Document:

Limited Deferred Compensation Plan

 Exhibit 10.1 
  
  
  
 Argo Group
International Holdings, Ltd. 
 Deferred Compensation Plan for Non-Employee Directors 
 Effective February 12, 2008 
  

 CONTENTS 
  

					
	ARTICLE	  		  	PAGE
			
	 ARTICLE I
	  	References, Construction and Definitions	  	1
			
	 ARTICLE II
	  	Administration	  	4
			
	 ARTICLE III
	  	Participation	  	5
			
	 ARTICLE IV
	  	 Awards, Deferrals and Matching Contributions
	  	5
			
	 ARTICLE V
	  	Investments and Funding of Benefit Payments	  	6
			
	 ARTICLE VI
	  	Deferred Compensation Accounts	  	6
			
	 ARTICLE VII
	  	Distributions from the Plan	  	7
			
	 ARTICLE VIII
	  	Participant Rights	  	8
			
	 ARTICLE IX
	  	Miscellaneous	  	9

  

 ARGO GROUP AMENDED AND RESTATED DEFERRED COMPENSATION PLAN 
 FOR NON-EMPLOYEE DIRECTORS 
 Effective February 12, 2008 
 The purpose of this Plan is to provide certain deferred compensation benefits to non-employee members of
the board of directors of Argo Group International Holdings, Ltd. (the “Company”). The Plan and benefits provided under the Plan are intended to be in compliance with the requirements of Section 409A of the Code. This Plan shall be
deemed an unfunded promise to pay and the rights of any Participant or Beneficiary to benefits under this Plan shall, at all times, be no more than that of a general and unsecured creditor of the Company. 
 ARTICLE I 
 References, Construction
and Definitions 
 This Plan and any other documents created under this Plan are intended to be understood by Participants. Words used in this Plan,
other than as specifically defined in this Article I, have the meaning their context dictates. If, however, a situation arises in which an undefined word has more that one meaning, the ambiguity shall be resolved by the Plan Administrator, pursuant
to its power under Article II. 
 Unless otherwise indicated, all references made in this Plan shall be to articles and sections contained in this Plan. The
headings and subheadings have been inserted for convenience of reference only and are to be ignored in construction of the provisions of this Plan. In the construction of this Plan, the singular shall include the plural wherever appropriate.

 The following terms (in alphabetical order) shall have the meanings set forth opposite such terms for purposes of this Plan: 
  

	1.01	Advisory Committee: A group of one or more individuals appointed by the Company to perform the duties of the Plan Administrator, in accordance with the terms of the Plan.

  

	1.02	Beneficiary: the Spouse of the Participant as of the Participant’s date of death or, if so named, any other person or legal entity designated by the Participant in the
Participant’s Enrollment Form. If a Participant fails to designate a Beneficiary on an Enrollment Form or each of the Participant’s designated Beneficiaries die before benefits become payable under this Plan, then such Participant’s
Beneficiary shall be the Participant’s estate. 

  

	1.03	 Benefit Payment: a payment made to a Participant or Beneficiary triggered by a Distribution Event under this Plan equal to the sum of (a) the market
value of a Participant’s Stock Unit Account determined by reference to the closing price of the Company’s stock on the national stock exchange on which such stock is listed as of the date of the Distribution Event or as of the date that is
exactly six (6) months after the date of the Distribution Event, whichever is higher, (b) the principal value of the Cash Compensation Account as of the date of the Distribution Event, and (c) interest as provided in Section 6.04
below on the principal value contained in the Cash 

	 	 
Compensation Account accrued from the date of the Distribution Event through the date on which payment is made by the Plan Administrator.

  

	1.04	Board: The Board of Directors of the Company. 

  

	1.05	Cash Compensation Account: An account balance shown on a separate bookkeeping record which reflects the amount of cash compensation deferred by each Participant that may
become payable to a Participant or Beneficiary under this Plan. The Account shall be a bookkeeping entry only and shall be utilized solely as a devise to measure and determine the amount of any Benefit Payment to the Participant or Beneficiary upon
the occurrence of a Distribution Event. 

  

	1.06	Change in Control: The earliest of the following to occur: 

  

	 	(a)	The date that any one person or group (as that term is defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)) (“Group”), acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person or Group) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company; provided that if any one person or
Group is considered to effectively control the Company, the acquisition of additional control of the Company by the same person or Group is not considered to cause a Change in Control of the Company; 

  

	 	(b)	The date that any one person or Group acquires ownership of the stock of the Company that, together with stock held by such person or Group, constitutes more than 50% of the total
fair market value or total voting power of the stock of the Company; provided that if any one person or Group is considered to own more than 50% of the total fair market value or total voting power of the Company, the acquisition of
additional control of the Company by the same person or Group is not considered to cause a Change in Control of the Company; provided further that this part (b) applies only when there is a transfer or issuance of stock of the Company
and the Company’s stock remains outstanding after the transaction; 

  

	 	(c)	The date that a majority of the members of the Board of Directors of the Company is replaced during any 12-month period by directors whose appointment or election is not endorsed by
a majority of the members of the Board of Directors of the Company; or 

  

	 	(d)	The date that any one person or Group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or Group) assets from the
Company that have a total “gross fair market value” equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions; provided that a transfer of
assets by the Company to a related person, as described in Treasury Regulation Section 1.409A-3(i)(5)(vii)(B), is not considered to cause a Change in Control of the Company. For this purpose, “gross fair market value” means the value
of the assets of the Company, or the assets being disposed of, determined without regard to any liabilities associated with such assets. 

  

 2 

	 	    	Notwithstanding anything contained herein to the contrary, it is intended that there will be a Change in Control under this Plan only to the extent such event or transaction would
constitute a “change in control event” as such term is defined in Treasury Regulation Section 1.409A-3(i)(5), and thus the provisions of the definition of Change in Control shall be applied and interpreted in a manner consistent with
the provisions of such Treasury Regulation, as amended from time to time. 

  

	1.07	Code: the Internal Revenue Code, as amended. 

  

	1.08	Company: Argo Group International Holdings, Ltd. 

  

	1.09	Deferred Compensation: the amount of compensation not yet earned which is awarded to the Participant and which the Participant and the Company agree shall be deferred in
accordance with the Plan. 

  

	1.10	Distribution Event: the occurrence of an event set out in Section VII below which entitles a Participant or Beneficiary to a Benefit Payment. 

  

	1.11	Effective Date: February 12, 2008. 

  

	1.12	Enrollment Form: the form made available by the Plan Administrator for each Participant to acknowledge and accept participation in this Plan, defer fees, and to designate a
Beneficiary 

  

	1.13	ERISA: the Employee Retirement Income Security Act of 1974, as amended. 

  

	1.14	Participant: a non-employee member of the Board of Directors of the Company. Each non-employee Board member, as of the Effective Date, shall be deemed a Participant.

  

	1.15	Plan: The Argo Group International Holdings, Ltd. Deferred Compensation Plan for Non-Employee Directors, as may be amended from time to time. 

  

	1.16	Plan Administrator: The Company shall be the Plan Administrator. However, certain individuals may be appointed to the Advisory Board pursuant to Section 2.01 to perform
the duties of Plan Administrator. 

  

	1.17	Plan Year: the 12-consecutive month period commencing January 1st of each year and ending the following December 31st. The first Plan year shall be a short plan
year, beginning February 12, 2008 and ending December 31, 2008. 

  

	1.18	Spouse: the individual to whom the Participant is legally married as of the date the Participant terminates services as a member of the Board. 

  

	1.19	 Stock Units: bookkeeping entry units which mirror Company stock in value and are awarded to Participants pursuant to the terms of the Plan. The value of
Stock Units shall fluctuate on an equal basis with the Company’s common stock based upon the market price of the Company’s common stock on the national stock exchange on which such stock is listed. Dividends awarded on Company common stock
shall be treated as awarded on Stock Units on an equal basis. The value of such dividends shall be 

  

 3 

	 	 
converted into additional Stock Units (in the method described above) as of the date such dividends are declared. 

  

	1.20	Stock Unit Account: An account balance shown on a separate bookkeeping record, reflecting an accumulation of Stock Units for each Participant that may become payable to a
Participant or Beneficiary under this Plan. The Account shall be a bookkeeping entry only and shall be utilized solely as a device to measure and determine the amount of any Benefit Payment to the Participant or Beneficiary upon the occurrence of a
Distribution Event. 

  

	1.21	Termination With Cause: Termination of the Participant’s service as a member of the Board as a result of the Participant’s dishonesty, wrongful conduct, or willful
malfeasance. Such conduct may include theft, fraud or any act that reflects negatively on the Board, Company and/or the Company’s employees, Advisory Committee, shareholders, or any affiliate, as determined by the Plan Administrator in its sole
and absolute discretion. 

  

	1.22	Total Disability: any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not
less than twelve (12) months and that renders the participant unable to engage in any substantial gainful activity. 

 ARTICLE II 
 Administration 
  

	2.01	Plan Administrator. The Company shall be the Plan Administrator and named fiduciary of this Plan for purposes of ERISA. To perform its duties as Plan Administrator, however,
the Company may appoint one or more individuals to the Advisory Committee to perform the duties of the Plan Administrator. Any individual appointed to the position of Advisory Committee Member shall not be permitted to participate in this Plan.

  

	2.02	Duties and Powers. It shall be the principal duty of the Plan Administrator to see that the Plan is carried out in accordance with its terms. The performance of this duty may
be accomplished by, but is not limited to, the following actions: 

  

	 	(a)	The Plan Administrator may exercise any and all powers necessary to fulfill all responsibilities under the Plan. 

  

	 	(b)	The Plan Administrator may seek advice from others in exercising its duties under the Plan. Individuals providing such advice to the Plan Administrator shall not be deemed to serve
in an official capacity and, therefore, will not be disqualified from participating in the Plan. 

  

	 	(c)	The Plan Administrator shall interpret the Plan and establish such rules and documentation as deemed reasonable, necessary and proper to implement any and all purposes of the Plan.

  

 4 

	 	(d)	Any decision made, or action taken, by the Plan Administrator arising out of or in connection with the interpretation and administration of the Plan shall be in the Plan
Administrator’s sole discretion, except as expressly limited by this Plan, and shall be final and conclusive in all cases. 

  

	 	(e)	The Plan Administrator may correct any defect, supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent deemed necessary.

 ARTICLE III 
 Participation 
  

	3.01	Eligibility. All non-employee members of the Board are eligible participate in the Plan. 

  

	3.02	Continued Participation. A Participant shall remain a Participant until the earlier of the Participant’s Total Disability, retirement, death, or termination of services
as a member of the Board. 

  

	3.03	Agreement. A Participant’s acceptance of the terms and conditions of this Plan shall be evidenced by the Enrollment Form executed by the Participant and the Plan
Administrator. Such Enrollment Form shall incorporate the provisions of this Plan by reference and shall be considered part of this Plan. 

 ARTICLE IV 
 Awards, Deferrals and Matching Contributions 
  

	4.01	Awards. The Compensation Committee, at its discretion, may provide non-cash compensation awards to Participants, which shall be credited to each individual Participant’s
Account in the form of Stock Units as of the date such award is granted, (“Awards”). 

  

	4.02	Deferral Contributions. A Participant may defer all or part of the Participant’s anticipated cash compensation for service as a member of the Board within the
limitations described in this Article IV. Such deferrals must be made in writing, in accordance with the requirements of the Enrollment Form, prior to the beginning of any Plan Year during which such cash compensation is anticipated to be earned or
within thirty (30) days after becoming a Participant in the Plan, and such election shall be irrevocable for the applicable Plan Year. 

  

	4.03	Deferral Amounts. A Participant may defer either fifty percent (50%) or one hundred percent (100%) of the Participant’s anticipated cash compensation for
service as a Director each Plan Year; provided, however, that any deferral election shall apply only to compensation for services rendered as a Director subsequent to the date on which a deferral election is made.

  

 5 

	4.04	Matching Contributions. The Company shall grant a matching Award equal to 75% on all cash compensation deferred. The Award shall be converted into Stock Units (on an equal
basis with Company common stock) based upon the fair market value of the Company’s common stock on the date the deferral amount would otherwise have been earned as determined by the closing price of the stock on the national stock exchange on
which the stock is listed. 

 ARTICLE V 
 Investments and Funding of Benefit Payments 
  

	5.01	Source of Distributions. All distributions under this Plan shall be made by the Company in cash. 

  

	5.02	Company Assets. The Company, at its discretion, may acquire assets in connection with its liabilities assumed under this Plan. Such assets, if any, acquired or held to pay
benefits under the Plan shall not be deemed to be held for the benefit of any Participant or Beneficiary, except to the extent that such assets are restricted under the terms of a trust created to hold such assets. To the extent any assets are held
by the Company in a separate fund or trust in connection with its liabilities assumed under this Plan, such assets shall continue to be subject to the Company’s creditors in the event of bankruptcy or insolvency of the Company. All assets
acquired or held in connection with the Company’s liabilities under this Plan shall remain the sole property of the Company and part of the unpledged and unrestricted general assets of the Company, subject only to the claims of the
Employer’s general creditors. In no event shall any Participant or Beneficiary have a greater interest or status than that of a general and unsecured creditor as to any assets of the Company in connection with this Plan.

  

	5.03	Investment Risk. The Company, its officers, directors and employees shall not be liable to any Participant or Beneficiary for any loss on the value to Stock Units because of
changes in market value, regardless if such market value change is the result of action (or inaction) taken by the Company, its officers, directors or employees. 

 ARTICLE VI 
 Deferred Compensation Accounts 
  

	6.01	Status of Accounts. Stock Unit Accounts and Cash Compensation Accounts shall be established via booking entries only. The Participant shall be a general creditor of the
Company and shall not have a vested interest, a secured position or a preferred position as to the amounts shown in such accounts. No account established under this Plan shall be construed to be a trust account for any Participant or Beneficiary.

  

	6.02	Opening Balance of Stock Unit Account: Each Participant’s Stock Unit account shall be credited with an initial balance of 1,650 Stock Units. 

  

	6.03	Value of Stock Unit Account. At any specific date the value of a Participant’s Stock Unit Account shall be equal to the hypothetical market value of the Stock Units
recorded therein using the closing price of the Company’s stock on the national stock exchange on which such stock is listed. 

  

 6 

	6.04	Interest. All amounts recorded in the Cash Compensation Account shall be credited with bookkeeping entries for interest, compounded annually, earned at a rate two
(2) percent above the prime commercial lending rate published in the Wall Street Journal on such date or the last preceding business day, first using the rate in effect on the date the Plan was adopted and using the prime rate in effect on
May 1 each year thereafter. 

  

	6.05	Non-Assignability of Accounts. 

  

	 	(a)	The interests of the Participant in the Stock Unit Account or the Cash Compensation Account shall not be assignable or otherwise available to the Participant until actually paid to
the Participant or Beneficiary following a Distribution Event under this Plan. 

  

	 	(b)	The interests of the Participant in the Stock Unit Account and Cash Compensation Account shall not be subject to the rights of creditors of the Participant and shall be exempt from
execution, attachment and all other legal or equitable process of such creditors. 

 ARTICLE VII 
 Distributions from the Plan 
  

	7.01	Distribution Events. A Participant or Beneficiary under this Plan shall be eligible to receive a Benefit Payment under this Plan only upon the occurrence of a Distribution
Event, which shall be deemed to occur on: 

  

	 	(a)	The date on which a Participant ceases to be a member of the Board due to the Participant’s retirement and such cessation of membership constitutes a “separation from
service” within the meaning of Section 409A of the Code. 

  

	 	(b)	The date on which a Participant ceases to be a member of the Board due to death or Total Disability. 

  

	 	(c)	The date on which a Participant ceases to be a member of the Board for any reason other than for death, retirement, Total Disability or Termination with Cause and such cessation of
membership constitutes a “separation from service” within the meaning of Section 409A of the Code; 

  

	 	(d)	The date on which a Change in Control becomes effective. 

  

	7.02	Benefit Payments. 

  

	 	(a)	 Upon Retirement or Termination Without Cause. Upon the occurrence of a Distribution Event due to retirement or because the Participant ceases to be a member
of the Board for any reason other than for retirement, death, Total Disability or Termination with Cause, the Plan Administrator shall distribute the 

  

 7 

	 	 
resulting Benefit Payment to the Participant or the Participant’s Beneficiary as soon as administratively possible following the date which is six
(6) months (the “Six (6) Month Date”) after the date of the Distribution Event and in no event later than December 31 of the calendar year in which the Six (6) Month Date occurs. 

  

	 	(b)	Upon Death or Total Disability. Upon the occurrence of a Distribution Event due to death or Total Disability, the Plan Administrator shall distribute the resulting Benefit
Payment to the Participant or Participant’s Beneficiary as soon as administratively possible immediately following the date of Participant’s death or Total Disability and in no event later than December 31 of the calendar year in
which such date occurs. 

  

	 	(c)	Change of Control. Upon the occurrence of a Distribution Event relating to a Change of Control, the Plan Administrator shall distribute the resulting Benefit Payment to the
Participant or Participant’s Beneficiary as soon as administratively possible following the Six (6) Month Date after the date of the Distribution Event and in no event later than December 31 of the calendar year in which the Six
(6) Month Date occurs. 

  

	7.03	Termination With Cause. If a Participant ceases to be a member of the Board as a result of Termination With Cause, then the Participant’s participation in this Plan
shall terminate automatically as of the date the Participant ceases to be a member of the Board, and the Participant shall not be entitled to any Benefit Payment under this Plan. 

  

	7.04	Mental or Legal Incompetence. The Company, in its sole discretion, may make a Benefit Payment to the guardian or other legal representative of a Participant or Beneficiary,
if the Participant or Beneficiary is determined by a court of proper jurisdiction to be mentally or legally incompetent to receive such benefit distribution. Any such distribution shall be in full and complete satisfaction of all claims whatsoever
by or on behalf of such Participant under this Plan against the Company, the Plan Administrator, any member of the Board, other Participants, shareholders of the Company, and any other person acting on behalf such persons or the Company.

 ARTICLE VIII 
 Participant Rights 
  

	8.01	Rights to Benefits. The rights and status of a Participant or Beneficiary to the distribution of benefits or the payment of amounts under this Plan shall be the same as the
rights and status of any other general and unsecured creditor of the Company. If the Company segregates assets in a separate fund or trust for the payment of amounts under this Plan, such fund or trust does not create in any Participant or
Beneficiary a greater interest or status than that of a general and unsecured creditor. 

  

 8 

	8.02	Director Rights. No member of the Board shall have any claim or right to benefits under this Plan, except as specifically provided in this Plan and authorized by the Plan
Administrator. 

  

	8.03	Fiduciary Indemnity. No Participant or Beneficiary shall look to, or have any claim whatsoever against any person acting on behalf of the Company for the distribution or
payment of benefits under this Plan. 

 ARTICLE IX 
 Miscellaneous 
  

	9.01	Not an Employment Contract. THIS PLAN IS NOT AN EMPLOYMENT CONTRACT. Participants are and shall continue to be non-employee directors. Nothing in this Plan shall be construed
to limit in any way the right of a Participant to terminate the Participant’s services as a member of the Board, or the right of the shareholders or Board to terminate the director’s services as a member of the Board.

  

	9.02	Amendment or Termination. The Company shall have the right to amend or terminate this Plan at any time. However, any such action shall not modify the obligation of the
Company to pay a benefit to any Participant, determined as of the date of such amendment or termination, except to the extent that such modification is mutually agreed to by the Participant and the Company. Absent a mutual agreement, the benefit of
a Participant shall not be less than the benefit such Participant would be entitled to receive under this Plan, as of the date of such amendment or termination of this Plan. 

  

	9.03	Indemnification. The Company shall indemnify and hold harmless any employee who may act on behalf of the Company in the administration of this Plan from and against
liability, loss, cost or expense (including reasonable attorneys’ fees) incurred at any time as a result of or in connection with any claims, demands, actions or causes of action of any person, Participant or Beneficiary, any person claiming a
benefit through or under any of them, or any other person, party or authority claiming to have an interest in this Plan or standing to act for any persons or groups having an interest in this Plan, for or on account of, any of the acts or omissions
(or alleged acts or omissions) of any employee, director or officer of the Company, the Plan Administrator, or any individual acting on behalf of the Plan Administrator, except to the extent resulting from such person’s willful misconduct.

  

	9.04	Tax Effects. The Company makes no warranties or representations with regard to the tax effects or results of this Plan. Any Participant participating under this Plan shall be
deemed to have relied upon the Participant’s own tax advisors with regard to such effects. 

  

	9.05	No Assignment; Binding Effect. Neither Participants nor Beneficiaries shall have the right to alienate, assign, commute or otherwise encumber an Account or potential benefit
due under this Plan for any purpose whatsoever, and any attempt to do so shall be disregarded completely as null and void. The provisions of this Plan shall be binding on each Participant and on any other person or entity that claims a benefit under
this Plan. 

  

 9 

	9.06	Governing Law. This Plan shall be construed in accordance with the laws of the State of Texas to the extent that such laws are not preempted by ERISA or other federal laws.

  

	9.07	Expenses. The Company shall pay all costs, expenses and fees incurred in providing services to the Plan and all other costs and expenses of administering and operating the
Plan.

  

	9.08	No Funding Required. The Company is not required to fund this Plan. It is the Company’s intention that this Plan be construed as an unfunded deferred compensation plan
maintained for non-employee members of the Board. 

  

	9.09	It is the intention that the provisions of this Plan comply with Section 409A of the Code and the rules, regulations and other authorities promulgated thereunder (including the
transition rules thereof) and all provisions of this Plan will be construed and interpreted in a manner consistent with Section 409A of the Code. 

  

	9.10	Entire Agreement. This Plan, as amended from time to time and supplemented with a properly completed and executed Enrollment Form, represents the entire agreement made
between such Participant and the Company with regard to all matters contained herein. 

  

	9.11	Severability. If any provision of this Plan is held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of this Plan,
and the remaining parts of this Plan shall be construed and enforced as if such illegal and invalid provisions had never been included. 

 IN
WITNESS WHEREOF, the Company has executed this Plan as of this 12th day of February, 2008. 
 Argo Group International Holdings, Ltd.

  

									
					
	By:	 	/s/ Mark E. Watson III	 		 	Attest:	 	/s/ Barbara C. Bufkin
					
	Title:	 	President and CEO	 		 	Title:	 	Senior Vice President

  

 10First Casualty Excess of Loss Reinsurance Contract

 Exhibit 10.1 
 INTERESTS AND LIABILITIES AGREEMENT 
 (the “Agreement”) 
 of 
 ASPEN INSURANCE LIMITED

 (the “Subscribing Reinsurer”) 
 with respect to the 
 FIRST CASUALTY EXCESS OF LOSS 
 REINSURANCE CONTRACT 
 (the
“Contract”) 
 issued to 
 AMERICAN INTERSTATE INSURANCE COMPANY 
 DeRidder, Louisiana 
 and 
 AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS 
 Austin, Texas 
 and 
 SILVER OAK CASUALTY, INC. 
 DeRidder,
Louisiana 
 and 
 any
other insurance companies which are now or hereafter come under the ownership, 
 control, or management of American Insurance Group

 (the “Company”) 
 The Subscribing
Reinsurer shall have a 50.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company. 
 This Agreement shall commence at 12:01 a.m. Standard Time, January 1, 2008 and shall Continue in force until 12:01 a.m., Standard Time, January 1, 2011. 
 The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be Several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers. 

 IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has Executed this Agreement as
of the date specified below: 
 Signed this 30th day of January, 2008. 
  

			
	By:	 	/s/ Mirek Wieczorek
	
	Print name: Mirek Wieczorek
	Title: Senior Underwriter

 INTERESTS AND LIABILITIES AGREEMENT 
 (the “Agreement”) 
 of 
 HANNOVER REINSURANCE (IRELAND) LIMITED 
 (the “Subscribing Reinsurer”) 
 with respect to the 
 FIRST CASUALTY EXCESS OF LOSS 
 REINSURANCE CONTRACT 
 (the “Contract”) 
 issued to

 AMERICAN INTERSTATE INSURANCE COMPANY 
 DeRidder, Louisiana 
 and 
 AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS 
 Austin, Texas 

and 
 SILVER OAK CASUALTY, INC.

 DeRidder, Louisiana 
 and 
 any other insurance companies which are now or hereafter come under the ownership, 
 control, or management of American Insurance Group 
 (the “Company”) 
 The Subscribing Reinsurer shall have a 50.00% share in the interests and liabilities of the
“Reinsurer” as set forth in the Contract attached hereto and executed by the Company. 
 This Agreement shall commence at 12:01 a.m. Standard Time,
January 1, 2008 and shall Continue in force until 12:01 a.m., Standard Time, January 1, 2011. 
 The share of the Subscribing Reinsurer in the
interests and liabilities of the “Reinsurer” shall be Several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other
subscribing reinsurers. 

 IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has Executed this Agreement as
of the date specified below: 
 Signed this 30th day of January, 2008. 
  

			
	
		
	By:	 	/s/ David Maguire
	
	Print name: David Maguire
	Title: Underwriter
		
	By:	 	/s/ Kathrin Wissner
	
	Print name: Kathrin Wissner
	Title: Associate Director

 AMERICAN INTERSTATE INSURANCE COMPANY 
 DeRidder, Louisiana 
 and 
 AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS 
 Austin, Texas 
 and 
 SILVER OAK CASUALTY, INC. 
 DeRidder, Louisiana 
 and 
 any other insurance companies which are now or hereafter come under the
ownership, 
 control or management of Amerisafe Insurance Group 
 FIRST CASUALTY EXCESS OF LOSS 
 REINSURANCE CONTRACT 

 TABLE OF CONTENTS 
  

					
	I	  	 BUSINESS COVERED
	  	1
			
	II	  	 TERM
	  	2
			
	III	  	 SPECIAL TERMINATION
	  	2
			
	IV	  	 DEFINITIONS
	  	4
			
		  	 Act of Terrorism
	  	4
			
		  	 Declaratory Judgment Expense
	  	4
			
		  	 Extra Contractual Obligations/Loss in Excess of Policy Limits
	  	4
			
		  	 Loss Adjustment Expense
	  	5
			
		  	 Loss Occurrence
	  	5
			
		  	 Written Premium
	  	6
			
		  	 Policy
	  	6
			
		  	 Contract Year
	  	6
			
		  	 Policy Year Manual Payroll (excluding clerical)
	  	7
			
		  	 Ultimate Net Loss
	  	7
			
	V	  	 TERRITORY
	  	7
			
	VI	  	 EXCLUSIONS
	  	7
			
	VII	  	 TERRORISM RISK INSURANCE PROGRAM REAUTHORIZATION ACT
	  	10
			
	VIII	  	 COVERAGE
	  	10
			
	IX	  	 MATERIAL CHANGE
	  	11
			
	X	  	 REINSURANCE PREMIUM
	  	13
			
	XI	  	 FUNDS WITHHELD ACCOUNT
	  	14
			
	XII	  	 NOTICE OF LOSS AND LOSS SETTLEMENTS
	  	15
			
	XIII	  	 LIABILITY OF REINSURERS
	  	15
			
	XIV	  	 LATE PAYMENTS
	  	15
			
	XV	  	 REPORTS AND REMITTANCES
	  	17
			
	XVI	  	 COMMUTATION
	  	18
			
	XVII	  	 NOTIONAL EXPERIENCE ACCOUNT
	  	19
			
	XVIII	  	 ANNUITIES AT THE COMPANY’S OPTION
	  	20
			
	XIX	  	 SUNSET
	  	20
			
	XX	  	 SUBROGATION
	  	21
			
	XXI	  	 ERRORS AND OMISSIONS
	  	21
			
	XXII	  	 OFFSET
	  	21
			
	XXIII	  	 CURRENCY
	  	21
			
	XXIV	  	 TAXES
	  	22

					
			
	XXV	  	 FEDERAL EXCISE TAX
	  	22
			
	XXVI	  	 NET RETAINED LINES
	  	22
			
	XXVII	  	 THIRD PARTY RIGHTS
	  	23
			
	XXVIII	  	 SEVERABILITY
	  	23
			
	XXIX	  	 GOVERNING LAW
	  	23
			
	XXX	  	 ACCESS TO RECORDS
	  	23
			
	XXXI	  	 CONFIDENTIALITY
	  	23
			
	XXXII	  	 INSOLVENCY
	  	24
			
	XXXIII	  	 ARBITRATION
	  	25
			
	XXXIV	  	 UNAUTHORIZED REINSURANCE
	  	26
			
	XXXV	  	 SERVICE OF SUIT
	  	29
			
	XXXVI	  	 MODE OF EXECUTION
	  	31
			
	XXXVII	  	 ENTIRE AGREEMENT
	  	31
			
	XXXVIII	  	 INTERMEDIARY
	  	31
			
		  	 Nuclear Incident Exclusion Clause - Liability - Reinsurance - U.S.A.
	  	

 FIRST CASUALTY EXCESS OF LOSS 
 REINSURANCE CONTRACT 
 (the “Contract”) 
 between 
 AMERICAN INTERSTATE INSURANCE
COMPANY 
 DeRidder, Louisiana 
 and 
 AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS 
 Austin, Texas 
 and 
 SILVER OAK CASUALTY, INC. 
 DeRidder, Louisiana 
 and 
 any other insurance companies
which are now or hereafter come under the ownership, control or management of Amerisafe Insurance Group 
 (collectively the
“Company”) 
 and 
 THE SUBSCRIBING REINSURER(S) EXECUTING THE 
 INTERESTS AND LIABILITIES AGREEMENT(S) 
 ATTACHED HERETO 
 (the
“Reinsurer”) 
 ARTICLE I 
 BUSINESS COVERED 
 By this Contract the Reinsurer agrees to reinsure the excess liability of the Company under its Policies that are
in force at the effective time and date hereof or issued or renewed at or after that time and date, and classified by the Company as Workers’ Compensation, Employers Liability, including but not limited to coverage provided under the U.S.
Longshore and Harbor Workers’ Compensation Act, Jones Act, Outer Continental Shelf Lands Act and any other Federal Coverage extensions and General Liability business, subject to the terms, conditions and limitations hereafter set forth.

  

 1 

 ARTICLE II 
 TERM 
  

	A.	This Contract shall apply to all losses occurring during the period 12:01 a.m., Standard Time, January 1, 2008 (as set forth in the Company’s policies) to
12:01 a.m., Standard Time, January 1, 2011. 

  

	B.	The Reinsurer shall have no right to either terminate or commute this Contract other than as set forth in paragraph G of the MATERIAL CHANGE ARTICLE or in the COMMUTATION ARTICLE or
in the SPECIAL TERMINATION ARTICLE. 

  

	C.	This Contract shall continue in force and shall apply, subject to all of the terms and limits hereof, to the Company’s Ultimate Net Loss until this Contract has been commuted
in accordance with the terms of the COMMUTATION ARTICLE or until all Ultimate Net Loss has been paid by the Reinsurer in accordance with the terms of the COVERAGE ARTICLE. 

 ARTICLE III 
 SPECIAL TERMINATION 
  

	A.	The Company may terminate a subscribing reinsurer’s share in this Contract by giving 90 days written notice to the subscribing reinsurer upon the happening of any one of the
following circumstances: 

  

	 	1.	A State Insurance Department or other legal authority orders the subscribing reinsurer to cease writing business, or 

  

	 	2.	The subscribing 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 agent known by whatever name, to take possession of its assets or control of its operations, or 

  

	 	3.	For any period not exceeding 12 months which commences no earlier than 12 months prior to the inception of this Contract, the subscribing reinsurer’s
policyholders’ surplus, as reported in the financial statements of the subscribing reinsurer, has been reduced by 20.0% or more, or 

  

	 	4.	The subscribing reinsurer has become merged with, acquired or controlled by any company, corporation, or individual(s) not controlling the subscribing reinsurer’s operations
previously, or 

  

	 	5.	The subscribing reinsurer has reinsured its entire liability under this Contract without the Company’s prior written consent, or 

  

 2 

	 	6.	The subscribing reinsurer receives an A. M. Best rating of lower than A-, or an S&P financial strength rating of lower than A-, or 

  

	 	7.	The subscribing reinsurer has ceased writing new and renewal reinsurance for the lines of business covered hereunder, or 

  

	 	8.	The Company’s outside auditors determine during the first two months of the Term of the Contract that the Contract does not provide sufficient risk transfer to constitute
reinsurance in accordance with the Financial Accounting Standards Board Statements guidelines. 

  

	B.	A subscribing reinsurer may terminate their share of this Contract by giving 90 days written notice to the Company upon the happening of any one of the following circumstances:

  

	 	1.	A State Insurance Department or other legal authority orders the Company to cease writing business, or 

  

	 	2.	The Company 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 agent known by whatever name, to take possession of its assets or control of its operations, or 

  

	 	3.	The Company has become merged with, acquired or controlled by any company, corporation, or individual(s) not controlling the subscribing reinsurer’s operations previously.

 In the event of termination in accordance with paragraph A or B, above, the liability of the subscribing reinsurer shall
be terminated in accordance with the expiration or termination provisions of the TERM ARTICLE except that the prior written notice given the subscribing reinsurer in paragraph A or B, above, will apply as regards notice of termination.

  

	C.	In the event of Special Termination, the earned premium and the limit of liability for the Contract Year will be prorated as of the termination date. The Company has the option to
commute past liabilities for losses in accordance with the COMMUTATION ARTICLE. 

  

	D.	 In the event the Company terminates a subscribing reinsurer’s share in this Contract under the provision of this Article, the Company shall have the option to
require the subscribing reinsurer to fund its share of outstanding loss and Loss Adjustment Expense reserves, reserves for losses and Loss Adjustment Expense incurred but not reported to the Company (IBNR as determined by the Company) and any other
balances or financial obligations. Within 30 days of the Company’s written request to fund, the subscribing reinsurer shall provide to the Company a clean, unconditional, evergreen, irrevocable letter of credit or a trust agreement which
establishes a trust account for the benefit of the Company. The method of funding must be acceptable to the Company, shall be established with a financial institution suitable to the Company, shall comply with any applicable state or federal laws

  

 3 

	 	 
or regulations involving the Company’s ability to recognize these agreements as assets or offsets to liabilities in such jurisdictions and shall be at
the sole expense of the subscribing reinsurer. The Company and the subscribing reinsurer may mutually agree on alternative methods of funding or the use of a combination of methods. This option is available to the Company at any time there remains
any outstanding liabilities of the subscribing reinsurer. Notwithstanding the foregoing, the Company shall not require funding in accordance with this subparagraph in the event the subscribing reinsurer has otherwise fully funded its obligations
under this Contract in a manner acceptable to the Company. 

 ARTICLE IV 
 DEFINITIONS 
  

	A.	Act of Terrorism 

 “Act of Terrorism” as used
herein shall mean any act that is certified as an “act of terrorism” under the Terrorism Risk Insurance Program Reauthorization Act of 2007 and any other extensions or amendments thereto (“TRIPRA”). 
  

	B.	Declaratory Judgment Expense 

 “Declaratory Judgment
Expense” as used herein shall mean all expenses incurred by the Company in connection with a declaratory judgment action brought to determine the Company’s defense and/or indemnification obligations that are allocable to a specific claim
subject to this Contract. Declaratory Judgment Expense shall be deemed to have been incurred on the date of the original loss (if any) giving rise to the declaratory judgment action. 
  

	C.	Extra Contractual Obligations/Loss in Excess of Policy Limits 

  

	 	1.	Extra Contractual Obligations 

 This Contract shall protect
the Company for any “Extra Contractual Obligations” which as used herein shall mean any punitive, exemplary, compensatory or consequential damages, other than Loss in Excess of Policy Limits, paid or payable by the Company as a result of
an action against it by its insured, its insured’s assignee or a third party claimant, by reason of alleged or actual negligence, fraud or bad faith on the part of the Company in handling a claim under a Policy subject to this Contract.

 An Extra Contractual Obligation shall be deemed to have occurred on the same date as the loss covered or alleged to be covered under the
Policy. 
  

	 	2.	Loss in Excess of Policy Limits 

 This Contract shall
protect the Company for any “Loss in Excess of Policy Limits” which as used herein shall mean an amount that the Company would have been contractually liable to pay had it not been for the limit of the original Policy as a 

  

 4 

 
result of an action against it by its insured, its insured’s assignee or a third party claimant. Such loss in excess of the limit shall have been
incurred because of failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud, or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action
against its insured or in the preparation or prosecution of an appeal consequent upon such action. 
  

	 	3.	Notwithstanding anything stated herein, this paragraph C shall not apply where an Extra Contractual Obligation and/or Loss in Excess of Policy Limits has been incurred due to
an adjudicated finding of fraud and/or criminal act committed by a member of the Board of Directors or a corporate officer or any employee of the Company acting individually or collectively or in collusion with a member of the Board of Directors or
a corporate officer or a partner of any other corporation or partnership. 

  

	D.	Loss Adjustment Expense 

 “Loss Adjustment
Expense” as used herein shall mean all costs and expenses allocable to a specific claim that are incurred by the Company in the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim, including court
costs and costs of supersedeas and appeal bonds, and including 1) pre-judgment interest, unless included as part of the award or judgment; 2) post-judgment interest; 3) legal expenses and costs incurred in connection with coverage questions and
legal actions connected thereto, including Declaratory Judgment Expense; and 4) a pro rata share of salaries and expenses of Company field employees, and expenses of other Company employees who have been temporarily diverted from their normal
and customary duties and assigned to the field adjustment of losses covered by this Contract. Loss Adjustment Expense does not include unallocated loss adjustment expense. Unallocated loss adjustment expense includes, but is not limited to, salaries
and expenses of employees, other than (4) above, and office and other overhead expenses. 
  

	E.	Loss Occurrence 

 “Loss Occurrence” as used
herein shall mean any one disaster or casualty or accident or loss or series of disasters or casualties or accidents or losses arising out of or caused by one event. Within the context of this definition and except for Occupational Disease and
Cumulative Trauma, the Company shall be the sole judge of what constitutes one event. 
  

	 	1.	As respects losses resulting from Occupational or Industrial Disease or Cumulative Trauma, each employee shall be considered a separate Loss Occurrence subject to the following:

 Losses resulting from Occupational or Industrial Disease or Cumulative Trauma suffered by employees of an insured for which
the employer is liable, as a result of a sudden and accidental event not exceeding 72 hours in duration, shall be considered one Loss Occurrence and may be combined with losses classified as other than Occupational or Industrial Disease or
Cumulative Trauma which arise out of the same 

  

 5 

 
event and the combination of such losses shall be considered as one Loss Occurrence within the meaning hereof. 
 “Occupational or Industrial disease” is any abnormal condition that fulfills all of the following conditions: 
 1. It is not traceable to a definite compensable accident occurring during the employee’s past or present employment 
 2. It has been caused by exposure to a disease producing agent or agents present in the workers’ occupational environment. 
 3. It has resulted in death or disability. 
 “Cumulative Trauma” is an injury that fulfils all of the following conditions: 
 1. It is not traceable to a definite
compensable accident occurring during the employees past or present employment and shall be as defined by applicable statutes or regulations. 
 2. It has occurred from and has been aggravated by a repetitive employment related activity. 
 3. It has resulted in death or
disability. 
  

	 	2.	As respects General Liability policies where the Company’s limit of liability for Products and Completed Operations coverages is determined on the basis of the insured’s
aggregate losses during a policy period, all such losses proceeding from or traceable to the same causative agency shall, at the Company’s option, be deemed to have been caused by one occurrence commencing at the beginning of the policy period,
it being understood and agreed that each renewal or annual anniversary date of the policy involved shall be deemed the beginning of a new policy period. 

  

	F.	Written Premium 

 “Written Premium” as used
herein is defined as used in the company’s data system. 
  

	G.	Policy 

 “Policy” or “Policies” as used
herein shall mean the Company’s binders, policies and contracts providing insurance or reinsurance on the classes of business covered under this Contract. 
  

	H.	Contract Year 

 “Contract Year” as used herein
shall mean each 12-month period as follows: 
  

 6 

	 	1.	Contract Year 1: 12:01 a.m., Standard Time, January 1, 2008 (as set forth in the Company’s policies) to 12:01 a.m., Standard Time, January 1, 2009.

  

	 	2.	Contract Year 2: 12:01 a.m., Standard Time, January 1, 2009 (as set forth in the Company’s policies) to 12:01 a.m., Standard Time, January 1, 2010.

  

	 	3.	Contract Year 3: 12:01 a.m., Standard Time, January 1, 2010 (as set forth in the Company’s policies) to 12:01 a.m., Standard Time, January 1, 2011.

  

	I.	Policy Year Manual Payroll (excluding clerical) 

	

 “Policy Year Manual Payroll (excluding clerical)” shall mean manual payroll as
used for applying manual premium rates for policies incepting or renewed during the calendar year excluding manual payroll for Manual Class Codes 8810 and 953. The 2007 Policy year manual payroll (excluding clerical) is estimated to be
$3,340,487,000. 
  

	J.	Ultimate Net Loss 

 “Ultimate Net Loss” shall
mean the actual loss, including any pre-judgment interest which is included as part of the award or judgment, “Second Injury Fund” assessments that can be allocated to specific claims, Loss Adjustment Expense, 90% of Loss in Excess of
Policy Limits, and 90% of Extra Contractual Obligations, paid or to be paid by the Company on its net retained liability after making deductions for all recoveries, subrogations and all claims on inuring reinsurance, whether collectible or not;
provided, however, that in the event of the insolvency of the Company, payment by the Reinsurer shall be made in accordance with the provisions of the INSOLVENCY ARTICLE. Nothing herein shall be construed to mean that losses under this Contract are
not recoverable until the Company’s Ultimate Net Loss has been ascertained. 
 Notwithstanding the definition of “Ultimate Net
Loss” herein, the provisions of paragraph D of the COVERAGE ARTICLE as respects the Minnesota Workers’ Compensation Reinsurance Association shall apply. 
 ARTICLE V 
 TERRITORY 
 The territorial limits of this Contract shall be identical with those of the Company’s Policies. 
 ARTICLE VI 
 EXCLUSIONS 
  

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

  

	 	1.	Reinsurance assumed by the Company under obligatory reinsurance agreements, except: 

  

 7 

	 	a.	Agency reinsurance where the policies involved are to be reunderwritten in accordance with the underwriting standards of the Company and reissued as Company policies at the next
anniversary or expiration date; and 

  

	 	b.	Intercompany reinsurance between any of the reinsured companies under this Contract. 

  

	 	2.	Nuclear risks as defined in the “Nuclear Incident Exclusion Clause – Liability – Reinsurance – U.S.A.” (NMA 1590 21/9/67) attached hereto.

  

	 	3.	Liability as a member, subscriber or reinsurer of any Pool, Syndicate or Association, including Assigned Risk Plans or similar plans; however, this exclusion shall not apply to
liability under a Policy specifically designated to the Company from an Assigned Risk Plan or similar plan. 

  

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

  

	 	5.	Any “Act of Terrorism” directly or indirectly involving the use of nuclear, chemical, biological or radiological devices. 

  

	 	6.	Business written to apply in excess of a deductible of more than $25,000, and business issued to apply specifically in excess over underlying insurance. However, if the Company is
required, by any state regulation, to provide a deductible of more than $25,000, this exclusion shall not apply. 

  

	 	7.	Workers’ Compensation where the principal exposure, as defined by the governing class code, is: 

  

	 	a.	Operation of aircraft, but only if the annual estimated policy premium is $250,000 or more; 

  

	 	b.	Operation of Railroads, subways or street railways; 

  

	 	c.	Operation or navigation of vessels or barges; 

  

	 	d.	Manufacturing, assembly, packing or processing of fireworks, fuses, nitroglycerine, magnesium, pyroxylin, ammunition or explosives. This exclusion does not apply to the assembly,
packing or processing of explosives when the estimated annual premium is under $250,000 and does not apply to the commercial use of explosives 

  

 8 

	 	e.	Underground mining. 

  

	 	8.	As respects General Liability policies, exposures, other than those identified below, as included in the General Liability section of the Company’s Commercial Lines Manual:

  

	 	a.	Class 97111 – Logging; 

  

	 	b.	Class 58873 – Sawmill; 

  

	 	c.	Class 59984 – Woodyard and Drivers; 

  

	 	d.	Class 95410 – Grading of Land; 

  

	 	e.	Class 45819 – Lumber Yard; 

  

	 	f.	Class 10073 – Repair Shops and Drivers; 

  

	 	g.	Class 43822 – Timber Cruiser; 

  

	 	h.	Class 99793 – Truckmen Not Otherwise Classified; 

  

	 	i.	Class 91591 – Contractors – Subcontracted Work Other Than Construction; 

  

	 	j.	Class 49452 – Vacant Land. 

  

	 	9.	All excess of loss reinsurance assumed by the Company. 

  

	 	10.	Business written by the Company on a co-indemnity basis where the Company is not the controlling carrier. 

  

	 	11.	As regards interests which at the time of loss or damage are on shore, no liability shall attach hereto in respect to any loss or damage which is occasioned by war, invasion,
hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority. This War Exclusion Clause shall not, however, apply to interests
which at time of loss or damage are within the territorial limits of the United States of America (comprising the Fifty States of the Union, the District of Columbia and including bridges between the United States of America and Mexico provided they
are under United States ownership), Canada, St. Pierre and Miquelon, provided such interests are insured under policies containing a standard war or hostilities or warlike operations exclusion clause. 

  

	B.	 Notwithstanding the foregoing, insureds regularly engaged in operations not excluded under paragraph A above, but whose operations may include one or more perils
excluded therein, shall not be excluded from coverage afforded by this Contract, provided said operations are incidental to the main operations of the insured. Notwithstanding the foregoing, coverage extended under this paragraph for incidental
operations of an insured 

  

 9 

	 	 
shall not apply to exposures excluded under subparagraphs 1 though 5 and 11 of paragraph A above. The Company shall be the judge of what constitutes an
incidental part of the insured’s operation. 

  

	C.	Except for subparagraphs 1 through 5 and 11 of paragraph A above, if the Company is inadvertently bound or is unknowingly exposed (due to error or automatic provisions of
policy coverage) on a risk otherwise excluded in paragraph A above, such exclusion shall be waived. The duration of said waiver will not extend beyond the time that notice of such coverage has been received by a responsible underwriting authority of
the Company and for a period not exceeding 30 days thereafter, or such longer period required to conform with any notice of cancellation provisions prescribed by regulatory authorities, such period not to exceed 12 months plus odd time (not
exceeding 18 months). 

  

	D.	If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in subparagraph 6 of paragraph A, reinsurance shall apply, but
only for the difference between the Company’s retention and the limit required by the applicable state statute, and in no event shall the Reinsurer’s liability exceed the limit set forth in the Coverage Article. 

 

	E.	Notwithstanding the foregoing, any reinsurance falling within the scope of one or more of the exclusions set forth above that is specially accepted by the Reinsurer from the Company
shall be covered under this Contract and be subject to the terms hereof. 

  

	F.	Should a court of competent jurisdiction invalidate any exclusion or expand coverage of the original Policy of the Company, any amount of Loss for which the Company would not be
liable, except for such invalidation or expansion of coverage, shall not be subject to any of the exclusions, conditions and limitations hereinafter set forth under this Contract. 

 ARTICLE VII 
 TERRORISM RISK INSURANCE
PROGRAM REAUTHORIZATION ACT 
  

	A.	The Reinsurer will indemnify the Company for all loss resulting from Acts of Terrorism (excluding Acts of Terrorism caused by or result from nuclear, biological, chemical or
radiological events), but only to the extent that such losses are recoverable under the terms and conditions of this contract and that such losses only include that portion of loss that is not recoverable under the Terrorism Risk Insurance Program
Reauthorization Act of 2007 (TRIPRA) and any subsequent amendments. Under no circumstances will Reinsurers fund any losses recoverable under TRIPRA. In the event of a subsequent recovery under TRIPRA in respect of any paid loss under this Contract,
that recovery shall inure to the benefit of the Reinsurers. 

 ARTICLE VIII 
 COVERAGE 
  

	A.	Part A 

  

 10 

 The Reinsurer shall be liable for the amount of Ultimate Net Loss in excess of the Company’s
retention, being $1,000,000 each Loss Occurrence, subject to a limit of liability to the Reinsurer of $4,000,000 each Loss Occurrence. No recovery shall be made under this Part A unless and until the Company shall have first satisfied an annual
aggregate deductible in respect of all cumulative paid losses otherwise recoverable under this Part A equal to $20,000,000. The Reinsurer’s liability in respect of all losses occurring during the term of this Contract shall not exceed
$20,000,000 any one Contract Year or $40,000,000 over all Contract Years. 
 Part B 
 The Reinsurer shall be liable for the amount of Ultimate Net Loss in excess of the Company’s retention, being $1,000,000 each Loss Occurrence,
subject to a limit of liability to the Reinsurer of $4,000,000 each Loss Occurrence. No recovery shall be made under this Part B unless and until the Company shall have first satisfied an annual aggregate deductible in respect of all cumulative paid
losses otherwise recoverable under this Part B equal to $40,000,000. The Reinsurer’s liability in respect of all losses occurring during the term of this Contract shall not exceed $20,000,000 any one Contract Year or $20,000,000 over all
Contract Years. 
 For avoidance of doubt, this Contract shall be subject to a Loss Occurrence Limit equal to $4,000,000 and shall be
inclusive of all indemnity, Extra Contractual Obligations, Excess of Policy Limits amounts and Loss Adjustment Expenses recoverable under this Contract with respect to each Loss Occurrence 
  

	B.	As respects General Liability business, the Reinsurer shall be liable for the amount of Ultimate Net Loss in excess of the Company’s retention for Part A and/or Part B above
subject to a maximum recovery of $10,000,000 for Part A and Part B combined and for each Contract year. 

  

	C.	The Company shall be permitted to purchase (or maintain) other reinsurance which inures to the benefit of this Contract. 

  

	D.	The Company shall be permitted to carry excess of loss reinsurance applying to Workers’ Compensation risks in the State of Minnesota, actual recoveries under which shall inure
to the benefit of this Contract. Such coverage shall be provided through the Minnesota Workers’ Compensation Reinsurance Association. Notwithstanding the treatment of inuring coverage in the definition of Ultimate Net Loss, the liability of the
Reinsurer for Minnesota Workers’ Compensation risks is not released. 

 ARTICLE IX 
 MATERIAL CHANGE 
 The Company shall not introduce material
changes in its generally established practices, including but not limited to claims, acceptance and underwriting policies, its inuring reinsurance protection and loss reserving process (including the allocation of loss adjustment expenses 

  

 11 

 
between allocated and unallocated) in any manner which materially affects this Contract, unless the Company has received the prior written approval from the
Reinsurer. 
  

	A.	Prior to the start of each of Contract Year 2 and Contract Year 3, a determination shall be made as respects whether a Material Change to the underlying Business Covered by this
Contract has occurred. 

  

	 B.
	 The Company shall provide to Reinsurer, no later than August 15th
 of each of 2008 and 2009, a schedule of the distribution of Written Premium by Governing Class Group for the five Governing Class Groups enumerated in paragraph C below. Written Premium for purposes of
this Article shall be: 

  

	 	1.	With respect to the determination for Contract Year 2: actual Written Premium from the effective date of this Contract, being January 1, 2008 through July 31, 2008
plus projected Written Premium from August 1, 2008 through December 31, 2009, and 

  

	 	2.	With respect to the determination for Contract Year 3: actual Written Premium from the effective date of this Contract, being January 1, 2008 through July 31, 2009
plus projected Written Premium from August 1, 2009 through December 31, 2010. 

  

	 	3.	To the extent that the percentage distribution of Written Premium for each of the five Governing Class Groups is within the applicable ranges listed in paragraph C below, no
Material Change in Business Covered shall have been deemed to occur and the operation of this Contract shall continue without change or modification. 

  

	 	4.	To the extent that the percentage distribution of Written Premium for any of the five Governing Class Groups falls outside the applicable ranges listed in paragraph C below,
or to the extent that the Logging component of the Lumber Governing Class Group exceeds five percentage points, a Material Change in Business Covered shall have been deemed to occur. 

  

	C.	The ranges for the five Governing Class Groups shall be as follows: 

 Construction – No less than 25% nor more than 40% 
 Trucking – No less than 18% nor more than 30%

 Lumber – No less than 5% nor more than 15% 
 Roofing – No less than 5% nor more than 15% 
 Manufacturing – No less than 2% nor more than 12%

 All such percentages being calculated as Written Premium for the applicable Governing Class Group as calculated under paragraph B above for
the period specified therein divided by total Written Premium for all Governing Class Groups as calculated under paragraph B above for the period specified therein. 
  

 12 

	 D.
	 The Company shall provide to Reinsurer, no later than August 15th
 of each of 2008 and 2009, a calculation of Policy Year Manual Payroll (excluding clerical) for the current Contract Year. Policy Year Manual Payroll (excluding clerical) for purposes of this Article
shall be: 

  

	 	1.	With respect to the determination for Contract Year 2: actual policy year manual payroll from the effective date of this Contract, being January 1, 2008 through July 31,
2008 plus projected policy year manual payroll from August 1, 2008 through December 31, 2008, in each case excluding policy year manual payroll in Manual Class Codes 8810 and 953, and 

  

	 	2.	With respect to the determination for Contract Year 3: actual policy year manual payroll from the first day of Contract Year 2, being January 1, 2009 through July 31, 2009
plus projected policy year manual payroll from August 1, 2009 through December 31, 2009, in each case excluding policy year manual payroll in Class Codes 8810 and 953. 

  

	 	3.	To the extent that Policy Year Manual Payroll (excluding clerical) as determined above for each of Contract Year 2 and Contract Year 3 is not less than $2,840,000,000 nor more than
$3,842,000,000, no Material Change in Business Covered shall have been deemed to occur and the operation of this Contract shall continue without change or modification. 

  

	 	4.	To the extent that Policy Year Manual Payroll (excluding clerical) as determined above for each of Contract Year 2 and Contract Year 3 is less than $2,840,000,000 or more than
$3,842,000,000, a Material Change in Business Covered shall have been deemed to occur. 

  

	E.	A Material Change shall have been deemed to occur if the Company acquires, during the term of this Contract, any insurance or reinsurance company having annual subject premium of
$20,000,000 or more. 

  

	F.	If a Material Change has been deemed to occur under paragraphs B, D or E above for any Contract Year, Company and Reinsurer shall mutually agree to such modifications of this
contract as shall be deemed necessary to reflect the Material Change, including but not limited to, changes in Exclusions, Reinsurance Premium, the Company’s annual aggregate deductible, the Reinsurer’s fixed expenses or any other Contract
features or the adoption of new limitations or changes in coverage. 

  

	G.	If a Material Change has been deemed to occur under paragraphs B or D above for either Contract Year 2 or Contract Year 3, and the Company and Reinsurer are not able to mutually
agree to the necessary modifications described in paragraph F above, then the Reinsurer may cancel the Contract at the end of Contract Year 1 or Contract Year 2 as applicable, by the provision of 90 calendar day’s prior written notice by
certified mail as described in the TERM ARTICLE. If such notice of cancellation is not received, the operation of this Contract shall continue without change. 

  

 13 

	H.	If a Material Change has been deemed to occur under paragraph E above for any Contract Year and the Company and Reinsurer are not able to mutually agree to the necessary
modifications described in paragraph F above, then this Contract shall not apply to the acquired company and any business written by such acquired company shall be excluded. 

 ARTICLE X 
 REINSURANCE PREMIUM 
  

	A.	As premium for the reinsurance provided hereunder, the Company shall pay the Reinsurer its respective share of $15,715,000 for Contract Year 1, $15,715,000 for Contract Year 2 and
$15,715,000 for Contract Year 3. Each such Contact Year premium is to be paid in four equal quarterly installments of $3,928,750 on January 1 (with the exception that the first quarterly installment under this Contract shall be due upon signing
rather than on January 1, 2008), April 1, July 1 and October1 or within five business days of the installment date. 

  

	B.	The Reinsurer shall allow the Company a 30% commission on all premiums ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums
at the same rate. 

 ARTICLE XI 
 FUNDS WITHHELD ACCOUNT 
 At the subscribing reinsurer’s option, the Company shall retain any and all
Reinsurance Premiums due hereunder on a Funds Withheld basis, provided however that payment of the subscribing reinsurer’s fixed expenses at a rate of 14% of the Reinsurance Premium net of the applicable Ceding Commission shall be paid in cash
to the subscribing reinsurer at such time as the respective Reinsurance Premiums are due and shall not be affected by the terms of this FUNDS WITHHELD ACCOUNT ARTICLE. 
 In consideration of the subscribing reinsurer choosing this Funds Withheld option, the Company agrees (i) to calculate a Notional Funds Withheld Account Balance from the inception of this Contract until there is
a complete and final release of all of the Reinsurer’s obligations to the Reinsured under this Contract and (ii) that the Notional Funds Withheld Account Balance (as defined below) may be offset by the Reinsurer against liability of any
nature whatsoever (whether then contingent, due and payable, or in the future becoming due) that it may then have, or in the future may have, under this Contract and (iii) such offset shall occur as a condition precedent to any payments by the
Reinsurer hereunder. 
 As of the close of each calendar quarter, and at any other time as required, the Company shall calculate the balance of the Notional
Funds Withheld Account as follows: 
  

	 	1.	100% of the balance of the Notional Funds Withheld Account from the immediately preceding calendar quarter (at the Inception Date of this Contract, the starting balance is zero);
less 

  

 14 

	 	2.	100% of the Company’s Ultimate Net Loss paid or deemed paid by the Reinsurer since the preceding calendar quarter; plus 

  

	 	3.	The Reinsurance Premium deemed received by the Reinsurer since the preceding calendar quarter; less 

  

	 	4.	The Ceding Commission deemed paid by the Reinsurer since the preceding calendar quarter; less 

  

	 	5.	The Reinsurer’s fixed expenses at a rate of 14% of the difference between (3) and (4) above; plus 

  

	 	6.	The interest credit since the preceding calendar quarter. Such interest credit shall be equal to the result of the “interest crediting rate” applied to the quarter end sum
of [1 minus 2 plus 3 minus 4 minus 5]. 

  

	 	The	interest crediting rate shall be equal to one fourth (0.25) of the greater of: 

  

	 	a.	The five (5) year U.S. Treasury note rate as published in the Wall Street Journal on the first business day of each Contract Year minus fifty (50) basis points, or

  

	 	b.	5.00%. 

 For all avoidance of doubt, it is intended that if a subscribing
reinsurer chooses the Funds Withheld option as described above then the Notional Funds Withheld Account Balance as calculated above at any date shall equal the subscribing reinsurer’s share of the Notional Experience Account, as calculated in
the NOTIONAL EXPERIENCE ACCOUNT ARTICLE as of that same date. 
 ARTICLE XII 
 NOTICE OF LOSS AND LOSS SETTLEMENTS 
 All loss settlements made
by the Company that are within the terms and conditions of this Contract (including but not limited to ex gratia payments) shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt of
satisfactory evidence of the amount paid by the Company. Upon receipt of the Summary Report as described below in the REPORTS AND REMITTANCES ARTICLE, the Reinsurer agrees to promptly pay or allow, as the case may be, its share of each such
settlement in accordance with this Contract. 
 ARTICLE XIII 
 LIABILITY OF REINSURERS 
 All reinsurances for which the Reinsurer shall be liable by virtue of this Contract
shall be subject in all respects to the same rates, terms, conditions, interpretations and waivers and to the same 

  

 15 

 
modifications, alterations, and cancellations, as the respective policies to which such reinsurances relate, the true intent of the parties to this Contract
being that the Reinsurer shall follow the fortunes of the Company. 
 ARTICLE XIV 
 LATE PAYMENTS 
 (The provisions of this article shall not be
implemented unless specifically invoked, in writing, by one of the parties to the Contract) 
  

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

  

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

  

	 	2.	1/365ths of a rate equal to the 90-day Treasury Bill rate as published in The Wall Street Journal on the first business day following the date a remittance becomes due plus
300 basis points; times 

  

	 	3.	The amount past due, including accrued interest. 

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

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

  

	 	1.	As respects the payment of deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract. 

  

	 	2.	Any claim or loss payment due the Company hereunder shall be deemed due 10 business days after the proof of loss or demand for payment is transmitted to the Reinsurer. If such
loss or claim payment is not received within the10 days, interest will accrue on the payment or amount overdue in accordance with the interest penalty calculation above, from the date the proof of loss or demand for payment was transmitted to
the Reinsurer. 

  

	 	3.	As respects any payment, adjustment or return due either party not otherwise provided for in subparagraphs 1 and 2 of this paragraph, the due date shall be as provided for in the
applicable section of this Contract. 

  

	C.	 For purposes of interest calculation only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary. The validity of any claim or payment may be
contested 

  

 16 

	 	 
under the provisions of this Contract. If the debtor party prevails in an arbitration, or any other proceeding, there shall be no interest penalty due.
Otherwise, any interest will be calculated and due as outlined above. 

  

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

 ARTICLE XV 
 REPORTS AND REMITTANCES 
  

	A.	Quarterly Reports and Remittances: 

  

	 	1.	While this Contract is in force, within 60 calendar days from the end of each calendar quarter, the Company shall supply to the Reinsurer a Quarterly Statement, as filed with the
Louisiana Department of Insurance and a Summary Report listing: 

  

	 	a.	The Company’s quarterly Net Earned Premium. 

  

	 	b.	The aggregate amount of Ultimate Net Loss, including paid, case outstanding, and IBNR components of this total. 

  

	 	c.	The portion of paid, case outstanding, and IBNR Ultimate Net Loss ceded under this Contract from inception of this Contract and for the quarter. 

  

	 	d.	Claims reserved by the Company at 50% of its retention hereunder. 

  

	 	e.	A report showing the Notional Funds Withheld Account Balance as calculated in the FUNDS WITHHELD ACCOUNT ARTICLE (if applicable). 

 All for business covered during the term of this Contract as reflected in the Quarterly Statement. 
  

	 	2.	While this contract is in force, within 60 calendar days from the end of each calendar quarter, the subscribing reinsurers shall supply to the Company a report showing the Notional
Experience Account Balance as calculated in the NOTIONAL EXPERIENCE ACCOUNT ARTICLE. 

  

	 	3.	Quarterly within 5 business days from the beginning of each calendar quarter, the Company shall pay to the Reinsurer the reinsurance premium as stipulated in the REINSURANCE PREMIUM
ARTICLE. 

  

	 	4.	Payment to the Company of quarterly ceded paid loss amounts due from the Reinsurer, or payment to the Reinsurer of quarterly ceded paid loss adjustments due from the Company, shall
be in arrears and shall be made within 45 calendar days from actual receipt by the Reinsurer of the Summary Report in paragraph A.1, above. 

  

 17 

	B.	The Company shall furnish to the Reinsurer, upon its written request, any and all actuarial, accounting or statistical data as may be required by the Reinsurer for regulatory filing
purposes, reserve setting or any other reasonable purpose. 

 ARTICLE XVI 
 COMMUTATION 
  

	A.	The Reinsurer may cancel and commute this Contract at any time with 90 calendar days’ advance written notice by certified mail, but only in the event(s) of:

  

	 	1.	Payment by the Reinsurer of the overall aggregate limit; or 

  

	 	2.	Failure by the Company to pay any amounts when due under this Contract, if such default is not cured within 30 calendar days following receipt by certified mail by the Company of
notice of such default from the subscribing reinsurer. 

  

	B.	At any time after expiration of this Contract, or except as provided within the TERM ARTICLE, the Company may commute this Contract with 90 calendar days’ advance written
notice by certified mail, but only if the Notional Experience Account balance is greater than zero. 

  

	C.	As provided within the SPECIAL TERMINATION ARTICLE, upon the Company’s termination of a subscribing reinsurer’s share in the Contract upon the happening of any one of the
enumerated circumstances, the Company has the option but not the obligation to commute this Contract with written notice. 

  

	D.	Upon Commutation by the Reinsurer in accordance with paragraph A, above, or Commutation by the Company in accordance with paragraph B, above, the following shall occur:

  

	 	1.	The Notional Experience Account balance shall be calculated as stipulated in the NOTIONAL EXPERIENCE ACCOUNT ARTICLE, as of the date of commutation. 

  

	 	2.	The “Commutation Settlement Amount” will be equal to the amount under paragraph D.1, above, and the Reinsurer shall remit to the Company this Commutation Settlement Amount
within 5 U.S. business days following such calculation. 

  

	 	3.	Upon receipt of the Commutation Settlement Amount, the Company shall provide the Reinsurer with a complete and final release of any further liability under this Contract, or so
deemed; concurrently, the Company shall release any Letters of Credit provided by the Reinsurers under the UNAUTHORIZED REINSURANCE ARTICLE. 

  

	E.	Upon Commutation by the Company in accordance with paragraph C above and the SPECIAL TERMINATION ARTICLE, the Commutation Settlement Amount shall be the greater of the amount
calculated in paragraph D or the net present value of outstanding ceded reserves including incurred but not reported losses. 

  

 18 

 If the Reinsurer disputes the Commutation Settlement Amount established by the Company under this
paragraph E, then such dispute shall be settled by a panel of three actuaries, one to be chosen by each party and the third by the two so chosen. If either party refuses or neglects to appoint an actuary within 30 days, the other party may appoint
two actuaries. If the two actuaries fail to agree on the selection of a third actuary within 30 days of their appointment, each of them shall name two, of whom the other shall decline one and the decision shall be made by drawing lots. All the
actuaries shall be Fellows of the Casualty Actuarial Society or members of the American Academy of Actuaries. All of the actuaries shall be independent of either party to this Contract. Each party shall bear the cost of their appointed actuary (or
actuary appointed for them if they fail to make a timely appointment) and shall share the cost evenly of the third actuary. 
 The settlement
agreed upon by a majority of the panel of actuaries shall be final and binding on both parties and set forth in a sworn written document expressing their professional opinion that said value is fair for the complete mutual release of all liabilities
in respect of such reserves. 
 ARTICLE XVII 
 NOTIONAL EXPERIENCE ACCOUNT 
 As of the close of each calendar quarter, and at any other time as stipulated in
the COMMUTATION ARTICLE, the subscribing reinsurer shall calculate the value of the Notional Experience Account as follows: 
  

	 	1.	100% of the balance of the Notional Experience Account from the immediately preceding calendar quarter (at the Inception Date of this Contract, the starting balance is zero); less

  

	 	2.	100% of the Company’s Ultimate Net Loss paid by the Reinsurer since the preceding calendar quarter; plus 

  

	 	3.	The Reinsurance Premium received by the Reinsurer since the preceding calendar quarter; less 

  

	 	4.	The Ceding Commission paid by the Reinsurer since the preceding calendar quarter; less 

  

	 	5.	The Reinsurer’s fixed expenses at a rate of 14% of the difference between (3) and (4) above; plus 

  

	 	6.	The interest credit since the preceding calendar quarter. Such interest credit shall be equal to the result of the “interest crediting rate” applied to the quarter end sum
of [1 minus 2 plus 3 minus 4 minus 5]. 

 The interest crediting rate shall be equal to one fourth (0.25)
of: 
  

 19 

	 	a.	The five (5) year U.S. Treasury note rate as published in the Wall Street Journal on the first business day of each Contract Year minus fifty (50) basis points if the
subscribing reinsurer elects to receive premium on a funds transferred basis, or 

  

	 	b.	The greater of i) the five (5) year U.S. Treasury note rate as published in the Wall Street Journal on the first business day of each Contract Year minus fifty (50) basis
points, or ii) 5.00% if the subscribing reinsurer elects the provisions of the FUNDS WITHHELD ACCOUNT ARTICLE. 

 ARTICLE
XVIII 
 ANNUITIES AT THE COMPANY’S OPTION 
  

	A.	Whenever the Company is required, or elects, to purchase an annuity or to negotiate a structured settlement, either in satisfaction of a judgment or in an out-of-court settlement or
otherwise, the cost of the annuity or the structured settlement, as the case may be, shall be deemed part of the Company’s Ultimate Net Loss. 

  

	B.	The terms “annuity” or “structured settlement” shall be understood to mean any insurance policy, lump sum payment, agreement or device of whatever nature
resulting in the payment of a lump sum by the Company in settlement of any or all future liabilities which may attach to it as a result of an occurrence. 

  

	C.	In the event the Company purchases an annuity which inures in whole or in part to the benefit of the Reinsurer, it is understood that the liability of the Reinsurer is not released
thereby. In the event the Company is required to provide benefits not provided by the annuity for whatever reason, the Reinsurer shall pay its share of any loss. 

 ARTICLE XIX 
 SUNSET 
 Seven (7) years after the expiration of this Contract (i.e., January 1, 2018), the Company shall advise the Reinsurer of any Loss Occurrences attaching to this
Contract which have not been finally settled and which may result in a claim by the Company under this Contract. No liability shall attach hereunder for any claim or claims not reported to the Reinsurer within this 7-year period. If a loss arising
out of a Loss Occurrence is reported during this period, all losses arising out of the same Loss Occurrence shall be deemed reported under this paragraph regardless of when notification of loss is provided. 
 If the Notional Experience Account balance is positive and the Company does not commute this Contract on or before December 31, 2017, the Company shall pay to the
Reinsurer in cash each January 1, beginning January 1, 2018, an annual charge equal 200 basis points times the then current balance in the Notional Experience Account. 
  

 20 

 ARTICLE XX 
 SUBROGATION 
 The Reinsurer shall be credited with subrogation or salvage recoveries (i.e., reimbursement
obtained or recovery made by the Company, less Loss Adjustment Expense incurred in obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder. Subrogation or salvage recoveries thereon
shall always be used to reimburse the excess carriers in the reverse order of their priority according to their participation before being used in any way to reimburse the Company for its primary loss. The Company, at its sole option and discretion,
may enforce its rights to subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and may prosecute all claims arising out of such rights. 
 ARTICLE XXI 
 ERRORS AND OMISSIONS 
 Any inadvertent delay, omission or error shall not be held to relieve either party hereto from any liability which would attach to it hereunder if such delay, omission or error had not been made, provided such
omission or error is rectified upon discovery. 
 ARTICLE XXII 
 OFFSET 
 The Company and each subscribing reinsurer may offset any balance or amount due from one party to the
other under this Contract or any other contract heretofore or hereafter entered into between the Company and such subscribing Reinsurer, whether acting as assuming reinsurer or ceding company. The party asserting the right of offset may exercise
such right any time whether the balances due are on account of premiums or undisputed losses or otherwise. 
 ARTICLE XXIII 

 CURRENCY 
  

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

  

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

  

 21 

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

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

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

  

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

 ARTICLE XXVI 

NET RETAINED LINES 
  

	A.	This Contract applies only to that portion of any Policy which the Company retains net for its own account and, in calculating the amount of any loss hereunder and also in computing
the amount or amounts in excess of which this Contract attaches, only loss or losses in respect of business covered which the Company retains net for its own account shall be included. 

  

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

  

 22 

 ARTICLE XXVII 
 THIRD PARTY RIGHTS 
 This Contract is solely between the Company and the Reinsurer, and in no instance shall
any other party have any rights under this Contract except as expressly provided otherwise in the INSOLVENCY ARTICLE. 
 ARTICLE XXVIII

 SEVERABILITY 
 If any provision of this
Contract shall be rendered illegal or unenforceable by the laws or regulations of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or
the enforceability of such provision in any other jurisdiction. 
 ARTICLE XXVIX 
 GOVERNING LAW 
 This Contract shall be governed as to
performance, administration and interpretation by the laws of the State of Louisiana, exclusive of that state’s rules with respect to conflicts of law, except as to rules with respect to credit for reinsurance in which case the applicable rules
of all states shall apply. 
 ARTICLE XXX 
 ACCESS TO RECORDS 
 The Reinsurer or its designated representatives shall have access to the books and records of the Company on
matters relating to this reinsurance at all reasonable times for the purpose of obtaining information concerning this Contract or the subject matter hereof. 
 ARTICLE XXXI 
 CONFIDENTIALITY 
 The Reinsurer, except with the express prior written consent of the Company, shall not directly or indirectly, communicate, disclose or divulge to any affiliated company, or to any third party, any knowledge or
information that may be acquired either directly or indirectly during the placement of this contract or obtained as a result of a claims or underwriting the inspection of the Company’s books, records and papers for the purpose of this Contract.
The restrictions as outlined in this Article shall not apply to communication or disclosures that the Reinsurer is required to make to its statutory auditors, retrocessionaires, legal counsel, consulting actuaries, arbitrators involved in any
arbitration procedures under this Contract or disclosures required 

  

 23 

 
upon subpoena or other duly-issued order of a court or other governmental agency or regulatory authority. 
 The following information shall not be subject to this Article: 
 Information that is or becomes publicly available or in the public domain, unless due to an unauthorized act or omission on the part of the Reinsurer or by other persons permitted to receive such information under this Article, in violation
of this Contract. 
 Information in the possession of the Reinsurer or any other persons permitted to receive such information under this
Article that prior to disclosure by the Company, was not known by the Reinsurer to have been provided on a confidential basis. 
 Information
that was independently created or derived by the Reinsurer without reference to or reliance upon confidential information. 
 ARTICLE
XXXII 
 INSOLVENCY 
  

	A.	In the event of the insolvency of the Company, this reinsurance shall be payable directly to the Company or to its liquidator, receiver, conservator or statutory successor, with
reasonable provision for verification, on the basis of reported claims allowed by the liquidation court without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the
Company has failed to pay all or a portion of any claim. It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the
Company indicating the Policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and
that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the Company or its
liquidator, receiver, conservator or statutory successor. The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the Company as part of the expense of conservation or liquidation to the extent
of a proportionate share of the benefit which may accrue to the Company solely as a result of the defense undertaken by the Reinsurer. Where two or more subscribing reinsurers are involved in the same claim and a majority in interest elect to
interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the Company. 

  

	B.	 It is further agreed that, in the event of the insolvency of the Company, the reinsurance under this Contract shall be payable directly by the Reinsurer to the
Company or its liquidator, receiver, conservator, or statutory successor, except (1) where this Contract specifically provides another payee of such reinsurance in the event of the insolvency of the Company or (2) where the Reinsurer with
the consent of the direct insured or insureds 

  

 24 

	 	 
has assumed such Policy obligations of the Company as direct obligations of the Reinsurer to the payee under such Policies and in substitution for the
obligations of the Company to such payees. 

  

	C.	In the event of the insolvency of any company or companies listed in the designation of “Company” under this Contract, this Article shall apply only to the insolvent
company or companies. 

 ARTICLE XXXIII 
 ARBITRATION 
  

	A.	As a condition precedent to any right of action hereunder, any irreconcilable dispute arising out of the interpretation, performance or breach of this Contract, including the
formation or validity thereof, whether arising before or after the expiry or termination of the Contract, shall be submitted for decision to a panel of 3 arbitrators. Notice requesting arbitration will be in writing and sent by certified mail,
return receipt requested, or such reputable courier service as is capable of returning proof of receipt of such notice by the recipient to the party demanding arbitration. 

  

	B.	The Company shall have the option to either litigate or arbitrate where: 

  

	 	1.	The Reinsurer makes any allegation of misrepresentation, non-disclosure, concealment, fraud or bad faith; or 

  

	 	2.	The Reinsurer experiences any of the circumstances set forth in subparagraphs 1 through 7 of paragraph A of the SPECIAL TERMINATION ARTICLE. 

  

	C.	One arbitrator shall be appointed by each party. If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter,
after 10 days notice by certified mail or reputable courier as provided above of its intention to do so, may appoint the second arbitrator. 

  

	D.	The two arbitrators shall, before instituting the hearing, appoint an impartial third arbitrator who shall preside at the hearing. If the 2 arbitrators are unable to agree upon
the third arbitrator within 30 days of their appointment, the Company shall petition the American Arbitration Association to appoint the third arbitrator. If the American Arbitration Association fails to appoint the third arbitrator within
30 days of being requested to do so, either party may request a district court judge of the federal district court having jurisdiction over the geographical area in which the arbitration is to take place, or if the federal court declines to
act, the state court having general jurisdiction in such area to select the third arbitrator from a list of 6 individuals (3 named by each arbitrator previously appointed). All arbitrators shall be disinterested active or former senior
executives of insurance or reinsurance companies or Underwriters at Lloyd’s, London. 

  

	E.	 Within 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 

  

 25 

	 	 
procedure and evidence. Unless the panel agrees otherwise, arbitration shall take place in DeRidder, Louisiana 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 Louisiana. The decision of any 2 arbitrators when rendered in writing shall
be final and binding. The panel is empowered to grant interim relief as it may deem appropriate. 

  

	F.	The panel shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible following the termination of the
hearings. Judgment upon the award may be entered in any court having jurisdiction thereof. 

  

	G.	If more than one subscribing reinsurer is involved in arbitration where there are common questions of law or fact and a possibility of conflicting awards or inconsistent results,
all such subscribing reinsurers shall constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the subscribing reinsurers constituting the one party; provided, however, that nothing
therein shall impair the rights of such subscribing reinsurers to assert several, rather than joint defenses or claims, nor be construed as changing the liability of the subscribing reinsurers under the terms of this Contract from several to joint.

  

	H.	Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator. The remaining costs of the
arbitration shall be allocated by the panel. The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys fees, to the extent permitted by law. 

ARTICLE XXXIV 
 UNAUTHORIZED
REINSURANCE 
 (Applies only to a subscribing reinsurer who does not qualify for full credit with any insurance regulatory authority having
jurisdiction over the Company’s reserves.) 
  

	A.	 As regards Policies or bonds issued by the Company coming within the scope of this Contract, the Company agrees that when it shall file with the insurance
regulatory authority or set up on its books reserves for losses covered hereunder which it shall be required by law to set up, it will forward to the subscribing reinsurer a statement showing the proportion of such reserves which is applicable to
the subscribing reinsurer. The subscribing reinsurer hereby agrees to fund such reserves in respect of known outstanding losses that have been reported to the subscribing reinsurer and allocated loss adjustment expense relating thereto, losses and
allocated loss adjustment expense paid by the Company but not recovered from the subscribing reinsurer, plus reserves for losses incurred but not reported, as shown in the statement prepared by the Company (hereinafter referred to as
“subscribing reinsurer’s obligations”) by funds withheld, cash advances, qualified trust, or a Letter of Credit. The subscribing reinsurer shall have the option of determining the method of funding provided it is acceptable to the
insurance regulatory 

  

 26 

	 	 
authorities having jurisdiction over the Company’s reserves. All costs associated with the method of funding shall be borne solely by the subscribing
reinsurer. 

  

	B.	When funding by a Letter of Credit, the subscribing reinsurer agrees to apply for and secure timely delivery to the Company of a clean, irrevocable and unconditional Letter of
Credit issued by a bank and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the subscribing reinsurer’s proportion of said reserves. Such Letter
of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (60 days where required by insurance regulatory
authorities) prior to any expiration date the issuing bank shall notify the Company by certified or registered mail that the issuing bank elects not to consider the Letter of Credit extended for any additional period. 

  

	C.	The subscribing reinsurer and Company agree that the Letters of Credit provided by the subscribing reinsurer pursuant to the provisions of this Contract may be drawn upon at any
time, notwithstanding any other provision of this Contract, and be utilized by the Company or any successor, by operation of law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company for
the following purposes, unless otherwise provided for in a separate Trust Agreement: 

  

	 	1.	To reimburse the Company for the subscribing reinsurer’s obligations, the payment of which is due under the terms of this Contract and which has not been otherwise paid;

  

	 	2.	To make refund of any sum which is in excess of the actual amount required to pay the subscribing reinsurer’s obligations under this Contract; 

  

	 	3.	To fund an account with the Company for the subscribing reinsurer’s obligations. Such cash deposit shall be held in an interest bearing account separate from the Company’s
other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the subscribing reinsurer; 

  

	 	4.	To pay the subscribing reinsurer’s share of any other amounts the Company claims are due under this Contract. 

 In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for subparagraph 1 or 3 or, in the
case of subparagraph 4, the actual amount determined to be due, the Company shall promptly return to the subscribing reinsurer the excess amount so drawn. All of the foregoing shall be applied without diminution because of insolvency on the
part of the Company or the subscribing reinsurer. 
  

	D.	The issuing bank shall 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. 

  

	E.	 At quarterly intervals and immediately following each reinsurance premium payment, the Company shall prepare a specific statement of the subscribing
reinsurer’s obligations, for 

  

 27 

	 	 
the sole purpose of amending the Letter of Credit as set forth in subparagraphs 1 and 2 below. For avoidance of doubt, the subscribing reinsurer’s
obligation under this paragraph E shall include any positive balance of the Notional Experience Account as calculated under the NOTIONAL EXPERIENCE ACCOUNT ARTICLE: 

  

	 	1.	If the statement shows that the subscribing reinsurer’s obligations exceed the balance of credit as of the statement date, the subscribing reinsurer shall, within 30 days
after receipt of notice of such excess, secure delivery to the Company of an amendment to the Letter of Credit increasing the amount of credit by the amount of such difference. 

  

	 	2.	If, however, the statement shows that the subscribing reinsurer’s obligations are less than the balance of credit as of the statement date, the Company shall, within
30 days after receipt of written request from the subscribing reinsurer, release such excess credit by agreeing to secure an amendment to the Letter of Credit reducing the amount of credit available by the amount of such excess credit.

  

	F.	With regard to funding in whole or in part by any Trust Account, it is agreed that the subscribing Reinsurer shall enter into a trust agreement and establish a Trust Account
hereunder for the sole benefit of the Company with a trustee (“Trustee”). The Trustee and the trust agreement shall comply with all applicable requirements of regulatory authorities having jurisdiction over the Company.

  

	G.	The Reinsurer agrees that the assets deposited into the Trust Account shall consist only of currency of the United States of America, certificates of deposit issued by a United
States bank and payable in United States legal tender, and investments of the types specified in paragraphs (1), (2), (3), (8) and (10) of Section 1404(a) of the New York Insurance Law, provided such investments are issued by an
institution that is not the parent, subsidiary or affiliate of either the Grantor or the Beneficiary (“Authorized Investments”). 

  

	H.	The Reinsurer, prior to depositing assets with the Trustee, shall execute all assignments and endorsements in blank, and shall transfer legal title to the Trustee of all shares,
obligations or any other assets requiring assignments, in order that the Company, or the Trustee upon direction of the Company, may whenever necessary negotiate any such assets without consent or signature from the Reinsurer or any other entity.

  

	I.	The Reinsurer shall deposit in the Trust Account Authorized investments at least equal in value to one hundred percent (100%) of the Reinsurer’s Obligations (less the
value of the balance of credit available under any Letter(s) of Credit). 

  

	J.	At quarterly intervals and immediately following each reinsurance premium payment, the Company shall determine if the Trust Account is adequately funded with respect to the
Company’s liabilities reinsured under the Contract. If the Company determines that the fair market value of the Authorized Investments held in the Trust Account is less than one hundred percent (100%) of the Reinsurer’s Obligations,
the Company shall send the Reinsurer a notice specifying the amount of the inadequacy and the Reinsurer shall deposit such amount in the Trust Account within thirty (30) days of receipt of such notice. 

  

 28 

	K.	All settlements of account under the Trust Agreement between the Company and Reinsurer shall be made in cash or its equivalent. 

  

	L.	The Reinsurer and the Company agree that the assets in the Trust Account may be withdrawn by the Company at any time, notwithstanding any other provisions in the Contract, provided
such assets are applied and utilized by the Company or any successor of the Company by operation of law, including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Company, without diminution because of the
insolvency of the Company or the Reinsurer, only for the following purposes: 

  

	 	1.	To reimburse the Company for the Reinsurer’s share of the Obligations paid by the Company under the terms and provisions of the reinsured policies; 

  

	 	2.	To fund an account specifically established by the Company in an amount at least equal to the deduction, for reinsurance ceded, from the Company’s liabilities ceded under this
Contract. Such amount shall include, but not be limited to, amounts for policy reserves, and reserves for claims and losses incurred (including losses incurred but not reported); and 

  

	 	3.	To pay any other amounts, consistent with the terms of this Contract, which the Company has calculated to be due to it. 

  

	M.	If and to the extent that the laws and regulations governing the Company’s right to obtain statutory financial statement credit for the reinsurance provided pursuant to this
Contract are amended such that the Reinsurer is no longer required to secure 100% of its share of the Obligations, the Company acknowledges and agrees that the Reinsurer’s obligation to provide such security shall immediately and automatically
be reduced to the extent permitted by such amended laws and regulations. 

 ARTICLE XXXV 
 SERVICE OF SUIT 
 (This Article is applicable if the
subscribing reinsurer is not domiciled in the United States of America and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities. This Article is not
intended to conflict with or override the obligation of the parties to arbitrate their disputes in accordance with the ARBITRATION ARTICLE.) 
  

	A.	 In the event of the failure of the subscribing reinsurer to pay any amount claimed to be due hereunder, the subscribing reinsurer, at the request of the Company,
shall submit to the jurisdiction of a court of competent jurisdiction within the United States. Nothing in this Article constitutes or should be understood to constitute a waiver of the subscribing reinsurer’s rights to commence an action in
any court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States. The
subscribing reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by subscribing 

  

 29 

	 	 
reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court
jurisdiction and, in any suit instituted against any of them upon this Contract, and shall abide by the final decision of such court or of any appellate court in the event of an appeal. 

  

	B.	Service of process in such suit may be made upon the agent for the service of process (“agent”) named below, depending on the jurisdiction where the Company chooses to
bring suit: 

  

	 	 1.
	 If the suit is brought in the State of California, the law firm of Mendes and Mount, 445 South Figueroa Street,
38th Floor, Los Angeles, California 90071 shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any
such suit; 

  

	 	2.	If the suit is brought in the State of New York, the law firm of Mendes and Mount, 750 Seventh Avenue, New York, New York 10019 shall be authorized and directed to accept
service of process on behalf of the subscribing reinsurer in any such suit; 

  

	 	3.	If the suit is brought in any state other than California or New York, either of the agents described in subparagraphs 1 or 2 above shall be authorized and directed to accept
service of process on behalf of the subscribing reinsurer in any such suit; or 

  

	 	4.	If the subscribing reinsurer has designated an agent in the subscribing reinsurer’s Interests and Liabilities Agreement attached hereto, then that agent shall be authorized and
directed to accept service of process on behalf of the subscribing reinsurer in any suit. However, if an agent is designated in the subscribing reinsurer’s Interests and Liabilities Agreement and the agent is not located in California as
respects a suit brought in California or New York as respects a suit brought in New York, in keeping with the laws of the states of California and New York which require that service be made on an agent located in the respective state if a suit is
brought in that state, the applicable office of Mendes and Mount stipulated in subparagraphs 1 and 2 above must be used for service of suit unless the provisions of paragraph C of this Article apply. 

  

	C.	Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the subscribing 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 proceedings instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, 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. 

  

 30 

 ARTICLE XXXVI 
 MODE OF EXECUTION 
 This Contract may be executed either by an original written ink signature of paper
documents, by an exchange of facsimile copies showing the original written ink signature of paper documents, or by electronic signature by either party employing appropriate software technology as to satisfy the parties at the time of execution that
the version of the document agreed to by each party shall always be capable of authentication and satisfy the same rules of evidence as written signatures. The use of any one or a combination of these methods of execution shall constitute a legally
binding and valid signing of this Contract. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original. 
 ARTICLE XXXVII 
 ENTIRE AGREEMENT 
 This Contract shall constitute the entire agreement between the parties with respect to the business being reinsured hereunder. There are no understandings between the parties other than as expressed in this Contract.
Any change or modification to this Contract shall be null and void unless made by amendment to this Contract and signed by both parties. 
 ARTICLE XXXVIII 
 INTERMEDIARY 
 Willis Re Inc., One Galleria Tower, 13355 Noel Road, Suite 400, Dallas, Texas 75240-6643 is hereby recognized as the intermediary negotiating this Contract and through whom all communications relating thereto shall be transmitted to
the Company or the Reinsurer. However, all communications concerning accounts, claim information, funds and inquiries related thereto shall be transmitted to the Company or the Reinsurer through Willis Re Inc., 5420 Millstream Road, P.O.
Box 3000, McLeansville, North Carolina 27301-3000. Payments by the Company to Willis Re Inc. shall be deemed to constitute payment to the Reinsurer and payments by the Reinsurer to Willis Re Inc. shall be deemed to constitute payment to the
Company only to the extent that such payments are actually received by the Company. 
 IN WITNESS WHEREOF, the Company by its duly authorized
representative has executed this Contract as of the date specified below: 
 Signed this 31st day of January, 2008. 
 AMERICAN INTERSTATE INSURANCE
COMPANY 
 AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS 
 SILVER OAK CASUALTY, INC. 
 By: Geoffrey Banta, 
 Executive Vice President and Chief Financial Officer 
  

 31 

 NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE - U.S.A. 
 (1) This reinsurance does not cover any loss or liability accruing to the Reassured as a member of, or subscriber to, any association of insurers or reinsurers formed
for the purpose of covering nuclear energy risks or as a direct or indirect reinsurer of any such member, subscriber or association. 
 (2) Without in any
way restricting the operation of paragraph (1) of this Clause it is understood and agreed that for all purposes of this reinsurance all the original policies of the Reassured (new, renewal and replacement) of the classes specified in Clause II
of this paragraph (2) from the time specified in Clause III in this paragraph (2) shall be deemed to include the following provision (specified as the Limited Exclusion Provision): 
 Limited Exclusion Provision.* 
  

	I.	It is agreed that the policy does not apply under any liability coverage, to 

 (injury, sickness, disease, death or destruction, 
 (bodily injury or property damage 
 with respect to which an insured under the policy is also an insured under a nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability. 
  

	II.	Family Automobile Policies (liability only), Special Automobile Policies (private passenger automobiles, liability only), Farmers Comprehensive Personal Liability Policies
(liability only), Comprehensive Personal Liability Policies (liability only) or policies of a similar nature; and the liability portion of combination forms related to the four classes of policies stated above, such as the Comprehensive Dwelling
Policy and the applicable types of Homeowners Policies. 

  

	III.	The inception dates and thereafter of all original policies as described in II above, whether new, renewal or replacement, being policies which either 

  

	 	(a)	become effective on or after 1st May, 1960, or 

  

	 	(b)	become effective before that date and contain the Limited Exclusion Provision set out above; 

 provided this paragraph (2) shall not be applicable to Family Automobile Policies, Special Automobile Policies, or policies or combination policies
of a similar nature, issued by the Reassured on New York risks, until 90 days following approval of the Limited Exclusion Provision by the Governmental Authority having jurisdiction thereof. 
 (3) Except for those classes of policies specified in Clause II of paragraph (2) and without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that for all purposes of this reinsurance the original liability policies of the Reassured (new, renewal and replacement) affording the following coverages: 
 Owners, Landlords and Tenants Liability, Contractual Liability, Elevator Liability, Owners or Contractors (including railroad) Protective Liability,
Manufacturers and Contractors Liability, Product Liability, Professional and Malpractice Liability, Storekeepers Liability, Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle or Garage Liability) shall be deemed to
include, with respect to such coverages, from the time specified in Clause V of this paragraph (3), the following provision (specified as the Broad Exclusion Provision): 
 Broad Exclusion Provision.* 
 It is agreed that the policy does not apply: 
  

	I.	Under any Liability Coverage, to 

 (injury, sickness, disease, death or destruction  
 (bodily injury or property damage 
  

	 	(a)	with respect to which an insured under the policy is also an insured under a nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic
Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability; or 

  

	 	(b)	resulting from the hazardous properties of nuclear material and with respect to which (1) any person or organization is required to maintain financial protection pursuant to
the Atomic Energy Act of 1954, or any law amendatory thereof, or (2) the insured is, or had this policy not been issued would be, entitled to indemnity from the United States of America, or any agency thereof, under any agreement entered into
by the United States of America, or any agency thereof, with any person or organization. 

  

	II.	Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to 

 (immediate medical or surgical relief,  
 (first aid, 
 to expenses
incurred with respect to 
 (bodily injury, sickness, disease or death  
 (bodily injury 
 resulting
from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any person or organization. 
  

 1 

	III.	Under any Liability Coverage to 

 (injury, sickness, disease, death or destruction  
 (bodily injury or property damage 
 resulting from the hazardous properties of nuclear material, if 
  

	 	(a)	the nuclear material (1) is at any nuclear facility owned by, or operated by or on behalf of, an insured or (2) has been discharged or dispersed therefrom;

  

	 	(b)	the nuclear material is contained in spent fuel or waste at any time possessed, handled, used, processed, stored, transported or disposed of by or on behalf of an insured; or

  

	 	(c)	the (injury, sickness, disease, death or destruction  

 (bodily injury or property damages 
 arises out of the furnishing by an insured of services, materials, parts
or equipment in connection with the planning, construction, maintenance, operation or use of any nuclear facility, but if such facility is located within the United States of America, its territories, or possessions or Canada, this exclusion
(c) applies only to 
 (injury to or destruction of property at such nuclear facility 
 (property damage to such nuclear facility and any property threat. 
  

	IV.	As used in this endorsement: 

 “Hazardous
properties” include radioactive, toxic or explosive properties; “nuclear material” means source material, special nuclear material or byproduct material; “source material,” “special nuclear
material,” and “byproduct material” have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; “spent fuel” means any fuel element or fuel component, solid or liquid,
which has been used or exposed to radiation in a nuclear reactor; “waste” means any waste material (1) containing byproduct material and (2) resulting from the operation by any person or organization of any nuclear
facility included within the definition of nuclear facility under paragraph (a) or (b) thereof; “nuclear facility” means 
  

	 	(a)	any nuclear reactor, 

  

	 	(b)	any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling, processing
or packaging waste, 

  

	 	(c)	any equipment or device used for the processing, fabricating or alloying of special nuclear material if at any time the total amount of such material in the custody of the insured
at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235, 

  

	 	(d)	any structure, basin, excavation, premises or place prepared or used for the storage or disposal of waste, and includes the site on which any of the foregoing is located, all
operations conducted on such site and all premises used for such operations; “nuclear reactor” means any apparatus designed or used to sustain nuclear fission in a self-supporting chain reaction or to contain a critical mass of
fissionable material; 

 (With respect to injury to or destruction of property, the word “injury”
or “destruction” 
 (“property damage” includes all forms of radioactive contamination of property

 (includes all forms of radioactive contamination of property. 
  

	V.	The inception dates and thereafter of all original policies affording coverages specified in this paragraph (3), whether new, renewal or replacement, being policies which become
effective on or after 1st May, 1960, provided this paragraph (3) shall not be applicable to 

  

	 	(i)	Garage and Automobile Policies issued by the Reassured on New York risks, or 

  

	 	(ii)	statutory liability insurance required under Chapter 90, General Laws of Massachusetts, until 90 days following approval of the Broad Exclusion Provision by the Governmental
Authority having jurisdiction thereof. 

 (4) Without in any way restricting the operation of paragraph (1) of this Clause, it is
understood and agreed that paragraphs (2) and (3) above are not applicable to original liability policies of the Reassured in Canada and that with respect to such policies this Clause shall be deemed to include the Nuclear Energy Liability
Exclusion Provisions adopted by the Canadian Underwriters’ Association of the Independent Insurance Conference of Canada. 
  

	*NOTE:	The words printed in italics in the Limited Exclusion Provision and in the Broad Exclusion Provision shall apply only in relation to original liability policies which include a
Limited Exclusion Provision or a Broad Exclusion Provision containing those words. 

  

 2

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