Document:

Exhibit 10.4
DATE
NAME

ADDRESS

CITY, STATE ZIP
RE:   EMPLOYMENT AGREEMENT
Dear :
As you know, Inland Western Retail Real Estate Trust, Inc. (the “Company”) has entered into an agreement to acquire, through subsidiaries of the Company, certain entities presently providing advisory and property management services to the Company pursuant to an Agreement and Plan of Merger dated as of  August 14, 2007 (the “Merger Agreement”).  This letter agreement (this “Agreement”) sets forth the terms under which, upon the consummation of transactions set forth in the Merger Agreement (the “Closing”), you agree to be employed by the Company.
1.             POSITION AND RESPONSIBILITIES.   You shall serve as [TITLE] of the Company, with duties commensurate to such a position, and such other duties and responsibilities as assigned from time to time by the Board of Directors of the Company.  In addition, as requested by the Board of Directors of the Company, you will provide advice, consultation and services to any other entities which control, are controlled by or are under common control with the Company now or in the future.  During your Employment Period (as defined below), you will (a) faithfully serve and further the interests of the Company, (b) comply with all reasonable rules and policies of the Company and (c) devote all of your business time, attention and energies to the performance of your duties as described herein.
2.             EMPLOYMENT PERIOD.   Your term of employment with the Company shall commence on the date of the Closing and shall continue until December 31, 2007 (the “Employment Period”), subject to earlier termination as provided herein.  Notwithstanding the foregoing, your Employment Period may be terminated (i) by you or the Company for any reason effective upon sixty (60) days prior written notice or (ii) by the Company for Cause effective without prior written notice to you.  For the purposes of this Agreement, “Cause” shall mean (a) conduct amounting to fraud, embezzlement or illegal misconduct in connection with your employment under this Agreement, (b) conduct that the Company reasonably believes has brought the Company into substantial public disgrace or disrepute, (c) failure to perform your duties as reasonably directed by the Company, (d) gross negligence or willful misconduct with respect to the Company or its employees, clients or activities or (e) any other material breach of (i) this Agreement, (ii) any other agreement between you and the Company or (iii) any written policy adopted by the Company with respect to conflicts of interest, standards of business conduct or fair employment practices or any other similar matter.  With respect to items (c) and 
 

 
(e) above, the Company shall first provide you with notice of its intent to terminate for Cause and a description of the grounds for termination, and shall provide you with fifteen (15) days to cure any such grounds prior to the effectiveness of such termination.
3.             COMPENSATION.   During your Employment Period, the Company shall pay you a base salary of [SALARY] ($xxxx) per year (the “Base Salary”), pro-rated for the remainder of 2007.  At the end of the Employment Period, the Company shall review your Base Salary to determine an appropriate Base Salary to be effective at the beginning of the subsequent period as the parties hereto may agree upon.   In addition to Base Salary, Inland Real Estate Investment Corporation (“IREIC”) shall determine and may pay to you an annual bonus for the year ended December 31, 2007 (the “2007 Bonus”) in the sole discretion of IREIC.  Consistent with past practice, the Company shall not reimburse IREIC for any portion of the 2007 Bonus.  If your employment is terminated by you or the Company for any reason, the Company shall pay or provide your (i) Base Salary accrued through the termination of this Agreement, (ii) reimbursable expenses, (iii) pro-rata annual bonus (if any) and (iv) any benefits required to be paid or provided under applicable law, and you agree that you are not entitled to any other severance.
4.             PAYMENT AND REIMBURSEMENT OF EXPENSES.   All compensation shall be payable in intervals in accordance with the general payroll payment practice of the Company.  The Company shall reimburse you for all ordinary and necessary business expenses incurred by you in connection with the performance of your duties hereunder, which reimbursement shall be governed by the reimbursement policies of the Company.
5.             BENEFITS.   You shall be eligible to participate in any retirement, pension, profit-sharing or other similar plans of the Company or its affiliates which may now or hereafter be in effect and for which executive employees of the Company are eligible to participate.  In the event of the termination of your Employment Period, your rights with respect to any such plan, including the vesting of any benefits thereunder, shall be governed by the respective plan documents.
6.             CONFIDENTIALITY.   You hereby acknowledge and agree that the duties and services to be performed by you under this Agreement are special and unique and that as a result of your employment by the Company you have developed over time and will acquire, develop and use information of a special and unique nature and value that is not generally known to the public or to the Company’s industry, including but not limited to, certain records, secrets, documentation, software programs, price lists, ledgers and general information, employee records, mailing lists, client lists, client profiles, prospective customer or client lists, accounts receivable and payable ledgers, financial and other records of the Company or its affiliates, information regarding its clients or principles, and other similar matters (all such information being hereinafter referred to as “Confidential Information”).  You further acknowledge and agree that the Confidential Information is of great value to the Company and that the restrictions and agreements contained in this Agreement are reasonably necessary to protect the Confidential Information and the goodwill of the Company and the affiliates.  During your Employment Period and for a period of one (1) year thereafter, unless required by law, you will not divulge Confidential Information to any person, firm, corporation, limited liability company or other 
 

 2
 

 
organization without the prior written consent of the Company.  Upon the termination of your employment for any reason whatsoever, you shall deliver or cause to be delivered to the Company any and all Confidential Information, regardless of the medium upon which it is stored.

7.             NON-SOLICITATION.   You hereby
covenant and agree that, until the second anniversary of the Closing, you will
not hire, cause, encourage, or facilitate, either directly or indirectly, the
hiring of any employees of the Company, or any company
associated with the Inland Real Estate Group of Companies and their affiliates.

8.             GOVERNING LAW.   The parties agree that this Agreement shall be governed by the laws of the State of Illinois, and the parties agree that any suit, action or proceeding with respect to this Agreement shall be brought in the state courts in Chicago, Illinois or in the U.S. District Court for the Northern District of Illinois.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered as of the day and year first above written.

	
  INLAND WESTERN RETAIL REAL 

  ESTATE TRUST, INC., a Maryland 

  corporation

  	
   

  	
  [NAME]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  

 

 

 3Exhibit 10.29

STOCK
PURCHASE AGREEMENT

BETWEEN

GAINSCO,
INC.

MGA
INSURANCE COMPANY, INC.

AND

MONTPELIER
RE U.S. HOLDINGS LTD.

Dated as
of August 13, 2007

TABLE OF
CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page No.

  
	
  ARTICLE 1

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  PURCHASE AND SALE OF COMPANY SHARES

  	
   

  	
  8

  
	
  2.1

  	
   

  	
  Basic Transaction

  	
   

  	
  8

  
	
  2.2

  	
   

  	
  Purchase Price

  	
   

  	
  8

  
	
  2.3

  	
   

  	
  The Closing

  	
   

  	
  8

  
	
  2.4

  	
   

  	
  Deliveries at the Closing

  	
   

  	
  9

  
	
  2.5

  	
   

  	
  Post-Closing Adjustment

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  RELATED TRANSACTIONS

  	
   

  	
  10

  
	
  3.1

  	
   

  	
  Corporate Restructuring

  	
   

  	
  10

  
	
  3.2

  	
   

  	
  Transfer of Liabilities and Obligations

  	
   

  	
  10

  
	
  3.3

  	
   

  	
  Reduction in Capital and Surplus

  	
   

  	
  11

  
	
  3.4

  	
   

  	
  Elimination of Intercompany Contracts and Pools

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  REPRESENTATIONS AND WARRANTIES CONCERNING THE
  TRANSACTION

  	
   

  	
  12

  
	
  4.1

  	
   

  	
  Representations and Warranties of the Seller Parties

  	
   

  	
  12

  
	
  4.2

  	
   

  	
  Representations and Warranties of the Buyer

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  PRE-CLOSING COVENANTS

  	
   

  	
  26

  
	
  5.1

  	
   

  	
  General

  	
   

  	
  26

  
	
  5.2

  	
   

  	
  Notices and Consents

  	
   

  	
  27

  
	
  5.3

  	
   

  	
  Operation of Business

  	
   

  	
  27

  
	
  5.4

  	
   

  	
  Full Access

  	
   

  	
  28

  
	
  5.5

  	
   

  	
  Notice of Developments

  	
   

  	
  28

  
	
  5.6

  	
   

  	
  Exclusivity

  	
   

  	
  28

  
	
  5.7

  	
   

  	
  Preservation of Insurance Lines and Qualifications

  	
   

  	
  28

  
	
  5.8

  	
   

  	
  Financial Statements and Reports

  	
   

  	
  28

  
	
  5.9

  	
   

  	
  No Charter or Bylaw Amendments

  	
   

  	
  28

  
	
  5.10

  	
   

  	
  No Issuance of Securities

  	
   

  	
  29

  
	
  5.11

  	
   

  	
  No Dividends

  	
   

  	
  29

  
	
  5.12

  	
   

  	
  Resignations of Directors and Officers

  	
   

  	
  29

  
	
  5.13

  	
   

  	
  Intercompany Balances and Agreements

  	
   

  	
  29

  
	
  5.14

  	
   

  	
  Tax Matters

  	
   

  	
  29

  
	
  5.15

  	
   

  	
  Press Releases and Public Announcements

  	
   

  	
  29

  
	
  5.16

  	
   

  	
  Asset List

  	
   

  	
  29

  
	
  5.17

  	
   

  	
  State Assessments

  	
   

  	
  30

  
	
  5.18

  	
   

  	
  Regulatory Examinations

  	
   

  	
  30

  
	
  5.19

  	
   

  	
  Assignments

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  CONDITIONS TO OBLIGATION TO CLOSE

  	
   

  	
  30

  
	
  6.1

  	
   

  	
  Conditions to Obligation of the Buyer

  	
   

  	
  30

  
	
  6.2

  	
   

  	
  Conditions to Obligations of the Seller Parties

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  SELLER’S CLOSING DELIVERIES

  	
   

  	
  33

  

 

 i
 

 

 

	
  ARTICLE 8

  	
   

  	
  BUYER’S CLOSING DELIVERIES

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  POST-CLOSING COVENANTS

  	
   

  	
  35

  
	
  9.1

  	
   

  	
  General

  	
   

  	
  35

  
	
  9.2

  	
   

  	
  Litigation Support

  	
   

  	
  35

  
	
  9.3

  	
   

  	
  Cooperation as to Tax Matters

  	
   

  	
  35

  
	
  9.4

  	
   

  	
  Change of Name

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  INDEMNIFICATIONS

  	
   

  	
  40

  
	
  10.1

  	
   

  	
  The Seller Parties’ Indemnification of the Buyer

  	
   

  	
  40

  
	
  10.2

  	
   

  	
  The Buyer’s Indemnification of the Seller Parties

  	
   

  	
  41

  
	
  10.3

  	
   

  	
  Notice of Claims

  	
   

  	
  42

  
	
  10.4

  	
   

  	
  Third-Party Claims

  	
   

  	
  42

  
	
  10.5

  	
   

  	
  Interest

  	
   

  	
  43

  
	
  10.6

  	
   

  	
  Remedies

  	
   

  	
  43

  
	
  10.7

  	
   

  	
  Limitations on Indemnification

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
  SURVIVAL OF REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
  TERMINATION

  	
   

  	
  44

  
	
  12.1

  	
   

  	
  Termination of Agreement

  	
   

  	
  44

  
	
  12.2

  	
   

  	
  Effect of Termination

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
  EXPENSES

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
   

  	
  CONFIDENTIALITY

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  46

  
	
  15.1

  	
   

  	
  No Third-Party Beneficiaries

  	
   

  	
  46

  
	
  15.2

  	
   

  	
  Entire Agreement

  	
   

  	
  47

  
	
  15.3

  	
   

  	
  Succession and Assignment

  	
   

  	
  47

  
	
  15.4

  	
   

  	
  Counterparts

  	
   

  	
  47

  
	
  15.5

  	
   

  	
  Headings

  	
   

  	
  47

  
	
  15.6

  	
   

  	
  Notices

  	
   

  	
  47

  
	
  15.7

  	
   

  	
  Governing Law

  	
   

  	
  49

  
	
  15.8

  	
   

  	
  Amendments and Waivers

  	
   

  	
  49

  
	
  15.9

  	
   

  	
  Severability

  	
   

  	
  49

  
	
  15.10

  	
   

  	
  Construction

  	
   

  	
  49

  
	
  15.11

  	
   

  	
  Incorporation of Exhibits and Schedules

  	
   

  	
  50

  
	
  15.12

  	
   

  	
  Consent to Jurisdiction

  	
   

  	
  50

  
	
  15.13

  	
   

  	
  Enforcement

  	
   

  	
  50

  
	
  15.14

  	
   

  	
  Non-Duplication

  	
   

  	
  50

  

 ii
 

LIST OF
EXHIBITS

	
  Exhibit 1

  	
   

  	
  Administration Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 2

  	
   

  	
  Assumption Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 3

  	
   

  	
  Quota Share Reinsurance Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 4

  	
   

  	
  Reinsurance Trust Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 5

  	
   

  	
  Guaranty Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit 6

  	
   

  	
  Transfer and Assignment Agreement

  

 

DISCLOSURE
SCHEDULE

	
  Section 1

  	
   

  	
  Acceptable Financial Assets

  
	
   

  	
   

  	
   

  
	
  Section 2.2

  	
   

  	
  Purchase Price Adjustment

  
	
   

  	
   

  	
   

  
	
  Section 4.1(c)

  	
   

  	
  Noncontravention

  
	
   

  	
   

  	
   

  
	
  Section 4.1(e)

  	
   

  	
  Shares

  
	
   

  	
   

  	
   

  
	
  Section 4.1(f)

  	
   

  	
  Title to the Shares

  
	
   

  	
   

  	
   

  
	
  Section 4.1(k)

  	
   

  	
  Securities and Assets

  
	
   

  	
   

  	
   

  
	
  Section 4.1(l)

  	
   

  	
  Real Property

  
	
   

  	
   

  	
   

  
	
  Section 4.1(m)

  	
   

  	
  Employee Benefit Plans and Employees

  
	
   

  	
   

  	
   

  
	
  Section 4.l(o)

  	
   

  	
  Taxes

  
	
   

  	
   

  	
   

  
	
  Section 4.1(p)

  	
   

  	
  Suits and Other Proceedings - The Seller Parties and
  the Company

  
	
   

  	
   

  	
   

  
	
  Section 4.1(r)

  	
   

  	
  Compliance with Insurance Laws

  
	
   

  	
   

  	
   

  
	
  Section 4.1(u)(2)

  	
   

  	
  Licenses and Permits – Surplus or Excess Lines
  Qualifications

  
	
   

  	
   

  	
   

  
	
  Section 4.1(u)(6)

  	
   

  	
  Licenses and Permits – Deposits

  
	
   

  	
   

  	
   

  
	
  Section 4.1(v)

  	
   

  	
  Reinsurance

  
	
   

  	
   

  	
   

  
	
  Section 4.l(w)(i)

  	
   

  	
  Contracts

  

 

 iii
 

 

	
  Section 4.l(w)(ii)

  	
   

  	
  Specified Contracts

  
	
   

  	
   

  	
   

  
	
  Section 4.1(x)

  	
   

  	
  Insurance

  
	
   

  	
   

  	
   

  
	
  Section 4.l(y)

  	
   

  	
  Corporate Records

  
	
   

  	
   

  	
   

  
	
  Section 4.l(z)

  	
   

  	
  Consents and Approvals – The Seller Parties and the
  Company

  
	
   

  	
   

  	
   

  
	
  Section 4.l(aa)

  	
   

  	
  Contracts with Agents and Powers of Attorney

  
	
   

  	
   

  	
   

  
	
  Section 4.1(ab)

  	
   

  	
  Bank and Financial Institution Accounts

  
	
   

  	
   

  	
   

  
	
  Section 4.1(ac)

  	
   

  	
  Related Party Transactions

  
	
   

  	
   

  	
   

  
	
  Section 4.2(g)

  	
   

  	
  Consents and Approvals – The Buyer

  
	
   

  	
   

  	
   

  
	
  Section 5.13

  	
   

  	
  Intercompany Balances and Agreements

  
	
   

  	
   

  	
   

  
	
  Section 6.1(m)

  	
   

  	
  Banks with Continuing Accounts

  

 

 iv

STOCK
PURCHASE AGREEMENT

THIS
STOCK PURCHASE AGREEMENT is entered into as of August 13, 2007 (this “Agreement”),
by and between Montpelier Re U.S. Holdings Ltd., a Delaware corporation (the “Buyer”);
GAINSCO, INC., a Texas corporation (the “Parent”); and MGA Insurance
Company, Inc., a stock property and casualty insurance company domiciled in the
State of Texas and a wholly-owned subsidiary of the Parent (“MGA”).  The Parent and MGA are referred to herein as
the “Seller Parties” and the Seller Parties and the Buyer are referred
to collectively herein as the “Parties.”

WHEREAS,
on the date hereof the Parent owns all of the issued and outstanding capital
stock of General Agents Insurance Company of America, Inc., a stock property
and casualty insurance company domiciled in the State of Oklahoma (the “Company”)
and the Company owns all of the issued and outstanding capital stock of MGA;

WHEREAS,
the Parties have agreed that the Buyer will purchase from the Parent, and the
Parent will sell to the Buyer, all of the issued and outstanding capital stock
of the Company in return for cash;

WHEREAS,
the Buyer’s intent in acquiring the capital stock of the Company is that, as of
the Closing Date, the Company shall be a “clean shell” to wit: its assets will
consist only of the Company’s corporate franchise, its license to transact
insurance as a property and casualty insurance company pursuant to the Oklahoma
Insurance Code, and certain other assets as contemplated herein and that the
Company shall have no liabilities that have not been provided for as
contemplated herein; and

WHEREAS,
in connection with this Agreement, as of the Closing Date, the Seller Parties
are to take the actions provided for herein to (i) cause one hundred percent
(100%) of the Company’s existing insurance liabilities and claims to be
reinsured; (ii) provide for the Company’s remaining liabilities; and (iii)
reduce the Company’s capital and surplus, all as contemplated herein;

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.

ARTICLE  1

DEFINITIONS

“Acceptable
Financial Assets” means only the following kinds of assets which shall be
valued at their Market Value as of the close of business on the Business Day
immediately preceding the Closing Date: 
(i) cash and Cash Equivalents; (ii) investment grade obligations of U.S.
corporations or state or local governments (or instrumentalities thereof)
(other than Cash Equivalents) that are listed in Section 1 of the Disclosure
Schedule and are permissible 

 1
 

investments under
Oklahoma insurance law; and (iii) existing deposits of cash, securities or
other assets with state insurance departments listed in Section 4.1(u)(6) of
the Disclosure Schedule.

“Act”
means the Securities Act of 1933, as amended.

“Administration
Agreement” means the Administration Agreement between the Company and MGA
substantially in the form attached as Exhibit 1 hereto.

“Affiliate”
has the meaning set forth in Rule 12b-2 of the regulations promulgated under
the Securities Exchange Act.

“Ancillary
MGA Agreements” means the Administration Agreement, the Assumption
Agreement, the Transfer and Assignment Agreement, the Quota Share Reinsurance
Agreement and the Reinsurance Trust Agreement.

“Assumption
Agreement” means the Liability Assumption Agreement between the Company and
MGA substantially in the form attached as Exhibit 2 hereto.

“Business
Day” means any day other than a Saturday, Sunday, a day on which banking
institutions in the State of Connecticut or Texas are permitted or obligated by
law to be closed or a day on which the New York Stock Exchange is closed for
trading.

“Buyer”
has the meaning set forth in the preface.

“Buyer
Indemnitees” shall have the meaning set forth in Section 10.1 below.

“Cap”
shall have the meaning set forth in Section 10.7.

“Cash
Equivalent” shall mean United States Treasury obligations or senior
corporate debt obligations issued by Entities rated “AAA” or its equivalent by
one or more nationally recognized rating organizations, in each case having a
remaining term to maturity as of the last Business Day preceding the Closing
Date of less than six (6) months.

“Claim
Notice” shall have the meaning set forth in Section 10.3 below.

“Closing”
has the meaning set forth in Section 2.3 below.

“Closing
Date” has the meaning set forth in Section 2.3 below.

“Code”
means the Internal Revenue Code of 1986, as amended.  Any reference to any particular Code Section
shall be interpreted to include any revision of or successor to that section
regardless of how numbered or classified.

“Company”
has the meaning set forth in the preface.

“Company
Financial Statements” has the meaning set forth in Section 4.1(g)(3) below.

 2
 

“Confidentiality
Agreement” shall have the meaning set forth in Article 14.

“Consolidated
Tax Return” has the meaning set forth in Section 9.3(a)(1).

“Contract”
or “Contracts” has the meaning set forth in Section 4.1(w).

“Deposit”
has the meaning set forth in Section 4.1(t)(5) below.

“Disclosure
Schedule” means the Disclosure Schedule referred to in this Agreement.

“Elections”
has the meaning set forth in Section 9.3(j)(1).

“Employee
Benefit Plan” means each written or oral “employee benefits plan” (as such
term is defined in Section 3(3) of ERISA) and each bonus, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock option,
stock purchase, phantom stock, retirement, savings excess benefit, supplemental
unemployment, paid-time off, educational assistance, vacation, sick leave,
severance, disability, death benefit, medical, dental or life insurance plan,
program or arrangement, in each case adopted, sponsored, maintained or
contributed to or required to be adopted, sponsored, maintained or contributed
to by or on behalf of the Company for the benefit of any present or former
officers, directors, employees, consultants or agents of the Company (including
any dependents or beneficiaries thereof) or as to which the Company may have any
present or future liability.

“Encumbrance”
means a Lien, voting agreement, voting trust, proxy or any other similar
arrangement or restriction of any kind whatsoever.

“Entity”
means a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a Governmental Authority.

“Environmental Liability” has the meaning set
forth in Section 4.1(s).

“Escrow
and/or Custodial Agreements” means the agreements entered into by the
Company pursuant to the insurance laws of the states of Louisiana and New
Hampshire, including the Custodian Agreement dated August 10, 1992 by and
between the Company and First NH Investment Services Corporation and the
pledged certificates of deposit in the aggregate amount of $200,000.00 securing
obligations of the Company under Louisiana insurance laws; provided that the
agreement with respect to Louisiana, and the deposit relating thereto, shall be
excluded if, at the Closing, the Company has a Surplus or Excess Lines
Qualification in Louisiana and the deposit is necessary with respect thereto.

“Existing
Reinsurance Agreements” has the meaning set forth in Section 4.1(v) below.

“Filing
Party” has the meaning set forth in Section 9.3(a)(3) below.

 3
 

“Final
Fair Market Value” has the meaning set forth in Section 2.5(b) below.

“Form
A Filing” has the meaning set forth in Section 5.2(c) below.

“GAAP”
means United States generally accepted accounting principles as in effect from
time to time.

“Governmental Authority”
means any court, arbitral body, administrative or governmental body,
department, commission, board, agency, political subdivision or
instrumentality, or any legislative, executive or regulatory authority or
agency.

“Guaranty
Agreement” means the Guaranty Agreement of the Parent in favor of the Buyer
substantially in the form of Exhibit 5 hereto.

“Income
Tax” means any federal, state, local or foreign income tax, including any
interest, penalty or addition thereto, whether disputed or not.

“Income
Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Income Taxes, including any
schedule or attachment thereto.

“Indemnified
Party” has the meaning set forth in Section 10.3 below.

“Independent
Accounting Firm” shall mean an independent nationally recognized accounting
firm mutually acceptable to the Buyer and the Seller Parties.

“Indemnitor”
has the meaning set forth in Section 10.3 below.

“Information”
shall have the meaning set forth in Article 14 below.

“Insurance
License” shall have the meaning set forth in Section 4.1(u)(1) below.

“Investment” as
applied to any Person means (i) any direct or indirect purchase or other
acquisition by such Person of any bond, debenture, note, instrument, stock,
security or other obligation or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.

“Knowledge”
means the actual knowledge of the designated party or such knowledge that
should have been gained through reasonable inquiry by such party.  The Seller Parties or the Buyer shall be
deemed to have knowledge of a particular fact or other matter only if any
individual who is serving as an executive officer of such party has, or at any
time had, Knowledge of such fact or other matter.

“Latest
Balance Sheet” means the unaudited statutory balance sheet of the Company
as of March 31, 2007.

“Laws”
shall have the meaning set forth in Section 4.1(q) below.

 4
 

“Lien”
means any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind (including, without limitation, any conditional sale or other title
retention agreement or lease in the nature thereof), any sale of receivables
with recourse, any filing or agreement to file a financing statement as a
debtor under the Uniform Commercial Code or any similar statute other than to
reflect the ownership by a third party of property leased pursuant to a lease
which is not in the nature of a conditional sale or title retention agreement,
or any subordination arrangement in favor of another Person (other than any
subordination arising in the ordinary course of business).

“Loss”
means, with respect to any Person, any and all claims, losses, liabilities,
damages, deficiencies, obligations, costs or expenses, penalties and reasonable
attorneys’ fees and disbursements incurred by such Person (other than any Taxes
or any such amounts to the extent related to Taxes).

“Market
Value” means (i) in the case of securities (other than Cash Equivalents)
listed on an exchange or on an over-the-counter market, the closing price on
such exchange or market (or the average of the closing bid and asked prices if
there is no closing price) plus all accrued but unpaid interest on such
securities through the last Business Day preceding the Closing Date if such
amount is not already reflected in such closing price (or such bid and asked
prices) and (ii) in the case of cash or Cash Equivalents, the face amount
thereof.

“Material
Adverse Effect” means a change, event (including any damage, destruction or
Loss, whether or not covered by insurance), condition, state of facts or
development that, individually or in the aggregate, has had or would reasonably
be expected to have a material adverse effect on the Insurance License or
Surplus or Excess Lines Qualifications held by the Company or on the assets
(tangible or intangible), liabilities, regulatory compliance or governmental
relations of the Company; provided, however,
to the extent such effect results from any of the following, such effect shall
not be considered a Material Adverse Effect: 
(i) a change in the Market Value of Investments made in accordance with
the investment guidelines in effect prior to the date hereof; (ii) any adverse
change or effect that is caused by or that arises out of conditions affecting
the economy or securities markets generally; (iii) any adverse change or effect
that arises out of conditions effecting the insurance or financial services
industries generally, including, without limitation, circumstances, changes or
effects in or affecting interest rates, securities markets, accounting
principles, practices or conventions or applicable law (whether federal, state,
local or foreign); or (iv) any adverse change or effect resulting from the
announcement or the pendency of the transactions contemplated hereby.

“MGA”
has the meaning set forth in the preface.

“MGA
Financial Statements” has the meaning set forth in Section 4.1(g)(2) below.

“New
York Trust Agreement” means the Company’s Declaration of Trust, dated
October 10, 1994, creating a trust in accordance with the New York Insurance
Law.

“Parent
Financial Statements” has the meaning set forth in Section 4.1(g)(1) below.

 5
 

“Parties”
has the meaning set forth in the preface.

“Person”
means an individual or an Entity.

“Policies”
has the meaning set forth in Section 4.1(u)(3) below.

“Pre-Closing
Tax Period” shall mean any taxable period or portion thereof that ends on
or prior to the Closing Date.

“Post-Closing
Tax Period” shall mean any taxable period or portion thereof that begins
after the Closing Date.

“Purchase
Price” has the meaning set forth in Section 2.2.

“Rebate
or Kickback” has the meaning set forth in Section 4.1(t).

“Related
Transactions” means the transactions described in Sections 3.1, 3.2, 3.3
and 3.4.

“Reinsurance
Trust Agreement” means the Reinsurance Trust Agreement substantially in the
form of Exhibit 4, and subject to reasonable revisions requested by the
appointed trustee.

“Quota
Share Reinsurance Agreement” means the Quota Share Reinsurance Agreement
between the Company and MGA substantially in the form of Exhibit 3.

“SAP”
means, with respect to any Person, the statutory accounting principles and
applicable actuarial standards of practice prescribed or permitted by the rules
and regulations of the National Association of Insurance Commissioners and the
insurance commissioner (or similar authority) of such Person’s jurisdiction of
domicile, applied on a basis consistent with that of prior years (other than
where a lack of consistency results from changes in the statutory accounting
principles or actuarial standards of practice so prescribed or permitted).

“Section
2.2 Amount” has the meaning set forth in Section 2.2.

“Securities
Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Seller
Parties” has the meaning set forth in the preface.

“Seller
Indemnitees” shall have the meaning set forth in Section 10.2 below.

“Shares”
has the meaning set forth in Section 4.1(e) below.

“Straddle
Taxes” has the meaning set forth in Section 9.3(f)(3) below.

“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which (i) if a
corporation, a 

 6
 

majority of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination
thereof.  For purposes hereof, a Person
or Persons shall be deemed to have a majority ownership interest in a limited
liability company, partnership, association or other business entity if such
Person or Persons shall be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses or shall be
or control any managing director or general partner of such limited liability
company, partnership, association or other business entity.

“Surplus
or Excess Lines Qualified” or “Surplus or Excess Lines Qualification” means
(i) with respect to those United States jurisdictions which maintain a list of
insurance companies which are approved, qualified or eligible to write
insurance coverage on a “surplus lines” or “excess lines” basis, as those terms
are commonly understood in the United States insurance industry, the inclusion
of the Company on such list or written confirmation from a Governmental
Authority of such United States jurisdiction that the Company will appear in
the next publication of such list; (ii) with respect to those United States
jurisdictions in which a surplus lines association or excess lines association
or stamping office maintains a list of insurance companies approved, qualified
or eligible to write insurance coverage on a surplus lines or excess lines
basis, the inclusion of the Company on such list or the written confirmation from
the surplus lines association or excess lines association or stamping office
that the Company will appear in the next publication of such list; and (iii)
with respect to the United States jurisdictions in which neither clause (i) nor
clause (ii) above applies, the Company satisfies the requirements of such
jurisdiction for writing insurance coverage on a surplus lines or excess lines
basis.

“Tax”
or “Taxes” means any and all federal, state, local, foreign and other
net income, gross income, gross receipts, sales, use, ad valorem, transfer,
registration, excise, franchise, capital stock, profits, license, stamp, lease,
service, service use, payroll, wage, employment, social security, severance,
occupation, excise, premium, real or personal property, windfall profits,
customs, duties, alternative or add-on minimum, estimated and other taxes,
fees, assessments and charges of any kind whatever, together with any interest
and penalties, additions to tax or additional amounts with respect thereto,
whether disputed or not.

“Tax
Indemnifying Party” has the meaning set forth in Section 9.3(a)(3) below.

“Tax
Claim” has the meaning set forth in Section 9.3(d) below.

“Tax
Return” means any return, information report or filing with respect to
Taxes, including any schedules attached thereto and including any amendment
thereof.

“Threshold”
shall have the meaning set forth in Section 10.7.

 7
 

“Transfer
and Assignment Agreement” means the Transfer and Assignment Agreement
between the Company and MGA substantially in the form attached as Exhibit 6
hereto.

“Transfer
Taxes” has the meaning set forth in Section 9.3(c) below.

ARTICLE 2

PURCHASE
AND SALE OF COMPANY SHARES

2.1           Basic Transaction. On and
subject to the terms and conditions of this Agreement, the Buyer agrees to
purchase from the Seller Parties, and the Seller Parties agree to sell to the
Buyer, all of the Shares for the consideration specified in Section 2.2.

2.2           Purchase Price.  The Buyer agrees to pay to the Seller Parties
(as directed by them) at the Closing an amount equal to the sum of (i)
$4,750,000, (ii) $125,000 for each of the States of Louisiana and Colorado if
the Company has a Surplus or Excess Lines Qualification that is valid, in
force, unimpaired and in good standing on the Closing Date in such state, and (iii)
the Market Value of Acceptable Financial Assets owned by the Company
immediately prior to the Closing (which shall exclude (a)
the assets to be included in the transfer to the Parent pursuant to Section
3.1, (b) the assets held in trust pursuant to
the New York Trust Agreement and the Liberty Trust, (c)
the assets held pursuant to the Escrow and/or Custodial Agreement for the State
of New Hampshire and, if the Excess or Surplus Lines Qualification for
Louisiana is not in force on the Closing Date, the assets held pursuant to the
Escrow and/or Custodial Agreement for the State of Louisiana, and (d) the assets included in the transfers contemplated by
Section 3.3(a)) in an amount equal to $5,000,000 (the “Purchase Price”);
provided, however, that if any of the
Company’s Surplus or Excess Lines Qualifications in the jurisdictions listed in
Section 4.1(u)(2) of the Disclosure Schedule is not valid, in force, unimpaired
and in good standing on the Closing Date, the Purchase Price shall be reduced
by the amount set forth in Section 2.2 of the Disclosure Schedule opposite the
name of the jurisdiction in which such Surplus or Excess Lines Qualification is
not valid, in force, unimpaired or in good standing, or, if there is more than
one such jurisdiction, the sum of the amounts set forth in Section 2.2 of the
Disclosure Schedule opposite the names of such jurisdictions (the “Section
2.2 Amount”).  At the Closing, in
exchange for the delivery by the Seller Parties to the Buyer of the Shares, the
Buyer shall pay to the Seller Parties the Purchase Price by wire transfer of
immediately available funds to a bank account designated by the Seller Parties.

2.3           The Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”) shall take place at the offices of the
Parent at 3333 Lee Parkway, Suite 1200, Dallas, Texas, commencing at 10:00
a.m., local time on a date to be mutually agreed within thirty (30) days
following the satisfaction or waiver of all conditions precedent set forth in
this Agreement (other than conditions with respect to actions that the
respective Parties will take at the Closing itself) or such other date as may
otherwise be agreed upon by the Seller Parties and the Buyer (the “Closing
Date”).  The Parties shall use their
best efforts to cause the Closing to be effective as of the first day of a
calendar month.

 8
 

2.4           Deliveries at the Closing.  At the Closing, (i) the Seller Parties will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Article 7 below, (ii) the Buyer will deliver to the Seller
Parties the various certificates, instruments, and documents referred to in
Article 8 below, (iii) the Seller Parties will deliver to the Buyer stock
certificates representing all of the Shares, endorsed in blank or accompanied
by duly executed assignment documents, and (iv) the Buyer will deliver to the
Seller Parties the consideration specified in Section 2.2.

2.5           Post Closing Adjustment.

(a)           At least three (3) Business Days
prior the Closing Date, the Seller Parties shall provide to the Buyer a
preliminary determination of the projected Market Value of the Acceptable
Financial Assets as of the Closing Date.

(b)           Within five (5) Business Days after
the Closing Date, the Seller Parties shall provide to the Buyer a final
determination of the Market Value of the Acceptable Financial Assets as of the
Closing Date (“Final Fair Market Value”).  If the Final Fair Market Value exceeds
$5,000,000, then the Buyer shall pay to the Seller Parties an amount equal to such
excess, in immediately available funds by wire transfer to a bank account
designated in writing by the Seller Parties. 
If the Final Fair Market Value is less than $5,000,000, then the Seller
Parties shall pay to the Buyer an amount equal to such shortfall, in
immediately available funds by wire transfer to a bank account designated in
writing by the Buyer.  Any payment due
pursuant to this Section 2.5(b) shall be made within ten (10) Business Days
after the Closing Date or, if a Dispute Notice is filed pursuant to Section
2.5(c), within five (5) Business Days after the resolution of the disagreement
described in such Dispute Notice.

(c)           In the event that the Buyer disagrees
with the Final Fair Market Value of the Acceptable Financial Assets, the Buyer
shall provide notice of such disagreement and the nature or reason therefor to
the Seller Parties no later than three (3) Business Days after the delivery to
the Buyer of such final determination (the “Dispute Notice,” and the
date of its delivery, the “Dispute Notice Date”).  The Seller Parties and the Buyer shall use
their best efforts to resolve such disagreement by negotiation for five (5)
Business Days following the Dispute Notice Date, and if no resolution is
reached within such period, the dispute shall be jointly submitted by the Buyer
and the Seller Parties to the Independent Accounting Firm on the next Business
Day following the expiration of such period. 
The Independent Accounting Firm shall make its determination of the Fair
Market Value of the Acceptable Financial Assets as of the Closing Date within
fifteen (15) Business Days after submission thereof, which determination shall
be binding and conclusive on all of the Parties hereto.  Each of the Parties shall cooperate fully in
assisting the Independent Accounting Firm, as it may require or request, to
reach such determination and shall take all actions necessary to expedite and
to cause the Independent Accounting Firm to expedite such determination.  Upon completion of the Independent Accounting
Firm’s review, payment of any amount required pursuant to Section 2.5(b) shall
be made by the Seller Parties or the Buyer, as the case may be, within five (5)
Business Days after such determination. 
The Seller Parties and the Buyer shall each pay fifty percent (50%) of
the total fees and expenses of the Independent Accounting Firm; provided, however, if the Independent Accounting Firm makes
its determination of the Fair Market Value of the 

 9
 

Acceptable
Financial Assets as of the Closing Date and such determination is substantially
the same as the value determined by one of the Parties, then the other Party
shall pay 100% of the total fees and expenses of the Independent Accounting
Firm.

ARTICLE 3

RELATED
TRANSACTIONS

Subject
to the additional conditions precedent set forth in Article 6 of this
Agreement, the obligations of the Buyer and the Seller Parties to consummate
the purchase of the Shares is subject to and conditioned upon completion of the
following transactions in form and substance reasonably satisfactory to the
Buyer and the Seller Parties:

3.1           Corporate Restructuring.  Prior to the Closing and after completion of
the transaction contemplated in Section 3.3(a), and subject to receipt of all
applicable consents and approvals identified in Section 4.1(z) of the
Disclosure Schedule in form and substance reasonably acceptable to the Parties,
the Seller Parties shall cause the Company to transfer to the Parent all of the
issued and outstanding capital stock of MGA.

3.2           Transfer of Liabilities and
Obligations.

(a)           At the Closing, MGA and the Company
shall enter into the Assumption Agreement, the Transfer and Assignment
Agreement, and the Administration Agreement, and the Parent shall enter into
the Guaranty Agreement.

(b)           No later than the close of business
on the Business Day immediately preceding the Closing Date, (i) the Seller
Parties shall terminate and commute any and all intercompany cessions,
reinsurance agreements, retrocessions, pooling arrangements and other transfers
of insurance risk by and between the Company, on the one hand, and the Seller
Parties and their Affiliates, on the other hand; (ii) MGA shall enter into the
Quota Share Reinsurance Agreement, and (iii) MGA and the Company shall enter
into the Reinsurance Trust Agreement, and MGA shall transfer to the trustee,
for deposit to the trust account thereunder, the assets described therein.  The performance of MGA under the Quota Share
Reinsurance Agreement, including its financial obligations described therein,
shall be secured by the Reinsurance Trust Agreement.

(c)           The Seller Parties and the Buyer
acknowledge and agree that it is their mutual intent that the Company shall
have no liabilities or obligations whatsoever at the Closing, except for the
liabilities and obligations specified in the last sentence of Section 4.1(h),
and the Seller Parties shall take all necessary steps to ensure that the
Company receives full financial statement credit for the transfers and
assumptions contemplated by this Section 3.2 under the Laws of the State of Oklahoma.

 10

3.3           Reduction
in Capital and Surplus.

(a)           On the Closing Date and prior to the
Closing and the transaction contemplated in Section 3.1, and subject to receipt
of all applicable consents and approvals identified in Section 4.1(z) of the
Disclosure Schedule in form and substance reasonably acceptable to the Parties,
the Company shall transfer to MGA all of the assets of the Company in amounts
sufficient to reduce the remaining statutory capital and surplus of the Company
(without counting its investment in MGA and after giving effect to the initial
reserve transfer contemplated by the Quota Share Reinsurance Agreement and
after taking into account the assets to be transferred pursuant to the Transfer
and Assignment Agreement) to $5,000,000. 
In connection with the transfer of such assets, at or prior to the
Closing the Company shall notify JP Morgan Chase Bank, as successor to Texas
Commerce Bank, trustee under the New York Trust Agreement, of the Company’s
intention to terminate such Trust Agreement. 
At the Closing, pursuant to the Transfer and Assignment Agreement, the
Company shall assign to MGA all of the Company’s right, title and interest in
and to the New York Trust Agreement, the Escrow and/or Custodial Agreements,
and the Liberty Trust, and all proceeds thereof, and shall designate MGA as the
Company’s agent and representative in connection with all matters relating to
such trusts and other arrangements and shall authorize MGA to take all steps
necessary or desirable to terminate said arrangements, including without
limitation, the power and authority to engage a firm of independent certified
public accountants to conduct the audit of the trust fund and to negotiate with
the New York Department of Insurance regarding the termination of the New York
Trust Agreement and the distribution of the proceeds thereof.  MGA shall assume and be responsible for all
fees and other costs associated with the administration of the trust after the
Closing Date and all expenses, taxes and other charges and liabilities associated
with the termination of the trust; and MGA shall indemnify and hold the Company
harmless from and against any and all such fees, costs, expenses, taxes and
other charges and liabilities relating thereto.

(b)           The Seller Parties and the Buyer
agree that following the transfer by the Company of the capital stock of MGA
pursuant to Section 3.1 and the amount described in Section 3.3(a) and the
consummation of the transactions contemplated by the Ancillary MGA Agreements,
the Company shall not have any material assets except for the assets specified
in the last sentence of Section 4.1(k).

(c)           On the Closing Date and after the
Closing, the Buyer shall contribute admissible unencumbered assets to the
Company totaling $15,000,000.

3.4           Elimination of Intercompany
Contracts and Pools.  Except as
contemplated by Section 5.13, prior to the Closing, and subject to all
applicable consents and approvals identified in Section 4.1(z) of the
Disclosure Schedule, the Seller Parties shall remove the Company as a party from
all intercompany contracts and pools, excluding reinsurance in place to meet
the terms of this Agreement.  Except as
contemplated by Section 5.13, the Seller Parties and the Buyer acknowledge and
agree that it is their mutual intent that the Company shall have no liabilities
or obligations with respect to any intercompany contracts or pools whatsoever
at or after the Closing.

 11
 

ARTICLE 4

REPRESENTATIONS
AND WARRANTIES CONCERNING THE TRANSACTION

4.1           Representations and Warranties of
the Seller Parties.  As a material
inducement to the Buyer to enter into this Agreement and purchase the Shares,
the Seller Parties, jointly and severally, make the following representations
and warranties to the Buyer.  Nothing in
the Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the applicable Section of the
Disclosure Schedule identifies the relevant exception in reasonable detail.

(a)           Organization of the Seller Parties
and the Company.

(1)           The Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite power and authority (corporate and otherwise) to
own, lease and operate its properties and assets and to conduct its business as
it is now being conducted, to execute and deliver this Agreement and the
Guaranty Agreement, to perform its obligations hereunder and thereunder, and to
carry out the other transactions contemplated hereby and thereby.

(2)           MGA is a stock property and casualty
insurance company duly organized, validly existing and in good standing under
the laws of the State of Texas and has all requisite power and authority
(corporate and otherwise) to own, lease and operate its properties and assets
and to conduct its business as it is now being conducted, to execute and
deliver this Agreement and the Ancillary MGA Agreements, to perform its
obligations hereunder and thereunder, to own, hold, sell and transfer the
Shares to the Buyer (subject to the receipt of the consents and approvals set
forth in Section 4.1(z) of the Disclosure Schedule), and to carry out the other
transactions contemplated hereby and thereby.

(3)           The Company is a stock property and
casualty insurance company duly organized, validly existing and in good
standing under the laws of the State of Oklahoma and has all requisite power
and authority (corporate and otherwise) to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted,
to execute and deliver the Ancillary MGA Agreements, to perform its obligations
thereunder and to carry out the other transactions contemplated hereby and
thereby.  At the Closing, the Company
will not own and will not be obligated to in any way to acquire, either
directly or indirectly, any voting securities or other equity interest or
securities in any other Entity or be a participant in any partnership, pooling
arrangement or joint venture with any other Person.

(4)           The copies of the articles of
incorporation, bylaws and other organizational documents of the Seller Parties
and the Company that have been furnished to the Buyer and its counsel reflect
all amendments made thereto at any time prior to the date of this Agreement or
the Closing, as the case may be, and are true, correct and complete.

 12
 

(b)           Authorization of the Transactions.

(1)           The execution and delivery of this
Agreement by the Seller Parties and the performance by the Seller Parties of
their respective obligations hereunder have been duly and validly authorized by
all necessary corporate action on the part of each of the Seller Parties.  This Agreement constitutes a legal, valid,
and binding obligation of each the Seller Parties and is enforceable against
each of the Seller Parties in accordance with its terms.

(2)           At the Closing, the Guaranty
Agreement will have been duly executed and delivered by the Parent and the
performance by the Parent of its obligations thereunder will have been duly and
validly authorized by all necessary corporate action on the part of the Parent and
the Guaranty Agreement will constitute a legal, valid and binding obligation of
the Parent and will be enforceable against the Parent in accordance with its
terms.

(3)           At the Closing, the Ancillary MGA
Agreements will have been duly executed and delivered by MGA and the
performance by MGA of its obligations thereunder will have been duly and
validly authorized by all necessary corporate action on the part of MGA.  At the Closing and subject to the receipt of
the consents and approvals set forth in Section 4.1(z) of the Disclosure
Schedule, the Ancillary MGA Agreements will each constitute a legal, valid, and
binding obligation of MGA and will be enforceable against MGA in accordance
with its terms.

(c)           Noncontravention.

(1)           Neither the execution and delivery of
this Agreement or the Guaranty Agreement nor, subject to the receipt of the
consents and approvals set forth in Section 4.1(z) of the Disclosure Schedule,
the consummation of the transactions contemplated hereby and thereby and the
performance of and compliance with the terms hereof and thereof by the Parent
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
Governmental Authority to which the Parent is subject,  (ii) violate any provision of the articles of
incorporation, bylaws or other organizational documents of the Parent, (iii)
except as set forth in Section 4.1(c) of the Disclosure Schedule, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice under, or result in the creation of any Lien
upon the Shares or any other assets of the Parent, under any agreement, contract,
lease, license, instrument, or other arrangement to which the Parent is a party
or by or to which it or its assets may be bound or subject.

(2)           Neither the execution and delivery of
this Agreement, the Administration Agreement and the Assumption Agreement nor,
subject to the receipt of the consents and approvals set forth in Section
4.1(z) of the Disclosure Schedule, the execution and delivery of the Transfer
and Assignment Agreement, the Quota Share 

 13
 

Reinsurance Agreement and the Reinsurance Trust Agreement
and the consummation of the transactions contemplated hereby and thereby and
the performance of and compliance with the terms hereof and thereof by MGA and
the Company, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any Governmental Authority to which MGA or the Company is subject, (ii) violate
any provision of the articles of incorporation, bylaws or other organizational
documents of MGA or the Company, (iii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify or cancel, or require any notice
under, or result in the creation of any Lien upon the Shares or any other
assets of MGA or the Company, under any agreement, contract, lease, license,
instrument, or other arrangement to which either MGA or the Company is a party
or by or to which either of them or their assets may be bound or subject.

(d)           Brokers’ Fees.  Neither the Seller Parties nor the Company
has nor will have any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.

(e)           Shares.  The authorized capital stock of the Company
consists of 4,000,000 shares of common stock, par value $1.00 per share, of
which 3,000,000 shares are issued and outstanding (the “Shares”).  The Company does not have any other class of
authorized capital stock.  All of the
Shares are duly authorized, validly issued, fully paid and non-assessable.  Except as set forth in Section 4.1(e) of the
Disclosure Schedule, there are no outstanding securities, profit participation
rights, obligations, rights, subscriptions, warrants, options, phantom stock
rights, calls, commitments or demands of any character or (except for this
Agreement) other contracts of any kind that give any Person the right to (i)
purchase or otherwise receive or be issued any shares of capital stock of the
Company or any security or liability of any kind convertible into or
exchangeable for any shares of capital stock of the Company or any unit, equity
appreciation rights or phantom stock rights in any equity plan, or (ii) other
than the Seller Parties, receive any benefits or rights similar to any rights
enjoyed by or accruing to a holder of the Shares, or any rights to participate
in the equity, income or election of directors or officers of the Company.

(f)            Title to the Shares.  Except as set forth in Section 4(f) of the
Disclosure Schedule, as of the date hereof the Parent has marketable title to
the Shares free and clear of all Liens and, upon delivery of the Shares to the
Buyer pursuant to Section 2.4, the Buyer will acquire good and marketable title
thereto, free and clear of any Liens other than those created by the Buyer.

(g)           Financial Statements.  The Seller Parties have furnished to the
Buyer true and complete copies of the following financial statements:

(1)           The audited consolidated financial
statements of the Parent and its consolidated Subsidiaries as of and for the
three years ended December 31, 2004, through December 31, 2006, and the
unaudited consolidated financial statements as of and for the quarter ended
March 31, 2007 (together with the notes relating thereto, whether or not 

 14
 

included therein) (collectively, the “Parent
Financial Statements”).  Each Parent
Financial Statement, including without limitation, each consolidated balance
sheet and each of the consolidated statements of operations, shareholders’
equity and comprehensive loss and cash flows contained therein, (i) was
prepared in accordance with GAAP applied on a basis and in a manner consistent
with prior periods except as disclosed in the notes thereto, (ii) is consistent
with the books and records of the Parent and its consolidated Subsidiaries
(which are accurate and complete in all material respects), and (iii) fairly
presents the consolidated financial condition as of the date thereof, and the
consolidated results of operations, shareholders’ equity and cash flows for and
during the periods covered thereby, of the Parent.  The Parent maintains, on behalf of itself and
its consolidated subsidiaries, a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are executed
in accordance with management’s general or specific authorizations, (2)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (3)
access to assets is permitted only in accordance with management’s general or
specific authorization and (4) the recorded accountability for assets is
compared with the existing assets at reasonable market intervals and
appropriate action is taken with respect to any differences.

(2)           MGA’s audited statutory financial
statements as of and for the three years ended December 31, 2004, through
December 31, 2006, and the unaudited statutory financial statements as of and
for the quarter ended March 31, 2007 (together with the notes relating thereto,
whether or not included therein), as filed with or submitted to Texas
Department of Insurance on forms prescribed or permitted by such department
(collectively, the “MGA Financial Statements”).  Each MGA Financial Statement complied in all
material respects with all applicable laws, statutes, rules and regulations
when so filed, and all material deficiencies with respect to any MGA Financial
Statement have been cured or corrected. 
Each MGA Financial Statement, including without limitation, each balance
sheet and each of the statements of operations, capital and surplus accounts
and cash flows contained therein, (i) was prepared in accordance with SAP
applied on a basis and in a manner consistent with prior periods except as disclosed
in the notes thereto, (ii) is consistent with the books and records of MGA
(which are accurate and complete in all material respects), and (iii) fairly
presents the financial condition as of the date thereof, and the results of
operations for and during the periods covered thereby, of MGA.  MGA has disclosed to the Buyer all accounting
principles or practices used in preparing the MGA Financial Statements for
which MGA has requested approval or received permission from the Texas
Department of Insurance.

(3)           The Company’s audited statutory
financial statements as of and for the three years ended December 31, 2004,
through December 31, 2006, and the unaudited statutory financial statements as
of and for the quarter ended March 31, 2007 (together with the notes relating
thereto, whether or not included therein), as filed with or submitted to the
Oklahoma Insurance Department on forms prescribed or permitted by such
department (collectively, the “Company Financial Statements”).  Each Company Financial Statement complied in
all material respects with all applicable laws, statutes, rules and regulations
when so filed, and all material deficiencies with respect to any 

 15
 

Company Financial Statement have been cured or
corrected.  Each Company Financial
Statement, including without limitation, each balance sheet and each of the
statements of operations, capital and surplus accounts and cash flows contained
therein, (i) was prepared in accordance with SAP applied on a basis and in a
manner consistent with prior periods except as disclosed in the notes thereto,
(ii) is consistent with the books and records of the Company (which, in turn,
are accurate and complete in all material respects), and (iii) fairly presents
the financial condition as of the date thereof, and the results of operations
for and during the periods covered thereby, of the Company.  The Seller Parties have disclosed to the
Buyer all accounting principles or practices used in preparing the Company
Financial Statements for which the Company has requested approval or received
permission from the Oklahoma Insurance Department.

(h)           Absence of Undisclosed Liabilities.  On the date hereof, the Company has no
liabilities or obligations of any nature (whether absolute, accrued,
contingent, unliquidated and whether for insurance liabilities or otherwise,
whether or not known to the Seller Parties or the Company, whether due or to
become due and regardless of when asserted) other than liabilities and
obligations reflected in the Company Financial Statements.  As of the Closing, the Company will have no
liabilities or obligations of any nature whatsoever, except for liabilities
which are transferred to and assumed by MGA pursuant to the Quota Share
Reinsurance Agreement, liabilities reinsured pursuant to the Existing
Reinsurance Agreements, liabilities which are assumed by MGA from the Company
pursuant to the Assumption Agreement, obligations under the Transfer and
Assignment Agreement, liabilities the responsibility for which is delegated to
MGA pursuant to the Administration Agreement, payables to MGA with respect to
reinsurance recoverables under the Existing Reinsurance Agreements, if any, and
liabilities for Taxes which are not yet due and payable.

(i)            Absence of Certain Events.  Since December 31, 2006, the Company has
conducted no business other than that reasonably related to running off of its
existing insurance business and the settlement of claims, and has not, except
in furtherance of the transactions contemplated by this Agreement, including
those identified in Article 3:

(1)           issued
or renewed any policies of insurance or reinsurance or otherwise engaged in the
insurance or reinsurance business, except for transactions under the Existing
Reinsurance Agreements;

(2)           issued
any bonds, debentures, notes or other debt securities or any capital stock or
other equity interests or any securities convertible, exchangeable or
exercisable into any capital stock or other equity interests;

(3)           borrowed any amount or incurred or
become subject to any liability or other obligation;

(4)           declared, set aside or made any
payment or distribution of cash or other property to its shareholders or equity
holders with respect to its capital stock or other equity interests or
purchased or redeemed any shares of its capital stock or other equity interests
(including, without limitation, any warrants, options or other rights to
acquire its capital stock or other equity securities);

 16
 

(5)           mortgaged or pledged any of its
properties or assets (tangible or intangible) or subjected them to any material
Lien;

(6)           sold, assigned or transferred any of
its tangible assets or canceled any material debts or claims;

(7)           sold, assigned, transferred or
licensed any intangible assets;

(8)           suffered any extraordinary, material
losses or waived any rights of material value, whether or not in the ordinary
course of business or consistent with past practice;

(9)           made any Investment, except for
Investments in the ordinary course of business;

(10)         made any capital expenditures or
commitments ;

(11)         made any loans or advances to, or
guaranties for the benefit of,  any other
Person;

(12)         suffered any material damage,
destruction or casualty loss, whether or not covered by insurance;

(13)         taken any steps to incorporate any
Subsidiary; or

(14)         entered into any other material
transaction, except Investment transactions in the ordinary course of business.

(j)            No Material Adverse Effect.  As of the date hereof, since March 31, 2007,
there has been, no Material Adverse Effect with respect to the Company.

(k)           Securities and Assets.  The Company has marketable title to the
stock, bonds, notes and other securities and the other assets owned by the
Company on the date of this Agreement, free and clear of all Liens.  Section 4.1(k) of the Disclosure Schedule
lists all investments in stock, bonds, notes and other securities owned by the
Company on March 31, 2007, all of which complied when made in all respects with
applicable insurance laws and regulations, except for restrictions in respect
of Deposits or the rights of third parties arising out of the Existing
Reinsurance Agreements.  At the Closing
Date, the Company will have no assets, except the Acceptable Financial Assets.

(l)            Real Property.  Except as set forth in Section 4.1(l) of the
Disclosure Schedule, the Company does not have, and never has had, any
ownership interest, security interest, leasehold interest, license or other
interest of any kind in any real property whatsoever.

(m)          Employee Benefit Plans and
Employees.  Except as set forth in
Section 4.1(m) of the Disclosure Schedule, the Company has not adopted,
maintained, sponsored, contributed to, participated in or incurred any
liability under or with respect to any Employee Benefit Plan.  At or before the Closing Date, the Company’s
participation in all Employee 

 17
 

Benefit Plans
listed in Section 4.1(m) of the Disclosure Schedule shall have been terminated
and any liabilities related thereto shall have been assumed by MGA pursuant to
the Assumption Agreement.  The Company
has no employees and has no obligation to pay any compensation or benefits to,
and has no other existing or contingent liability to, any of its former
officers, directors or employees.

(n)           No Intercompany Liabilities.  Except as contemplated by Section 5.13, as of
the Closing, there will be no outstanding liabilities or obligations between or
among the Company, on the one hand, and the Seller Parties or any Affiliate
thereof, on the other hand, except under the Ancillary MGA Agreements.

(o)           Taxes.  Except as set forth in Section 4.1(o) of the
Disclosure Schedule, (i) all Tax Returns which are required to be filed by or
with respect to the Company have been duly and timely filed in accordance with
all applicable Laws; (ii) all such Tax Returns are true, correct and complete
and have been prepared in compliance with all applicable laws and regulations;
(iii) all Taxes due or claimed or asserted by any Taxing authority to be due
from or with respect to the Company for the periods covered by such returns
(whether or not such Taxes are shown on a Tax Return) have been duly and timely
paid; (iv) the Company is not currently the beneficiary of any extension of
time within which to file any Tax Return; (v) all Taxes which are required to
be withheld from amounts paid or owing to any employee, shareholder, creditor
or third party contractor of the Company have been withheld and paid over to
the appropriate Taxing authorities; (vi) all Taxes have been duly and fully
provided for in the books and records of the Company in accordance with SAP,
including without limitation, in each of the Company Financial Statements;
(vii) no statute of limitations with respect to any Taxes has been waived and
no extension of time with respect to any Tax assessment or deficiency has been
agreed to by or on behalf of the Company; (viii) the accrual for Taxes on the
Latest Balance Sheet would be adequate to pay all Tax liabilities of the
Company if its current tax year were to end on the date of the Latest Balance
Sheet (excluding any amount recorded which is attributable solely to timing
differences between book and Tax income); (ix) since the date of the Latest
Balance Sheet, the Company has not incurred any liability for Taxes; (x) an
assessment of any additional Taxes for periods for which Tax Returns have been
filed by the Company would not  exceed
the recorded liability therefor on the Latest Balance Sheet (excluding any
amount recorded which is attributable solely to timing differences between book
and Tax income); (xi) no foreign, federal, state or local tax audits or
administrative or judicial proceedings are pending or being conducted with
respect to the Company and neither of the Seller Parties nor the Company has
received any notice indicating an intent to commence any such proceeding; (xii)
no information related to Tax matters has been requested by any foreign,
federal, state or local taxing authority and no notice indicating an intent to
open an audit or other review has been received by the Seller Parties or the
Company from any foreign, federal, state or local taxing authority; (xiii)
there are no material unresolved claims concerning the Company’s Tax
liabilities; (xiv) no claim has been made by any Taxing authority that the
Company is subject to Tax or required to file a Tax Return in any jurisdiction
where it has not filed Tax Returns; (xv) there are no Liens for Taxes (other
than Taxes not yet due and payable) upon any of the assets of the Company;
(xvi) the Company is not liable for the Taxes of any other Person (a) as a transferee or successor, (b)
by contract or indemnity, (c) under
Treasury Regulation §1.1502-6 (or any corresponding provision of state, local
or foreign Tax law) or (d) otherwise;
(xvii) the Company is not a party to or bound by any 

 18
 

Tax indemnity,
Tax sharing or Tax allocation agreement; (xviii) the Company is not jointly or
severally liable for Taxes as a result of being a member of a consolidated
group, other than the consolidated group of which the Seller Parties and their
Affiliates are members; (xix) the Company will not be required to include any material
item of income in, or exclude any material item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing as
a result of any (a) change in method of accounting
for a taxable period ending on or prior to the Closing Date, (b) “closing agreement” as described in Section 7121 of the
Code (or any corresponding provision of state, local or foreign law) executed
prior to the Closing, (c) intercompany
transactions or any excess loss account described in the Treasury Regulations
under Section 1502 of the Code (or any corresponding provision of state, local
or foreign law), (d) installment sale or open
transaction disposition made prior to the Closing, or (e)
prepaid amount received prior to the Closing; and (xx) the Company has not
distributed stock of another Person, or had its stock distributed by another
Person, in a transaction that was purported or intended to be governed in whole
or in part by Section 355 or 361 of the Code.

(p)           Suits
and Other Proceedings.  Except as set
forth in Section 4.1(p) of the Disclosure Schedule, as of the date of this
Agreement there are no actions, suits, proceedings, claims, investigations or
examinations pending against either of the Seller Parties or the Company or, to
the Knowledge of the Seller Parties, threatened against or affecting either of
the Seller Parties or the Company, nor any administrative, arbitration or
mediation proceedings pending against either of the Seller Parties or the
Company or, to the Knowledge of the Seller Parties, threatened against the
Seller Parties or the Company, nor is there any outstanding order, writ,
injunction, award or decree of any Governmental Authority or any arbitration
tribunal or mediator against either of the Seller Parties or the Company.  Section 4.1(p) of the Disclosure Schedule
contains an accurate list and description of such pending or threatened actions
or proceedings and the amount reserved by the Company in respect of any
potential liability that may arise out of or in connection with each such
action or proceeding.  Except as set
forth in Section 4.1(p) of the Disclosure Schedule and except for any third
party claims made or actions or other proceedings commenced after the date of
this Agreement under any insurance policy, binder, commitment, endorsement or
contract issued by the Company, at the Closing Date there will be no actions,
suits, proceedings, claims, investigations or examinations pending against
either of the Seller Parties or the Company or, to the Knowledge of the Seller
Parties, threatened against or affecting either of the Seller Parties or the
Company, nor any administrative, arbitration or mediation proceedings pending
against either of the Seller Parties or the Company or, to the Knowledge of the
Seller Parties, threatened against the Seller Parties or the Company, nor will
there be any outstanding order, writ, injunction, award or decree of any
Governmental Authority or any arbitration tribunal or mediator against either
of the Seller Parties or the Company on the Closing Date, which in any such
case (i) would restrain, enjoin, prohibit or in any way impair the ability of
the Seller Parties or the Company to consummate the transactions contemplated
hereby, (ii) would reasonably be expected to have a Material Adverse Effect, or
(iii) would reasonably be expected to have a material adverse effect on the
ability of the Company to conduct an insurance business after the Closing under
the Insurance License or any of the Surplus or Excess Lines Qualifications.

(q)           Compliance with Laws.  To the Knowledge of the Seller Parties, the
Company has complied in all material respects with, and is now complying in all
material respects with, all foreign, federal, state and local statutes, laws,
regulations, ordinances, 

 19
 

judgments,
injunctions, orders, licenses, approvals, permits and other requirements
(collectively, “Laws”) applicable to the Company or its business,
properties or assets and no noncompliance therewith, whether or not material,
will have, or is reasonably likely to result in a materially adverse effect on
the condition or business of the Company, or the Insurance License or Surplus
or Excess Lines Qualifications held by the Company as of the date of this
Agreement.  Neither of the Seller Parties
nor the Company has received notice from any Governmental Authority of, or has
any Knowledge of, any alleged noncompliance. 
The Company is not relying on any exemption from or deferral of any Law
that would not be available to it after the Closing.  To the Knowledge of the Seller Parties, there
are no pending changes in any Law that would prevent the Company from
conducting an insurance or reinsurance business after the Closing.

(r)            Compliance with Insurance Laws.
Without limiting the representations and warranties contained in Sections
4.1(q) and (u), except as set forth in Section 4.1(r) of the Disclosure
Schedule:

(1)           To the Knowledge of the Seller
Parties, the Company is in compliance in all material respects with the
requirements of the insurance laws and regulations of the State of Oklahoma and
the insurance laws and regulations of other jurisdictions which are applicable
to its operations, and has filed all notices, reports, statements,
registrations, documents and other information required to be filed thereunder;
and the Company has received no notification from any insurance regulatory
authority to the effect that any additional permit or license from such
insurance regulatory authority is needed to be obtained by the Company.

(2)           The Company is not undergoing any statutory
or similar examination of its books, records, accounts or business by any
federal or state regulatory agency or other Governmental Authority.

(3)           The Company belongs to all guaranty
fund associations, pools, bureaus, and similar organizations required by
applicable law in Oklahoma and in each other jurisdiction in which the Company
maintains a Surplus or Excess Lines Qualification in order for the Company to
conduct its business in such jurisdiction and has paid or will pay all
assessments or other amounts due to such guaranty fund associations or similar
organizations for all periods through the Closing Date.

(s)           Environmental
Compliance.  To the Knowledge of the
Seller Parties, the Company is not subject to, and neither of the Seller
Parties nor the Company has any reason to believe that the Company may become
subject to, any material liability (contingent or otherwise) or material
corrective or remedial obligation arising under any federal, state, local or
foreign law, rule or regulation (including the common law) relating to or
regulating health, safety, pollution or the protection of the environment.  Any such liability, regardless of materiality
and regardless of the Knowledge of the Seller Parties, is referred to herein as
an “Environmental Liability”.

(t)            Rebates and
Kickbacks.  To the Knowledge of the
Seller Parties, neither the Company nor any of its officers, managers,
directors, employees or agents, nor any other Person or entity acting on behalf
of the Company, acting alone or together, has unlawfully or in violation of any
policy or code of ethics of the Company or any its Affiliates: (i) received, 

 20
 

directly or
indirectly, any rebates, payments, commissions, promotional allowances or any
other economic benefits, regardless of their nature or type, from any customer,
governmental employee or other person or entity with whom the Company has done
business, directly or indirectly; (ii) directly or indirectly, given or agreed
to give any contribution, gift, bribe, rebate, payoff, influence payment,
kickback or similar benefit to any customer, governmental employee or other
person or entity regardless of form, whether in money, property or services
including, without limitation, (x) to obtain favorable treatment in securing
any business or in obtaining any license or approval, (y) to pay for favorable
treatment for business secured or any license or governmental approval
obtained, or (z) to obtain special concessions or pay for special concessions
already obtained for or in respect of the Company.  Any such action, regardless of the Knowledge
of the Seller Parties, is referred to herein as a “Rebate or Kickback”.

(u)           Licenses and Permits.

(1)           The Company is licensed to do a
property and casualty insurance business in the State of Oklahoma (the “Insurance
License”), and such Insurance License is valid and is in full force and
effect and free and clear of all Liens. 
The Company is not a party to any agreement, and is not subject to any
order, formal or informal, limiting the Company’s ability to make full use of
the Insurance License which has been issued to it or requiring the Company to
comply with regulatory standards, procedures or requirements different from
those generally applicable to companies with certificates of authority or
licenses similar to the Insurance License. 
The Company has not (i) relinquished the Insurance License or had it
revoked or suspended, (ii) been involved in a proceeding, whether formal or
informal, to revoke, suspend, limit or restrict the Insurance License or the
Company’s corporate charter, (iii) been notified by any Governmental Authority
that such Governmental Authority might have cause to revoke, suspend, limit or
restrict such Insurance License or the Company’s corporate charter, or become
aware that any such suspension, revocation, or limitation has been threatened
by any Governmental Authority, or (iv) written any business in any jurisdiction
on an admitted basis other than those in which it is qualified to write
business on an admitted basis.  Subject
to the receipt of the consents and approvals set forth in Section 4.1(z) of the
Disclosure Schedule, the Insurance License is not subject to termination as a
result of the execution of this Agreement nor the consummation of the
transactions contemplated hereby.

(2)           Section 4.l(u)(2) of the Disclosure
Schedule contains a true and correct list of each jurisdiction in which the
Company is Surplus or Excess Lines Qualified as of the date of this
Agreement.  Other than as set forth in
Section 4.1(u)(2) of the Disclosure Schedule, the Company has not received a
notice of suspension or termination with respect to any such eligibility, the
Seller Parties have no Knowledge of any threatened cancellation or termination
in connection therewith, nor does either of the Seller Parties have Knowledge
of any event, inquiry, investigation or proceeding that could reasonably be
expected to result in such cancellation or termination.  The Company has not written or assumed any
business in any other jurisdiction on a non-admitted basis other than the class
or type of business which it is authorized to write in such jurisdiction

 21

(3)           All forms of insurance policies and
riders thereto issued by the Company (collectively, the “Policies”) are,
to the extent required under applicable insurance laws, on forms approved by
the applicable insurance regulatory authorities of the jurisdiction where
issued or have been filed with and not objected to by such regulatory
authorities within the period provided for objection.  The Company does not have any Policies
currently issued and in force.

(4)           To the Knowledge of the Seller
Parties, the Company is in material compliance with all applicable insurance
laws regulating the practices of marketing and selling the insurance policies
it is licensed and authorized to issue and no noncompliance therewith, whether
or not material, will have, or is reasonably likely to result in, a Material
Adverse Effect with respect to the Company.

(5)           The Company has (i) timely paid all
guaranty fund assessments that are due, or claimed or asserted by any insurance
regulatory authority to be due from the Company, and (ii) provided for all such
assessments in the Company Financial Statements to the extent necessary to be
in conformity in all material respects with SAP.

(6)           Section 4.1(u)(6) of the Disclosure
Schedule lists all funds maintained by the Company with Governmental
Authorities under any applicable insurance law (each a “Deposit”).  Section 4.1(u)(6) of the Disclosure Schedule
accurately sets forth the assets comprising each such Deposit, and the name of
the bank and the number of the bank account in which such Deposit is
maintained.

(7)           The Company is not currently the
subject of any investigation, examination, supervision, conservation,
rehabilitation, liquidation, receivership, insolvency or other similar
proceeding nor is the Company operating under any written or oral formal or
informal agreement or understanding with the licensing authority of any
jurisdiction or any other regulatory authority or requires it to take, or
refrain from taking any action.

(v)           Reinsurance.  Section 4.1(v) of the Disclosure Schedule
lists all (i) reinsurance and retrocessional treaties and agreements pursuant
to which the Company is a party and has ceded liability, under which any party
to such agreement may have any liability or other obligations to the Company,
and of which the Seller Parties have Knowledge and (ii) reinsurance and
retrocessional treaties and agreements to which the Company is a party and
under which the Company may have any liability or other obligations
(collectively, the “Existing Reinsurance Agreements”).  The Seller Parties have provided the Buyer
with access to a true and complete copy of each of the Existing Reinsurance
Agreements.  Each of the Existing
Reinsurance Agreements is valid and binding on the Company in all respects in
accordance with its terms and, to the Knowledge of the Seller Parties, each of
the Existing Reinsurance Agreements is valid and binding on the reinsurer
thereto in accordance with its terms, in each case, except as enforcement may
be limited by applicable bankruptcy, reorganization, insolvency, moratorium, or
similar laws affecting generally the enforcement of creditors’ rights and by
the general principles of equity (whether or not considered in a court of law
or equity).  The Seller Parties have no
reason to believe that any amount recoverable by the Company pursuant to an
Existing

 22
 

Reinsurance
Agreement is not fully collectible in due course, excluding any amounts covered
by the Reinsurance Trust Agreement.  The
Company is not in default in any material respect as to any Existing Reinsurance
Agreement, nor on the date of this Agreement is either of the Seller Parties
aware that the financial condition of any party to an Existing Reinsurance
Agreement is impaired to the extent that a default thereunder may be reasonably
anticipated.  Except as disclosed in
Section 4.1(v) of the Disclosure Schedule, none of the Existing Reinsurance
Agreements contains any “change of control” provision or any other provision
providing that the other party thereto may terminate such Existing Reinsurance
Agreement prior to its established expiration date as a result of the
transactions contemplated by this Agreement. 
On the date of this Agreement the Company is entitled to take full
credit on its statutory financial statements filed with the Oklahoma Insurance
Department with respect to liabilities ceded under all Existing Reinsurance
Agreements pursuant to which the Company has ceded reinsurance and will be
entitled on and after the Closing Date to such credit with respect to all
liabilities ceded under the Quota Share Reinsurance Agreement.

(w)          Contracts.  Section 4.1(w)(i) of the Disclosure Schedule
sets forth a list of all material contracts, agreements and commitments
(including undertakings or commitments to any Governmental Authority but
excluding insurance policies issued by the Company in the normal course of
business) which are in force and to which the Company is a party or by which
any of its assets or properties are bound or subject (the “Contracts”).  Section 4.1(w)(ii) of the Disclosure Schedule
identifies each Contract (i) which provides that a  “change of control” of the Company will cause
a termination of the Contract or constitutes a default thereunder or otherwise
grants to the other party the right to terminate the Contract upon a change of
control, (ii) which grants any Person a Lien on all or any part of the assets
of the Company or (iii) under which the Company may have any liability,
liquidated or unliquidated, contingent or otherwise, after the Closing.  The Seller Parties have provided the Buyer
with a full, accurate and complete copy of each of the Contracts.

(x)            Insurance.  Section 4.1(x) of the Disclosure Schedule
contains a true and complete list of all policies of fire, liability, workmen’s
compensation and other forms of insurance policies and fidelity bonds presently
in effect insuring the Company’s business showing the policy limits, type of
coverage, annual premiums, expiration dates and deductibles.  The Seller Parties have provided the Buyer
with access to complete and correct copies of all such insurance policies and
fidelity bonds.  All such policies and
fidelity bonds are valid, outstanding and enforceable policies and provide
insurance coverage for the properties, assets and operations of the Company, of
the kinds, in the amounts and against the risks required to comply with
applicable Law.  In the event that any
such policy is a “claims made” policy, the Seller Parties represent and warrant
that the Seller Parties shall retain all liabilities for claims against such
policy made after the Closing for events occurring prior to the Closing that
would have been covered under such policy if it had been written on an
occurrence basis.  There are no
outstanding unpaid claims made by the Company under any of such policies or
bonds, and the Company has received no notice of cancellation or non-renewal
thereof.  The Company has not been
refused any insurance with respect to any aspect of its operations or
businesses, nor has its coverage been limited by any insurance carrier to which
it has applied for insurance or with which it has carried insurance.  No notice of cancellation or termination has
been received with respect to any such policy or fidelity bond.  The activities and operations of the Company
have

 23
 

been conducted in
a manner so as to conform in all material respects to all applicable provisions
of such insurance policies and fidelity bonds.

(y)           Corporate Records.  The Seller Parties have provided the Buyer
with full, accurate and complete copies of the Company’s articles of incorporation,
bylaws and other organizational documents. 
The Seller Parties have also provided the Buyer with the corporate
minutes and all amendments thereto of the Company since January 1, 1997, all of
which corporate minutes and amendments thereto are correct and complete in all
material respects and accurately reflect in all material respects all
proceedings of the shareholders and directors of the Company (and all
committees thereof) since January 1, 1997. 
Except as set forth in Schedule 4.1(y) of the Disclosure Schedule, the
stock record book of the Company contains complete and accurate records of the
stock ownership of the Company and the transfer of the shares of its capital
stock.

(z)            Consents and Approvals.  Except for the consents and approvals listed
in Section 4.1(z) of the Disclosure Schedule, no consent, approval or
authorization of, or declaration, filing or registration with, any Person is
required to be obtained or made by either of the Seller Parties or the Company
in connection with the Related Transactions or the execution, delivery and
performance by the Seller Parties and the Company of this Agreement and the
other agreements and instruments referred to herein and the consummation of the
transactions contemplated hereby.

(aa)         Contracts with Agents and Powers of
Attorney, Etc.  Section 4.1(aa) of
the Disclosure Schedule is a complete and accurate list of all contracts that
the Company has on the date hereof with producing or general agents, and on or
before the Closing all of such contracts shall have been terminated.  The Company has not granted any currently
effective power of attorney to any person, except pursuant to the Ancillary MGA
Agreements.

(ab)         Bank and Financial Institution
Accounts.  Set forth in Section
4.1(ab) of the Disclosure Schedule is a true, correct and complete list showing
the name and address of each bank or other financial institution with which the
Company has an account, line of credit or safe deposit box, the account numbers
or box numbers relating thereto, and the name of each person authorized to draw
thereon or have access thereto.  There
are no credit cards issued to any present or past officer, employee or agent of
the Company under which the Company has any current or potential future
liability.

(ac)         Related Party Transactions.  Except as set forth in Section 4.1(ac) of the
Disclosure Schedule, no officer, director, employee, shareholder, member or
Affiliate of the Seller Parties or any individual related by blood, marriage or
adoption to any such individual or any Entity in which any such Person or
individual owns any beneficial interest, is a party to any material agreement,
contract, commitment or transaction with the Company or has any material
interest in any material assets of the Company.

(ad)         Examination Reports.  The Seller Parties have furnished or will
furnish to the Buyer true and correct copies of the latest examination report
of the Oklahoma Insurance Department and copies of all independent audit
reports of the Company.  The Seller
Parties will

 24
 

allow the Buyer
access to complete and correct copies of all registrations, filings and
submissions made by the Company with any Governmental Authority, which are
reasonably required for the conduct of the Company’s business after the Closing
and any reports of examinations issued by any such Governmental Authority that
relate to the Company.

(ae)         Disclosure.  No representation or warranty by the Seller
Parties contained in this Agreement or in any certificate, notice or schedule
furnished to the Buyer or any of its representatives hereunder contains an
untrue statement of a material fact or omits to state a material fact required
to be stated herein or therein or necessary to make the statements herein or
therein not misleading, and, to the Knowledge of the Seller Parties, no
statement contained in any document furnished to the Buyer or to which the
Buyer was given access pursuant to this Agreement, when taken together and with
the disclosures herein and in the Disclosure Schedule, contains an untrue statement
of a material fact or omits to state a material fact required to be stated
herein or therein or necessary to make the statements herein or therein not
misleading, which statement or omission, whether related to this Agreement or
any certificate, notice, schedule or other document, affects (i) the title to
the Shares, (ii) the Insurance License, (iii) the Excess or Surplus Lines
Qualifications or (iv) would reasonably be expected to have a Material Adverse
Effect.

4.2           Representations and Warranties of
the Buyer.  The Buyer hereby
represents and warrants to the Seller Parties as follows:

(a)           Organization of the Buyer.  The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of State of Delaware and
has all requisite power and authority (corporate and otherwise) to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby.

(b)           Authorization of Transaction.  The execution, delivery, and compliance with
the terms of this Agreement by the Buyer and the performance by the Buyer of
its obligations hereunder have been duly and validly authorized by all
necessary corporate action on the part of the Buyer.  This Agreement, assuming due execution and
delivery by the Seller Parties , constitutes a legal, valid, and binding
obligation of the Buyer and is enforceable against the Buyer in accordance with
its terms.

(c)           Noncontravention.  Neither the execution and delivery of this
Agreement nor, subject to the receipt of the consents and approvals set forth
in Section 4.2(g) of the Disclosure Schedule, the consummation of the
transactions contemplated hereby and the fulfillment of and compliance with the
terms hereof by the Buyer, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which the Buyer is subject, (ii)
violate any provision of the certificate of incorporation, bylaws or other
organizational documents of the Buyer, (iii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or require any
notice under, or result in the creation of any Lien upon any assets of the
Buyer, under any agreement, contract, lease, license, instrument, or other
arrangement to which either the Buyer is a party or by or to which it or its
assets may be bound or subject.

 25
 

(d)           Brokers’ Fees.  The Buyer has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Seller Parties or the
Company could become liable or obligated.

(e)           Investment.  The Buyer is buying the Shares for investment
only and not with a view to resale in connection with any distribution of any
of the Shares except in compliance with the Act and all other applicable
securities laws.  The Buyer understands
that the Shares have not been registered under the Act or under the securities
laws of any state and that the Shares may not be sold, transferred, offered for
sale, pledged, hypothecated or otherwise disposed of in the absence of an
effective registration under the Act except pursuant to a valid exemption from
such registration.  The Buyer is an “accredited
investor” (as defined in Rule 501(a) of Regulation D under the Securities Act
of 1933) and has knowledge and experience in financial and business matters
such that it is capable of evaluating the merits and risks associated with the
purchase of the Shares and is able to bear the economic risks of an investment
therein for an indefinite period of time.

(f)            Suits and Other Proceedings.  There are no actions, suits, proceedings,
claims, investigations or examinations pending against the Buyer or, to the
Knowledge of the Buyer, threatened against or affecting the Buyer, nor any
administrative, arbitration or mediation proceedings pending against the Buyer
or, to the Knowledge of the Buyer, threatened against the Buyer, nor is there
any outstanding order, writ, injunction, award or decree of any Governmental
Authority or any arbitration tribunal or mediator against the Buyer, which in
any such case would restrain, enjoin, prohibit or in any way impair the ability
of the Buyer to consummate any of the transactions contemplated herein.  Section 4.2(f) of the Disclosure Schedule
contains an accurate description of each such pending or threatened action or
proceeding.

(g)           Consents and Approvals.  Except for the consents and approvals listed
in Section 4.2(g) of the Disclosure Schedule, no consent, approval or
authorization of, or declaration, filing or registration with, any Person
(including, without limitation, any Governmental Authority) is required to be
obtained or made by the Buyer in connection with the Buyer’s execution,
delivery and performance by the Buyer of this Agreement and the other
agreements and instruments referred to herein and the consummation of the
transactions contemplated hereby.

ARTICLE 5

PRE-CLOSING
COVENANTS

The
Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.

5.1           General.  Each of the Parties will use its commercially
reasonable efforts to take all action and to do all things necessary, proper or
advisable in order to consummate and make

 26
 

effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Article 6 below).

5.2           Notices and Consents.

(a)           The Seller Parties will (i) take
commercially reasonable steps necessary or desirable, and proceed diligently
and in good faith and use commercially reasonable efforts to obtain as promptly
as practicable, all consents, approvals, and authorizations of the Persons
(including, without limitation, any Governmental Authorities) identified in
Section 4.1(z) of the Disclosure Schedule, (ii) make such declarations, filings
and registrations with such Persons (including, without limitation, any Governmental
Authorities) identified in Section 4.1(z) of the Disclosure Schedule, including
making the necessary filings with respect to the Related Transactions within
ten (10) Business Days after the date hereof, and provide such other
information and communications to such Persons (including, without limitation,
any Governmental Authorities) as the Buyer or such Persons may reasonably
request, and (iii) cooperate with the Buyer in obtaining, as promptly as
practicable, all approvals, consents and authorizations of Persons (including,
without limitation, any Governmental Authorities) identified in Section 4.2(g)
of the Disclosure Schedule.

(b)           The Buyer will (i) take commercially
reasonable steps necessary or desirable, and proceed diligently and in good
faith and use commercially reasonable efforts to obtain as promptly as
practicable, all consents, approvals and authorizations of the Persons
(including, without limitation, any Governmental Authorities) identified in
Section 4.2(g) of the Disclosure Schedule, (ii) make such declarations, filings
and registrations with the Persons (including, without limitation, any
Governmental Authorities) identified in Section 4.2(g) of the Disclosure
Schedule, including the filing of a Form A Holding Company Acquisition Statement
with the Oklahoma Insurance Department (the “Form A Filing”) within ten
(10) Business Days after the date hereof, and provide such other information
and communications to such Persons (including, without limitation, any
Governmental Authorities) as the Seller Parties or such Persons may reasonably
request, and (iii) cooperate with the Seller Parties in obtaining, as promptly
as practicable, all approvals, consents and authorizations of Persons
(including, without limitation, any Governmental Authorities) identified in
Section 4.1(z) of the Disclosure Schedule.

(c)           The Seller Parties agree to provide
the Buyer with prompt notice of the receipt by a Seller Party of any approval,
consent or authorization of a Person (including, without limitation, any Governmental
Authority) identified in Section 4.1(z) of the Disclosure Schedule, and the
Buyer agrees to provide the Seller Parties with prompt notice of the Buyer’s
receipt of any approval, consent, or authorization of a Person (including,
without limitation, any Governmental Authority) identified in Section 4.2 (g)
of the Disclosure Schedule.  The Buyer
agrees that not less than three (3) Business Days prior to the Buyer’s filing
of its Form A Filing, the Buyer will provide to the Seller Parties a copy of
such Form A Filing and provide the Seller Parties with three (3) Business Days
to provide comments thereon.

5.3           Operation of Business.  Except as may otherwise be contemplated by
this Agreement and except for ongoing transactions pursuant to the Quota Share
Reinsurance Treaty

 27
 

Attaching January
1, 1993 between and among the Company, MGA and Gainsco County Mutual Insurance
Company, the Seller Parties will not cause or permit the Company to, and the
Company will not, engage in any business other than that reasonably related to
running off its existing insurance business and the settlement of claims.

5.4           Full Access.  The Seller Parties will permit, and the
Seller Parties will cause the Company to permit, representatives of the Buyer
to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Company, to all premises,
properties, personnel, books, records, contracts, and documents of or
pertaining to the Company.  The Buyer
will treat any information it receives from the Seller Parties or the Company
in the course of the reviews contemplated by this Section 5.4 in accordance
with Article 14.

5.5           Notice of Developments.  Each Party will give prompt written notice to
the other of any development causing a breach of any of its own representations
and warranties in Article 4.  No
disclosure by any Party pursuant to this Section 5.5, however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation or breach of warranty.

5.6           Exclusivity.  The Seller Parties shall not (and the Seller
Parties hereby agree to cause their respective 
subsidiaries, Affiliates, shareholders, representatives, employees,
directors and officers not to), directly or indirectly through any other party,
(i) initiate or make any offer or proposal or engage in any discussions or
negotiations with or provide any non-public information to any other person,
firm, entity or corporation with respect to the sale or other transfer of all
or substantially all of the assets of the Company or its outstanding capital
stock or other equity interests or a merger or consolidation with or into a
third party involving the Company, or (ii) solicit any offer or proposal
relating any such transaction involving the Company; and the Seller Parties
will notify the Buyer promptly of the receipt of any unsolicited offer or
proposal relating any such transaction involving the Company.

5.7           Preservation of Insurance Lines
and Qualifications .  The Seller
Parties shall, and shall cause the Company to, use commercially reasonable
efforts to preserve the Company’s Insurance License and all Surplus Lines and
Excess Lines Qualifications in effect as of the date of this Agreement in full
force and effect.

5.8           Financial Statements and Reports.  As promptly as practicable, the Seller
Parties will deliver to the Buyer true and complete copies of such financial
statements, reports, or analyses related to the Company as may be prepared or
received by the Seller Parties, the Company, or any other Affiliate of the
Company to the extent such other Affiliate’s financial statements specifically
relate to the Company’s business, operations, or affairs, including without
limitation, quarterly statements, normal internal reports, and special reports
(such as those of consultants) specifically relating to the Company’s business
operations and affairs.

5.9           No Charter or Bylaw Amendments.  The Seller Parties will cause the Company to
refrain from amending the Company’s articles of incorporation or bylaws and
from taking any

 28
 

action with
respect to any such amendment without first having obtained the Buyer’s written
consent thereto.

5.10         No Issuance of Securities.  The Seller Parties will cause the Company to
refrain from authorizing or issuing any shares of the Company’s capital stock
or other equity interests or entering into any contract or granting any option,
warrant, or right calling for the authorization or issuance of any such shares
or other equity interests, or creating or issuing any securities directly or
indirectly convertible into or exchangeable for any such shares or other equity
interests, or issuing any options, warrants, or rights to purchase any such
convertible securities.

5.11         No Dividends.  The Seller Parties will cause the Company to
refrain from declaring, setting aside, or paying any dividend or other
distribution in respect of the capital stock of the Company and from directly
or indirectly redeeming, purchasing or otherwise acquiring any capital stock of
the Company or any interest in or right to acquire any such stock, except that
the Company shall make the transfers contemplated in Sections 3.1 and 3.3(a).

5.12         Resignations of Directors and
Officers.  The Seller Parties will
cause all of the members of the Company’s Board of Directors and all officers
of the Company to tender, effective as of the Closing Date, their releases and
resignations from the Board of Directors and as officers of the Company, as the
case may be.

5.13         Intercompany Balances and Agreements.  Except as set forth in Section 5.13 of the
Disclosure Schedule or as contemplated by the Ancillary MGA Agreements, prior
to the Closing, the Seller Parties shall (i) settle, or cause to be settled,
all intercompany balances between the Company, on the one hand, and the Seller
Parties and any of their Affiliates, on the other hand, and (ii) terminate, or
cause to be terminated, each contract between the Company, on the one hand, and
any of the Seller Parties or their Affiliates, on the other hand.

5.14         Tax Matters.  Except to the extent required by law, no new
elections with respect to Taxes or any changes in current elections with
respect to Taxes, to the extent any such elections or changes could adversely
affect the Taxes of the Company for any taxable period or portion thereof
beginning after the Closing Date, shall be made after the date of this
Agreement without the prior written consent of the Buyer.

5.15         Press Releases and Public
Announcements.  No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement or the transactions contemplated hereby prior to, or
on, the Closing Date without the prior written approval of the other Party; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its or its Affiliates’ publicly-traded
securities (in which case the disclosing Party will use its reasonable best
efforts to advise the other Party prior to making the disclosure).

5.16         Asset List.  No earlier than twenty (20) Business Days
prior to the Closing Date, the Seller Parties shall provide to the Buyer a list
of any investment grade obligations, other than Acceptable Financial Assets,
which are owned by the Company as of the date of delivery of such list and will
not be transferred to the Parent or MGA in connection with the Related
Transactions

 29
 

(the “Asset
List”).  Unless the Buyer reasonably
objects in writing to the retention by the Company of any assets set forth on
the Asset List within five (5) Business Days of the Buyer’s receipt of the
Asset List, the Buyer shall be deemed to have accepted such assets as
Acceptable Financial Assets.  In the
event that the Buyer does so object to the retention by the Company of any
investments included on the Asset List, the Seller Parties shall, prior to
Closing, substitute the objectionable assets with assets that are reasonably
acceptable to the Buyer.

5.17         State Assessments. The Seller
Parties agree to pay any and all guaranty fund and catastrophe pool
assessments, assigned risk plan assessments, board and bureau fees, whether
imposed before, on or after the Closing Date, made by any state guaranty fund,
pool, board, bureau, plan or similar entity, net of any premium tax deductions
or offsets, relating to insurance premiums earned or received by the Company on
or before the Closing Date.

5.18         Regulatory Examinations. The
Seller Parties shall cooperate with the Buyer in providing a response to any
reports of examination conducted by any state insurance regulatory authorities
involving matters that occurred on or before the Closing Date and shall pay any
and all fines, penalties or assessments made against the Company (i) as a
result of any examinations that were or are conducted by an insurance
regulatory authority on or before the Closing Date or (ii) with respect to
matters that occurred on or before the Closing Date.

5.19         Assignments.  The Seller Parties shall use their reasonable
best efforts prior to the Closing to cause the following assignments to occur
(including reasonable best efforts to obtain the necessary consents thereto):
assignment by the Company to MGA of (i) that certain Software License Agreement
dated June 13, 2003, by and between the Company and SunGard iWorks, as amended
and (ii) that certain 3-Year Price Contract dated April 5, 2007, by and between
Financial Software Innovations, Inc. and General Agents Insurance Companies
Group.  The Seller Parties shall make a
request prior to the Closing of the consent of Liberty County Mutual Insurance
Company for: (i) the assignment and novation by the Company to MGA of that
certain 100% Quota Share Reinsurance Agreement dated December 2, 2002 by and
among the Company, GAINSCO County Mutual Insurance Company (now known as
Liberty County Mutual Insurance Company) and MGA Agency, Inc.; and (ii) the
assignment by the Company to MGA of all right, title and interest in and to
that certain Reinsurance Trust Agreement dated December 2, 2002 among
JPMorganChase Bank, GAINSCO County Mutual Insurance Company and the Company.

ARTICLE 6

CONDITIONS
TO OBLIGATION TO CLOSE

6.1           Conditions to Obligation of the
Buyer.  The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:

(a)           the representations and warranties of
the Seller Parties set forth in Section 4.1 that are qualified as to
materiality shall be true and correct, and the representations and warranties
set forth in Section 4.1 that are not so qualified shall be true and correct in

 30
 

all material
respects, in each case at and as of the Closing Date, except that any
representations and warranties that are given as of a particular date or period
shall be true and correct only as of such date or period;

(b)           the Seller Parties shall have
performed and complied in all material respects with all of their respective
covenants hereunder through the Closing;

(c)           no injunction, judgment, order,
decree, ruling, charge or investigation shall be pending or threatened before
any Governmental Authority wherein a judgment, order, writ, injunction,
stipulation or decree would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or
(iii) permit consummation of the transactions contemplated by this
Agreement only subject to any condition or restriction that has had or would
reasonably be expected to have a Material Adverse Effect;

(d)           the Seller Parties shall have
delivered to the Buyer a certificate to the effect that each of the conditions
specified above in Sections 6.1(a) and (b) is satisfied in all respects;

(e)           the Parties shall have received, without
any conditions or limitations to which the Buyer has a reasonable objection,
all authorizations, consents and approvals of, and shall have made such
declarations, filings and registrations with, Persons (including, without
limitation, any Governmental Authorities) identified in Sections 4.l(z) and
4.2(g) of the Disclosure Schedule;

(f)            all certificates, instruments and
other documents required by Article 7 to be delivered by the Seller Parties to
the Buyer shall have been so delivered;

(g)           the Seller Parties shall have
tendered the Shares in exchange for the payment of the Purchase Price as
contemplated by Article 2;

(h)           the Insurance License of the Company
shall be valid, in force, unimpaired and in good standing on the Closing Date;
the Surplus or Excess Lines Qualifications of the Company shall be valid, in
force, unimpaired and in good standing, to the extent that such status is
reasonably determinable, on the Closing Date in jurisdictions in which the sum
of the respective percentages of projected premiums, calculated using the
percentages set forth opposite the name of each jurisdiction in Section 2.2 of
the Disclosure Schedule, total at least seventy percent (70%);

(i)            all of the members of the Company’s
Board of Directors and all of the Company’s officers shall have tendered their
written releases and resignations effective as of the Closing Date;

(j)            the Ancillary MGA Agreements and the
Guaranty Agreement shall have been duly executed and delivered by the parties
thereto;

 31

(k)           each of the Related
Transactions that are the responsibility of the Seller Parties shall have been
completed in accordance with Article 3;

(l)            no Material Adverse
Effect shall have occurred after the date of this Agreement;

(m)          the Company shall have delivered
to the Buyer signature cards with each bank listed in Section 6.1(m) of the
Disclosure Schedule at which the Company will maintain one or more accounts
that continue after the Closing, terminating the ability of any of the Company’s
officers or employees to sign checks and take other actions on behalf of the
Company and transferring such ability to the chief executive officer and chief
financial officer of the Buyer;

(n)           the Company shall have
delivered to the Buyer long-form certificates of good standing issued by the
Oklahoma Secretary of State, and certificates evidencing that the Company is in
good standing in all jurisdictions where the Company is obligated to be
registered as a foreign corporation, dated as of a date not earlier than five
(5) Business Days before the Closing Date;

(o)           all corporate actions
and other proceedings required to carry out the transactions contemplated
hereby or incidental hereto shall be reasonably satisfactory to and shall have
been approved by counsel for the Buyer and such counsel shall have been
furnished with certified copies of such corporate actions and other proceedings
as it shall have reasonably requested; and

(p)           the Buyer shall have
received an opinion of Akin Gump Straus Hauer & Feld LLP, counsel to the Seller
Parties and the Company, in a form reasonably acceptable to the Buyer and its
counsel.

The
Buyer may waive any condition specified in this Section 6.1 if it executes a
writing so stating at or prior to the Closing.

6.2           Conditions to
Obligations of the Seller Parties. 
The obligations of the Seller Parties to consummate the transactions to
be performed by them in connection with the Closing are subject to satisfaction
of the following conditions:

(a)           the representations and
warranties of the Buyer set forth in Section 4.2 that are qualified as to
materiality shall be true and correct, and the representations and warranties
set forth in Section 4.2 that are not so qualified shall be true and correct in
all material respects, in each case at and as of the Closing Date, except that
any representations and warranties that are given as of a particular date or
period shall be true and correct only as of such date or period;

(b)           the Buyer shall have
performed and complied in all material respects with all of its covenants
hereunder through the Closing;

 32
 

(c)           no injunction,
judgment, order, decree, ruling, charge or investigation shall be pending or
threatened before any Governmental Authority wherein a judgment, order, writ,
injunction, stipulation or decree would (i) prevent consummation of any of the
transactions contemplated by this Agreement, or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation;

(d)           the Buyer shall have
delivered to the Seller Parties a certificate to the effect that each of the
conditions specified above in Sections 6.2(a) and (b) is satisfied in all
respects;

(e)           the Parties shall have
received, without any conditions or limitations to which the Seller Parties
have a reasonable objection, all consents, approvals and authorizations of, and
shall have made such declarations, filings and registrations with, Persons
(including, without limitation, any Governmental Authorities) identified in
Sections 4.1(z) and 4.2(g) of the Disclosure Schedule;

(f)            all certificates,
instruments and other documents required by Article 8 to be delivered by the
Buyer to the Seller Parties shall have been so delivered;

(g)           the Buyer shall have
tendered payment of the Purchase Price in the manner described in Article 2 in
exchange for the Shares;

(h)           the Ancillary MGA
Agreements and the Guaranty Agreement shall have been duly executed and
delivered by the parties thereto; and

(i)            the Seller Parties
shall have received an opinion of Shipman & Goodwin LLP, counsel to the
Buyer, in a form reasonably acceptable to the Seller Parties and their counsel.

The
Seller Parties may waive any condition specified in this Section 6.2 if they
execute a writing so stating at or prior to the Closing.

ARTICLE 7

SELLER’S
CLOSING DELIVERIES

At
the Closing, the Seller Parties will deliver to the Buyer the following items
against delivery of items specified in Article 8 below:

(a)           The certificate or
certificates representing the Shares duly endorsed in blank or with stock
powers duly endorsed in blank;

(b)           A certificate executed
by the President or other duly authorized officer of each of the Seller Parties
certifying that all corporate action on the part of such Seller

 33
 

Party necessary to
authorize the execution, delivery and performance of this Agreement and the
transactions contemplated thereunder by the Seller Parties have been duly
taken;

(c)           The certificate
required by Section 6.1(d) and the opinion required by 6.1(p);

(d)           Duly executed
resignations from all of the Company’s directors and officers effective as of
the Closing Date;

(e)           Evidence of the receipt
by the Seller Parties, in such form as is reasonably acceptable to the Buyer,
of the approvals, consents and authorizations of, and of such declarations,
filings or registrations with, Persons (including, without limitation, any
Governmental Authorities) identified in Section 4.1(z) of the Disclosure
Schedule;

(f)            Confirmation which can
reasonably be obtained, issued by each of the regulatory authorities or surplus
or excess lines associations, as appropriate, of the State of Oklahoma and the
jurisdictions listed in Section 4.1(u)(2) of the Disclosure Schedule, other
than those jurisdictions where the Company is considered Surplus or Excess
Lines Qualified pursuant to clause (iii) of the definition thereof, evidencing
the licensure or Surplus or Excess Lines Qualification, as the case may be, of
the Company in such jurisdiction; and

(g)           Possession of any and
all books and records of the Company (i) relating to the Insurance License and
the Surplus or Excess Lines Qualifications and the ongoing regulatory matters
(including all documents and records relating to the Deposits), (ii) the
Company’s minute books (including the original or certified copies of the
Company’s articles of incorporation and bylaws), stock record book, and the
corporate seal of the Company, and (iii) any other books and records reasonably
requested by the Buyer which are related to any assets which the Company will
have title to after the Closing or to other matters for which the Company will
have any continuing responsibility after the Closing.

ARTICLE 8

BUYER’S
CLOSING DELIVERIES

At
the Closing, the Buyer will deliver to the Seller Parties the following items
against delivery of items specified in Article 7:

(a)           A certificate executed
by the President or other duly authorized officer of the Buyer certifying that
all corporate action on the part of the Buyer necessary to authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereunder by the Buyer has been duly taken;

(b)           The certificate
required by Section 6.2(d) and the opinion required by Section 6.2(i);

 34
 

(c)           Copies of the documents
evidencing the Buyer’s receipt, in such form as is acceptable to the Seller
Parties, of the approvals, consents and authorizations of, and of such
declarations, filings or registrations with, the Persons (including, without
limitation, any Governmental Authorities) identified in Section 4.2(g) of the
Disclosure Schedule; and

(d)           Cash by wire transfer
of immediately available funds for the full amount of the Purchase Price
specified in Section 2.2 of this Agreement.

ARTICLE 9

POST-CLOSING
COVENANTS

The
Parties agree as follows with respect to the period following the Closing.

9.1           General.  In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
Party reasonably may request, all at the sole cost and expense of the
requesting Party; provided, however, that the
foregoing shall not limit any Party’s rights to indemnification under Article
10.  With respect to actions referred to
herein to be taken by the Company after the Closing, the Buyer will cause the
Company to take such actions.

9.2           Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing involving the Company, each of the other Parties shall cooperate
with it and its counsel in the defense or contest, make available their
personnel, and provide such testimony and access to their books and records as
shall be necessary in connection with the defense or contest, all at the sole
cost and expense of the contesting or defending Party; provided,
however, that the foregoing shall not limit any Party’s rights to
indemnification under Article 10.

9.3           Cooperation as to
Tax Matters.

(a)           Preparation and
Filing of Tax Returns.

(1)           The Parent shall
include the income of the Company in the Parent’s federal consolidated income
Tax Returns for all taxable periods or portions thereof ending on or before the
Closing Date, shall prepare or cause to be prepared in a manner consistent with
past practice (to the extent such past practices could not in the reasonable
judgment of the Parent cause the Parent or any Affiliate thereof to incur any
additions to Taxes or penalties) and file or cause to be filed on a timely
basis all (i) Tax Returns of the Company for taxable periods ending on or
before the Closing Date and (ii)

 35
 

consolidated, unitary, combined or similar Tax Returns
(the “Consolidated Tax Returns”) that include the Company and the Parent
or any Affiliate of the Parent; and subject to the Buyer’s indemnity for Taxes
pursuant to this Section 9.3, the Seller Parties shall pay or shall cause to be
paid all Taxes attributable to such Tax returns.  The Buyer shall cause the Company to furnish
all information reasonably requested by the Seller Parties with respect to the
preparation of any such Tax returns.

(2)           Except as provided in
Section 9.3(a)(1), the Buyer shall prepare or cause to be prepared and file or
cause to be filed on a timely basis all Income Tax Returns with respect to the
Company for taxable periods beginning after the Closing Date and the Buyer
shall be responsible for filing all other Tax Returns of or relating to the
Company to the extent such Tax Returns are required to be filed on a date after
the Closing Date and shall (except as otherwise provided below) pay all Taxes
attributable to such Tax Returns.  At the
Parent’s request and expense, the Buyer shall cooperate in filing one or more
amended returns or other requests for, and pursuant to Section 9.3(b) shall promptly
pay over to the Parent, any refund of or credit for any Taxes attributable to
the Pre-Closing Tax Period.

(3)           With respect to any Tax
return required to be filed or caused to be filed by the Seller Parties or the
Buyer pursuant to Section 9.3(a)(1) or Section 9.3(a)(2) with respect to the
Company (such Party the “Filing Party”) and as to which an amount of Tax
is allocable to the Party that is not the Filing Party (the “Tax
Indemnifying Party”), the Filing Party shall provide the Tax Indemnifying
Party and its authorized representatives with a copy of such completed Tax
Return or in the case of a Consolidated Tax Return, a pro forma Tax Return for
the Company (prepared on a separate company basis) and a statement certifying
and setting forth the calculation of the amount of Tax shown on such Tax Return
that is allocable to such Tax Indemnifying Party, together with appropriate
supporting information and schedules at least fifteen (15) Business Days prior
to the due date (including any extension thereof) for the filing of such Tax
Return or Consolidated Tax Return (as the case may be), and such Tax
Indemnifying Party and its authorized representatives shall have the right to
review and comment on such Tax Return (as the case may be) and statement prior to
the filing of such Tax return.

(4)           A Tax Indemnifying
Party shall pay the Filing Party the amount so allocated to it pursuant to this
Section 9.3 at least three (3) Business Days before the due date of the Tax
return required to be filed by the Filing Party or within twenty (20) Business
Days following an agreement between the Seller Parties and the Buyer that an
indemnity amount is payable by the other, or within fifteen (15) Business Days
of (i) an assessment of a Tax by a taxing authority, or (ii) a “determination”
as defined in Section 1313(a) of the Code (or any similar provision of state or
local law) has been made.  If liability
under this Section 9.3 is in respect of costs or expenses other than Taxes,
payment by the Tax Indemnifying Party of any amounts due under this Section 9.3
shall be made within ten (10) days after the date when the Tax Indemnifying
Party has been notified by the Filing Party that the Tax Indemnifying Party has
a liability for a

 36
 

determinable amount under this Section 9.3 and is
provided with calculations and all other materials supporting such liability.

(b)           Tax Refunds, Credit
and Tax Attributes.  Rights and
benefits relating to all Tax attributes of the Company arising from or relating
to any Pre-Closing Tax Period shall remain with the Parent and the Buyer shall
pay to the Parent an amount equal to any Tax refund the Buyer or any Affiliate
thereof obtains from any such Tax attributes within the earlier of thirty (30)
days after:  (i) the Buyer or any
Affiliate thereof files a Tax return which claims, reflects or reports such Tax
benefit or (ii) the Buyer or any Affiliate thereof receives a Tax refund which
relates or is attributable to any such Pre-Closing Tax Period Tax attributes of
the Company.  The Buyer agrees that it
will not make any elections or take any positions with respect to Taxes that
could adversely affect the Parent’s interest and rights in the Pre-Closing Tax
Period Tax attributes of the Company. 
The Buyer further agrees that it shall not (unless otherwise requested
by the Parent) carry back, and shall not cause or permit the Company or any
other Affiliate of the Buyer or the Company to carry back, any net operating
loss, loss from operations or any other Tax attribute of the Company to any
Pre-Closing Tax Period of the Company or the Parent or any Affiliate thereof
(including, but not limited to, any member of any Affiliated, combined or
unitary group of which the Company is or was a member).  The Buyer agrees that the Seller Parties
shall not have any obligation under this Agreement to return or remit any
refund or other Tax benefit attributable to a breach by the Buyer of the
immediately preceding sentence and any Tax refund or Tax benefit resulting from
any such breach will be solely for the Seller Parties’ account.

(c)           Transfer Taxes.  The Seller Parties shall be liable for and
shall pay, and shall hold the Buyer and its Affiliates harmless against any
real property transfer or gains, sales, use, transfer, value added, stock
transfer, stamp Taxes, any transfer, recording, registration, and other fees,
and any similar Taxes which become payable in the applicable jurisdiction in
connection with the effectuation of the transactions contemplated hereunder and
imposed upon the Seller Parties, the Company or the Buyer and any Affiliates
thereof (“Transfer Taxes”).

(d)           Tax Notice; Tax
Controversies.  The Seller Parties
and the Buyer shall provide to each other notice within ten (10) days of
receipt of any notice of deficiency, proposed adjustment, assessment, audit, examination
or other administrative or court proceeding, suit, dispute or other claim (a “Tax
Claim”) in which the IRS or any other Governmental Authority makes or
proposes to make a Tax adjustment to any Tax period which includes any period
up to the Closing Date.  The Seller
Parties shall control any such proceeding to the extent such proceeding could
adversely affect the Taxes of the Seller Parties or any Affiliate thereof or
could result in the Seller Party’s being liable for any amount of Taxes or
losses related thereto either under the Law or pursuant to this Agreement, and
the Buyer shall control all other such proceeding, provided
that, with respect to any such Tax Claim, the Party not controlling
the proceeding of such Tax Claim or its representative shall (to the extent
permitted by Law) have the right, at its expense, to participate in any such
Tax Claim.  The Parties agree that they
will not settle, compromise or agree to any Tax adjustment which affects or could
affect the other Party’s Tax liability without the prior written consent of the
other Party, which consent shall not be unreasonably withheld; provided, that
the Seller Parties shall have the right to settle or compromise any such
proceedings that the Seller Parties control without the consent of the Buyer

 37
 

provided
that the settlement or compromise could not affect the Tax
liability of the Company after the Closing Date.

(e)           Cooperation and
Controversies.  Except as provided in
Section 9.3(a), the Seller Parties, the Buyer and the Company shall reasonably
cooperate, and shall cause their respective Affiliates, agents, auditors,
representatives, officers and employees reasonably to cooperate, in preparing
and filing all Tax Returns (including amended returns and claims for refund),
including maintaining and making available to each other all records necessary
in connection with Taxes and with respect to any Tax Claim, which cooperation
shall include, but not be limited to (i) providing all relevant information
that is available to the Buyer, the Seller Parties and/or the Company, as the
case may be, with respect to such Tax Claim, (ii) making personnel available at
reasonable times, and (iii) preparation of responses to requests for
information, provided that the foregoing shall be done in a manner so as to not
interfere unreasonably with the conduct of business by the Buyer, the Seller
Parties or the Company, as the case may be. 
Neither the Seller Parties, the Company nor the Buyer shall dispose of
any Tax Returns, Tax schedules, Tax work papers or any books or records unless
it first offers in writing to the other Party the right to take possession of
such materials at such other Party’s sole expense and the other Party fails to
accept such offer within fifteen (15) days of the offer being made or if an
offer is accepted fails to take possession within thirty (30) days of the date
on which the offer is made.  Any
information obtained under this Section 9.3(e) shall be kept confidential,
except as may be otherwise necessary in connection with the filing of Tax
returns or claims for refund or in conducting an audit or other proceeding.

(f)            Tax Indemnities.

(1)           The Seller Parties
shall be liable for and shall indemnify and hold harmless the Buyer and the
Company from and against any and all damages, Taxes and expenses arising out of
(i) any breach of the Seller Parties’ covenants in this Section 9.3, and (ii)
any liability for Taxes of the Company for any Pre-Closing Tax Period.

(2)           The Buyer shall
indemnify and hold harmless the Seller Parties from and against any and all
Taxes, and any damages and expenses related thereto, that relate or are
attributable to any Post-Closing Tax Period, other than those that are
specifically indemnified by the Seller Parties pursuant to paragraph (f)(1)
above.

(3)           In the case of Taxes
that are payable with respect to a taxable period that begins before the
Closing Date and ends after the Closing Date (“Straddle Taxes”), the
portion of any such Tax that is allocable to the portion of the period ending
on the Closing Date shall be:  (i) with
respect to premium Taxes the amount of such Taxes that relate to premiums
written as of the Closing Date, (ii) in the case of Taxes imposed on a periodic
basis with respect to the assets of the Company, or otherwise measured by the level
of any item (other than premiums), deemed to be the amount of such Taxes for
the entire period (or, in the case of such Taxes determined on an arrears
basis, the amount of such Taxes for the immediately preceding period),
multiplied by a fraction the numerator of which is the number of calendar days
in the period ending on the Closing Date and the denominator of which is the
number of calendar days in the

 38
 

entire period irrespective of the lien or assessment
date of such Taxes, and (iii) with respect to Taxes imposed on or measured by
income, gross receipts, wages, expenses or other similar periodic measures
(other than premiums) or imposed on sales, assignments or any other transfers
of any property shall be deemed equal to the amount which would be payable if
the taxable year ended with the Closing Date (based on an interim closing of
the books as of the close of the Closing Date).

(g)           Survival.  All agreements, covenants and indemnification
matters contained in this Section 9.3 shall survive the Closing until the
expiration of the applicable statute of limitations period.

(h)           Termination of Tax
Sharing Agreements.  As of the
Closing Date, the Seller Parties shall cause all Tax allocation, Tax sharing,
Tax indemnification and reimbursement and similar agreements and arrangements
between the Seller Parties and their Affiliates, on the one hand, and the
Company, on the other, to be extinguished and terminated with respect to the
Company, and any rights or obligations existing under any such agreement or arrangement
(including any obligation of the Company to make any payment of any kind
thereunder) shall be extinguished and no longer enforceable.

(i)            Coordination.  Except as provided in Section 4.1(o) with
respect to representations and warranties relating to Tax matters and Section
5.14, notwithstanding any other provision in this Agreement to the contrary,
this Section 9.3 shall control all matters relating to Taxes and any claims,
liabilities, damages, deficiencies, obligations, costs or expenses, penalties
and reasonable attorneys’ fees and disbursements related thereto.

(j)            Section 338(h)(10)
Election.

(1)           The Parent and the
Buyer shall jointly make timely and irrevocable elections under Section 338 (h) (10)
of the Code and, if permissible, similar elections under any applicable state
or local income tax laws with respect to the purchase and sale of the Shares
(the “Elections”) through the filing of a Form 8023 (and any state
equivalent).  The Parent, the Company and
the Buyer shall report the transactions contemplated herein consistent with the
Elections and shall take no position contrary thereto unless and to the extent
required to do so pursuant to a determination (as defined in Section 1313(a) of
the Code or any similar state or local tax provision).  The Seller Parties and the Buyer shall
cooperate in good faith to complete all necessary filings for the elections in
a timely manner.  The Seller Parties
shall pay all Taxes and shall be entitled to receive any tax benefit arising as
a result of the Elections.

(2)           For purposes of making
the Elections, Buyer shall determine the value of the tangible and intangible
assets of the Company and shall within sixty (60) days after the Closing Date
provide the Parent with written notice setting forth the allocation of the
Buyer’s “adjusted grossed-up basis” in the shares of the Company (within the
meaning of the Treasury Regulations under Section 338 of the Code) to such
assets (the “Initial Allocation”). 
The Initial Allocation shall be binding upon the Buyer and the Seller
Parties for purposes of allocating the “deemed selling price” (within the

 39
 

meaning of the Treasury Regulations) among the assets
of the affected entities; provided, however,
that if the Parent believes that all or a portion of the Initial Allocation is
incorrect and notifies the Buyer of such belief within thirty (30) days after
having received the Initial Allocation from the Buyer, the Independent
Accounting Firm will determine whether the Initial Allocation is incorrect and
the determination of such Independent Accounting Firm shall be final and the
Buyer and the Seller Parties shall then be bound by the Initial Allocation as
adjusted, if necessary, to reflect the determination of the Independent
Accounting Firm (the “Final Allocation”).  Notwithstanding anything to the contrary in
this Agreement, the Final Allocation shall be determined no later than twenty
(20) days prior to the date that the Buyer must file the Election forms.  In the event it is determined that the
Initial Allocation was incorrect, the Buyer shall pay to the Seller Parties the
cost of the Independent Accounting Firm. 
The Seller Parties and the Buyer shall bear equally all costs of the
Independent Accounting Firm which are not paid by the Buyer pursuant to the
immediately preceding sentence.  The
Buyer and the Parent shall file, and cause their respective Affiliates to file,
all forms that relate to the Election in a manner consistent with the Final
Allocation and notwithstanding anything to the contrary in this Agreement, shall
take no position inconsistent therewith.

9.4           Change of Name.  Promptly after Closing, but in no event later
than sixty (60) days following the Closing, the Buyer shall cause the Company
to (i) change its name to a name that does not include the phrase “General
Agents” and (ii) cease issuing any policies or transacting any insurance
business utilizing the name, trademarks, service marks, patents, copyrights or
other intellectual property rights of the Company or any of its Affiliates as
of the date hereof, including, without limitation, the phrase “General Agents”
except to the extent (i) necessary in connection with carrying out the
transactions contemplated by the Ancillary MGA Agreements or (ii) required to
be used in regulatory filings or proceedings to describe the Company’s
relationships prior to the Closing; provided, however,
that when the use of such names or intellectual property rights is necessitated
or required as set forth in (i) or (ii) above, the Buyer shall clearly indicate
in writing in conjunction therewith that such name is the Company’s former
name. Neither the Buyer nor the Company will use the name “GAINSCO” or any
derivative thereof following the Closing.

ARTICLE
10

INDEMNIFICATIONS

10.1         The Seller Parties’
Indemnification of the Buyer.  The
Seller Parties, jointly and severally, agree to defend, indemnify and hold the
Buyer and its shareholders, subsidiaries, Affiliates, officers, directors,
employees, agents and other representatives, successors and assigns (the “Buyer
Indemnitees”), harmless at all times from and against any and all Losses
resulting from or relating in any way to:

(i)            any inaccuracy or
breach of any representation or warranty or breach or nonfulfillment of any
covenant or agreement made by the Seller Parties which is

 40
 

contained in this Agreement or in any certificate
furnished by either of the Seller Parties pursuant hereto;

(ii)           any actions, omissions,
operations or business of the Company, or any of its shareholders, Affiliates,
officers, directors, employees, agents and other representatives, and their
respective successors and assigns, occurring prior to the Closing the
responsibility for which has not been assumed by MGA under the Quota Share
Reinsurance Agreement or the Assumption Agreement;

(iii)          the failure of the
Seller Parties or the Company to obtain the consent of any third party or
Governmental Authority required of the Seller Parties or the Company regarding
the Share purchase, the Related Transactions or any of the other transactions
contemplated hereby;

(iv)          any and all insurance
and reinsurance claims, liabilities and obligations of the Company pertaining
to the operations of the Company prior to the Closing that are not reinsured
pursuant to the Quota Share Reinsurance Agreement, including without limitation,
all commissions, fees, unearned premiums and commission and/or premium
adjustments;

(v)           any of the suits or
other proceedings described in Section 4.1(p) of the Disclosure Schedule;

(vi)          any Environmental
Liability arising out of events or circumstances that occurred prior to the
Closing;

(vii)         any Rebates or Kickbacks
occurring prior to the Closing; and

(viii)        any enforcement of this
indemnity.

10.2         The Buyer’s
Indemnification of the Seller Parties. 
The Buyer agrees to defend, indemnify and hold the Seller Parties and
their respective shareholders, subsidiaries, Affiliates, officers, directors,
employees, agents, successors and assigns (the “Seller Indemnitees”),
harmless at all times from and against any and all Losses resulting from or
relating in any way to:

(i)            any inaccuracy or
breach of any representation or warranty or breach or nonfulfillment of any
covenant or agreement made by the Buyer which is contained in this Agreement or
in any certificate or document furnished by the Buyer pursuant hereto;

(ii)           any actions, omissions,
operations or business of the Company, or any of its shareholders, Affiliates,
officers, directors, employees, agents and other representatives, and their
respective successors and assigns, following the Closing; or

 41

(iii)          the failure of the Buyer
to obtain the consent of any third party or Governmental Authority required of
the Buyer regarding the Share purchase, the Related Transactions or any of the
other transactions contemplated hereby;

(iv)          any and all insurance and
reinsurance claims, liabilities and obligations of the Company pertaining to
the operations of the Company after the Closing, including without limitation,
all commissions, fees, unearned premiums and commissions and premium
adjustments; and

(v)           any enforcement of this
indemnity.

10.3         Notice of Claims.  Any party seeking indemnification under this
Agreement (the “Indemnified Party”) shall give to the party from which
indemnification is sought (the “Indemnitor”) prompt written notice (a “Claim
Notice”) describing in reasonable detail the facts giving rise to any claim
for indemnification hereunder and shall include in such Claim Notice (if then
known) the amount or the method of computation of the amount of such claim, and
a reference to the provisions of this Agreement or such other agreement upon
which such claim is based; provided, that
a Claim Notice in respect of any action at law or suit in equity by or against
a third Person as to which indemnification will be sought shall be given
promptly after the action or suit is commenced; and provided,
further, that failure to give such notice shall not relieve the
Indemnitor of its obligations hereunder except to the extent it shall have been
prejudiced by such failure.  The parties
to the Administration Agreement, the Assumption Agreement and the Transfer and
Assignment Agreement shall follow and comply with the notice requirements of
this Section 10.3 in connection with the indemnification obligations set forth
in those agreements.

10.4         Third-Party Claims.  The Indemnitor shall have thirty (30) days
after receipt of any Claim Notices or information necessary to make the Claim
Notice complete, relating to any third Person claim, action or suit
(collectively, “Claim”) to notify the Indemnified Party of its election
to conduct and control the defense, compromise or settlement of such
Claim.  Unless the Indemnitor gives the
foregoing notice, the Indemnified Party shall have the right to conduct and
control, through counsel of its own choosing, the defense, compromise or
settlement of such Claim, and in any such case the Indemnitor shall cooperate
in connection with such Claim and shall furnish such records, information and
testimony and attend such conferences, discovery proceedings, hearings, trials
and appeals as may be reasonably requested by the Indemnified Party in
connection therewith; provided that, should the Indemnitor fail to timely give
notice as provided above in this Section 10.4, (i) the Indemnitor may, in any
event, participate, through counsel chosen by it and at its own expense, in the
defense of any such Claim and (ii) if the Indemnitor has acknowledged and
agreed in writing that it has an obligation to provide indemnification under
this Agreement or the Assumption Agreement, for any Loss incurred in connection
with or arising from such Claim, the Indemnitor shall have the right to assume
control of the defense, compromise or settlement of such Claim from the
Indemnified Party at any time by giving written notice of such election to the
Indemnified Party.  If the Indemnitor
timely gives notice as provided above in this Section 10.4 or assumes control
of the defense, compromise or settlement of any Claim, the Indemnified Party
shall cooperate in connection with such Claim and shall furnish such records,
information and testimony and attend such

 42
 

conferences,
discovery proceedings, hearings, trials and appeals as may be reasonably
requested by the Indemnitor in connection therewith; provided,
that the Indemnified Party may participate, through counsel chosen by it and at
its own expense, in the defense of any such Claim, as to which the Indemnitor
has so elected to conduct and control the defense thereof; and provided
further, that the Indemnitor shall not, without the written consent of the
Indemnified Party (which consent shall not be unreasonably withheld) pay,
compromise or settle any such Claim (i) in any case where the Indemnitor has
not acknowledged its obligation to provide indemnification to the Indemnified
Party under this Agreement or the Assumption Agreement, or (ii) seeking any
relief against an Indemnified Party other than monetary damages; and provided
further, that the Indemnitor shall, at any time prior to the settlement or
commencement of trial with respect to any Claim, tender the defense, compromise
and settlement of such Claim to the Indemnified Party should the Indemnitor
reasonably determine, based upon the information furnished to it by the
Indemnified Party or obtained by the Indemnitor in the course of defending the
Claim, that the Indemnitor is not obligated to provide indemnification to the
Indemnified Party under this Agreement or the Assumption Agreement.

10.5         Interest.  In the case of any payments made or costs or
damages incurred and paid by a party, interest on the amount thereof shall
accrue beginning the date any Loss is paid by the Indemnified Party or a date
thirty (30) days after written notice of the claim is given, whichever is
later, provided that such notice is accompanied by documentation describing the
basis of such claim in reasonable detail for evaluation; provided further,
however, that the claiming party shall only be entitled to receive such
interest to the extent that it is determined that such party is entitled to
indemnification hereunder.  Interest
shall accrue until the claim is paid in full at a variable rate equal to the
prime interest rate (as published in the Money Rates column of The Wall Street Journal) on the date that such interest
begins to accrue.

10.6         Remedies.  The Parties hereto expressly acknowledge and
agree that all rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available; provided, however, the Parties agree that all such remedies
shall be subject to the limitations set forth in this Section 10.6 and in
Section 10.7.  No Indemnitor shall be
liable or otherwise responsible to any Person for special, consequential,
incidental or punitive damages or for diminution in value or lost profits that
arise out of or relate to this Agreement or the performance or breach hereof; provided, however, that the foregoing shall not apply to any
amounts paid or owed by an Indemnified Party with respect to any Claim by a
third party.  No Party shall be liable
for any indemnification pursuant to this Article 10 for any claims for
misrepresentations and breaches of warranty that are the basis upon which any
other Party has terminated its Agreement pursuant to Section 12.1 or that are
based on misrepresentations and breaches of warranty that have been expressly
and specifically waived in writing.  In
addition to the limitations set forth in Section 10.7, the maximum amount for
which the Seller Parties shall be liable under this Agreement with respect to a
breach or failure of any representation, warranty or covenant pertaining to a
Surplus or Excess Lines Qualification because such Surplus or Excess Lines
Qualification is not valid, in force, unimpaired and in good standing on the
Closing Date, shall be equal to the amount of the adjustment to the Purchase
Price provided for in Section 2.2 so long as the sum of the respective
percentages attributable to the remaining jurisdictions, calculated using the
percentages set forth opposite the name of each jurisdiction in Section 2.2 of

 43
 

the Disclosure Schedule,
total an amount equal to or greater than the percentage set forth in Section
6.1(h).

10.7         Limitations on
Indemnification.  The maximum amount
for which the Seller Parties shall be liable under Section 10.1(i) shall not
exceed in the aggregate an amount equal to the Purchase Price less Five Million
Dollars ($5,000,000.00) (the “Cap”). 
No Loss shall be indemnifiable under Section 10.1(i) or considered in
determining the amounts for which indemnity would otherwise be provided under
Section 10.1(i) unless and until the aggregate amount of Losses claimed under
Section 10.1(i) exceeds $100,000, after which the Seller Parties shall be
liable back to and include the first dollar of aggregate Losses so claimed,
such that such amount is a threshold and not a deductible (the “Threshold”);
provided that the Seller Parties’
liability under Section 10.1(i) for Losses that arise from the breach of the
representations and warranties of Seller Parties set forth in Sections 4.1(b),
4.1(c), 4.1(e), 4.1(f), 4.1(m) and 4.1(o) shall not be subject to the Cap or
the Threshold.   Nothing set forth in
this Section 10.7 limits the Seller Parties’ liability for breach of any of the
representations and warranties of the Seller Parties of which the Seller
Parties had actual knowledge at any time prior to the date on which such
representation or warranty was made or any intentional breach by the Seller
Parties of any covenant or obligation hereunder.

ARTICLE 11

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

Except
as provided in Section 9.3(g), each representation and warranty made by the
Seller Parties and the Buyer shall survive the Closing and remain in effect
until the expiration of two (2) years following the Closing; provided, however, that the representations, warranties and
covenants contained in Sections 4.1(f), 4.1(o), 4.1(u)(1) and 15.14 shall
survive the Closing indefinitely and the representations and warranties
contained in Section 4.1(s) shall survive the Closing for sixty (60) days after
the expiration of the applicable statute of limitations, and each such
representation and warranty shall be fully applicable and effective whether or
not any of the Parties rely in fact thereon or have knowledge (acquired either
before or after the date hereof, and whether from the other Party or from its
own investigation) of any fact at variance with, or of any breach of, any such
representation or warranty.

ARTICLE
12

TERMINATION

12.1         Termination of
Agreement.  Prior to the Closing, the
Parties may terminate this Agreement as provided below:

(a)           the
Buyer and the Seller Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;

(b)           the Buyer may terminate
this Agreement by giving written notice to the Seller Parties at any time prior
to the Closing in the event (i) the Seller Parties have given

 44
 

the Buyer any notice pursuant to Section 5.5 and (ii)
the development that is the subject of the notice has had or is reasonably
expected to have a material adverse effect on the ability of the Seller Parties
to meet the conditions specified in Section 6.1 and Article 7 or otherwise
consummate the transactions contemplated hereby;

(c)           the Seller Parties may
terminate this Agreement by giving written notice to the Buyer at any time
prior to the Closing in the event (i) the Buyer has given the Seller Parties
notice pursuant to Section 5.5 and (ii) the development that is the subject of
the notice has had a material adverse effect on the ability of the Buyer to
meet the conditions specified in Section 6.2 and Article 8 or otherwise
consummate the transactions contemplated hereby;

(d)           by any Party if all
regulatory approvals required by the Oklahoma Insurance Department and the
Texas Department of Insurance have not been obtained by November 15, 2007, or
the Closing shall not have been consummated by December 15, 2007, for any
reason; provided, however, that the right to
terminate this Agreement under this Section 12.1(d) shall not be available to
any Party whose action or failure to act has been the principal cause of the
failure of the Closing to occur on or before such date and such action or
failure to act constitutes a material breach of this Agreement;

(e)           by the Buyer if any
Governmental Authority shall have issued an injunction, judgment, order, decree
or taken any other action which, in any case, would (i) prevent
consummation of any of the transactions contemplated by this Agreement,
(ii) cause any of the transactions contemplated by this Agreement to be
rescinded following the Closing, or (iii) permit consummation of the
transactions contemplated by this Agreement only subject to one or more
conditions or restrictions that has had or could have a Material Adverse
Effect, which action is final and nonappealable;

(f)            by the Buyer, upon a
breach of any representation, warranty, covenant or agreement on the part of
the Seller Parties set forth in this Agreement or if any representation or
warranty of the Seller Parties shall have become untrue, in either case such
that the conditions set forth in Section 6.1 would not be satisfied as of the
Closing Date; provided that the Buyer may not
terminate this Agreement under this Section 12.1(f) if such inaccuracy in the
representations and warranties or breach by the Seller Parties is cured by the
Seller Parties prior to the Closing Date, provided  further that the Seller Parties and the Company continue to
exercise commercially reasonable efforts to cure such inaccuracy or breach (it
being understood that the Buyer may not terminate this Agreement pursuant to
this Section 12.1(f) if the Buyer shall have materially breached this
Agreement); and

(g)           by the Seller Parties,
upon a breach of any representation, warranty, covenant or agreement on the
part of the Buyer set forth in this Agreement or if any representation or
warranty of the Buyer shall have become untrue, in either case such that the
conditions set forth in Section 6.2 would not be satisfied as of the Closing
Date; provided, that the Company may not
terminate this Agreement under this Section 12.1(g) if such inaccuracy in the
Buyer’s representations and warranties or breach by the Buyer is

 45
 

cured by the Buyer prior to the Closing Date, provided  further that
the Buyer continues to exercise commercially reasonable efforts to cure such
inaccuracy or breach (it being understood that the Seller Parties may not
terminate this Agreement pursuant to this Section 12.1(g) if the Seller Parties
shall have materially breached this Agreement).

12.2         Effect of Termination.  In the event of the termination of this
Agreement by the Seller Parties or the Buyer pursuant to this Article 12, this
Agreement shall become null and void and of no further force or effect, except
for the provisions of (i) Article 14 relating to the obligation of each of the
parties to keep confidential certain Information obtained by it, (ii) Article
13 relating to certain expenses, and (iii) this Article 12, and except that
nothing in this Article 12 shall be deemed to release any Party from any
liability for any prior willful breach by such Party of the terms and
provisions of this Agreement.

ARTICLE
13

EXPENSES

Except as
otherwise expressly provided herein, the Buyer and the Seller Parties shall
each pay all of their own fees, expenses and costs in connection with this
Agreement and the transactions and deliveries contemplated hereby, including
without limitation, fees of attorneys and financial advisors, and any brokers
or finders which may have been retained by such Party in connection with this
transaction.

ARTICLE
14

CONFIDENTIALITY

Each
of the Seller Parties and the Buyer agree to hold, and to cause their
respective Affiliates and representatives to hold, all books, records, data and
information (collectively, the “Information”) furnished to it (or its
Affiliates or representatives) by or on behalf of the other Party in connection
with the transactions contemplated by this Agreement in confidence to the
extent required by, and in accordance with, Section 7 of the Letter of Intent
Regarding the Purchase of General Agents Insurance Company of America, dated May
16, 2007 (the “Confidentiality Agreement”) between the Buyer and the
Parent.

ARTICLE
15

MISCELLANEOUS

15.1         No Third-Party
Beneficiaries.  Except as
specifically provided in Article 10, this Agreement shall not confer any rights
or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

 46
 

15.2         Entire Agreement.  This Agreement (including its exhibits and
schedules), the Ancillary MGA Agreements, the Guaranty Agreement and the
Confidentiality Agreement constitute the entire agreement among the Parties
relating to the subject matter hereof and thereof and supersede any prior or
contemporaneous understandings, agreements, or representations by or among the
Parties, written or oral, with respect thereto, including the Letter of Intent
Regarding the Purchase of General Agents Insurance Company of America, dated
May 16, 2007, among the Parent and Montpelier Re Holdings Ltd., other than
Section 7 thereof.

15.3         Succession and
Assignment.  This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns.  No
Party may assign either this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of the other Parties
except that the Buyer may assign its interest hereunder, without the consent of
the other Parties hereto, to any Affiliate of the Buyer, in which case the
Buyer shall remain liable for all of its obligations under this Agreement.

15.4         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

15.5         Headings.  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

15.6         Notices.  All notices, requests, demands, claims, and
other communications hereunder shall be in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two (2)
Business Days after) it is sent by a reputable overnight delivery service or by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:

If
to the Seller Parties, to:

GAINSCO, INC.

3333 Lee Parkway, Suite
1200

Dallas, Texas 75219-5134

Attention:  Daniel J. Coots, Chief Financial Officer

Facsimile:  (972) 629-4401

Telephone: 
(972) 629-4407

With a copy to:

John S. Daniels

General Counsel

GAINSCO, Inc.

3333 Lee Parkway, Suite
1200

Dallas, Texas 75218

Facsimile: (972) 629-4401

 47
 

Telephone: (972) 629-4411

And an additional copy to:

Barry Senterfitt

Akin Gump Strauss Hauer
& Feld LLP

300 West 6th Street, Suite 2100

Austin, Texas 78701

Facsimile: (512) 499-6290

Telephone: (512) 499-6216

If to the Buyer, to:

Montpelier Re U.S.
Holdings Ltd.

One Constitution Plaza,
5th Floor

Hartford,
Connecticut  06103

Attention:   Robert W. Heagney, Esq.

General Counsel

Facsimile:  (860) 838-4492

Telephone:  (860) 838-4464

E-mail: 
rob.heagney@montpelierus.com

With a copy to:

Montpelier Re Holdings
Ltd.

Montpelier House

94 Pitts Bay Road

P.O. Box HM 2079

Hamilton HM HX Bermuda

Attention:   Jonathan B. Kim, Esq.

General Counsel

Facsimile:  (441) 296-4358

Telephone:  (441) 297-9595

E-mail: 
jonathan.kim@montpelierre.bm

And an additional copy to:

Shipman & Goodwin LLP

One Constitution Plaza

Hartford, Connecticut
06103-1919

Attention:  John H. Lawrence, Jr., Esq.

Facsimile:  (860) 251-5211

Telephone: (860) 251-5139

E-mail: 
jlawrence@goodwin.com

 48
 

Any Party may send
any notice, request, demand, claim, or other communication hereunder to the
intended recipient at the address set forth above using any other means
(including personal delivery, messenger service, telecopy, telex, regular mail
or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. 
Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Party notice in the manner herein set forth.

15.7         Governing Law.  This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.

15.8         Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller Parties.  No waiver
by any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.

15.9         Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions hereof
or the validity or enforceability of the offending term or provision in any
other situation or in any other jurisdiction. 
If any term or other provision of this Agreement is held invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that
the transactions contemplated hereby be consummated as originally contemplated
to the fullest extent possible.

15.10       Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement. 
In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any of the provisions of this
Agreement.  When a reference is made in
this Agreement to an Article or to a Section, Subsection, Exhibit or Schedule,
such reference shall be to an Article of, a Section or Subsection of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated.  Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without
limitation.”  The words “hereof,” “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole (including, without limitation, the Disclosure
Schedule) and not to any particular provision of this Agreement.  The words “date hereof” shall refer to the
date of this Agreement set forth in the preface.  The term “or” is not exclusive.  The word “extent” in the phrase “to the
extent” shall mean the degree to which a subject or other thing extends, and
such phrase shall not mean simply “if.” 
The phrase “capital stock” or “capital stock of the Company” shall refer
to any ownership, membership, voting or other equity interest in the
Company.  The definitions contained in
this Agreement are applicable to the singular as well as the plural forms

 49
 

of such
terms.  Any agreement or instrument
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement or instrument as from time to time
amended, modified or supplemented. 
References to a person are also to its successors and permitted
assigns.  The covenants and agreements of
the Parties shall survive until the expiration of the time period for their performance
as provided herein.  Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context
requires otherwise.

15.11       Incorporation of
Exhibits and Schedules.  The Exhibits
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof as if fully set forth herein.

15.12       Consent to Jurisdiction.  Any legal action, suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby
shall be instituted in a United States District Court located in Chicago,
Illinois or in the courts of the State of Illinois located in Chicago, and each
party hereto agrees not to assert as a defense in any such action, suit or
proceeding, any claim that it is not subject personally to the jurisdiction of
such court, that its property is exempt or immune from attachment or execution,
that the action, suit or proceeding is brought in an inconvenient forum, that
the venue of the action, suit or proceeding is improper or that this Agreement
or the subject matter hereof may not be enforced in or by such court.  Each Party further irrevocably submits to the
jurisdiction of such court in any such action, suit or proceeding.  Any and all service of process and any other
notice in any such action, suit or proceeding shall be effective against any
party if given properly pursuant to the United States Federal Rules of Civil
Procedure or other applicable rules.

15.13       Enforcement. 
The Parties agree that irreparable damage might occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. 
It is accordingly agreed that the Parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, this being in addition
to any other remedy to which they are entitled at law or in equity.

15.14       Non-Duplication.  Notwithstanding any provision in this
Agreement or in any other agreement entered into pursuant hereto, the intent of
the Parties with respect to this Agreement and all other agreements related to
the sale of the Company by the Seller Parties to the Buyers is that any payment
made, or any obligation to make a payment owed, by the Seller Parties, or
either of them, to the Buyer (or to the Company) shall not be duplicative of
any other payment or obligation made or owed under this Agreement or any other
agreement entered into pursuant to the terms of this Agreement, including
without limitation any of the Ancillary MGA Agreements or the Guaranty
Agreement.  This principle shall apply
regardless of the number of agreements under which an obligation may be owed by
the Seller Parties and regardless of the number of different Persons that may
be individually entitled to recover.

*       *      
*       *

 50

IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date
first above written.

	
  

  	
  The Seller Parties:

  
	
   

  	
   

  
	
   

  	
  GAINSCO, INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn W. Anderson

  	
   

  
	
   

  	
   

  	
  Name: Glenn W.
  Anderson

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MGA INSURANCE COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Glenn W. Anderson

  	
   

  
	
   

  	
   

  	
  Name: Glenn W.
  Anderson

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The Buyer:

  
	
   

  	
   

  
	
   

  	
  MONTPELIER RE
  U.S. HOLDINGS LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kernan V. Oberting

  	
   

  
	
   

  	
   

  	
  Name: Kernan V.
  Oberting

  
	
   

  	
   

  	
  Title: President

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