Document:

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                                                                   EXHIBIT 10.24

                       QUOTA SHARE REINSURANCE AGREEMENT

                                     AMONG

                    STATE NATIONAL INSURANCE COMPANY, INC.,

                                      AND

                         NORTH POINTE INSURANCE COMPANY

                                      AND

                     NORTH POINTE FINANCIAL SERVICES, INC.

                          EFFECTIVE: DECEMBER 1, 2003

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                               TABLE OF CONTENTS

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<CAPTION>
Article                                                            Page
<S>                                                                <C>
         Preamble                                                   1

   1     Business Reinsured                                         1

   2     Original Conditions                                        2

   3     Exclusions                                                 2

   4     Commencement, Termination, Terms & Conditions              3

   5     Loss and Loss Adjustment Expense                           5

   6     Reports and Remittances                                    6

   7     Errors and Omissions                                       7

   8     Premium and Commission                                     8

   9     Access to Records                                          9

   10    Arbitration                                                9

   11    Assessments, Assignments, Fines and Penalties              10

   12    Premium Financing                                          11

   13    Insolvency                                                 11

   14    Alternate Payee                                            12

   15    Hold Harmless Provisions                                   12

   16    Loss in Excess of Policy Limits/ECO                        14

   17    Regulatory Matters                                         14

   18    The General Agent                                          15

   19    Reinsurer or General Agent or Transfer                     16

   20    Miscellaneous                                              16

   21    Loss and Unearned Premium Reserve Funding                  18

   22    Savings Clause                                             19
</TABLE>

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                       QUOTA SHARE REINSURANCE AGREEMENT

THIS QUOTA SHARE REINSURANCE AGREEMENT (this "Agreement") is made and entered
into as of December 1, 2003, by and among NORTH POINTE INSURANCE COMPANY, a
corporation organized under the laws of the State of Michigan ("Reinsurer"),
STATE NATIONAL INSURANCE COMPANY, INC., an insurance company organized under the
laws of the State of Texas ("Company"), and NORTH POINTE FINANCIAL SERVICES,
INC., a corporation organized under the laws of the State of Michigan ("General
Agent");

                                  WITNESSETH:

THAT, in consideration of the mutual covenants hereinafter contained and upon
the terms and conditions hereinbelow set forth, the parties hereto agree as
follows:

                                    PREAMBLE

It is understood that the Company, the Reinsurer and the General Agent
(hereinafter identified collectively as the "Parties") hereto wish to enter into
a reinsurance arrangement through which the General Agent will market and
produce insurance for bowling center proprietors in several states which
insurance will be written by the Company and reinsured by the Reinsurer (the
"Bowling Program"), and in which the Company is to bear no business, credit or
insurance risk whatsoever (save the risk of the Reinsurer's insolvency). The
Reinsurer shall hold the Company harmless and indemnify it for these and all
risks. The sole consideration provided by the Company, in exchange for the fees
as agreed to, is to permit the Policies (as hereinafter defined), which are
reinsured 100% under this Agreement to be issued in the name of the Company. All
provisions of this Agreement shall be interpreted so as to be in accord with
this Preamble.

                                   ARTICLE I
                               BUSINESS REINSURED

1.01 Effective as of the effective date of this Agreement, the Company obligates
itself to cede to the Reinsurer, and the Reinsurer obligates itself to accept,
100% of the Company's gross liability under all Bowling Program policies,
certificates, contracts, binders, agreements or other proposals or evidences of
insurance, new and renewal policies, binders, contracts of insurance and
endorsements (hereinafter called "Policies") issued by and on behalf of the
Company, in its sole discretion, as general liability, property, and
miscellaneous coverages during the term of this Agreement, produced by or
through the General Agent appointed by the Company at the request of the
Reinsurer as provided in Section 18.02 of this Agreement.

1.02 Subject to Section 15.05 hereof, the maximum policy limits for Policies are
as follows:

General Liability  $ 3,000,000
Property           $10,000,000

No coverage shall be bound or Policies issued unless Reinsurer has its own
reinsurance, acceptable to the Company, so that Reinsurer shall not have more
than a $1,000,000 net retention on any Policy. Reinsurer shall also require that
the documents evidencing such reinsurance contain clauses that name the Company
as an additional insured, enable the Company to be paid as an alternate payee
under the aforesaid reinsurance should Reinsurer

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become the subject of any conservation, liquidation or insolvency proceeding
and require that the Company be notified of any changes to aforesaid
reinsurance.

It is understood that the General Agent shall have the authority to bind the
Bowling Program's risks and shall not bind the Company to amounts in excess of
those stated above unless approved in writing by the Company on a case by case
basis.

                                   ARTICLE II
                              ORIGINAL CONDITIONS

2.01 Effective as of the effective date of this Agreement, the Company obligates
itself to cede to the Reinsurer, and the Reinsurer obligates itself to accept,
all of the Company's gross liability under all Policies issued by and on behalf
of the Company by the General Agent.

2.02 Business ceded hereunder shall include every original policy, rewrite,
renewal or extension (whether before or after the termination of this Agreement)
required by applicable statute, or by rule or regulation of any policy of
insurance ceded hereunder by the Company to the Reinsurer.

2.03 The liability of the Reinsurer shall commence obligatorily and
simultaneously with that of the Company as soon as the Company becomes liable,
and the premium on account of such liability shall be credited to the Reinsurer
from the original date of the Company's liability.

2.04 All reinsurance for which the Reinsurer shall be liable, by virtue of this
Agreement, shall be subject, in all respects, to the same rates, terms,
conditions, interpretations, waivers, the exact proportion of premiums paid to
the Company without any deduction for brokerage, and to the same modifications,
alterations and cancellations, as the respective insurance of the Company to
which such reinsurance relates, the true intent of this Agreement being that the
Reinsurer shall, in every case to which this Agreement applies and in the
proportion specified herein, follow the fortunes of the Company.

2.05 Nothing herein shall in any manner create any obligations, establish any
rights or create any direct right of action against the Reinsurer in favor of
any third party, or other person not party to this Agreement, or create any
privity of contract between the policyholders and the Reinsurer.

                                  ARTICLE III
                                   EXCLUSIONS

      With respect to the classes of business which the General Agent may be
authorized to produce under this Agreement, the General Agent will not solicit
or accept proposals or bind the Company for insurance coverage on the following
risks:

            (a) All business not specifically described as business covered
            under Article I of this Agreement.

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                                   ARTICLE IV
                COMMENCEMENT, TERMINATION, TERMS AND CONDITIONS

4.01 The effective date of this Agreement is at 12:01 a.m. Central Standard
Time, on December 1, 2003. This Agreement shall remain continuously in force
until terminated according to the provisions set forth herein.

4.02 This Agreement may be terminated as follows:

            (a) By any Party hereto, by providing at least ninety (90) days
            written notice to the other Parties, such notice to be sent by
            certified mail, return receipt requested, postage prepaid;

            (b) Immediately by mutual consent of the Company and Reinsurer;

            (c) Immediately upon written notice by the Reinsurer or the Company
            in the event of the cancellation or non-renewal of the General
            Agent's license by the a department of insurance as to the authority
            to write business in that state;

            (d) By the Reinsurer after thirty (30) days written notice to the
            General Agent and Company of the General Agent's failure to pay to
            the Reinsurer all payments of premiums due hereunder, provided,
            however, that in the event such payment is received by the Reinsurer
            prior to the date of cancellation stated in the Reinsurer's written
            notice this Agreement shall not be so terminated and said written
            notice shall be of no further force or effect. If the Reinsurer
            receives such late premium within a ten (10) day period following
            receipt of such notice, the Reinsurer shall inform the Company and
            the General Agent of such receipt as soon as the premium is received
            and the termination of the Agreement for reason of default shall be
            rescinded;

            (e) Immediately, upon written notice by the Company, if the
            Reinsurer or General Agent is found to be insolvent by a State
            Insurance Department or court of competent jurisdiction, or is
            placed in supervision, conservation, rehabilitation, or liquidation,
            or has a receiver or supervisor appointed. By the Reinsurer, upon
            thirty (30) days written notice, if the Company or General Agent is
            found to be insolvent by a State Insurance Department or court of
            competent jurisdiction, or is placed in supervision, conservation,
            rehabilitation or liquidation, or has a receiver or supervisor
            appointed;

            (f) By the Company immediately and automatically without prior
            written notice should the Texas Department of Insurance or other
            regulatory agency of competent jurisdiction, require cancellation or
            disallow credit for this reinsurance;

            (g) After thirty (30) days written notice by any party in the event
            that the Company, the Reinsurer or the General Agent amalgamates
            with or passes under the control of any other company or corporation
            or changes a majority of its officers or board of directors during
            the term of this Agreement; or

            (h) As provided in Section 22.02 of this Agreement.

4.03 When this Agreement terminates for any reason, reinsurance hereunder shall
continue to apply to the business in force at the time and date of termination
until expiration or

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cancellation of such business. It is understood that any Policies with effective
dates prior to the termination date but issued after the termination date are
covered under this Agreement. Additionally, the reinsurance hereunder shall
continue to apply as to Policies, which must be issued or renewed, as a matter
of state law or regulation or because a producing agent has not been timely
canceled, until the expiration dates on said Policies. The General Agent agrees
that, notwithstanding anything to the contrary, its appointment by the Company
to produce business terminates when this Agreement terminates unless the General
Agent's authority has been terminated earlier; except that the Company shall
provide the General Agent with the limited agency authority needed to service
the run-off of the business, e.q., issue, cancel, offer renewal where required
by law.

4.04 Upon termination of this Agreement, no party shall be relieved of or
released from any obligation created by or under this Agreement in relation to
payment, expenses, reports, accounting or handling, which relate to insurance
business reinsured under this Agreement. The Parties hereto expressly covenant
and agree that they will cooperate with each other in the handling of all such
run-off insurance business until all Policies have expired either by
cancellation or by terms of such Policies and all outstanding losses and loss
adjustment expenses have been settled. While by law and regulation, the Company
recognizes its primary obligations to its policyholders, the Reinsurer and
General Agent recognize that to the extent possible there shall be no cost to or
involvement by the Company in servicing this run-off. Upon termination of this
Agreement, the General Agent shall service the run-off of the business, and its
duties for such run-off shall include, but not be limited to, handling all
claims, and handling and servicing all policies through their natural
expiration, together with any policy renewals, required to be made by provisions
of applicable law, whether or not the effective date of such renewal is
subsequent to the effective date of cancellation of this Agreement. All costs
and expenses associated with the handling of such run-off business following the
cancellation or termination of this Agreement shall be borne solely by the
General Agent; however, the Reinsurer shall be ultimately responsible for the
run-off and shall pay any such costs and/or expenses if the General Agent does
not for any reason pay or cause to be paid such costs and expenses. If for any
reason the General Agent fails or is unable to service any such run-off business
(or any business while the Agreement is still in effect), including the payment
of claims, then consistent with this Agreement, the Reinsurer's obligation with
respect to such run-off business shall continue and the Reinsurer shall appoint
a successor to the General Agent, subject to the approval of the Company, to
administer and otherwise handle the run-off as provided herein. Such successor
shall perform all of the duties and obligations of the General Agent with
respect to servicing such run-off business, including the payment of claims. In
addition, the Company in its sole discretion may terminate the authority of the
General Agent or a successor thereto to handle such run-off business and the
Reinsurer shall then appoint a successor to handle the run-off, subject to the
Company's approval, at no cost to the Company.

4.05 In the event this Agreement is terminated, the Reinsurer shall remain
liable to and shall, immediately upon request, reimburse the Company for any
assessment made upon the Company. The Company shall likewise remain liable for,
and account to the Reinsurer for any recovery of such assessment, or any credit
allowed to it against its premium tax, applicable to the risks reinsured
hereunder.

4.06 The title and ownership of all undelivered Policies, books, supplies or
other property related to the reinsured business is in the name of the Company,
and upon termination these shall be delivered immediately by the Reinsurer
and/or General Agent to the Company, without compelling the Company to resort to
any legal proceedings to secure the aforesaid described property of the Company.

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4.07 This Agreement provides for termination on a run-off basis. The relevant
provisions of the Agreement shall apply to the business being run-off and shall
survive the termination of this Agreement.

4.08 This Agreement may be terminated on a cut-off basis only upon the mutual
agreement of the Company and Reinsurer.

4.09 Upon termination of this Agreement, the Reinsurer shall ensure the General
Agent takes those actions necessary, including, but not limited to, sending
statutorily prescribed non-renewal notices to insureds in a timely manner to
effectuate the intent that there be no renewals or new policies (but for those
required by applicable law or regulation) after the termination of this
Agreement.

                                   ARTICLE V
                        LOSS AND LOSS ADJUSTMENT EXPENSE

5.01 All loss settlements made by the Company or the General Agent under the
terms of this Agreement, whether under strict policy conditions or by way of
compromise, shall be unconditionally binding upon the Reinsurer in proportion to
its participation, and the Reinsurer shall benefit proportionately in all
salvage and recoveries. The Reinsurer shall assume and be liable for and pay on
behalf of the Company, 100% of all losses incurred in connection with the risks
covered by this Agreement, including, but not limited to, judgments (including
interest thereon) and settlements in connection therewith. The Reinsurer shall
also be liable for 100% of and pay on behalf of the Company all costs, expenses,
and fees (including, but not limited to, attorney's fees) incurred by the
Company in connection with the investigation or settlement or contesting the
validity of claims or losses covered under this Agreement (this shall include
but, of course, is not limited to, costs, expenses and fees resulting from a
declaratory judgment or injunctive action brought by an insured or other
person).

5.02 The Reinsurer's 100% share of losses, expense and loss recovery shall be
carried into the monthly accounting for which provision is hereinafter made.

5.03 The Company hereby empowers the Reinsurer, and the Reinsurer may, in its
discretion, and under its supervision appoint the General Agent, to accept
notice of and investigate any claim arising under any of the Policies, to pay,
adjust, settle, resist or compromise any such claim, unless the Company
specifically directs to the contrary with respect to any individual claim. In
the latter event, the Reinsurer and/or General Agent shall follow the
instructions of the Company as respects such claim. All such loss settlements,
whether under strict policy conditions or by the way of compromise, shall be
unconditionally binding upon the Reinsurer. However, should the Company be
ordered or instructed by an applicable Department of Insurance or any other
regulatory agency of competent jurisdiction to take any action or refrain from
taking any action with regard to any claim, the Reinsurer shall be bound by and
shall follow the order or instructions of such regulatory agency as though
Reinsurer were the object of such order or instruction. The Reinsurer will
exercise the authority granted hereunder in good faith and toward the end of
paying any and all valid claims.

5.04 All records pertaining to claims arising under insurance policies issued on
behalf of the Company through or by the General Agent subject to this Agreement
shall be deemed to be jointly owned records of the Company and the Reinsurer,
and shall be made available to the Company or the Reinsurer or their respective
representatives or any duly appointed examiner

                                       5
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for any state within the United States; and these records shall be kept in the
State of Michigan or such other jurisdiction as may be required by applicable
state law or regulation. Notwithstanding the foregoing, the Company is
authorized to maintain duplicate working files of all such records outside the
State of Michigan. The Company, the Reinsurer and the General Agent each agree
that it will not destroy any such records in its possession without the prior
written approval of the other parties except that the Company shall not be
required to retain files longer than required by the guidelines set forth by any
applicable state department of insurance.

5.05 The Reinsurer shall, or shall cause the General Agent to, establish a
separate claim register or method of recording claims arising under the Policies
covered by this Agreement so that all claims may be segregated and identified
separate and apart from other records of the Reinsurer or General Agent, with
such claims register to identify each claim on an individual case basis both as
to identify the insured(s) and the claimant, the reserve for loss and adjusting
expense. Such claim register shall be kept in a manner whereby the Company can,
at any time, determine the status of any claim arising under Policies covered by
this Agreement. Such records shall reflect the amount of reserves established
for the individual claim and the date when such reserve was established, and if
closed, whether such claim was closed with or without payment, and if with
payment, the amount paid thereon.

                                   ARTICLE VI
                            REPORTS AND REMITTANCES

6.01 In lieu of the Company furnishing the Reinsurer with bordereaux showing the
particulars of all reinsurances ceded hereunder, the Reinsurer shall furnish or
cause to be furnished to the Company, within forty-five (45) days after the
close of each of the respective periods indicated below (on forms agreeable to
the Parties), with monthly, quarterly and annual reports showing the following
statistical data in respect to the business reinsured hereunder:

            (a) Monthly, with the data segregated by major classes.

                  (i)   Ceded premiums written.

                  (ii)  Ceded unearned premiums.

                  (iii) Ceded losses paid.

                  (iv)  Ceded adjustment expenses paid during this month.

                  (v)   Losses outstanding.

                  (vi)  Ceding commission due the Company.

                  (vii) Commission due the General Agent.

            (b) Annually, with the data segregated by major classes.

                  (i)   Annual summaries of net premiums written, net losses
                        paid, net adjusting expenses paid during the year in
                        such form so as to enable the Company to record such
                        data in its annual convention statement. Such
                        information is to be furnished not later than February
                        15th of the following year. In force and unearned
                        premium segregated as to advance premiums, premiums
                        running twelve (12) months or less from inception date
                        of policy, and premiums running more than twelve (12)
                        months from inception date of policy in such form as to
                        enable the Company to record such data in its convention
                        annual statement.

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                  (ii)  Annual summaries of net premiums written by state
                        location in such form as to enable the Company to record
                        such premiums in its annual report to the Texas
                        Catastrophe Property Insurance Association.

            (c) Periodic, with data segregated by major lines.

                        Statistical or other data as may be requested from time
                        to time by regulatory authorities.

6.02 In order to facilitate the handling of the business reinsured under this
Agreement, the Reinsurer agrees to furnish the Company with any additional
reports necessary to provide the information needed by the Company to prepare
its monthly, quarterly and annual statements to regulatory authorities.

6.03 Within forty-five (45) days after the end of each month, the General Agent
shall remit to the Reinsurer the following:

            (a) Ceded net written premium during the month, less;

            (b) General Agent's commission thereon, less;

            (c) Paid losses and loss adjustment expenses paid, provided such
            losses and loss adjustment expenses have not been deducted on behalf
            of the Company in any previous monthly report.

The positive balance of (a) less (b) less (c) shall be remitted by the General
Agent with its report. Any balance shown to be due the Company shall be remitted
by the Reinsurer as promptly as possible after receipt and verification of the
General Agent's report.

                                  ARTICLE VII
                              ERRORS AND OMISSIONS

7.01 The Company shall not be prejudiced in any way by any omission through
clerical error, accident or oversight to cede to the Reinsurer any reinsurance
rightly falling under the terms of this Agreement, or by erroneous cancellation,
either partial or total, or any cession, or by omission to report, or by
erroneously reporting any losses, or by any other error or omission, but any
such error or omission shall be corrected immediately upon discovery.

7.02 Should the Company suffer any loss whatsoever, the Reinsurer shall assume
loss for its own account and save and hold the Company harmless therefor.

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                                  ARTICLE VIII
                             PREMIUM AND COMMISSION

8.01 In consideration of the acceptance by the Reinsurer of one hundred percent
(100%) of the Company's liability on insurance business reinsured hereunder, the
Reinsurer is entitled to one hundred percent (100%) of the Net Premiums (as
hereinafter defined) received by the General Agent or the Reinsurer on Policies
reinsured less (i) the ceding fee allowed the Company pursuant to Section 8.02
hereof, (ii) the commission paid to the General Agent and (iii) premium taxes on
Policies subject to reinsurance hereunder. "Net Premiums" shall mean the gross
premiums (excluding policy fees) charged on all original and renewal Policies
written on behalf of the Company, less return premiums. Such amounts as provided
in Section 5.09 of the General Agency Agreement (as hereinafter defined) shall
be paid to the Reinsurer or received from the Reinsurer by the General Agent on
behalf of the Company. "Net Policy Fees" shall mean gross policy fees, if any,
charged on all original and renewal Policies written on behalf of the Company,
less return policy fees.

8.02 It is understood that the General Agent shall pay, and the Reinsurer shall
guarantee, the Company directly a fee within forty-five (45) days following the
end of each month, 7% of Net Premiums and Net Policy Fees, plus the amount of
assessments and state premium taxes as provided in this Article VIII. (The
ceding fee amount shall be computed on a calendar year basis based on premium
written in each annual period ended December 31st.) Notwithstanding anything
else contained herein to the contrary, regardless of the amount of Net Premiums,
the minimum ceding fee due the Company shall be $100,000 for each six-month
period during which the Agreement is in effect, plus the aforementioned
assessments and state premium taxes. This minimum ceding fee shall not be
affected by the amounts of Net Premiums written in other six-month periods and
shall not be reduced by reason of payments in excess of the minimum in other
periods. The minimum ceding fee for each period shall be paid within sixty (60)
days of the end of each period. For these purposes, a policy's entire premium
shall be applied to the period in which the policy is written.

8.03 The General Agent shall allow and pay within forty-five (45) days of the
end of each month to the Company an amount equal to the state premium tax on the
net written premiums reinsured hereunder for the past month. Should any
additional premium tax be assessed at any time on written premium reinsured
hereunder, the Reinsurer shall pay the Company such additional premium tax
within (fifteen) 15 days of being informed by the Company of such additional
premium tax. The Parties acknowledge that at the effective date of this
Agreement, the applicable Department of Insurance (or other state agency
responsible for collecting premium taxes) may require the payment of estimated
premium taxes in advance on a semiannual basis. The Reinsurer shall, therefore,
pay to the Company within five days prior to the due date of any such estimated
premium tax payment, the amount that would be due based upon the business
produced hereunder.

8.04 The Reinsurer hereby guarantees that the Company will receive the ceding
fee provided hereunder irrespective of any events, losses or developments for
the term of this Agreement. Such payment is not dependent upon the performance
of the General Agent, underwriting experience, loss experience, whether premium
is collected or not, or any other event foreseen or unforeseen by the parties at
the inception of this Agreement. The Reinsurer shall guarantee payment to the
Company of its ceding fee on all premiums reinsured hereunder (prior to
deduction of premiums, if any, ceded by the Company for inuring reinsurance),
and in addition guarantees those amounts described in Section 8.07 of this
Agreement and is directly

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responsible for payment of the amount described in Article XI. The Company shall
allow return ceding fees on return premiums at the same rates.

8.05 The Reinsurer shall allow the General Agent a commission of 14.5% on all
premiums ceded to the Reinsurer hereunder. The General Agent shall allow the
Reinsurer return commission on return premiums at the same rate. This is an
obligation owing directly from the Reinsurer to the General Agent. The General
Agent shall not seek to recover from the Company, any commissions due and the
Reinsurer shall not seek to recover from the Company, any return commissions
due. No funds are due the General Agent from the Company.

8.06 It is expressly agreed that the commission allowed the General Agent
includes provision for premium taxes and ceding fees. General Agent shall pay to
the Company all premium taxes payable for policies subject to reinsurance
hereunder. In the event that the ceding fee and premium taxes are not so paid by
the General Agent within 60 days following the end of the month, the unpaid
balance shall be paid directly to the Company by the Reinsurer.

                                   ARTICLE IX
                               ACCESS TO RECORDS

      The Reinsurer or its duly appointed representatives shall have free access
at any and all reasonable times to such books and records of the Company or
General Agent, its departmental or branch offices, as shall reflect premium and
loss transactions of the Company and/or the business produced hereunder, for the
purpose of obtaining any and all information concerning this Agreement or the
subject matter thereof. Likewise, the Company or its duly appointed
representatives shall have free access at any and all reasonable times to such
books and records of the Reinsurer and/or General Agent, its departmental or
branch offices as shall reflect premium and loss transactions of the Company
and/or the business produced hereunder, for the purpose of obtaining any and all
information concerning this Agreement or the subject matter hereof.

                                   ARTICLE X
                                  ARBITRATION

10.01 As a condition precedent to any right of action hereunder, in the event of
any dispute or difference of opinion hereafter arising between the Company and
the Reinsurer with respect to this Agreement, or with respect to these Parties'
obligations hereunder, it is hereby mutually agreed that such dispute or
difference of opinion shall be submitted to arbitration.

10.02 One arbiter (an "Arbiter") shall be chosen by the Company and one Arbiter
shall be chosen by the Reinsurer and an umpire (an "Umpire") shall be chosen by
the Arbiters, all of whom shall be active or retired disinterested executive
officers of property and casualty insurance or reinsurance companies.

10.03 In the event that a party fails to choose an Arbiter within thirty (30)
days following a written request by either party to the other to name an
Arbiter, the party who has chosen its Arbiter may choose the unchosen Arbiter.
Thereafter, the Arbiters shall choose an Umpire before entering upon
arbitration. If the Arbiters fail to agree upon the selection for the Umpire
within thirty (30) days following their appointment, each Arbiter shall name
three nominees, of whom the other shall decline two, and the decision shall be
made by drawing lots.

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10.04 Each party shall present its case to the Arbiters and Umpire within a
reasonable amount of time after selection of the Umpire, unless the period is
extended by the Arbiters and the Umpire in writing and/or at a hearing in
Dallas, Texas. The Arbiters and Umpire shall consider this Agreement as an
honorable engagement, as well as a legal obligation, and they are relieved of
all judicial formalities and may abstain from following the strict rules of law
regarding entering of evidence. The decision in writing by a majority of the
Arbiters and Umpire when filed with the Parties shall be final and binding on
the parties. Judgment upon the final decision of the Arbiters and Umpire may be
entered in any court of competent jurisdiction.

10.05 In the event of a dispute between the Company and the Reinsurer concerning
this Agreement and the General Agency Agreement (regardless of whether either
party has claims against the General Agent), the entire dispute between the
Company and the Reinsurer shall be subject to arbitration as provided in this
Article X.

10.06 The costs of the arbitration, including the fees of the arbitrators and
the umpire, shall be borne equally unless the Arbiters and Umpire shall decide
otherwise.

10.07 This Agreement shall be interpreted under the laws of Texas and the
arbitration shall be governed and conducted according to the Texas General
Arbitration Act.

                                   ARTICLE XI
                 ASSESSMENTS, ASSIGNMENTS, FINES AND PENALTIES

11.01 The Reinsurer hereby assumes liability for any and all assessments and
assignments imposed as a result of Policies reinsured hereunder (whether before
or after the termination of this Agreement). The Reinsurer shall immediately
reimburse the Company for any assessments made against the Company pursuant to
those laws and regulations creating obligatory funds (including, but not limited
to, insurance guaranty and insolvency funds), pools, joint underwriting
associations, FAIR plans and similar plans. Amounts owed by the Reinsurer under
this Section shall be payable directly by the Reinsurer to the Company. The
Reinsurer shall be entitled to receive from the Company on or prior to the 31st
day of March of each year thereafter (or such date on which such premium taxes
are paid) a sum equal to the premium tax credit that is allowed to the Company
with respect to such assessments. The premium tax credit allowed the Reinsurer
hereunder is to be on a pro-rata and first-in, first-out basis. The Company
shall promptly return to the Reinsurer any amount of assessment refunded to or
credited to the Company.

11.02 This Agreement shall apply to risks assigned to the Company under any
assigned risk plan if, in the reasonable judgment of the Company, such risks
were assigned to the Company because of the business written and reinsured
hereunder.

11.03 The Reinsurer shall also pay promptly and directly to the Company any
fines, penalties and/or any other charge incurred by the Company as respects the
business reinsured hereunder arising out of the actions or inactions of the
General Agent unless such fines, penalties and/or any other charge was a direct
result of any willful misconduct on the part of the Company, which has been
finally determined by a court of competent jurisdiction after the exhaustion of
all appeals.

                                       10
<PAGE>

                                  ARTICLE XII
                               PREMIUM FINANCING

      With respect to Policies covered under the provisions of this Agreement,
if any premiums are financed, the General Agent shall receive and accept on
behalf of the Company all notices required by statute, contract or otherwise to
be given to the Company, including, without limitation, notices of the existence
of premium finance agreements or of cancellation of policies the premiums of
which are financed ("financed policies"). No producing agent or any other agent
shall be entitled to receive or accept any notice on behalf of the Company, and
the General Agent shall be responsible for and will indemnify and hold the
Company harmless from and against any and all liabilities, losses, claims,
damages and expenses incurred by reason of or arising out of any action taken or
inaction suffered as a result of receipt of any notice by any person, firm or
entity other than the General Agent or the Company. Notwithstanding any other
term or provision of this Agreement, the General Agent agrees to return and pay
over to any premium finance company (whether affiliated with the Company or not)
which has sent notice of cancellation of a financed policy to the General Agent,
on behalf of the Company, within thirty (30) days of receipt of such notice of
cancellation, any and all unearned commissions as of the date of cancellation,
together with any and all unearned premiums due any premium finance company. The
General Agent agrees to and does hereby relinquish any and all rights to any
unearned commissions for any such financed policy as of the date of
cancellation. The obligation of the General Agent to refund unearned commissions
and unearned premiums on a canceled financed policy shall survive the
termination or cancellation of this Agreement for so long as any policy written
under the terms of this Agreement remains in force. If the General Agent does
not fulfill its obligations to refund unearned commissions and unearned premiums
as provided in this Article XII and/or to indemnify the Company as provided in
this Article XII, then the Reinsurer shall pay the amount of the refund owed
and/or shall indemnify the Company even if the premium finance company is an
affiliate of the Company.

                                  ARTICLE XIII
                                   INSOLVENCY

13.01 In the event of insolvency of the Company, this reinsurance shall be
payable directly to the Company or to its liquidator, receiver, conservator or
statutory successor on the basis of the liability of the Company without
diminution because of the insolvency of the Company or because the liquidator,
receiver, conservator or statutory successor of the Company has failed to pay
all or a portion of any claims.

13.02 It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of the Company shall give written notice to the Reinsurer of
the pendency of a claim against the Company indicating the policy or bond
reinsured which claim would involve a possible liability on the part of the
Reinsurer within thirty (30) days after such claim is filed in the insolvency,
conservation or liquidated proceeding or in the receivership, and that during
the pendency of such claim, the Reinsurer may investigate such claims and
interpose, at its own expense, in the proceeding where such claim is to be
adjudicated, any defense or defenses that it may deem available to the Company
or its liquidator, receiver, conservator or statutory successor. The expense
thus incurred by the Reinsurer shall be chargeable, subject to the approval of
the Court, against the Company as part of the expense of conservation or
liquidation to the extent of a pro rata share of the benefit which may accrue to
the Company solely as a result of the defense undertaken by the Reinsurer.

                                       11
<PAGE>

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

13.04 It is further understood and agreed that, in the event of the insolvency
of the Company, the reinsurance under this Agreement shall be payable directly
by the Reinsurer to the Company or to its liquidator, receiver or statutory
successor, except (i) as provided by applicable law, (ii) where the Agreement
specifically provides another payee of such reinsurance in the event of the
insolvency of the Company and (iii) where the Reinsurer with the consent of the
direct insured or insureds has assumed such policy obligations of the Company as
direct obligations of the Reinsurer to the payees under such policies and in
substitution for the obligation of the Company to such payees.

                                  ARTICLE XIV
                                ALTERNATE PAYEE

14.01 As respects subject business assumed as reinsurance under this Agreement,
it is agreed that if the Company has a conservator, liquidator or receiver
appointed for it, or becomes the subject of any conservation, liquidation or
insolvency proceeding, and the General Agent exercises its option to require the
Company to permit all its liabilities under the Policies reinsured hereunder to
be assumed by another licensed insurer as is permitted pursuant to the General
Agency Agreement, such assuming insurer shall be substituted for the Company as
payee of any reinsurance recoverable hereunder in respect of losses under
Policies subject hereto, and the Reinsurer, shall make payment thereof directly
to the substituted insurer. In the event of assumption, the Company shall,
however, be entitled to any fronting fees and other sums owing hereunder with
respect to Policies originally issued on its behalf.

14.02 In the event that an assuming insurer is submitted for the Company under
Section 14.01, all the other provisions of this Agreement shall apply to the
substituted insurer in the same manner as if said insurer were substituted for
the Company as the reinsured party hereunder, and to the extent this Agreement
reinsures such substituted insurer, coverage hereunder shall be excluded as
respects the Company.

                                   ARTICLE XV
                            HOLD HARMLESS PROVISIONS

15.01 Notwithstanding anything else contained herein to the contrary, as
respects all matters related to this Agreement, in addition to those specific
provisions insulating the Company from specific risks hereunder, the Reinsurer
hereby covenants and agrees to reimburse and hold the Company harmless from and
against every claim, demand, liability, loss, damage, cost, charge, attorneys'
fees, expense, suit, order, judgment and adjudication of whatever kind or
character regarding (i) this Agreement and/or (ii) the business reinsured
hereunder (including, but not limited to, underwriting loss, credit loss, and/or
run-off expense and/or all legal fees and expenses incurred by the Company in
asserting its rights under this Agreement) whether or not such claim, demand,
loss, damage, cost, charge, attorneys' fees, expense, suit, order, judgment or
liability is within the terms of Policies written and reinsured hereunder. The
Reinsurer's obligation hereto relates to, but is not limited to the following:
all liability for agents' balances; return premiums and commissions; deceptive
trade practice liability; premiums, policy fees or other charges (whether
collected or not); costs, liability, damages, fees and/or expenses incurred by
the Company due to a lawsuit between the Reinsurer and/or the General Agent (any
dispute involving the Company and the Reinsurer is subject to arbitration); all
actions or

                                       12
<PAGE>

inactions by General Agent relating to this Agreement, any agreement with a
premium finance company or claims administrator, and/or all fees and/or
commissions owing to the General Agent under this and the aforementioned related
agreements.

15.02 The Company shall not be liable to the Reinsurer for premiums unless the
Company itself has actually received those premiums and wrongfully not remitted
them to the Reinsurer. The Reinsurer may not offset any balances on account of
losses, loss adjustment expenses or any other amounts due except as to premiums
actually received by the Company itself (as distinct from premiums not
collected, or premiums collected by the General Agent, or premium placed in the
premium trust account pursuant to the General Agency Agreement) which have
wrongfully not been transmitted to the Reinsurer.

15.03 If for any reason the General Agent fails or is unable to administer the
policies reinsured hereunder (whether the Agreement is still in effect or the
business is being run-off), (i) the Reinsurer shall appoint a party (acceptable
and approved by the Company) to administer the business and the Reinsurer shall
be responsible for 100% of the cost of said administration and (ii) the General
Agent will fully cooperate with the Company (or its designated representative)
in providing access to such of the General Agent's personnel, computer systems
or other assets or procedures as the Company may deem necessary to provide for
an orderly transition of the administration of the Policies reinsured hereunder.
If return premiums or other funds need to be returned to premium finance
companies, policyholders or sub-agents, the Reinsurer shall pay these amounts if
the successor or administrator does not.

15.04 The Reinsurer shall not sue, or seek arbitration, against the Company for
any acts of the General Agent for any monies which the General Agent owes unless
the Company has actually received those monies and has wrongfully not remitted
them to the Reinsurer; and the Reinsurer shall indemnify the Company for any
damages, liabilities and expenses incurred by reason of the General Agent's acts
or failure to act. The Company is not responsible for any commissions or other
monies payable to the General Agent in connection with this Agreement and the
General Agent shall not sue, or seek arbitration against, the Company for any
actions by, or debts owing from, the Reinsurer. The Reinsurer shall not seek to
recover from, or offset against, the Company any sums, whether premiums or other
monies, which the General Agent was unable or unwilling to remit to the Company
or the Reinsurer.

15.05 In the event the Reinsurer, or any agent appointed pursuant to this
Agreement, binds the Company for insurance coverage on insurance risks which are
in excess of the policy limits set forth in Article I, and/or are not within the
terms of business specified in Article I, and/or are not within the territory
specified in Article I, and/or are excluded under Article III, whether
intentional or not, the Reinsurer and General Agent will do such things and take
such actions as may be necessary to reduce the Company's exposure to such risks
and to hold the Company harmless against any liability or loss which may be
incurred by the Company in excess hereof. At the Company's request, the General
Agent in accordance with applicable law, and policy terms, shall cancel or not
renew any risk bound which is not in conformance with this Agreement. Any such
insurance coverage on insurance risks bound contrary to the limitations which
are in excess of the policy limits set forth in Article I, and/or are not within
the classes of business specified in Article I, and/or are not within the
territory specified in Article I, and/or are excluded under Article II, whether
intentional or not, shall be 100% reinsured and subject to this Agreement.

15.06 In furtherance of the protections afforded to the Company under this
Agreement, the Reinsurer expressly acknowledges that certain circumstances may
come to exist with respect to

                                       13
<PAGE>

the Policies reinsured hereunder that require adjustment to the timing of
Reinsurer remittances. If, in the sole discretion of the Company, an advance
payment or payments of the Reinsurer's obligations under this Agreement is
necessary to avoid irreparable harm to the Company (as, for example, in the
circumstance where the funds available in the premium trust account established
pursuant to Section 2.01 of the General Agency Agreement are insufficient to
provide for timely payment of claims), the Reinsurer shall make such payment or
payments promptly upon the Reinsurer's receipt of the Company's good faith
estimate or calculation of the necessity thereof.

15.07 When a claim is asserted or action commenced, including class actions
regardless of whether the class has been certified, relating in any way to the
Policies produced under this Agreement, the General Agent shall assume the
defense and associated costs and expenses thereof. The Company may elect,
however, at its sole discretion, on a case-by-case basis, to engage counsel
directly on its own behalf, and the expenses and costs related to such defense
shall be passed on to and paid by the General Agent within 60 days written
notice from the Company. In such cases where the claim or action relates to
business written by more than one agent of the Company, costs and expenses shall
be proportioned among applicable agents at the Company's sole discretion. Should
the General Agent fail to remit any amounts due to Company under this Section
15.07, then the Reinsurer shall pay such amounts within 60 days written notice
from the Company.

15.08 The Reinsurer will not reimburse and hold the Company harmless as to the
costs, liability, damages, fees and/or expenses caused by the Company's
negligent acts or omissions.

                                  ARTICLE XVI
                      LOSS IN EXCESS OF POLICY LIMITS/ECO

16.01 In the event the Company pays or is held liable to pay an amount of loss
in excess of its policy limit, but otherwise within the terms of its policy
(hereinafter called "loss in excess of policy limits") or any punitive,
exemplary, compensatory or consequential damages, other than loss in excess of
policy limits (hereinafter called "extra contractual obligations") because of
alleged or actual bad faith or negligence on its part in rejecting a settlement
within policy limits, or in discharging its duty to defend or prepare the
defense in the trial of an action against its policyholder, or in discharging
its duty to prepare or prosecute an appeal consequent upon such an action, or in
otherwise handling a claim under a policy subject to this Agreement, 100% of the
loss in excess of policy limits and/or 100% of the extra contractual obligations
shall be added to the Company's loss, if any, under the Policy involved, and the
sum thereof shall be reinsured 100% under this Agreement.

16.02 An extra contractual obligation shall be deemed to have occurred on the
same date as the loss covered or alleged to be covered under the Policy.

16.03 Notwithstanding anything stated herein, this Agreement shall not apply to
any loss incurred by the Company as a result of its own negligent act or
omission, or that of any officer or director or other agent (other than the
General Agent) of the Company.

                                  ARTICLE XVII
                               REGULATORY MATTERS

17.01 It is the Parties' understanding that any premiums which are overdue from
the General Agent to the Company may be deemed non-admitted assets. In
confirmation of the liabilities

                                       14
<PAGE>

assumed by the Reinsurer under this Agreement, the Reinsurer hereby assumes 100%
of all liability and responsibility for all premiums in the course of
collection.

17.02 The Reinsurer shall agree, at no cost to the Company, to take those
actions (including, but not limited to, modifications in how funds are handled
and how accounts are cleared, settled and the manner in which incurred losses
are accounted for) and agree to those arrangements necessary to ensure that the
Company suffers no adverse impact because of this reinsurance program and is in
compliance with any applicable laws of a state insurance department, insofar as
this reinsurance program is concerned.

                                 ARTICLE XVIII
                               THE GENERAL AGENT

18.01 The Company, the Reinsurer and the General Agent have entered into a
General Agency Agreement effective December 1, 2003 (the "General Agency
Agreement"), a complete copy of which is attached hereto as Exhibit "A" and
fully incorporated herein by this reference. The Reinsurer has selected the
General Agent to administer the business reinsured hereunder. While for
regulatory purposes, the General Agent will need to be appointed as the
Company's agent, it is recognized that the General Agent is acting on behalf of
the Reinsurer. The Company is making no evaluation of the General Agent's
qualification, has no obligation to furnish reports or statistics to the
Reinsurer, or to monitor the performance of the General Agent. The Company shall
file with the State all reports requested by the State based upon information
received from the General Agent and Reinsurer.

18.02 The Company will, at the request of the General Agent and the Reinsurer,
appoint producing agents to produce business through the General Agent. The
Company, in its sole discretion, may refuse to appoint any such agent; provided,
however, that such appointment shall not be unreasonably withheld. The General
Agent will not establish any sub-general agencies or any agencies with the
authority of a general agency. The Reinsurer shall hold the Company harmless
from and indemnify it for any damage, liability, claim, expense, cost or fees
(including attorneys' fees and expenses) of whatever kind or character caused
directly or indirectly by any action of or failure to act, by any such producing
agent.

18.03 The General Agent shall be responsible for the control of the producing
agents appointed by the Company at the request of and on behalf of the
Reinsurer, including compliance with state licensing laws and the financial
condition of such agents.

18.04 The Reinsurer shall guarantee payment to the Company of any amounts due
the Company from business produced by and/or policies issued by or through the
producing agents appointed by the Company at the request of and on behalf of the
General Agent and the Reinsurer. The Reinsurer and the General Agent shall be
solely responsible for notifying such agents of this Agreement and of any
termination hereof, and the Reinsurer shall be responsible for the consequences
of any failure to provide such notification.

18.05 The General Agent shall not sue, or seek arbitration, against the Company
for any acts of the Reinsurer and shall indemnify and hold the Company harmless
from and against any damages, liabilities and expenses incurred by reason of the
Reinsurer's acts or failures to act.

18.06 The Company shall conduct or have conducted the examinations of the
General Agent as provided in Section 5.13 of the General Agency Agreement. The
examinations provided for herein shall be at no cost to the Company, and the
Reinsurer shall indemnify and hold the

                                       15
<PAGE>

Company completely harmless as respects any liability, damage, charge, cost,
fine, or penalty, the Company may incur as a result of such examinations.

                                  ARTICLE XIX
                  REINSURER OR GENERAL AGENT SALE OR TRANSFER

      The Reinsurer or the General Agent agree to give the Company, 90 days
advance written notice of any sale or transfer of such party's business, or such
party's consolidation with a successor firm, in order that the Company may, in
its sole discretion:

            (a)   Assign this Agreement to the successor; or

            (b)   Enter into a new reinsurance agreement with the successor; or

            (c)   Terminate this Agreement as provided in Section 4.02(g) of
                  this Agreement.

                                   ARTICLE XX
                                 MISCELLANEOUS

20.01 This Agreement has been made and entered into in the State of Texas and
the Agreement shall be subject to and construed under the laws of the State of
Texas. This Agreement shall be deemed performable at the Company's
administrative office in Fort Worth, Texas, and it is agreed that the venue of
any controversy arising out of this Agreement, or any breach thereof, shall be
in Tarrant County, Texas.

20.02 All notices required to be given hereunder shall be deemed to have been
duly given by personally delivering such notice in writing or by mailing it,
Certified Mail, return receipt requested, with postage prepaid. Any Party may
change the address to which notices and other communications hereunder are to be
sent to such Party by giving the other Party written notice thereof in
accordance with this provision.

20.03 This Agreement shall be binding upon the Parties hereto, together with
their respective successors and permitted assigns. Neither the Reinsurer nor the
General Agent may assign any of its rights or obligations under this Agreement
without the prior written consent of the Company.

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

20.05 This Agreement is the entire agreement between the parties and supersedes
any and all previous agreements, written or oral, and amendments thereto with
respect to the subject matter hereof.

20.06 This Agreement may be amended, modified or supplemented only by a written
instrument executed by all Parties hereto.

20.07 A waiver by the Company, Reinsurer or General Agent of any breach or
default by the other party under this Agreement shall not constitute a
continuing waiver or a waiver by the Company or the Reinsurer of any subsequent
act in breach or of default hereunder.

                                       16
<PAGE>

20.08 Headings used in this Agreement are for reference purposes only and shall
not be deemed a part of this Agreement.

20.09 The Parties hereto intend all provisions of this Agreement to be enforced
to the fullest extent permitted. Accordingly, should a court of competent
jurisdiction or arbitration panel determine that the scope of any provision is
too broad to be enforced as written, the Parties intend that the court or
arbitration panel should reform the provision to such narrower scope as it
determines to be enforceable under present or future law; such provision shall
be fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance.

20.10 This Agreement is not exclusive and the Company reserves the right to
appoint or contract with other reinsurers, agents and/or managing agents in the
territory covered by this Agreement. The General Agent and the Reinsurer reserve
the right to market their insurance products in this territory by means other
than this Agreement.

20.11 The Reinsurer or General Agent shall not insert any advertisement
respecting the Company or the business to be written under this Agreement in any
publication or issue any circular or paper referring to the Company or such
business without first obtaining the written consent of the Company, which
consent will not be unreasonably delayed or withheld. The Reinsurer and/or
General Agent shall establish and maintain records of any such advertising as
required by applicable statutes and regulations.

20.12 Policy cancellations at the Company's request will be made strictly
subject to requirements imposed by the Bowling Program's underwriting rules and
practices as filed, and in compliance with applicable statutes and regulations
and the applicable provisions contained in this Agreement and the pertinent
policy. When directed by the Company, the Reinsurer will cancel any and all
Policies produced by it for any reason the Company deems necessary.

20.13 This Agreement shall be interpreted in conformance with applicable Texas
law and regulation. If it is found or ordered by a court or regulatory body that
a term or provision of this Agreement does not conform to such law or regulation
then this Agreement shall be deemed to be amended and modified in accordance
with such law. However, where this Agreement is found not to comply with
applicable law or regulation, the Company may in its sole discretion terminate
this Agreement immediately and without prior notice.

20.14 The Company agrees that the Reinsurer shall have the right, with the
approval of the Company, to determine the rates and prepare the rate filing for
the Company to file during the term of this Agreement and during the term of the
run-off. The Reinsurer and General Agent understand and agree that no business
shall be produced, until a written approval of the applicable rate rules and
forms is received from the regulatory authority of competent jurisdiction.

20.15 The Reinsurer shall provide semi-annually to Company at Reinsurer's
expense, an independent actuary opinion, performed by Terrence O'Brien at Price
Waterhouse Cooper's Chicago office, attesting to the adequacy of loss reserves
established for losses incurred and outstanding on business produced hereunder.

                                       17
<PAGE>

                                  ARTICLE XXI
                   LOSS AND UNEARNED PREMIUM RESERVE FUNDING

21.01 The Reinsurer will secure its obligations under this Agreement, including
the obligations for unearned premiums reserves, if any, and reserves for losses
incurred but not reported and losses reported but unpaid, via a security fund
(via a security fund agreement in a form and content reasonably acceptable to
the Company).

            (a) At a minimum, the security fund must:

                  (i)   comply with the provisions of Texas Insurance Code, art
                        5.75-1(d)(3) and 28 Texas Administrative Code 57.610;
                        and;

                  (ii)  be issued by or held with a Qualified United States
                        Financial Institution (as defined by the foregoing
                        statute and regulation).

            (b) Company may draw the full amount of the security fund to
            satisfy, in whole or in part the obligations of reinsurer hereunder
            or, if:

                  (i)   Reinsurer fails to comply with the provisions of this
                        Article XXI; or

                  (ii)  the issuer of the security fund gives Company notice of
                        cancellation or non-renewal of the security fund.

21.02 Within 10 business days of the effective date of this Agreement, and
within 10 business days prior to the end of each calendar quarter thereafter,
Company shall provide Reinsurer with a good faith estimate of the expected sum
of Reinsurer's ceded outstanding Unearned Premium and Loss Reserves as of the
end of the forthcoming calendar quarter (the "Estimate"). The Reinsurer shall,
within two business days prior to the commencement of such forthcoming calendar
quarter, fund a security fund in an amount equivalent to 100% of the Estimate.

21.03 If at any time, based upon the monthly reporting provided to Company under
this Agreement, it shall be determined by the Company or Reinsurer that the
amount of the security fund may not be equivalent to 150% of Reinsurer's ceded
outstanding Unearned Premium and 140% of Reinsurer's ceded outstanding Loss
Reserves as of the end of the current calendar quarter (the "Revised Estimate"),
then upon written notice from Company, Reinsurer shall immediately, and no later
than thirty (30) days after receipt of such written notice, increase the amount
of the security fund to an amount equivalent to 100% of the Revised Estimate.
The Company shall at all times be in possession of a security fund equivalent to
150% of Reinsurer's anticipated ceded outstanding Unearned Premium and 140% of
Reinsurer's anticipated ceded outstanding Loss Reserves as of the end of the
current calendar quarter.

21.04 Should the amount of the security fund at the end of any calendar quarter
be greater than the amount required in this Article XXI, the Reinsurer shall be
entitled to reduce the amount of the security fund to an amount not less than
the amount required in this Article XXI. The Qualified United States Financial
Institution shall permit such reduction upon receipt by it of the Company's
written statement that Reinsurer is entitled to such reduction, which written
statement shall not be unreasonably withheld by Company.

21.05 For the purpose of this Article XXI, Unearned Premiums means, as of any
given date, the aggregate premium attributable to the unexpired coverage period
of all insurance policies produced under the Agreement, as determined in
accordance with generally accepted statutory accounting principles consistently
applied. For this purpose, premium shall be the written

                                       18
<PAGE>

premium charged on the insurance policy for the period such policy is in force
irrespective of the subsequent billing and collection of such premium.

21.06 For the purpose of this Article XXI, Loss Reserves means, as of any given
date, the reserve attributable to losses incurred but not reported and losses
reported but not paid with respect to the insurance policies produced under this
Agreement, and shall include provision for both allocated and unallocated loss
adjustment expense, in each instance as determined in accordance with generally
accepted accounting principles consistently applied.

                                  ARTICLE XXII
                                 SAVINGS CLAUSE

22.01 If any law or regulation of any Federal, State or local government of the
United States of America, or the ruling of officials having supervision over
insurance companies, should prohibit or render illegal this Agreement, or any
portion thereof, as to risks or properties located in the jurisdiction of such
authority, either the Company or the Reinsurer may upon written notice to the
other suspend or abrogate this Agreement insofar as it relates to risks or
properties located within such jurisdiction to such extent as may be necessary
to comply with such law, regulations or ruling. Such illegality shall in no way
affect any other portion thereof; provided, however, that the Reinsurer or the
Company may terminate or suspend this Agreement insofar as it relates to the
business to which such law or regulation may apply.

22.02 This Agreement shall be interpreted in accordance with the laws of the
State of Texas. All provisions of this Agreement are intended to be enforced to
the fullest extent permitted. Accordingly, should a court of competent
jurisdiction or arbitration panel determine that the scope of any provision is
too broad to be enforced as written, the Parties intend that the court or
arbitration panel should reform the provision to such narrower scope as it
determines to be enforceable under present or future law; such provision shall
be fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance; provided, however, that where this Agreement is so found not to
comply with applicable law or regulation, the Company may in it sole discretion
terminate this Agreement immediately without prior notice.

                                       19
<PAGE>

IN WITNESS WHEREOF, the Parties hereto by their respective duly authorized
representatives have executed this Agreement as of the date first above written.

                                        STATE NATIONAL INSURANCE COMPANY, INC.

                                        By: /s/ Wyatt Blackburn
                                            ------------------------------------
                                        Its: President
                                        Date: 12/1/02

                                        NORTH POINTE INSURANCE COMPANY

                                        By: /s/ B. Matthew Petcoff
                                            ------------------------------------
                                        Its: President
                                        Date: 11/20/03

                                        NORTH POINTE FINANCIAL SERVICES, INC.

                                        By: /s/ James G. Petcoff
                                            ------------------------------------
                                        Its: President
                                        Date: 11/20/03

                                       20<PAGE>

                                                                   EXHIBIT 10.25

                            GENERAL AGENCY AGREEMENT

      THIS GENERAL AGENCY AGREEMENT (this "Agreement") is made and entered into
as of December 1, 2003, by and among STATE NATIONAL INSURANCE COMPANY, INC., an
insurance company organized under the laws of the State of Texas ("Company"),
NORTH POINTE INSURANCE COMPANY, an insurance company organized under the laws of
the State of Michigan ("Reinsurer"), and NORTH POINTE FINANCIAL SERVICES, INC.,
a company organized under the laws of the State of Michigan ("General Agent");

                                  WITNESSETH:

      THAT, in consideration of the mutual covenants hereinafter contained and
upon the terms and conditions herein below set forth, the parties hereto agree
as follows:

                                    PREAMBLE

      The Company, the Reinsurer and the General Agent have entered into a 100%
Quota Share Reinsurance Agreement dated as of December 1, 2003 (the "Reinsurance
Agreement"), a true and complete copy of which is attached hereto as Exhibit A,
and fully incorporated herein by this reference, which Reinsurance Agreement
requires the appointment of the General Agent to perform certain specified acts
on behalf of the Company and Reinsurer. These acts will include the marketing
and production of insurance for bowling center proprietors in several states
(the "Bowling Program"). The General Agent desires to perform the functions and
duties necessary under the Reinsurance Agreement. It is therefore mutually
agreed by the parties that the General Agent will perform all functions
necessary for the production, service and management of policies issued under
the Reinsurance Agreement in accordance with the terms and conditions set forth
therein and herein. To the extent that there is any conflict between the terms
of this Agreement and the Reinsurance Agreement, the Reinsurance Agreement shall
govern. Notwithstanding any provisions to the contrary contained elsewhere
herein or in any other document, it is expressly understood that the execution
and delivery of this Agreement and the Company's performance hereunder shall not
under any circumstances be interpreted to affect, weaken or modify the
Reinsurer's obligation to indemnify and hold the Company harmless from and
against the business, credit and insurance risks as set forth in the Reinsurance
Agreement. The contractual assumption by the Reinsurer of these risks in the
Reinsurance Agreements is a condition precedent to the Company's entering into
this Agreement with the General Agent.

                                   ARTICLE I
                             APPOINTMENT AND DUTIES

1.01 The Company, at the direction of the Reinsurer, hereby appoints the General
Agent as its managing general agent for the purpose of producing and handling
the business which is the subject of the Reinsurance Agreement issued or renewed
on or after the effective date of this Agreement. The Company, at the request of
the Reinsurer, hereby grants authority to the General Agent to solicit, accept
and receive applications for such classes of coverage as are specified in the
Reinsurance Agreement; to secure, at its own expense, reasonable underwriting
information through reporting agencies or other appropriate sources relating to
each risk insured; to issue, renew and countersign policies, certificates,
endorsements and binders which the Company may, from time to time, authorize to
be issued, delivered, renewed and countersigned; and to collect and receipt for
the premiums thereon and therefor.

                                       1
<PAGE>

1.02 All activities of the General Agent pursuant to this Agreement shall be in
strict compliance with the terms of the Reinsurance Agreement and all rules,
regulations and instructions of the Company, including, but not limited to, all
rules, instructions and specifications included in the Company's rate manuals,
rate brochures and rate schedules.

1.03 The Company, at the Reinsurer's request, further authorizes the General
Agent to perform all acts and duties under policies of insurance issued by the
Company as would otherwise be performed by the Company, including, but not
limited to, properly sending and/or receiving reports and notices and remitting
and/or receiving monies due from or to the Company, and adjusting and paying
losses or other claims. The Company grants to the General Agent the authority to
settle claims on behalf of the Company. However, the maximum dollar amount of
such authority per claim shall not exceed $50,000. For claims settlement in
excess of $50,000, the General Agent may only settle such claims with prior
approval of the Company and Reinsurer. The Company retains final authority to
determine any disputes relating to claims settlement and setting of loss
reserves. In performing each of the acts mentioned above, the General Agent
shall be under the direct supervision and control of the Reinsurer, and the
Reinsurer shall be solely responsible for the acts of the General Agent. While
there are acts of the General Agent which may be required by applicable law to
be performed on behalf of the Company, the Reinsurer shall remain ultimately
responsible for such acts and will indemnify and hold the Company completely
harmless for any damage, cost, liability, expense and/or loss (including
attorneys' fees and expenses) incurred by the Company as respects such acts of
the General Agent. The General Agent must send to the Company a report, as soon
as it becomes known, that a claim (i) involves a coverage dispute; (ii) involves
a demand in excess of policy limits; (iii) alleges bad faith; (iv) exceeds
General Agent's claims settlement authority; (v) is open for more than six
months; or (vi) alleges a violation of any applicable unfair practices and
unfair competition statutes. The Company may suspend or terminate the settlement
authority of the General Agent during the pendency of any dispute regarding any
event of default by the General Agent.

1.04 The General Agent is authorized to have claims adjusted through independent
claims adjusters, subject to the supervision of the Reinsurer. The selection of
independent claims adjusters shall be subject to prior written approval of the
Reinsurer and Company. Such independent claims adjusters are not the agents of
the Company and the Company shall be held harmless and indemnified by the
Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind
or character as a result of, related to or connected with any action or inaction
of such claims adjusters.

1.05 The Company shall not be responsible for the General Agent's expenses and
costs, including, but not limited to, salaries, bonuses, rentals, transportation
facilities, clerk hire, solicitors' fees, postage, advertising, exchange,
personal license fees, adjustment by the General Agent of losses under policies
issued by the General Agent, or any other agency expenses whatsoever. The
General Agent's sole compensation shall be the amounts payable to the General
Agent in Article VIII of the Reinsurance Agreement and in Article III of this
Agreement.

1.06 The General Agent understands and agrees that it has no power or authority
granted to it by the Company independent of the Reinsurance Agreement or
documents executed in connection with the Reinsurance Agreement, and that this
Agreement and the General Agent's authority hereunder shall cease immediately
upon termination, for any reason, of this Agreement or of the Reinsurance
Agreement (excepting only the General Agent's responsibilities with regard to
run-off and other matters as set forth herein or in the Reinsurance Agreement).

1.07 The General Agent shall not have the power to accept or bind risk other
than as set forth herein, as set forth in the Reinsurance Agreement or as may be
subsequently authorized by the

                                       2
<PAGE>

Company and Reinsurer in writing. The General Agent may not bind or cede
reinsurance or retrocession on behalf of the Company, may not commit the Company
to participation in insurance or reinsurance syndicates, and may not commit the
Company to a claim settlement with a reinsurer without the prior written
approval of the Company. If such prior written approval is given, the General
Agent shall forward promptly a report to the Company concerning such transaction
and/or payment. The Company hereby authorizes the General Agent to collect
payments for losses and loss adjustment expenses from a reinsurer. The General
Agent shall send a report to the Company concerning such transactions promptly.

1.08 The General Agent acknowledges that, with respect to any state in which
business is permitted to be written under the Reinsurance Agreement, this
Agreement shall not become effective until the General Agent is first duly
appointed by the Company with the applicable Department of Insurance. The
General Agent agrees that any producing agent receiving commission pursuant to
this Agreement shall first be duly registered by the Company and said
appointment on file with any applicable state insurance department. The General
Agent further agrees to be responsible for the payment of any penalty assessed
to the Company for any violation by the General Agent or any producing agent or
broker registered by the General Agent pursuant to the provisions of Article IV
hereof of any license or appointment provision of the Texas Insurance Code or
other applicable state statutes, and the rules and regulations promulgated
thereunder. If the General Agent fails to pay such penalty, the Reinsurer shall
pay it immediately upon written notification by the Company of the General
Agent's failure to pay such penalty.

1.09 It is understood that the Reinsurer has acknowledged that the Company shall
not be required to monitor the General Agent's compliance with the terms of
either the Reinsurance Agreement or this Agreement and the Reinsurer shall be
responsible for monitoring the General Agent's compliance with the Reinsurance
Agreement and this Agreement.

1.10 The authority and limitations of the General Agent to issue policies are as
follows:

            (a) the maximum annual premium volume the General Agent may produce
            under this Agreement is $20,000,000;

            (b) the basis of the rates charged are as provided in the Company's
            rate manuals, rate brochures and rate schedules which the General
            Agent shall follow, and the General Agent shall not decrease rates
            or increase discounts without the prior approval of the Company and
            Reinsurer;

            (c) the only classes of business the General Agent is authorized to
            produce and handle under this Agreement are the classes of business
            specified in the Reinsurance Agreement;

            (d) the maximum limits of liability for policies to be produced
            pursuant to this Agreement are set forth in the Reinsurance
            Agreement;

            (e) the General Agent may issue policies under this Agreement only
            to insured residents in the states in which business is permitted to
            be produced under the Reinsurance Agreement; but this limitation
            shall not apply to losses if said policies provide coverage outside
            the aforesaid territorial limit;

            (f) the General Agent shall only cancel policies as set forth in the
            policy form for the policies produced hereunder or as otherwise
            permitted by applicable law;

            (g) the maximum term for any policy issued hereunder shall be twelve
            (12) months;

                                       3
<PAGE>

            (h) the General Agent shall employ all reasonable and appropriate
            measures to control and keep a record of the issuance of the
            Company's insurance policies hereunder, including, but not limited
            to, keeping records of policy numbers issued and maintaining policy
            inventories,

            (i) the excluded risks are those set forth in the Reinsurance
            Agreement.

In underwriting policies, the General Agent shall follow the underwriting
guidelines developed by the General Agent, the Reinsurer and the Company, and
these guidelines are herein incorporated by reference.

                                   ARTICLE II
                                    PREMIUMS

2.01 It is expressly agreed and understood that all premiums collected by the
General Agent are collected on behalf of the Company; that such premiums are the
property of the Company and the Reinsurer as their respective interests may
appear pursuant to the Reinsurance Agreement, less such commissions and fees as
are due the General Agent as specified herein and in the Reinsurance Agreement.
All premiums collected by the General Agent on the business produced under the
Reinsurance Agreement shall be deposited in a premium trust account. Despite the
General Agent's ownership of the account, funds deposited therein on behalf of
the Company are understood to be owned by the Company. The only disbursements
from such account shall be the payment of claims, claims expenses, return
premiums, commission due the General Agent as authorized herein and in the
Reinsurance Agreement, and remittance of premiums to the Reinsurer and Company.
The General Agent shall not make personal use of any funds in this account. The
commissions payable to the General Agent are debts due to the General Agent by
the Reinsurer and the privilege herein granted of deducting commissions from
said premiums should not be taken as a waiver by the Company of its exclusive
ownership rights of premiums as provided herein. Should any dispute arise
between the Company, the Reinsurer and/or the General Agent regarding payment of
premium, the General Agent shall remit immediately all money and property,
without deductions for commissions, to the premium trust account with full
reservation of any and all rights reserved by the parties.

2.02 The General Agent shall furnish to the Company and the Reinsurer all
necessary premium and loss data (in a form acceptable to the Reinsurer and the
Company) no later than forty-five (45) days following the end of the month
during which the business is written or losses are incurred to enable the
Company to record statistics required by statutes, regulation or upon call by
authorities having competent jurisdiction. Such data shall include, but is not
limited to, premiums written and unearned premium. Said data shall be segregated
by lines of insurance and the state in which the risk is located.

2.03 The keeping of an account with the General Agent on the Company's books as
a creditor and debtor account is declared a record memorandum of business
transacted and neither such keeping of an account, nor alteration in commission
rate, nor failure to enforce prompt remittance or compromise or settlement or
declaration of balance of account, shall be held to waive assertion of the trust
relation as to premiums collected by the General Agent.

2.04 The General Agent shall be liable for the payment of all premiums upon all
policies of insurance written through the General Agent or any sub-agents of the
General Agent.

2.05 The General Agent shall remit to the Reinsurer, or Company as applicable,
any funds of or due to the Company under this Agreement at the earlier of the
following: (1) forty-five (45) days from the

                                       4
<PAGE>
end of the month in which premium is recorded; or (2) sixty (60) days from the
end of the month in which the coverage under this Agreement became effective.

2.06 The General Agent shall hold all funds of or due the Company in a fiduciary
capacity.

                                  ARTICLE III
                        COMPENSATION TO THE GENERAL AGENT

3.01 The Reinsurer shall allow the General Agent in full compensation for all
services rendered and in full reimbursement for all expenditures made by the
General Agent the fee specified in Article VIII of the Reinsurance Agreement.
The General Agent shall pay the Company directly its ceding fee as specified in
the Reinsurance Agreement (Article VIII), and the amounts for assignments,
assessments, premium taxes, fines and penalties as specified in the Reinsurance
Agreement (Articles XI and XII).

3.02 The Company shall not be liable for or responsible for any commissions or
other monies payable by the Reinsurer to the General Agent. The General Agent
shall not sue or seek arbitration against the Company for any actions by, or
debts owing from, the Reinsurer.

3.03 In the event the Company or the Reinsurer, during the continuance of this
Agreement or after its termination, refunds premiums under any policy of
insurance by reasons of cancellation or otherwise, the General Agent agrees
immediately to return to the Company or the Reinsurer, as applicable, the
commission previously received by it on the portion of the premium refunded. The
General Agent shall not be required to return, as commission or return
commission, monies greater than the total commission paid or otherwise payable
to the General Agent.

                                   ARTICLE IV
                                   SUB-AGENTS

4.01 The General Agent shall comply with, and shall be responsible to insure the
compliance by, all such producing agents with the terms of this Agreement and
the Reinsurance Agreement and all other written rules and regulations of the
Company, and treat as confidential and use only in the interest of the Company
all instructions, information and materials received from the Company.

4.02 The General Agent shall be solely responsible for the performances of any
producing agents under all of the terms and provisions hereof, including, but
not limited to, the collections of premiums and refunds of premiums.

4.03 Each such producing agent must be registered or appointed, as required, as
an agent of the Company through the appropriate regulatory body before any
application shall be accepted from him or other insurance performances on behalf
of the Company are performed. The General Agent shall be ultimately responsible
for the obligation of the producing agent to obtain an appointment as provided
herein.

4.04 It is also specified that the General Agent shall be responsible for all
commissions payable to any producing agents. The General Agent and any producing
agent shall not seek to hold the Company or Reinsurer liable through litigation,
arbitration or otherwise for commissions payable to such producing agents.

4.05 The Company, in its sole discretion with or without cause, and without
prior written notice, may terminate the appointment of any producing agent.

                                       5
<PAGE>

4.06 The General Agent shall not permit its subagents or subproducers to serve
on its Board of Directors.

4.07 The General Agent shall not appoint sub-managing general agents.

                                   ARTICLE V
                           ADDITIONAL DUTIES OF AGENT

5.01 The General Agent shall, at all times during the period of this Agreement,
comply with all applicable laws and all orders, policy decisions or other
requirements of the Texas Department of Insurance or other applicable state
insurance department.

5.02 All books, records, accounts, documents and correspondence of the General
Agent and any producing agent pertaining to the Company's and Reinsurer's
business shall, at all times, be open to examination by any authorized
representative of the Company or Reinsurer. The General Agent shall make copies
of records available upon request by the Company or Reinsurer, whether such
request is before or after termination of this Agreement or the Reinsurance
Agreement. The General Agent must maintain separate records of business,
including, but not limited to, underwriting files for each insurer for whom it
acts as a general agent. Such records must be maintained for five (5) years or
until the completion of a financial examination by the insurance department of
the state in which the Company is domiciled, whichever is longer.

5.03 The General Agent shall maintain adequate accounting procedures and
systems, at no cost or expense to the Company, and shall provide statistics in a
timely manner for all reporting requirements under the Reinsurance Agreement or
as shall be required from time to time by the regulatory authorities of the
State of Texas or any other applicable governmental agency or authority. Such
statistical information shall be provided to the Company by the General Agent at
the General Agent's sole cost and expense.

5.04 The General Agent shall forward to the Company, no later than the 30th day
of the month following the month being accounted for, a report in detail of all
policies of insurance written or placed, or liability increased or decreased, or
policies continued or renewed or canceled by or through the General Agent during
the month being accounted for, which shall include all premiums due thereon
whether collected or not. Such report shall show the net amount due to the
Company and Reinsurer on all such business on the lines of business authorized
to be written by the General Agent and the amounts paid in losses, loss
adjustment expenses and commissions. Such report shall also include, to the
extent not already included, both insurance and reinsurance transactions,
including:

            (i)   statement of written, earned and unearned premiums,

            (ii)  losses and loss expenses outstanding;

            (iii) losses incurred but not reported; and

            (iv)  any management fees.

The report shall be received by or confirmed to the Company no later than thirty
(30) days from the close of the month for which business is reported. The
Company shall maintain such account reports on file for at least five (5) years
and shall make the account reports available to the Commissioner of Insurance of
the State of Texas (the "Commissioner"), or other applicable state department of
insurance, for review upon request.

                                       6
<PAGE>
5.05 The General Agent shall account for and furnish to the Company, upon
request with reasonable notice, complete copies of all policies issued, copies
of all spoiled, voided or otherwise unissued policies, and copies of all claim
files created with respect to all loss occurrences under any policy issued under
this Agreement.

5.06 The title of all undelivered policies, books, supplies, or other property
related to the reinsured business is in the Company, and these shall be
delivered to the Company by the General Agent immediately upon the termination
of this Agreement. The General Agent will create and maintain copies of all such
materials, and will have an unrestricted right to use these materials after this
Agreement's termination. The General Agent agrees to surrender peaceably the
same without compelling the Company to resort to any legal proceedings
whatsoever. Upon request of the Company, prior to or after the termination of
this Agreement, the General Agent shall provide to the Company, at the General
Agent's sole cost and expense, electronic copies of any and all data related to
the reinsured business in a format specified by the Company. Further, the
General Agent shall ensure any vendor or other third party acknowledges and
agrees the Company, at no expense to the Company, shall have use of any systems,
data, information, reports, files or statistics prior to or after the
termination of this Agreement.

5.07 The General Agent shall not insert any advertisement respecting the Company
in any publication or issue any circular or paper referring to the Company
without first obtaining the written consent of the Company. The General Agent
shall comply with all statutes and regulations pertaining to advertising, and
establish and maintain records of any such advertising as required by the
applicable laws of the states in which it is doing business.

5.08 The General Agent shall maintain on behalf of the Company and Reinsurer
complete copies of all policies issued hereunder and copies of all claim files
created with respect to all loss occurrences thereunder. Any or all policies
and/or claim files required to be maintained by General Agent pursuant to this
Section 5.08 may be maintained in electronic data storage form accessible by
computer and if so stored in this fashion, no physical copy of such items need
be maintained. Where electronic claims files are maintained by the General
Agent, any data from such files requested or required by the Company shall be
provided within thirty (30) days or less if so requested by the Company.

5.09 The General Agent shall pay to the Reinsurer the positive balance, if any,
no later than forty-five (45) days following the end of the month during which
the business was written net written premiums collected hereunder (being defined
as premiums received and/or due the General Agent from the insured in a given
month less return premiums) less the General Agent's Provisional Commissions (as
defined in the Reinsurance Agreement) and less loss adjustment expenses and loss
payments. Should such balance be a negative amount, the Reinsurer shall pay the
General Agent as soon as possible after the end of the month, after receipt and
verification of the amount due as reported by the General Agent.

5.10 The General Agent shall be solely responsible for procuring any renewal,
extension, or new policy of insurance that may be required by any state or rule
or regulation of any state insurance department with respect to policies
originally written directly for the Company. The General Agent and Reinsurer
shall indemnify the Company and hold it harmless from any loss, damage, cost,
claim or expense whatsoever that the Company may incur, or for which it may
become liable, as a result of the said General Agent's failure, refusal or
neglect to fulfill said responsibility.

5.11 The General Agent agrees that its duties and obligations under this
Agreement shall be due and owing also to the Company's and Reinsurer's
successors and assigns.

                                       7
<PAGE>

5.12 Nothing in this Article V shall be construed as requiring the Company to
monitor the book of business which is the subject of the Reinsurance Agreement
for the benefit of the Reinsurer.

5.13 The Company shall conduct or cause to be conducted a semi-annual
examination of the General Agent, in accordance with the Company's audit
guidelines. Furthermore, if the Company's aggregate premium volume increases by
thirty (30) percent in any thirty (30) day period, the Reinsurer at no expense
to the Company, and on behalf of the Company, shall examine or cause to be
examined within ninety (90) days the General Agent if it writes more than twenty
(20) percent of the Company's volume and has also experienced a twenty (20)
percent increase in premium volume during that same thirty (30) day period.

The examinations required under the preceding paragraph shall adequately provide
the Commissioner with the information outlined in (a) through (e) below, shall
be made available to the Commissioner for review, shall remain on file with the
Company for a minimum of three (3) years and shall, at a minimum, contain
information concerning the following:

            (a)   claims procedures of the General Agent;

            (b)   timeliness of claims payments by the General Agent (i.e., lag
                  time between date claim is reported and date claim is paid);

            (c)   timeliness of premium reporting and collection by the General
                  Agent;

            (d)   compliance by the General Agent with underwriting guidelines
                  under Section 1.10 hereof; and

            (e)   reconciliation of policy inventory.

5.14 The General Agent shall return any unearned premium due insureds or other
persons on the business which is the subject of the Reinsurance Agreement; if
for any reason, the General Agent does not return such unearned premium, then
the Reinsurer shall pay such amount and/or amounts.

5.15 The General Agent shall be duly licensed as a managing general agent or as
otherwise required under applicable law to perform its duties hereunder.

5.16 Should any state insurance department make a request to the Company for any
data required to comply with a statistical data call, the General Agent shall be
solely responsible to provide the Company with such data. Should the request
from such state insurance department require the Company to contract the
services of an outside source, such as an actuarial firm, to compile the data
required, the General Agent shall be responsible for its proportionate share of
the total cost for services rendered.

5.17 General Agent, when placing business under this Agreement, may not charge a
per-policy fee in excess any fees allowed by the applicable insurance regulatory
authority.

5.18 The General Agent shall provide Company, at General Agent's expense, an
independent financial examination in a form acceptable to the applicable state
departments of insurance, or other regulatory body, if required.

5.19 The General Agent shall provide annually to Company, at General Agent's
expense, an independent actuary opinion attesting to the adequacy of loss
reserves established for losses
                                       8
<PAGE>
incurred and outstanding on business produced hereunder if General Agent
establishes total loss reserves including IBNR, if required by the applicable
insurance regulatory authority.

5.20 The General Agent acknowledges receipt of the Company's Statistical
Reporting Policy and Procedure Manual, and will act in accordance therewith. The
General Agent will act, at its sole cost and expense, on behalf of the Company
to produce, prepare, and file statistical information with the designated
statistical reporting bureau. The General Agent will also furnish the Company,
and other parties as designated by the Company, with monthly, quarterly and
annual reports showing statistical data in respect of the business written as
required.

5.21 Company will provide to the General Agent the percentage of written premium
to remit directly to Company on a monthly basis for bureau fees related to
statistical reporting, and boards and bureaus participation ("Bureau Fees"). In
addition to the Bureau Fees, should the Company be charged any fines or
penalties for incomplete, inaccurate, or delinquent reporting, the General Agent
shall pay such fines or penalties immediately upon written notice. The General
Agent will remit Bureau Fees as designated by the Company until notified of any
necessary adjustments to the amount of the Bureau Fees. Should the General Agent
fail to remit any amounts due to Company under this Section 5.21, then the
Reinsurer shall pay such amounts within 60 days written notice from the Company.
The initial Bureau Fees shall be .25% of written premium. The Bureau Fees are in
addition to other fees and expenses expressly enumerated herein.

                                   ARTICLE VI
                              TERM AND TERMINATION

6.01 The effective date of this Agency Agreement is 12:01 a.m., Central Standard
Time, on December 1, 2003, and shall remain continuously in force unless
canceled as follows:

            (a) This Agreement may be canceled by either party by giving at
            least ninety (90) days prior written notice to the other party.
            Notice shall be provided by registered mail, return receipt
            requested, and notice shall be deemed to have been provided on the
            date of mailing.

            (b) Immediately by mutual consent of the Company and General Agent.

            (c) At any time, by the Company, without prior notice in the event
            of the General Agent declaring bankruptcy or being declared or found
            bankrupt or insolvent, or being the subject of a cease and desist
            order, corrective order, or being placed in, or subject to, a
            proceeding of supervision, conservation, rehabilitation or
            liquidation.

            (d) Immediately upon written notice by the Company in the event of
            the cancellation or non-renewal of the General Agent's license by a
            state department of insurance as to the authority to write business
            in that state.

            (e) Immediately upon written notice by the General Agent in the
            event any action against the Company is commenced by Texas
            Department of Insurance or other applicable state insurance
            department pursuant to rehabilitation or liquidation. The Company
            agrees to furnish notice of such action immediately to the General
            Agent.

            (f) If the General Agent shall default in making remittance for net
            premiums then this Agreement shall be terminated according to the
            terms provided in Section 4.02(d) of the Reinsurance Agreement.

                                       9
<PAGE>

            (g) If the General Agent shall defraud or attempt to defraud the
            Company; or any policyholder, then the Company may at its sole
            discretion cancel this contract by giving the General Agent written
            notice of cancellation served personally or by mail, which shall be
            effective immediately.

            (h) As provided in Section 8.11 of this Agreement.

            (i) Automatically and immediately, without notice upon cancellation
            or termination of the Reinsurance Agreement.

6.02 This Agreement shall automatically become renewed from year to year upon
the renewal of the license or certificate of authority granted to the Company by
the Texas Department of Insurance, provided this Agreement shall not be
otherwise canceled.

6.03 It is expressly agreed and understood that nothing in this Article VI
authorizes the General Agent to write any new business under this Agreement
should the Reinsurance Agreement terminate, except the business that is required
to be renewed or issued because of applicable law or regulation, as provided in
Section 4.03 of the Reinsurance Agreement.

6.04 The Company shall have no liability to the General Agent by virtue of the
Company's termination of this Agreement as set forth in this Article; it being
expressly understood that partial consideration for the Company's grant of
agency authority to the General Agent is the General Agent's promise that the
Company shall not be responsible for any damages which might arise by virtue of
any termination of this Agreement.

6.05 In the event of termination of this Agreement, after the General Agent
having promptly accounted for and paid over premiums for which it may be liable,
the General Agent's records, use and control of expirations shall remain the
property of the General Agent and left in its undisputed possession.

6.06 In the event that this Agreement is terminated, the General Agent, for no
additional fee, shall have the authority (unless revoked by the Company at its
sole discretion in which case the Reinsurer shall appoint a successor at no cost
to the Company) as provided in this Agreement to continue to perform all of its
duties under this Agreement on the remaining policies during the run-off period.
The General Agent's duties during the run-off period shall include handling and
servicing of all policies through their natural expiration, together with any
policy renewals required to be made by the provisions of applicable law, whether
or not the effective date of such renewal is subsequent to the effective date of
cancellation of this Agreement. Further, upon termination of this Agreement, the
General Agent shall not be relieved of or released from any obligation created
by or under this Agreement in relation to payment, expenses, reports, accounting
or handling, which relate to the outstanding insurance business under this
Agreement existing on the date of such termination. The Company, General Agent
and Reinsurer will cooperate in handling all such business until the business
has expired either by cancellation or by the terms of the policies and all
outstanding losses and loss adjustment expenses have been settled.

6.07 As the Reinsurance Agreement provides for termination on a run-off basis,
the relevant provisions of this Agreement shall apply to business being run-off.
It is also expressly agreed that the terms, conditions and obligations of the
Preamble and Articles II, IV and V, Sections 6.04, 6.05, 6.06, 6.07 and 6.08,
Articles VII, Section 8.11 and Article IX herein shall survive termination of
this Agreement.

                                       10
<PAGE>

6.08 The Company may suspend the authority of the General Agent during the
pendency of any dispute regarding any event of default by the General Agent.

                                  ARTICLE VII
                       HOLD HARMLESS AND INDEMNIFICATION

      The General Agent agrees to and does hereby indemnify and hold the Company
harmless from and against any and all actions, causes of actions, suits,
arbitrations, or proceedings of any kind, liabilities, losses, claims, damages,
costs, or expenses (including attorneys' fees and expenses), incurred by the
Company by reason of, arising out of, or relating in any way to this Agreement
or any action taken or inaction by the General Agent in breach of the terms of
this Agreement or the terms of the Reinsurance Agreement, or which is not in
full compliance therewith. In addition, if the Reinsurer does not indemnify and
hold the Company harmless as required by the Reinsurance Agreement, the General
Agent shall fulfill the obligations of the Reinsurer and make the payments
required pursuant to the Reinsurance Agreement.

                                  ARTICLE VIII
                                 MISCELLANEOUS

8.01 This Agreement has been made and entered into in the State of Texas and
shall be governed by and construed in accordance with the laws of the State of
Texas.

8.02 This Agreement is not exclusive and the Company reserves the right to
appoint other agents in the territory covered by this Agreement and the General
Agent reserves the right to act as General Agent for other insurers or
reinsurers.

8.03 This Agreement shall be binding upon the parties hereto, together with
their respective successors and permitted assigns.

8.04 The Company shall have no right of control over the General Agent as to
time, means or manner of the General Agent's conduct within the terms of the
Agreement and the Reinsurance Agreement and the authority herein granted and
nothing herein is intended or shall be deemed to constitute the General Agent an
employee or servant of the Company. The General Agent shall at all times be an
independent contractor.

8.05 This Agreement shall be deemed performable at the Company's administrative
office in Fort Worth, Texas, and it is agreed that the venue of any controversy
arising out of this Agreement, or for the breach thereof, shall be in Tarrant
County, Texas.

8.06 The General Agent shall not assign any of its rights or obligations under
this Agreement without the prior written consent of the Company. No verbal
modification will be recognized by any party hereto and this Agreement cannot be
modified by any subsequent practices or course of dealing by the parties
inconsistent herewith. If the Company or the General Agent shall fail to take
advantage of a breach, if any, by another party of the terms, conditions,
covenants, or any of them herein contained, such failure shall not be deemed to
constitute, or be construed as, a waiver of any rights on the part of the
General Agent or Company to thereafter enforce any of the said terms, conditions
or covenants.

8.07 This Agreement may be amended, modified or supplemented only by a written
instrument executed by all parties hereto. All such amendments or changes shall
specify the effective date of such amendments or changes.

                                       11
<PAGE>

8.08 This Agreement supersedes any and all provisions, terms and/or conditions
of any other general agency agreements, whether oral or written, by, between and
among the parties with respect to the subject matter hereof.

8.09 The General Agent shall notify the Company in writing within thirty (30)
days when there is a change in the ownership of 10% or more of the outstanding
stock in the General Agent or when there is any change in the General Agent's
principal officers or directors.

8.10 The General Agent shall not offset balances due under this Agreement
against balances due or owing under any other contract.

8.11 This Agreement shall be interpreted in conformance with applicable Texas
law and regulation. If it is found or ordered by a court or regulatory body that
any provision or term of this Agreement does not conform to such law or
regulation then this Agreement shall be deemed to be amended, and modified to be
in accordance with such law. However, where this Agreement is found not to
comply with applicable law or regulations, the Company may in its sole
discretion terminate this Agreement immediately and without prior notice.

                                   ARTICLE IX
                                  ARBITRATION

9.01 As a condition precedent to any right of action hereunder, in the event of
any dispute or difference of opinion hereafter arising between the Company, on
the one hand, and the General Agent, on the other hand, with respect to this
Agreement or with respect to the General Agent's and/or the Company's
obligations hereunder, it is hereby mutually agreed that such dispute or
difference of opinion shall be submitted to arbitration.

9.02 The Company shall choose one arbiter (an "Arbiter") and the General Agent
shall choose one Arbiter. An umpire (an "Umpire") shall be chosen by the two
Arbiters, all of whom shall be active or retired disinterested executive
officers of property and casualty insurance or reinsurance companies.

9.03 Both the General Agent and the Company shall choose an Arbiter within 30
days following a written request by one party to the other to name an Arbiter.
In the event either the Company or the General Agent fails to choose an Arbiter
within this time period, the party who has chosen its Arbiter may choose the
unchosen Arbiter. Thereafter, the Arbiters shall choose an Umpire before
entering upon arbitration. If the Arbiters fail to agree upon the selection for
the Umpire within 30 days following their appointment, each Arbiter shall name
three nominees, of whom the other shall decline two and the decision shall be
made by drawing lots.

9.04 Each side shall present its case to the Arbiters and Umpire, in a hearing
in Dallas, Texas. The Arbiters and Umpire shall consider this Agreement as an
honorable engagement, as well as a legal obligation, and they are relieved of
all judicial formalities and may abstain from following the strict rules of law
regarding entering of evidence. The decision in writing by a majority of the
Arbiters and Umpire when filed with the Company and the General Agent shall be
final and binding. Judgment upon the final decision of the Arbiters and Umpire
may be entered in any court of competent jurisdiction.

9.05 In the event of a dispute between the Company and the General Agent
concerning this Agreement and the Quota Share Reinsurance Agreement between the
Company and the Reinsurer, regardless of whether either party has claims against
the Reinsurer, the entire dispute between the Company and the General Agent
shall be subject to arbitration as provided under this Article IX.

                                       12
<PAGE>

9.06 The costs of the arbitration, including the fees of the Arbiters and the
Umpire, shall be borne equally by the sides unless the Arbiters and Umpire shall
decide otherwise.

9.07 This Agreement shall be interpreted under the laws of Texas and the
arbitration shall be governed by the Texas Arbitration Code.

                                   ARTICLE X
                                    PRIVACY

10.01 The General Agent shall provide to each new policyholder, prior to or upon
the issuance of any Policies written under this Agreement, and in accordance
with applicable state and federal laws, an initial notice of the Company's
privacy policies and practices. Not less than annually thereafter, the General
Agent, upon the request of the Company, distribute a copy of the Company's
annual privacy notice, as may be amended from time to time, to each existing
policyholder. In addition, the General Agent shall, upon the request of the
Company, distribute revised privacy notices and opt-out notices as applicable to
each policyholder to reflect any revisions which may be made to the Company's
privacy policies and practices. In each case, the Company shall be responsible
for providing the Agency with a copy of the form for its privacy policies and
practices notice, which forms the General Agent shall use to create and deliver
the notices described herein, at the Agency's sole cost and expense. These
notices shall be created and delivered independent of any separate legal
obligation the General Agent may have to create and deliver its own such
notices.

10.02 The General Agent shall not disclose or use any nonpublic personal
financial information or nonpublic personal health information related to any
policyholder, or to any consumer or customer (as such terms are defined under
applicable state and federal privacy laws), except as necessary to carry out its
duties and obligations under this Agreement or as otherwise permitted under
applicable state or federal law.

10.03 The General Agent shall develop and implement, in accordance with
applicable state and federal laws, a comprehensive written information security
program designed to (i) ensure the security and confidentiality of nonpublic
personal financial information and nonpublic personal health information related
to any policyholder, or to any consumer or customer (as such terms are defined
under applicable state and federal privacy laws), (ii) protect against any
anticipated threats or hazards to the security or integrity of such information,
and (iii) protect against unauthorized access to or use of such information that
could result in substantial harm or inconvenience to any customer.

                                   ARTICLE XI
                            COVENANT NOT TO COMPETE

11.01 The General Agent has been involved in the marketing and production of
insurance for bowling centers (general liability, liquor liability and property)
for more than ten (10) years. The Company has not, does not currently, and will
not during this Agreement's term participate in any fronting programs in which
the primary risks to be insured are bowling centers or in which bowling center
proprietors are principal marketing targets. This covenant not to compete does
not apply to:

            (a) A bowling program that seeks to insure bowling centers owned or
            operated by AMF Bowling Worldwide, Inc., Brunswick Corporation or
            the United States Armed Services; or

            (b) A fronting program involving a specialized book of business
            (i.e. a Restaurant/Bar/Tavern program, Business Owners program or
            Commercial Multi-Peril program) that incidentally includes bowling
            center risks.

                                       13
<PAGE>

11.02 The consideration for this covenant not to compete with the General Agent
are the fees paid to the Company under this Agreement and this Agreement's
terms. If the Company breaches this covenant, the General Agent may proceed in
any court having equitable jurisdiction over the Company to obtain any
appropriate equitable remedies, including ex parte restraining orders and
injunctive orders during litigation and following judgment. In addition,
Purchaser may simultaneously seek all other remedies provided by law or in
equity for the breach of the Covenant.

      IN WITNESS WHEREOF, the Parties hereto by their respective duly authorized
representatives have executed this Agreement as of the date first above written.

STATE NATIONAL INSURANCE COMPANY, INC.

BY: /s/ Wyatt Blackburn
    ----------------------------------

ITS: President

DATE: 12/1/03

NORTH POINTE FINANCIAL SERVICES, INC.

BY: /s/ B. Matthew Petcoff
    ----------------------------------

ITS: Executive VP

DATE: 11/20/03

NORTH POINTE INSURANCE COMPANY

BY: /s/ James G. Petcoff
    ----------------------------------

ITS: Chairman/CEO

DATE: 11/20/03

                                       14

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