided Agent has accounted for and has made payments of all amounts due
Company and/or the Reinsurers and continues to do so.

                                       11
<PAGE>

         9. INDEMNIFICATION.

              Agent shall indemnify and hold harmless Company from and against
all losses, damages, costs, expenses, claims, fines, penalties, or liabilities
of any description suffered by Company with respect to Agent or any Policies
issued or underwritten by Agent, including, without limitation, any attorney's
fees, in connection with or arising out of: (i) any allegations, whether or not
such allegations are groundless, that Agent has not complied with any laws,
rules, or regulations to which it is subject; (ii) any breach of any warranty or
representation of Agent made in this Agreement or any other breach of this
Agreement by Agent; or (iii) any alleged misconduct, negligence,
misrepresentation, or other acts or failures to act of Agent or of it officers,
directors, employees, agents, sub-producers, or independent contractors.

         10. TERMINATION OF AGREEMENT.

         10.1 Except as specified in Sections 10.2 - 10.4 of this Agreement,
this Agreement shall terminate on December 31, 2005 at 12:01 a.m. Standard Time.

         10.2 This Agreement may be terminated immediately by Company upon
giving written notice to Agent via electronic, certified or registered mail in
the event of:

              10.2.1 The misappropriation by Agent of any of Company's funds or
property;

              10.2.2 The fraud, gross negligence, or willful misconduct of
Agent;

              10.2.3 The Agent's license or certificate of authority in the
Agent's state of residence is canceled, non-renewed or suspended by any public
authority;

              10.2.4 An assignment by Agent for the benefit of creditors; the
dissolution or liquidation of Agent; the appointment of a conservator, receiver,
or liquidator for a substantial part of Agent's property; the institution of
bankruptcy, insolvency, or similar proceedings by or against Agent;

                                       12
<PAGE>

              10.2.5 Material breach by Agent of any provision of this
Agreement;

              10.2.6 Termination of the Reinsurance Agreements for any reason;

              10.2.7 If any law or regulation of the federal, state, or local
government of any jurisdiction in which Agent is doing business shall render
illegal or invalid any transaction contemplated by this Agreement, any term of
this Agreement or the Reinsurance Agreements, this Agreement may be terminated
insofar as it applies to such jurisdiction by Company giving notice to Agent to
such effect or by Agent giving notice to Company to such effect;

              10.2.8 Change in ownership of ten percent (10%) or more of the
outstanding voting stock of Agent, sale or transfer of all Agent's assets,
merger of Agent, or change or resignation of any principal officer or director
of Agent;

              10.2.9. Agent's licenses required for it to perform this Agreement
expire, are terminated, or are not valid pursuant to the law of the State in
which the Agent is transacting business on behalf of the Company.

         10.3 This Agreement may be terminated at any time by either party by
giving at least ninety (90) days written notice of termination to the other
party.

         10.4  This Agreement may be terminated at any time by mutual written
agreement.

         10.5  Upon termination of this Agreement:

              10.5.1 If at any time Company sends notice of termination to Agent
as provided in Section 10.2 above or the Agreement is otherwise terminated as
provided herein, Agent shall not solicit, underwrite, quote, bind, or issue any
Policies or renew any existing Policies for which the inception date or renewal
date falls after the effective date of termination of this Agreement, nor shall
Agent cancel and rewrite any existing Policies to provide for inception or
anniversary dates prior to the effective date of termination of this Agreement.
Unless instructed otherwise by Company in writing, anniversary dates of Policies
shall be regarded as renewal dates for this purpose, and Agent shall terminate
any such Policies on its next anniversary date after the effective date of
termination of this Agreement, subject to applicable governmental regulatory
requirements for cancellation or non-renewal. Upon termination of this
Agreement, the authority of Agent to underwrite or issue Policies on behalf of
Company shall also terminate.

              10.5.2 Unless otherwise indicated by this Agreement or Company
otherwise notifies Agent in writing, Agent's duties and responsibilities under
this Agreement shall survive termination of this Agreement until such time as
all Policies issued, underwritten, or serviced by Agent pursuant to this
Agreement have expired and the Reinsurance Agreements have expired, all known
losses there under have been paid or settled, have run off or otherwise have
been disposed of in the judgment of Company, all incurred but not reported loss
reserves have been reduced to zero, and any amounts owed to Company by others or
under the Reinsurance Agreements have been collected by Company. The only
compensation Agent shall receive for its performance of its duties hereunder
(both during and after the term of this Agreement) is set forth in the
Commissions Section of Exhibit A attached hereto.

                                       13
<PAGE>

              10.5.3 Agent shall, unless notified in writing to the contrary by
Company:

              A.       Continue to represent Company for the purpose of
                       servicing Policies placed by Agent with Company which
                       are in force on, or renewed at Company's election, or
                       as required by law, after the date of termination of
                       this Agreement, and Agent shall continue to receive
                       its normal compensation for such services.

              B.       Issue and countersign appropriate endorsements on
                       Policies in force, provided that without prior
                       written approval of Company, such endorsement shall
                       not increase nor extend Company's liability nor
                       extend the term of any Policy.

              C.       Collect and receipt for premiums and retain
                       commissions out of premiums collected as full
                       compensation.

              10.6 Any notice issued pursuant to this Section shall be effective
on the day after it is received by Agent.

         11.  SUSPENSION OF AGENT'S AUTHORITY.

         11.1 In lieu of terminating this Agreement, Company may give written
notice to Agent that Company is immediately suspending Agent's authority in its
entirety or in any particular state to bind new or renewal business, change any
existing Policy and/or settle any claim during the pendency of any of the
following events:

              11.1.1 Agent is delinquent in payment of any monies due Company;

              11.1.2 Any dispute exists between Agent and Company regarding the
existence of any of the events listed in Section 10.2;

              11.1.3 The Reinsurance Agreements are not executed between Company
and its Reinsurers within nine months from inception of the Reinsurance
Agreements; or

              11.1.4 Agent has announced its intention to pursue the possible
sale, merger, joint venture, or strategic alliance of Agent with any other
company(ies), corporation(s), or individual(s) not controlling the Agent's
operations at the inception of this Agreement.

         11.2 Such suspension shall remain in effect until such delinquency is
cured or dispute is resolved and Agent receives written notification from
Company to that effect. If such delinquency is not cured within fifteen (15)
days from the date of receipt of written notification by Agent of such
delinquency, Company may exercise its right to terminate this Agreement under
Section 10.2.

         11.3 Unless otherwise notified in writing to the contrary by Company,
Agent's obligation under this Agreement shall continue during the suspension of
Agent's authority under this Agreement.

                                       14
<PAGE>

         11.4   Any notice of suspension issued pursuant to this Section shall
be effective immediately.

         12.  OWNERSHIP OF EXPIRATIONS

              Subject to Section 8 Books and Record, the use and control of
expirations will remain the property of the Agent; and the Company will not (a)
refer or communicate to any other agent or broker, the Company's records of
insureds, expiration dates and other material information relating to specific
risks except for loss or claims information specifically requested by the
insured or the insured's authorized representative nor (b) use such material
information relating to specific risks for purposes of solicitation.

         13. MEDIATION AND ARBITRATION.

         If any dispute arises between Company and Agent with reference to the
interpretation, performance, or breach of this Agreement (whether the dispute
arises before or after termination of this Agreement) such dispute, if not
resolved by the parties, must be submitted to non-binding mediation. If such
dispute is not resolved by non-binding mediation within sixty (60) days it will
then be submitted for decision to a panel of three arbitrators. Notice
requesting arbitration will be in writing and sent certified or registered mail,
return receipt requested.

         One arbitrator shall be chosen by each party and the two arbitrators
shall, before instituting the hearing, choose an impartial third arbitrator who
shall preside at the hearing. If either party fails for any reason to appoint
its arbitrator within thirty (30) days after being requested to do so by the
other party, the latter, after ten (10) days notice by certified or registered
mail of its intention to do so, may appoint the second arbitrator. If the two
arbitrators are unable to agree upon the third arbitrator within thirty (30)
days of their appointment, the third arbitrator shall be selected from a list of
six individuals (three named by each arbitrator) by a judge of the United States
District Court having jurisdiction over the geographical area in which the
arbitration is to take place, or if that court declines to act, the state court
having general jurisdiction in such area.

                                       15
<PAGE>

         All arbitrators shall be active or retired disinterested officials of
insurance or reinsurance companies not under the control or management of either
party to this Agreement and will not have personal or financial interests in the
result of the arbitration.

         Within thirty (30) days after notice of appointment of all arbitrators,
the panel shall meet and determine timely periods for briefs, discovery
procedures, and schedules for hearings.

         The panel shall be relieved of all judicial formality and shall not be
bound by the strict rules of procedure and evidence. Unless the panel agrees
otherwise, arbitration shall take place in Chicago, Illinois, but the venue may
be changed when deemed by the panel to be in the best interest of the
arbitration proceeding. Insofar as the arbitration panel looks to substantive
law, it shall consider the law of the State of Illinois. The decision of any two
arbitrators when rendered in writing shall be final and binding. The panel is
empowered to grant interim relief as it may deem appropriate.

         The panel shall interpret this Agreement as an honorable engagement
rather than merely a legal obligation and shall make its decision considering
the custom and practice of the applicable insurance and reinsurance businesses
within sixty (60) days following the termination of the hearing unless the
parties consent to an extension. Judgment upon the award may be entered in any
court having jurisdiction thereof.

         Punitive damages will not be awarded. The arbitrators may, however, at
their discretion award such other costs and expenses as they deem appropriate,
including but not limited to attorneys' fees, the cost of arbitration, and
arbitrators' fees, to the extent permitted by law.

         Agent agrees to hold harmless and fully indemnify Company in respect
all costs and expenses, of whatsoever nature, incurred or suffered by Company in
the event arbitration proceedings are initiated between Agent and the
Reinsurers, which involve no dispute of substance between Company and Agent.

                                       16
<PAGE>

         14. MISCELLANEOUS.

         14.1 This Agreement may be revised by mutual agreement of Agent and
Company and such revision shall be evidenced by a written agreement duly
executed by authorized representatives of Agent and Company, which specifies the
effective date thereof.

         14.2 Agent shall not have authority to represent Company on any
exclusive basis with respect to any policy form, line, or class or subclass of
business, unless otherwise authorized in writing by Company.

         14.3 Agent shall not commit Company to any expenses or obligations not
specifically provided for herein without the prior written permission of
Company.

         14.4 Company shall have the right to oversee and supervise the
operation of this Agreement, including but not limited to the right at all
reasonable times to have access to and to copy at Company's expense Agent's
books and records as they relate to this Agreement, which rights shall survive
the termination or expiration of this Agreement. The director or commissioner of
insurance of any state where Agent issues Policies on behalf of Company shall
have at all reasonable times the right of access to all books, records, and bank
account of Agent in a form usable by such official.

         14.5 During the term of this Agreement, Agent shall obtain and maintain
in full force and effect, at its expense, fidelity insurance with a minimum
policy limit of $1,000,000, errors and omissions insurance with a minimum policy
limit of $2,000,000, directors and officers insurance with a minimum policy
limit of $2,000,000, and general liability insurance with a minimum policy limit
of $1,000,000 and on such terms as are reasonably acceptable to Company. Agent
shall furnish Company with copies of the certificates of insurance for such
insurance, and shall not cancel or amend any such insurance without Company's
prior written consent.

         14.6 During the term of this Agreement and until all premium applicable
to policies issued hereunder is fully earned, Agent shall obtain and maintain in
full force and effect, at its own expense, an Account Receivable Guarantee Bond
with a minimum policy limit of $1,000,000/$3,000,000 and issued by a carrier
acceptable to Company.

         14.7 Agent shall provide to Company, copies of its quarterly financial
reports and annual audited financial reports.

                                       17
<PAGE>

         14.8 If the Agent fails in any respect to fulfill its duties and
responsibilities under this Agreement, then the expense incurred by the Company
in order to fulfill the Agent's duties and responsibilities under this Agreement
will be fully reimbursed by the Agent.

         14.9 This Agreement may not be directly or indirectly assigned by
either party in whole or in part, nor may Agent appoint a sub managing general
agent.

         14.10 Any provision of this Agreement which conflicts with applicable
law or regulation will be amended to the minimum extent necessary to effectuate
compliance with such law or regulation.

         14.11 Agent is an independent contractor, not an employee of Company,
and nothing in this Agreement shall be construed to create an employer/employee
relationship between Company and Agent.

         14.12 This Agreement shall be construed in accordance with the laws of
the State of Illinois.

         14.13 Neither Company nor Agent shall disclose material details of this
Agreement and the Policies without the prior consent of the other party.
However, this restriction will not apply to disclosures made by Company or Agent
to its agents, producers, shareholders, policyholders, auditors, accountants,
arbitrators, legal counsel, or other third parties as required in the ordinary
course of business, nor to disclosures required by arbitration panels,
governmental agencies, regulatory authorities, or courts of law.

         14.14 Failure of either party to enforce compliance with any term or
condition of this Agreement shall not constitute a waiver of such term or
condition. No waiver of any breach or default hereunder shall be valid unless in
writing and signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or similar
nature.

         14.15 Agent acknowledges and agrees that it will benefit from this
Agreement and that a breach by it of the covenants contained in Sections 1, 2,
4, 5, or 10.5 herein would cause Company irreparable damages that could not
adequately be compensated for only by monetary compensation. Accordingly, it is
understood and agreed that in the event of any such breach or threatened breach,
Company may apply to a court of competent jurisdiction for, and shall be
entitled to, injunctive relief from such court, without the requirement of
posting a bond or proof of damages, designed to cure existing breaches and to
prevent a future occurrence or threatened future occurrence of like breaches on
the part of Agent. It is further understood and agreed that the remedies and
recourses herein provided shall be in addition to, and not in lieu of, any other
remedy or recourse which is available to Company either at law or in equity in
the absence of this paragraph including without limitation the right to damages.

                                       18
<PAGE>

         14.16 Agent shall notify Company in writing via electronic, certified
or registered mail, within five (5) days if there is a change in ownership of
ten percent (10%) or more of the outstanding voting stock of Agent, sale or
transfer of all Agent's assets, merger of Agent, or change of any principal
officer or director of Agent including, but not limited to, resignation.

         14.17 Any notice or other communications required or permitted
hereunder shall be sufficiently given if sent by electronic, certified or
registered mail, postage prepaid, if to Agent, addressed to Tower Risk
Management Corporation, 120 Broadway, 14th Floor, New York, New York, 10271,
Attention: Michael H. Lee, President and if to Company addressed to Virginia
Surety Company, Inc., 175 West Jackson Blvd. Suite 1100, Chicago, IL 60604,
Attention: Wayne J. Baliga, Senior Vice President, with copy to: Oriana L.
Bakka, Senior Vice President 175 West Jackson Blvd., Suite 1100, Chicago, IL
60604, or such other address as notified by either party to the other.

                                       19
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.

TOWER RISK MANAGEMENT CORPORATION
By: /s/ Marina Contiero
    --------------------------------
Title: Vice President
       -----------------------------
Date:  March 2, 2005
      ------------------------------
Attest:
       -----------------------------

VIRGINIA SURETY COMPANY, INC.

By: /s/ Oriona Bakka
    --------------------------------
Title: Senior Vice President
       -----------------------------
Date:  March 1, 2005
      ------------------------------
Attest:
       -----------------------------

                                       20
<PAGE>

                                    EXHIBIT A

                              SCHEDULE OF AUTHORITY

                 EFFECTIVE DECEMBER 1, 2004 TO DECEMBER 31, 2005

Agent is only authorized to accept or bind business, as defined in the
Classification Section below, subject to the amounts and stipulations indicated
below. Amounts in excess of the authorized limits or classifications must be
referred to Company for review and approval prior to binding.

         GROSS NET WRITTEN PREMIUM LIMIT A maximum of $ 23,500,000 unless Agent
         obtains the prior written consent of Company. Gross Net Written Premium
         shall mean gross written premium of Company less returned premium for
         cancellations and reductions.

         POLICY TERM Not more than one year.

         POLICY LIMITS AND COVERAGE CLASSIFICATIONS

         Small Market Business, Middle Market Business and Large Lines Real
         Estate General Liability Business.
<TABLE>
<CAPTION>

        -------------------------------------------------------------------------------------
        COVERAGE                            LIMIT
        -------------------------------------------------------------------------------------
<S>                                         <C>
        Commercial Property
        (including Equipment Breakdown) *   $30 Million
        Commercial General Liability

                                            $1 Million per Occurrence / $2 Million Aggregate
        -------------------------------------------------------------------------------------

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

         The above coverages are provided on ISO forms and certain independent
         manuscript forms to be agreed.

         No other classes of insurance may be written on Company's insurance
         policies.

      *  implementation effective January 15, 2005 in New York, New Jersey and
         Pennsylvania

                                       21
<PAGE>

         COMMISSIONS Company will allow Agent a commission equal to the
         commissions provided for in the Multiple Line Quota Share Reinsurance
         Agreement AR 15935 and from such commissions, Agent shall pay to
         Company the policy issuing fee and taxes, fees and assessments as
         provided for in Section 4.1.10 of the Managing General Agency Agreement
         between Company and Agent.

         TERRITORIAL LIMITATIONS Agent shall not issue any policy in any
         jurisdiction other than the authorized states defined as New York, New
         Jersey, Pennsylvania and Connecticut. Agent may provide coverage for
         risks located in states other than the authorized states if such risks
         are ancillary to a schedule of locations in a policy where the majority
         of the risks are located within the authorized states. Company at its
         own discretion may limit or revoke Agent's authority as regards any
         particular state.

         It is understood that Equipment Breakdown policies will only be issued
         in the states of New York, New Jersey and Pennsylvannia

         RATES AND UNDERWRITING Agent shall not issue any policy that does not
         meet the rate and Tower Group Underwriting Guidelines set forth in
         Exhibit B attached to the Managing General Agency Agreement between
         Company and Agent, as amended from time to time by Company, and
         incorporated herein by reference, unless such policy is referred to
         Company for review and approval prior to binding.

         REINSURANCE Agent is not allowed to purchase treaty or facultative
         reinsurance on behalf of Company except as permitted under attached
         Exhibit E.

         PROFIT COMMISSION Thirty six (36) months after the expiration of this
         Agreement, and annually thereafter, Company will consider commuting the
         Multiple Line Quota Share Reinsurance Agreement with Tokio Millennium
         Re Ltd., Hannover Reinsurance (Ireland) Limited and E+S Reinsurance
         (Ireland) Limited, reference number AR15935, effective December 1, 2004
         to December 31, 2005 (Multiline Quota Share). Company will use the most
         recent actuarial review submitted by Agent in this consideration
         process. If the Company, with agreement of Agent, elects to commute
         said Multiple Line Quota Share, Company and Agent agree that Company
         will pay a Profit Commission from the commutation to Agent. The Profit
         Commission will be calculated by Agent when Company notifies Agent that
         it has commuted Multiple Line Quota Share and the annually thereafter
         each by June 1st using December 31st figures as follows:

                                       22
<PAGE>

         Multiple Line Quota Share's Commutation Premium less:

            (i)   Reserves for losses reported and outstanding;

            (ii)  Reserves for losses incurred but not reported;

            (iii) Reserves for loss expenses;

            (iv)  Reserves for unearned premiums;

            (v)   Reasonable expenses incurred by the Company if the company is
                  required to carry out the Agent's duties in accordance with
                  the authority granted to them under this Agreement and

            (vi)  Any amounts Agent owes Company in accordance with the terms
                  and conditions of this Agreement.

First Calculation - If the calculation
         produces a positive number that number will be multiplied by 50% to
         calculate the Profit Commission due Agent. Company will retain the
         remaining 50%. If the calculation produces a deficit number, Company
         will seek reimbursement under the terms and conditions of Quota Share
         Reinsurance Agreement with Tower Insurance Company of New York,
         reference number VSC2004/73, effective December 1, 2004 to December 31,
         2005 (TICNY Quota Share).

         Second and Subsequent Calculations - If the calculation produces a
         positive number, that number will be multiplied by the applicable
         percentage listed below to calculate the Profit Commission due Agent
         less any previously paid Profit Commission

         Second Annual Calculation - 60%

         Third Annual Calculation - 70%

         Fourth annual Calculation - 80%

         Fifth Annual Calculation - 90%

         Sixth Annual Calculation - 100%

                                       23
<PAGE>

         The remaining profit, if any, will be retained by Company. If the
         calculation produces a deficit number, Agent will pay back any Profit
         Commission paid from previous calculations and, if still in a deficit,
         Company will seek reimbursement under the terms and conditions of TICNY
         Quota Share. Any Profit Commission due Agent will be paid by Company
         within thirty (30) days after receipt and confirmation by Company. Any
         return Profit Commission due Company will be paid by Agent with its
         calculation.

         It is agreed that Company may request an interim calculation if it is
         determined that the calculation will result in a deficit to Company.
         Agent warrants that it will immediately return any previously paid
         Profit Commission by wire transfer to Company's account. The validity
         of this interim calculation may be contested under the provisions of
         this Agreement but Agent will advance 100% of any previously paid
         Profit Commission while it is contesting.
         It is agreed that reserves for losses incurred but not reported will be
         determined by Agent's actuary and approved by Company's actuary. In
         event Company and Agent cannot agree on the value of (i) through (v) as
         set forth above, they will mutually appoint an independent actuary
         and/or appraiser to assess such obligations. Any expense associated
         with the appointment of an independent actuary and/or appraiser will be
         paid by Agent.

         Profit Commission calculations will be cumulative if Company elects to
         renew this Agreement and the Multiple Line Quota Share with Tokio
         Millennium Re Ltd., Hannover Reinsurance (Ireland) Limited and E+S
         Reinsurance (Ireland) Limited, or another reinsurer.

         Company's obligation to pay any profit commission is contingent upon
         receipt of such profit commission amounts from the reinsurer. The
         Company shall have no obligation to pay any profit commission if such
         profit commission is not received from the reinsurer. The Company shall
         have 30 (thirty) days from receipt of the profit commission to remit
         the commission to the Agent. The Company shall have no obligation to
         calculate any profit commission pursuant to the terms of this
         paragraph.

                                       24
<PAGE>

                                    EXHIBIT B

                             UNDERWRITING GUIDELINES
                 EFFECTIVE DECEMBER 1, 2004 TO DECEMBER 31, 2005

TO BE RETAINED ON FILE AT AGENT'S PRINCIPAL OFFICE

                                       25
<PAGE>

                                    EXHIBIT C

                             REINSURANCE AGREEMENTS
                 EFFECTIVE DECEMBER 1, 2004 TO DECEMBER 31, 2005

Multiple Line Quota Share Reinsurance Agreement with Tokio Millennium Re Ltd.,
Hannover Reinsurance (Ireland) Limited and E+S Reinsurance (Ireland) Limited,,
reference number AR 15935 effective December 1, 2004 to December 31, 2005 12:01
a.m. standard time.

Quota Share Reinsurance Agreement with Tower Insurance Company of New York,
reference number VSC2004/, effective December 1, 2004 to December 31, 2005 12:01
a.m. standard time.

First Property Excess of Loss Reinsurance Agreement, reference number AR 15512,
Effective December 1, 2003 to December 31, 2004.

First Property Excess of Loss Reinsurance Agreement, reference number AR 15512,
Effective January 1, 2005 to December 31, 2005.

Second Property Excess of Loss Reinsurance Agreement, reference number AR 15513,
Effective December 1, 2003 to December 31, 2004.

Second Property Excess of Loss Reinsurance Agreement, reference number AR 15513,
Effective January 1, 2005 to December 31, 2005.

                                       26
<PAGE>

                                    EXHIBIT D

                              CLAIMS BILLING RATES

Staff Claims Examiners                               $ 70              $150
Staff Claims Investigators                           $ 70              $130
Staff Claims Auditors                                $ 85              $150
Staff Claims Supervisors                             $110              $150
Staff Claims Managers                                $130              $175
Staff Claims Counsel                                 $185              $275
Staff Attorneys                                      $125              $275
Staff Paralegal                                      $ 55              $ 85

                                    EXHIBIT E

                   PROPERTY FACULTATIVE REINSURANCE PROCEDURES

Agent will be permitted to purchase facultative reinsurance on behalf of Company
on property policies with limits greater than $10 Million up to $30 Million.

o   Agent may obtain quotations directly from General Reinsurance Corporation
    and American Re-Insurance Company (Facultative Reinsurers). Use of other
    Facultative Reinsurers must be pre-approved by the Company.

o   Agent will secure facultative quotes and bind the policies.

o   Agent will confirm that a policy is bound by sending Company an electronic
    mail confirmation and attaching a copy of the communication from the
    facultative reinsurer authorizing coverage. Company will be considered at
    risk only on policies where written confirmation of the facultative
    placement has been received.

o   When issuing the Policy, Agent will forward a complete copy, including all
    forms, to Facultative Reinsurers and Company.

o   Facultative Reinsurers will issue their reinsurance certificate, upon
    receipt of the Policy.

o   Original reinsurance certificates or a duplicate copy is to be forwarded to
    Company as soon as practicable

o   Facultative reinsurance placements will be segregated and so identified on
    the Company's monthly accounting bordereaux.

                                       27

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