Document:

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                   SURETY EXCESS OF LOSS REINSURANCE CONTRACT
            AS RESPECTS ONLY SURETY BUSINESS FOR THE DICK CORPORATION
                     (HEREINAFTER REFERRED TO AS "CONTRACT")

                           EFFECTIVE: JANUARY 1, 2004

                           entered into by and between

                             WESTERN SURETY COMPANY
                           UNIVERSAL SURETY OF AMERICA
                        SURETY BONDING COMPANY OF AMERICA
               (hereinafter collectively referred to as "Company")

                                       and

                          CONTINENTAL CASUALTY COMPANY
                    (hereinafter referred to as "Reinsurer")

Witnesseth:

In consideration of the mutual covenants contained herein, and upon the terms
and conditions hereinafter set forth the Company and the Reinsurer hereby agree
as follows:

ARTICLE 1 - SCOPE OF THE CONTRACT

This Contract is solely between the Company and the Reinsurer. Performance of
respective obligations of each party under this Contract shall be rendered
solely to the other party, except as specifically and expressly provided for in
the Insolvency Article. The provisions of this Contract are intended solely for
the benefit of the parties to and executing this Contract, and nothing in this
Contract shall in any manner create, or be construed to create, any obligations
to or establish any rights against any party to this Contract in favor of any
third parties or other persons not parties to and executing this Contract.

ARTICLE 2 - BUSINESS COVERED

The Company shall reinsure with the Reinsurer and the Reinsurer shall accept as
reinsurance from the Company the Company's net excess liability under the surety
business for only the principal Dick Corporation written or renewed and surety
reinsurance assumed (hereinafter referred to as "Bonds") by the Company that is
in force on January 1, 2004 and that is written or renewed during the term of
this Contract, in excess of $60,000,000.

Surety Excess of Loss as respects the Dick Corporation
Effective: January 1, 2004
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ARTICLE 3 - RETENTION OF COMPANY & LIABILITY OF THE REINSURER

The retention of the Company and the liability of the Reinsurer and all other
benefits accruing to the Company, as provided in this Contract or any amendments
thereof, shall apply to the parties comprising the Company as a group and not
separately to each of the parties. Any payment by the Reinsurer to any of the
parties comprising the Company shall discharge the Reinsurer's liability under
this Contract to the extent of such payment with respect to that loss.

Reinsurance hereunder shall be on an excess of loss basis and shall apply to
that portion of coverage which the Company retains net for its own account in
accordance with the provisions set forth under this Contract.

As respects only the business covered hereunder as described in Article 2
Business Covered, the Reinsurer shall pay to the Company the amount of loss in
excess of the Company's Retention as set forth in the Schedule of Reinsurance
below, but the Reinsurer's liability shall not exceed the Limit of Liability of
the Reinsurer as stated in the Schedule of Reinsurance.

                             SCHEDULE OF REINSURANCE

<TABLE>
<S>                                   <C>
-------------------------------------------------
Company Retention                     $60,000,000
-------------------------------------------------
Limit of Liability of the Reinsurer   $40,000,000
-------------------------------------------------
</TABLE>

Under no circumstances, howsoever arising, shall the Reinsurer be liable under
this Contract for more than $40,000,000 of Net Loss, in the aggregate, inclusive
of all loss, allocated expense payments, extra contractual obligations or losses
in excess of original policy limits.

ARTICLE 4 - COMMENCEMENT AND TERMINATION

The Contract shall take effect on January 1, 2004 and shall remain in full force
and effect through December 31, 2004, both days inclusive, and provides cover
for losses discovered during the term of this Contract on Bonds in force on
January 1, 2004 and Bonds written, renewed or assumed during the term of this
Contract all as respects business classified by the Company as Surety Business
as described in Article 2 - Business Covered.

ARTICLE 5 - DEFINITIONS

"Company Retention" shall mean that amount indicated as the Company Retention in
the Schedule of Reinsurance as set forth in the Retention of Company & Liability
of Reinsurer Article. It is understood and agreed that any underlying
reinsurance maintained by the Company

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on the business reinsured hereunder, shall not be deducted in determining the
Company's Retention, including amounts retained by the Company or its affiliated
companies under common management or common ownership.

"Net Written Premium" shall mean the Company's written premium on the business
covered hereunder net of applicable returns and cancellations and net of
premiums on inuring reinsurance.

"Loss(es) Discovered" shall mean that the Company shall have discovered a loss
when:

a)   a claim or a collection of claims on the covered Bond business exceeds
     $30,000,000, whether or not the Company has an incurred loss on the
     principal Dick Corporation through the establishment of a reserve or
     payment of loss or allocated expenses; or

b)   when the Company has incurred a loss of $30,000,000 or more on the
     principal Dick Corporation through the establishment of a reserve, payment
     of loss or allocated expenses, assumption of a liability to prevent a
     default or a combination thereof.

"Net Loss" shall mean all loss and allocated expense payments made by the
Company (1) in the investigation, defense, settlement, or mitigation of claims
or potential claims (including the prevention of defaults) on the Bond business
covered hereunder, and (2) in the recovery or attempted recovery of such loss
and expense payments, less salvage and subrogation. The Company's office
expenses and salaries of its employees are not allocated expenses and are not
included in Net Loss. "Net Loss" shall include extra contractual obligations and
losses in excess of original policy limits to the extent that any underlying
excess of loss reinsurance purchased by the Company covers such obligations and
losses. It is understood and agreed that any underlying reinsurance maintained
by the Company on the business reinsured hereunder, shall not be deducted in
determining the Company's Net Loss.

ARTICLE 6 - PREMIUM

Upon execution of this Contract by the Company and the Reinsurer, the Company
shall pay the Reinsurer premium of $3,000,000, which shall be considered fully
earned.

ARTICLE 7 - ADDITIONAL PREMIUM

If any Net Loss is ceded to this Contract, the Company shall immediately pay the
Reinsurer an additional premium of $6,000,000.

Surety Excess of Loss as respects the Dick Corporation
Effective: January 1, 2004
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ARTICLE 8 - NOTICE OF LOSS & SETTLEMENTS

The Company shall investigate and settle or defend all claims and losses
including those involving the extension of credit or the advancement of money.
All payments of claims or losses by the Company within the sum or limits of its
Bonds and within the amount of reinsurance set forth in Article 3 - Retention of
Company and Liability of Reinsurer, shall be binding on the Reinsurer, subject
to the terms of this Contract.

The Reinsurer shall pay to the Company the Reinsurer's portion of Net Loss
within thirty days after receipt of the proof of loss from the Company. Any
subsequent changes in the amount of Net Loss shall be reported by the Company to
the Reinsurer, and the amount due either party shall be remitted within thirty
days after receipt of such report.

ARTICLE 9 - CO-SURETY

It is understood and agreed by the parties to this Contract that Continental
Casualty Company and any one of its affiliated insurers shall act as co-surety
as respects business covered by this Contract, when so requested by the Company.

ARTICLE 10 - EXCESS OF ORIGINAL POLICY LIMITS

This Contract shall protect the Company as provided in Article 2 - Business
Covered, in connection with loss in excess of the limit of the original policy,
such loss in excess of the limit having been incurred because of failure by the
Company to settle within the policy limit or by reason of alleged or actual
negligence, fraud or bad faith in rejecting an offer of settlement or in the
preparation of the defense or in the, trial of any action against its insured or
reinsured or in the preparation or prosecution of an appeal consequent upon such
action.

However, this Article shall not apply where the loss has been incurred due to
fraud by a member of the Board of Directors or a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.

For the purpose of this Article, the word "loss" shall mean any amounts for
which the Company would have been contractually liable to pay had it not been
for the limit of the original policy. The date on which any Excess of Original
Policy Limit loss is incurred by the Company shall be deemed, in all
circumstances, to be the date of the original loss.

ARTICLE 11 - EXTRA CONTRACTUAL OBLIGATIONS

This Contract shall protect the Company as provided in Article 2 - Business
Covered, where the loss includes any extra contractual obligations.

Surety Excess of Loss as respects the Dick Corporation
Effective: January 1, 2004
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The term "Extra Contractual Obligations" is defined as those liabilities not
covered under any other provision of this Contract and which arise from the
handling of any claim on business covered hereunder, such liabilities arising
because of, but not limited to, the following: failure by the Company to settle
within the policy limit, or by reason of alleged or actual negligence, fraud or
bad faith in rejecting an offer of settlement or in preparation of the defense
or in the trial of any action against its insured or reinsured or in the
preparation or prosecution of an appeal consequent upon such action.

The date on which any Extra Contractual Obligation loss is incurred by the
Company shall be deemed, in all circumstances, to be the date of the original
loss.

However, this Article shall not apply where the loss has been incurred due to
fraud by a member of the Board of Directors or a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any loss covered hereunder.

ARTICLE 12 - SALVAGE & SUBROGATION

The Reinsurer shall be subrogated to the rights of the Company to the extent of
its loss payments to the Company. The Company agrees to enforce its rights of
salvage and subrogation by taking whatever action is necessary to recover its
loss from an obligee, principal, indemnitor, or any other party who caused or
contributed to its loss or part thereof, or to assign those rights to the
Reinsurer, unless enforcement is waived by the mutual consent of the Company and
the Reinsurer. Recoveries shall be distributed to the parties in an order
inverse to that in their liabilities accrued.

ARTICLE 13 - OFFSET

The Company or the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract or any
other facultative or treaty reinsurance entered into between certain of the
parties hereto. The party asserting the right of offset may exercise such right
at any time whether the balances due are on account of premiums or losses. In
the instance of insolvency of one or more of the reinsured Companies, applicable
state law will apply.

ARTICLE 14 - CURRENCY

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

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Effective: January 1, 2004
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<PAGE>
Amounts paid or received by the Company in any other currency shall be converted
to United States Dollars at the rate of exchange at the date such transaction is
entered on the books of the Company.

ARTICLE 15 - ACCESS TO RECORDS

The Company shall allow the Reinsurer to inspect, at reasonable times, the
records of the Company relevant to the business reinsured under this Contract,
including but not limited to Company files concerning premium, underwriting,
claims, losses or legal proceedings which involve or may involve the Reinsurer
and the Reinsurer may make copies of any records pertaining thereto. This right
of inspection, audit and information shall survive termination of this Contract
and shall run to the natural expiry of all liabilities under the Bonds
reinsured.

ARTICLE 16 - ERRORS AND OMISSIONS

Any inadvertent delay, omission or error shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, omission, or error had not been made, provided such omission or error is
rectified as soon as possible after discovery.

ARTICLE 17 - TAXES

The Reinsurer shall maintain the required reserves as to the Reinsurer's portion
of claims and losses. The Company shall be liable for all premium taxes on
business covered hereunder. If the Reinsurer is obligated to pay any premium
taxes on this business, the Company shall reimburse the Reinsurer, however, the
Company shall not be required to pay taxes twice of the same premium.

ARTICLE 18 - INSOLVENCY

This reinsurance shall be payable by the Reinsurer on the basis of the liability
of the reinsured Company(ies) under Bonds reinsured hereunder without
diminution, because of the insolvency of one or more than one of the Companies,
to the Company(ies) or its liquidator, receiver, or statutory successor.

In the event of insolvency of one or more than one of the Companies, the
liquidator or receiver or statutory successor of the Company(ies) shall give
written notice to the Reinsurer of the pendency of a claim filed against the
Company(ies) on the Bond or Bonds reinsured within a reasonable time after such
claim is filed in the insolvency proceeding. During the pendency of such claim
the Reinsurer may investigate such claim and interpose, at its own expense, in
the proceeding where such claim is to be adjudicated, any defense or defenses
which it may doom available to the Company(ies) or its liquidator or receiver or
statutory successor. The expenses thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the

Surety Excess of Loss as respects the Dick Corporation
Effective: January 1, 2004
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Company(ies) as part of the expense of liquidation to the extent of a
proportionate share of the benefits which may accrue to the Company(ies) solely
as a result of the defense so undertaken by the Reinsurer.

Should one or more than one of the Companies go into liquidation or should a
receiver be appointed, the Reinsurer shall be entitled to deduct from any sums
which may be or may become due to the Company(ies) any sums which are due to the
Reinsurer by the Company(ies) and which are payable at a fixed or stated date
under this Contract, the Surety Excess of Loss Reinsurance Contract, the
Certificates of Facultative Reinsurance, the Surety Quota Share Treaty or the
Aggregate Stop Loss Reinsurance Contract between certain of the parties hereto
to the full extent permitted by the laws of the insolvent party's state of
domicile.

It is further understood and agreed that, in the event of the insolvency of one
or more than one of the Companies, the reinsurance under this Contract shall be
payable directly by the Reinsurer to the Company(ies) or to its liquidator,
receiver or statutory successor, except a) where this Contract specifically
provides another payee of such reinsurance in the event of the insolvency of the
Company(ies) or b) where the Reinsurer with the consent of the direct insured or
insureds has assumed such Bond obligations of the Company(ies) as direct
obligations of the Reinsurer to the payees under such Bonds and in substitution
for the obligations of the Company(ies) to such payees.

In no event shall anyone other than the parties to this Contract or, in the
event of one or more than one of the Company's insolvency, its liquidator
receiver, or statutory successor, have any rights under this Contract.

ARTICLE 19 - AMENDMENTS

This Contract may be altered or amended in any of its terms and conditions by
mutual written consent of the Company and the Reinsurer. Such written mutual
consent will then constitute a part of this Contract.

ARTICLE 20 -ARBITRATION

As a condition precedent to any right of action hereunder, any dispute arising
out of the interpretation, performance or breach of this Contract, including the
formation or validity thereof, shall be submitted for decision to a panel of
three arbitrators. Notice requesting arbitration will be in writing and sent
certified mail, return receipt requested.

One arbitrator shall be chosen by each party and the two arbitrators shall,
before instituting the hearing, choose an impartial third arbitrator who shall
preside at the hearing. If either party fails to appoint its arbitrator within
thirty (30) days after being requested to do so by the other party,

Surety Excess of Loss as respects the Dick Corporation
Effective: January 1, 2004
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<PAGE>
the latter, after ten (10) days notice by certified mail of its intention to do
so, may appoint the second arbitrator.

If the two arbitrators are unable to agree upon the third arbitrator within
thirty (30) days of their appointment, the third arbitrator shall be selected
from a list of six individuals (three named by each arbitrator) by a judge of
the federal district court having jurisdiction over the geographical area in
which the arbitration is to take place, or if the federal court declines to act,
the state court having general jurisdiction in such area.

All arbitrators shall be disinterested active or former executive officers of
insurance or reinsurance companies or Underwriters at Lloyd's London.

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

The panel shall be relieved of all judicial formality and shall not be bound by
the strict rules of procedure and evidence. Arbitration shall take place in
Sioux Falls, South Dakota, or a location mutually agreed to by the panel.
Insofar as the arbitration panel looks to substantive law, it shall consider the
law of the State of South Dakota. The decision of any two arbitrators when
rendered in writing shall be final and binding. The panel is empowered to grant
interim relief as it may deem appropriate.

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

Each party shall bear the expense of its own arbitrator and shall jointly and
equally bear with the other party the cost of the third arbitrator. The
remaining costs of the arbitration shall be allocated by the panel. The panel
may, at its discretion, award such further costs and expenses as it considers
appropriate, including but not limited to attorneys fees, to the extent
permitted by law, The panel is prohibited from awarding punitive, exemplary or
treble damages, of whatever nature, in connection with any arbitration
proceeding concerning this Contact.

ARTICLE 21 - CHOICE OF LAW

This Contract, including all matters relating to formation, validity and
performance thereof, shall be interpreted in accordance with the law of the
State of South Dakota.

ARTICLE 22 - AGENCY

For purposes of sending and receiving notices and payments required by this
Contract, the reinsured Company that is set forth first in the Title section to
this Contract will be deemed the

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<PAGE>
agent for all other reinsured companies referenced in the Title of this
Contract. In no event however, will any reinsured Company be deemed the agent of
the other with respect to the terms of the Insolvency Article.

ARTICLE 23 - ENTIRE CONTRACT

This Contract represents the entire agreement and understanding among the
parties as respects the subject matter hereto. No other oral or written
agreements or contracts relating to the risks reinsured hereunder currently
exist and/or are contemplated between the parties.

ARTICLE 24 - FUNDING OF RESERVES

(This Article is only applicable if the Reinsurer cannot qualify for credit by
each governmental authority having jurisdiction over the Company's reserves.)

As regards Policies issued by the Company coming within the scope of this
Contract, the Company agrees that, when it files with the Insurance Department
or sets up on its books reserves for losses (including Loss and Loss Expense
paid by the Company but not recovered from the Reinsurer, Loss and Loss Expense
reported and outstanding, and an allowance for Incurred But Not Reported Losses
and Loss Expenses as determined by the Company) covered hereunder and/or
unearned premium, which it is required by law to set up, it shall forward to the
Reinsurer a statement showing the proportion of such reserves applicable to it.
The Reinsurer hereby agrees that it shall apply for and secure delivery to the
Company of a clean, irrevocable, unconditional Letter of Credit, dated on or
before December 31 of the year in which the request is made, issued by a member
of the Federal Reserve System or any bank approved for use by the NAIC
Securities Valuation Office, and containing provisions acceptable to the
insurance regulatory authorities having jurisdiction over the Company's reserves
in an amount equal to the Reinsurer's proportion of reserves as shown in the
statement prepared by the Company.

The Letter of Credit shall be issued for a period of not less than one year, and
shall be automatically extended for one year from its date of expiration or any
future expiration date unless 30 days prior to any expiration date the issuing
bank notifies the Company by registered mail that the issuing bank elects not to
consider the Letter of Credit extended for any additional period. An issuing
bank, not a member of the Federal Reserve System or not chartered in the state
of domicile of the Company, shall provide 60 days notice to the Company prior to
any expiration in the event of nonextension.

Notwithstanding any other provisions of this Contract, the Company or its
court-appointed successor in interest may draw upon such credit at any time
without diminution because of the insolvency of the Company or of any Reinsurer
for one or more of the following purposes only:

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A.   To reimburse the Company for the Reinsurer's share of unearned premium on
     Policies reinsured hereunder on account of cancellations of such policies.

B.   To pay the Reinsurer's share or to reimburse the Company for the
     Reinsurer's share of any Loss reinsured by this Contract, which has not
     been otherwise paid.

C.   To make refund of any sum in excess of the actual amount required to pay
     the Reinsurer's share of any liability reinsured by this Contract.

D.   In the event of nonextension of Letters of Credit as provided for above, to
     establish deposits of the Reinsurer's share of reserves for losses and/or
     unearned premium under this Contract.

E.   To pay any other amounts the Company claims are due under this Contract.

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

At annual intervals, or more frequently as agreed but never more frequently than
semi-annually, the Company shall prepare, for the sole purpose of amending the
Letter of Credit, a specific statement of the Reinsurer's share of loss and/or
unearned premium reserves. If the statement shows that the Reinsurer's share of
such reserves exceeds the balance of credit as of the statement date, then the
Reinsurer shall, within 30 days after receipt of notice of such excess, secure
delivery to the Company of an amendment of such difference. If, however, the
statement shows that the Reinsurer's share of such reserves is less than the
balance of credit as of the statement date, the Company shall, within 30 days
after receipt of written request from the Reinsurer, release such excess credit
by agreeing to secure an amendment to the Letter of Credit, reducing the amount
of credit available by the amount of such excess credit.

The Reinsurer shall be responsible for any and all costs, fees and charges as
respects establishing and maintaining a Letter of Credit under the provisions of
this Article.

ARTICLE 25 - SERVICE OF SUIT

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

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Effective: January 1, 2004
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<PAGE>
In the event of the failure of any Reinsurer hereon to pay any amount claimed to
be due hereunder, such Reinsurer, at the request of the Company, shall submit to
the jurisdiction of a court of competent jurisdiction within the United States
and shall comply with all requirements necessary to give that court
jurisdiction. Nothing in this Article constitutes or should be understood to
constitute a waiver of the Reinsurer's rights to commence an action in any court
of competent jurisdiction in the United States, to remove an action to a United
States District Court, or to seek a transfer of a case to another court as
permitted by the laws of the United States or of any state in the United States.
Service of process in such suit may be made upon Mendes and Mount, 750 Seventh
Avenue, New York, New York 10019-6829. In any suit instituted against it upon
this Contract, the Reinsurer shall abide by the final decision of such court or
of any appellate court in the event of any appeal.

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

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

ARTICLE 26 - SEVERABILITY

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 render illegal this Contract, 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, abrogate, or amend this Contract 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, suspension, abrogation, or amendment of a portion of this
Contract shall in no way affect any other portion thereof.

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Effective: January 1, 2004
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ARTICLE 27 - HONORABLE UNDERTAKING

The purposes of this Contract are not to be defeated by narrow or technical
legal interpretations of its provisions. The Contract shall be construed as an
honorable undertaking and should be interpreted for the purpose of giving effect
to the real intentions of the parties hereto.

ARTICLE 28- NOTICES

Any notice relating to this Contract shall be in writing and shall be
sufficiently given if delivered by certified mail to the Reinsurer at the
following address:

     Continental Casualty Company
     CNA Plaza
     Attn.: Chief Financial Officer
            Chicago, IL 60685

and to the Company at the following address:

     Western Surety Company
     Attn.: Chief Executive Officer
            Sioux Falls, South Dakota 57117-5077

ARTICLE 29 - SPECIAL PROVISION

At any time subsequent to the inception of this Contract:

A.   should the ownership, control or management of the Company or the Reinsurer
     be altered or changed, in whole or in part, in such a way that receipt or
     payment of funds or any other contemplated transaction under this Contract
     would be prohibited by United States of America statute, regulation and/or
     other applicable law, or

B.   should the Company or the Reinsurer become subject to restrictions imposed
     by the United States government, so that receipt or payment of funds or any
     other contemplated transaction under this Contract would be prohibited by
     United States of America statute, regulation and/or other applicable law,

the Company or the Reinsurer must immediately notify the other party of same in
writing via certified, registered, or internationally recognized overnight
courier service, and the obligation to pay or receive funds or otherwise perform
under this Contract shall be suspended until such time as the Company or the
Reinsurer are authorized by applicable law, regulation, or license to perform
under this Contract.

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Effective: January 1, 2004
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<PAGE>
ARTICLE 30 - CONFIDENTIALITY

The Reinsurer hereby acknowledges that the documents, information and data
provided to it by the Company, whether directly or through an authorized agent,
in connection with the placement, execution, or performance of this Contract
(hereinafter called the "Confidential Information") are proprietary and
confidential to the Company. Confidential Information shall not include
documents, information or data that the Reinsurer can show: (i) is publicly
known or has become publicly known through no unauthorized act of the Reinsurer,
(ii) has been rightfully received from a third person without obligation of
confidentiality, or (iii) was known by the Reinsurer prior to the placement of
this Contract without an obligation of confidentiality.

The Reinsurer agrees not to disclose any Confidential Information; however, this
provision shall not apply to disclosures made by the Reinsurer, in the ordinary
course of business, to its retrocessionaires, auditors, accountants, or
regulatory agencies, arbitration panels or courts of law.

IN WITNESS WHEREOF the parties acknowledge that no intermediary is involved in
or brought about this transaction, and the parties hereto, by their authorized
representatives, have executed this Contract:

on this       day of

WESTERN SURETY COMPANY

By:
    ------------------------------------

Title:
       ---------------------------------

Attested by:
             ---------------------------

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Effective: January 1, 2004
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<PAGE>
and on this       day of

UNIVERSAL SURETY OF AMERICA

By:
    ------------------------------------

Title:
       ---------------------------------

Attested by:
             ---------------------------

and on this       day of

SURETY BONDING COMPANY OF AMERICA

By:
    ------------------------------------

Title:
       ---------------------------------

Attested by:
             ---------------------------

and on this       day of

CONTINENTAL CASUALTY COMPANY

By:
    ------------------------------------

Title:
       ---------------------------------

Attested by:
             ---------------------------

Surety Excess of Loss as respects the Dick Corporation
Effective: January 1, 2004
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                                                                               .
                                                                               .
                                                                               .
                     SURETY $3,000,000 EXCESS OF $12,000,000
                      EXCESS OF LOSS REINSURANCE AGREEMENT

<TABLE>
<CAPTION>
                                                                  ARTICLE   PAGE
                                                                  -------   ----
<S>                                                               <C>       <C>
BUSINESS COVERED                                                        I     2
TERM                                                                   II     3
TERRITORY                                                             III     3
EXCLUSIONS                                                             IV     3
DEFINITIONS                                                             V     7
RETENTION AND LIMIT                                                    VI    10
REINSTATEMENTS                                                        VII    10
NET RETAINED LINES                                                   VIII    11
PREMIUM                                                               VIX    11
OTHER REINSURANCE                                                       X    11
EXTRA CONTRACTUAL OBLIGATIONS                                          XI    11
LOSS NOTICES AND SETTLEMENTS                                          XII    13
OFFSET                                                               XIII    13
SALVAGE AND SUBROGATION                                               XIV    13
WARRANTIES                                                             XV    14
DELAYS, ERRORS, OR OMISSIONS                                          XVI    16
ENTIRE AGREEMENT AND MODIFICATION                                    XVII    16
ACCESS TO RECORDS                                                   XVIII    16
CONFIDENTIALITY                                                       XIX    17
INSOLVENCY                                                             XX    17
ARBITRATION                                                           XXI    18
TAXES                                                                XXII    19
FEDERAL EXCISE TAX                                                  XXIII    19
CURRENCY                                                             XXIV    19
AGENCY                                                                XXV    20
NOTICES                                                              XXVI    20
CHOICE OF LAW                                                       XXVII    20
SPECIAL PROVISION                                                  XXVIII    20
SIGNATURE PAGE                                                               21
</TABLE>

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Page 1 of 22
<PAGE>
                     SURETY $3,000,000 EXCESS OF $12,000,000
                      EXCESS OF LOSS REINSURANCE AGREEMENT

     THIS AGREEMENT is made and entered into by and between WESTERN SURETY
COMPANY, SURETY BONDING COMPANY OF AMERICA, UNIVERSAL SURETY OF AMERICA
(collectively referred to as the "Company") of the one part and CONTIENTAL
CASUALTY COMPANY (hereafter referred to as the "Reinsurer") of the other part.

     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:

                                    ARTICLE I

BUSINESS COVERED

     This Agreement is to indemnify the Company in respect of the net excess
liability, as hereinafter provided and specified, which may accrue to the
Company as a result of loss or losses discovered during the term of this
Agreement under any and all bonds heretofore or hereinafter issued or entered
into by or on behalf of the Company and classified by the Company as:

          ALL CONTRACT SURETY BUSINESS AND COMMERCIAL SURETY BUSINESS WRITTEN BY
          THE COMPANY AND BUSINESS ASSUMED BY WESTERN SURETY COMPANY OR
          UNIVERSAL SURETY OF AMERICA FROM CONTINENTAL CASUALTY COMPANY,
          NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, AMERICAN CASUALTY COMPANY
          OF READING, PENNSYLVANIA, CONTINENTAL INSURANCE COMPANY AND ITS
          AFFILIATES (ALL OF WHICH ARE HEREINAFTER REFERRED TO AS "CNA SURETY
          CORPORATION AND BUSINESS ASSUMED FROM CNA") EXCEPT ALL BUSINESS
          UNDERWRITTEN IN SIOUX FALLS, SOUTH DAKOTA AND IN THE COMPANY'S SMALL &
          SPECIALTY CONTRACT OFFICES BY WESTERN SURETY COMPANY, UNIVERSAL SURETY
          OF AMERICA AND SURETY BONDING COMPANY OF AMERICA WHICH SHALL BE
          EXCLUDED FROM COVERAGE HEREUNDER.

     All reinsurance for which the Reinsurer will be obligated by virtue of this
Agreement will be subject to the same terms, conditions, interpretations,
waivers, modifications, and alterations as the respective bonds of the Company
to which this Agreement applies. This Agreement is solely between the Company
and the Reinsurer. Performance of the obligations of each party under this
Agreement shall be rendered solely to the other party; however, if the Company
becomes insolvent, the liability of the

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<PAGE>
Reinsurer shall be modified to the extent set forth in the Insolvency Article.
In no instance shall any principal, indemnitor, or obligee of the Company or any
claimant against a principal, indemnitor, or obligee of the Company have any
rights under this Agreement.

                                   ARTICLE II

TERM

     This Agreement shall apply to losses discovered during the 15-month term
from October 1, 2003 through December 31, 2004, both days inclusive. At the
option of either the Company or the Reinsurer, this Agreement may be cancelled
at anytime during its term, by either party hereto providing the other party
with 60 calendar days prior written notice of its intention to cancel this
Agreement.

     Notwithstanding the expiration of this Agreement as hereinabove provided,
its provisions shall continue to apply to all unfinished business hereunder to
the end that all obligations and liabilities incurred by each party hereunder
shall be fully performed and discharged.

                                   ARTICLE III

TERRITORY

     This Agreement shall be worldwide in geographical scope as per original
bonds.

                                   ARTICLE IV

EXCLUSIONS

     This Agreement does not cover:

     A.   Business accepted by the Company as reinsurance from other insurance
          companies or associations; however, this exclusion shall not apply to
          CNA Surety Corporation and business assumed from CNA.

     B.   Any loss or liability accruing to the Company directly or indirectly
          from any business written by or through any pool or association
          including pools or associations under which membership by the Company
          is required under any statutes or regulations.

     C.   All liability of the Company arising by agreement, operation of law,
          or otherwise from its participation or membership, whether voluntary
          or involuntary, in any Insolvency Fund. "Insolvency Fund" includes any

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<PAGE>
          Guaranty Fund, Insolvency Fund, Plan, Pool, Association, Fund, or
          other arrangement, howsoever denominated, established or governed,
          which provides for any assessment of, or payment, or assumption by the
          Company of part or all of any claim, debt, charge, fee, or other
          obligation of an insurer, or its successors, or assigns which has been
          declared by any competent authority to be insolvent or which otherwise
          is deemed unable to meet any claim, debt, charge, fee, or other
          obligation in whole or in part.

     D.   Co-surety bonds not controlled in their entirety by the Company ("not
          controlled in their entirety" means the Company does not have a
          contractual agreement with the producing agent and has not received
          the premium from or paid a commission to the producing agent on the
          bond(s) in question, or co-surety bonds on which the Company has
          accepted liability as an accommodation to the lead co-surety in lieu
          of the Company exercising its customary due diligence in reliance upon
          its established underwriting standard as evidenced by its case file).

     E.   Bank Depository Bonds that exceed $25,000,000 in the aggregate during
          the 12-month calendar year (being January 1 through December 31) of
          this Agreement, as respects each insured Commercial Bank or each
          insured chartered Savings Bank having minimum assets of at least
          $100,000,000. The $25,000,000 limit shall include either a single bond
          in the amount of $25,000,000 (that has been written with a special
          acceptance) written in favor of one depositor or multiple bonds issued
          to the same bank amounting to $25,000,000, in the aggregate, written
          in favor of multiple depositors.

     F.   Bonds classified by the Surety Association of America as class codes
          580, 581 or 597 and the following bonds associated with or
          guaranteeing:

          1.   Bonds associated with commercial investment and loan guarantees.

          2.   Guarantees of corporate debt.

          3.   Note guarantee bonds.

          4.   Net asset value/money market bonds.

          5.   Refundment guarantees.

          6.   Guarantees of principal and interest.

          7.   Municipal bonds.

          8.   Mortgage deficiency bonds.

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<PAGE>
          9.   Any fluctuation in financial markets or commodity prices.

          10.  Inaccuracy of any currency valuations.

          11.  Overpayments of any financial obligations for any reasons
               including, but not limited to accounts receivable coverage.

          12.  Golden parachute coverage.

          13.  Guarantees of bank letters of credit.

          14.  Guarantees of mortgage backed securities.

          15.  Film guarantees.

          16.  Student loans.

          17.  Weather-related insurance.

          18.  Structured financial transactions originating or residing in the
               debt or capital markets.

          19.  Collateralized loan obligations (CLO) and/or collateralized bond
               obligations (CBO) collectively known as collateralized debt
               obligations, including but not limited to conventional CLO's,
               synthetic CLO's and/or balance sheet CLO's.

          20.  Instruments designed to guarantee funded credit transactions,
               including, but not limited to contingent capital products,
               contingent liquidity products and/or contingent equity products
               which raise capital by selling securities or provide event
               liquidity subject to certain conditions being met.

          21.  Instruments designed to guarantee credit wraps, transactions that
               provide credit substitution and/or credit enhancement of loans,
               underlying asset backed securities, municipal bonds that directly
               enhance the credit risk of debt securities to investors.

          22.  Instruments designated as bonds that guarantee the performance of
               assets that are securitized into marketable securities for sale
               to investors.

     G.   Bail Bonds.

     H.   Business written under the Small Business Administration's Surety Bond
          Guarantee Program.

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<PAGE>
     I.   Advance Payment Bonds except those that cover partial payments not to
          exceed 25% of Construction or Supply Bonds.

     J.   Bonds commonly known as Completion Bonds, that involve an undertaking
          by the surety to a lender to a construction project to the effect that
          the project shall be completed, free of liens, whether or not the
          owner or user of the project performs its obligations to the
          contractor; provided, however, that any such bonds which are dual
          obligee bonds wherein a so-called "Savings clause" (i.e., a provision
          to the effect that the lender as beneficiary of the bond is not
          entitled to indemnity there under if the owner or user of the project
          has not performed its obligations to the contractor) is utilized will
          not by reason of this exclusion be excluded from coverage hereunder.

     K.   Closure and Post Closure Bonds and bonds covering superfund hazardous
          waste removal which are written with an effective date on or after
          January 1, 2002.

     L.   Qualifying Bonds of insurance companies with a rating of less than AAA
          (S & P) and/or A+ (A.M. Best), which are written with an effective
          date on or after January 1, 2002.

     M.   Lease Bonds with a term exceeding 5 years or with covenants to build.

     N.   Bonds written at the request of the Company's bond claim department.

     O.   Bonds guaranteeing payment of settlements to third party
          administrators.

     P.   Losses arising from a principal where the Company has received notice
          of claim for said principal prior to the inception of this Agreement.

     Q.   SEC liability bonds.

     R.   Reclamation bonds (except for aggregate sand and gravel pits and strip
          coal mining where such obligations are incidental to the principal's
          overall obligations) which are written with an effective date on or
          after January 1, 2002.

     S.   Surety bonds issued or written where principal is owned by, affiliated
          with, or a subsidiary of either the Company or CNA Financial
          Corporation.

     T.   Black lung or United Mine Workers of America bonds that are written
          with an effective date on or after January 1, 2002.

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<PAGE>
     U.   Surety bonds covering contracts with expected durations in excess of
          five years at contract inception, exclusive of construction warranties
          or change orders.

     V.   Ship building.

     W.   Excess FDIC.

     X.   Surety loss attributable to a certified act of terrorism as defined by
          the Federal Terrorism Risk Insurance Act of 2002.

     Y.   Excess SIPC bonds.

     The Company may submit in writing to the Reinsurer for special acceptance
     hereunder business not covered by this Agreement. If said business is
     accepted by the Reinsurer it shall be subject to the terms of this
     Agreement, except as such terms are modified by such acceptance. Any loss
     occurring on an excluded bond shall be ignored in determining the Company's
     ultimate net loss for the purposes of this Agreement.

                                    ARTICLE V
DEFINITIONS

     The following definitions shall apply to this Agreement:

     A.   "Aggregate bonded work program" shall mean the following:

          1.   As respects principals for which the Company provides contract
               bonds primarily in connection with construction contracts, the
               greater of: (a) the aggregate line of authority issued by the
               Company for bonded construction contracts or supply contracts
               issued, or (b) the uncompleted portion of bonded construction
               contracts or supply contracts, including the principal's share of
               joint ventures, outstanding bid bonds where the contract shall be
               bonded, and excluding cost-plus contracts not subject to
               guaranteed maximum prices, at the time a bond is executed.

          2.   As respects principals for which the Company provides contract
               bonds either primarily in connection with contracts for machinery
               made to a special order and which bonds are classified as Class A
               or Class A-1 in the Contract section of the Surety Association of
               America manual, or in connection with contracts for the supply of
               goods or services, the greater of: (a) the aggregate line of
               authority issued by the Company and outstanding at the time a
               bond is executed, or (b) the aggregate of bond penalties for all
               bonds, including bid bonds, known to the Company as outstanding
               at the time a bond is executed.

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<PAGE>
          3.   As respects contract principals with incidental Commercial Surety
               exposure, the aggregate bonded work program shall be the greater
               of: (a) the aggregate line of authority issued by the Company for
               bonded construction contracts or supply contracts issued, or (b)
               the uncompleted portion of bonded construction contracts or
               supply contracts, including the principal's share of joint
               ventures, outstanding bid bonds where the contract will be
               bonded, and excluding cost-plus contracts not subject to
               guaranteed maximum prices, at the time a bond is executed plus
               the aggregate of bond penalties for all non-contract bonds, known
               to the Company as outstanding at the time a bond is executed.

     B.   "Bond" shall mean any bond, undertaking, guarantee, indemnity, binder,
          or other obligation, including riders and endorsements and letters and
          agreements in connection therewith, at any time issued, assumed or
          accepted by the Company and classified by the Company as Surety
          business at the effective date of such business.

     C.   "Bonded aggregate liability" as respects International Business shall
          mean the sum of:

          1.   for performance and/or payment bonds with limits greater than 50%
               of the contract price, the uncompleted portion of bonded
               construction contracts including the principal's share of joint
               ventures bonded by the Company, outstanding bids approved by the
               Company and the Company's portion of the contract being bonded,
               excluding bonded cost-plus contracts not subject to guaranteed
               maximum prices, plus:

          2.   the outstanding penal sum of low penalty bonds (bond with limits
               below 50% of the contract price) and all other bonds (including
               those on supply/furnish and install contracts) bonded by the
               Company at the time a bond is executed.

     D.   "Contract Surety business" shall mean principals for which the Company
          provides contract bonds primarily in connection with construction
          contract(s) and/or primarily in connection with contracts for
          machinery made to a special order and which bonds are classified as
          Class A or Class A-1 in the Contract section of the Surety Association
          of America manual, and/or in connection with contracts for the supply
          of goods or services. Contract Surety business may contain incidental
          Commercial Surety exposure. "Incidental Commercial Surety exposure" is
          defined as 12.5% of the overall bonded exposure up to a maximum of
          $25,000,000 related to bonds that are classified in the Non-Contract
          section of the Surety Association of America manual.

     E.   "Gross net written premium income" shall mean the gross written
          premium accounted for by the Company under all surety business

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<PAGE>
          reinsured hereunder during the term of this Agreement, less deductions
          for return premiums and cancellations, and less premiums, if any, paid
          by the Company for facultative reinsurances or treaty reinsurances,
          recoveries from which would inure to the benefit of the Reinsurers
          hereon.

     F.   "Loss discovered" shall mean the following:

          The Company shall have discovered a loss when the Company has incurred
          a loss of $5,000,000 or more for each principal through the
          establishment of a reserve, payment of loss or allocated expenses,
          assumption of a liability to prevent a default, or a combination
          thereof. Any loss discovered under the Company's previous Surety
          Excess of Loss Reinsurance Agreement or its 24-month extended
          discovery period cannot also be a discovered loss subject to the terms
          and conditions of this Agreement. Likewise, the principal, IT Group,
          being a known loss, cannot be discovered under this Agreement.

     G.   "Principal" shall mean one or more firms or corporations under the
          same management or control, or one or more persons or entities for
          whom bonds were executed in reliance upon the indemnity of the same
          person, firm or corporation, or in reliance upon the indemnity of a
          related group of persons, firms or corporations.

     H.   "Total industry-wide aggregate work program" shall mean the following:

          1.   As respects principals for which the Company provides contract
               bonds primarily in connection with construction contracts either
               as sole surety or as part of a co-surety/shared account
               arrangement, the greater of: (a) the total aggregate line of
               authority issued by the Company in addition to all participating
               co-sureties/shared account arrangements for bonded and unbonded
               construction contracts or supply contracts issued, or (b) the
               total uncompleted portion of bonded and unbonded construction
               contracts or supply contracts of all the participating
               co-sureties or sureties in a sharing arrangement, including the
               principal's share of joint ventures, outstanding bids and the
               contract being bonded and excluding cost-plus contracts not
               subject to guaranteed maximum prices, at the time a bond is
               executed.

          2.   As respects principals for which the Company provides contract
               bonds either primarily in connection with contracts for machinery
               made to a special order and which bonds are classified as Class A
               or Class A-1 in the Contract section of the Surety Association of
               America manual, or in connection with contracts for the supply of
               goods or services, the greater of: (a) the total aggregate line
               of authority issued by the Company and outstanding at the time a
               bond is executed which includes co-surety/shared account

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<PAGE>
               arrangements, or (b) the total aggregate of bond penalties for
               all bonds, including bid bonds, known to the Company as
               outstanding at the time a bond is executed, including
               co-surety/shared account arrangements.

     I.   "Ultimate Net Loss" shall mean all loss and allocated expense payments
          made by the Company in the investigation, defense, settlement, or
          mitigation of claims or potential claims (including the prevention of
          defaults) on the surety business of the Company and in the recovery or
          attempted recovery of such payments, plus 90% extra contractual
          obligations, if any, as defined herein, less salvage and subrogation
          recoveries and less amounts due from reinsurance which inures to the
          benefit of this Agreement, whether collectible or not. Office expenses
          and salaries of employees of the Company or any subsidiary or related
          or wholly owned company of the Company are not allocated expense
          payments. If the Company becomes insolvent, this definition shall be
          modified to the extent set forth in the Insolvency Article.

                                   ARTICLE VI

RETENTION AND LIMIT

     No claim shall be made hereunder unless the Company has first sustained an
ultimate net loss in excess of $12,000,000 each principal. The Reinsurer shall
then be liable for the amount of ultimate net loss in excess of $12,000,000 each
principal. The limit of liability to the Reinsurer shall not exceed $3,000,000
ultimate net loss, each principal.

                                   ARTICLE VII

REINSTATEMENTS

     The Reinsurer agrees that in the event of the whole or any portion of the
liability hereunder being exhausted by an ultimate net loss, each principal, the
amount so exhausted shall be automatically reinstated from the time of discovery
of such loss, provided always that the Reinsurer's liability hereon shall not
exceed $3,000,000 in respect of any one ultimate net loss, each principal, nor
more than $12,000,000 for all ultimate net losses during the term of this
Agreement, subject to the provisions of the Warranties Article.

     For the first reinstatement hereunder, the Company shall pay an additional
premium calculated at pro rata of the amount reinstated applied to $1,500,000.
As respects the second reinstatement hereunder, the Company shall pay an
additional premium calculated at pro rata of the amount reinstated applied to
$2,500,000. For the third and final reinstatement hereunder the Company shall
pay an additional premium calculated at pro rata of the amount reinstated
applied to $2,500,000.

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<PAGE>
                                  ARTICLE VIII

NET RETAINED LINES

     This Agreement applies to only that portion of any insurance or reinsurance
which the Company retains net for its own account, prior to the deduction of any
underlying reinsurance and in calculating the amount of loss hereunder and also
in computing the amount or amounts in excess of which this Agreement attaches,
only loss in respect of that portion of any insurance or reinsurance which the
Company retains net for its own account prior to deduction of any underlying
reinsurance, shall be included. The amount of the Reinsurer's liability
hereunder shall not be increased by reason of the inability of the Company to
collect from any other reinsurers, whether specific or general, any amounts
which may have become due from them, whether such inability arises from the
insolvency of such other reinsurers or otherwise.

                                   ARTICLE IX

PREMIUM

     Upon execution of this Agreement by both parties hereto the Company shall
pay to the Reinsurer $300,000 which shall be considered fully earned when
received by the Reinsurer.

     If the Company makes a claim to the Reinsurer hereunder, at the time the
Reinsurer pays the Company for that loss, the Company shall pay the Reinsurer an
additional premium of fifty percent of the amount of the paid loss. For the
avoidance of doubt, the additional premium described in this paragraph of
Article IX - Premium shall not apply to the Company as respects any payments
that may be made hereunder by the Reinsurer under the reinstatement provisions
in Article VII - Reinstatements.

                                    ARTICLE X

OTHER REINSURANCE

     The Company agrees to notify the Reinsurer in writing as soon as practical
of any other reinsurance covering business which is subject to this Agreement.
The Company shall notify the Reinsurer of any changes in treaty share
reinsurance arrangements as soon as practical.

                                   ARTICLE XI

EXTRA CONTRACTUAL OBLIGATIONS

     A.   This Agreement shall indemnify the Company, within the limits of this
          Agreement, for extra contractual obligations awarded by a court of
          competent jurisdiction against the Company arising from the surety
          business reinsured hereunder. Such extra contractual obligation shall
          be

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<PAGE>
          added to the amount of the loss within the Company's bond limit and
          the sum thereof shall be considered one loss subject to the exclusions
          and limitations set forth in this Agreement.

     B.   "Extra contractual obligations" are defined as those damages for which
          the Company is liable to pay that are not covered under any other
          provision of this Agreement including but not limited to compensatory,
          punitive damages and related expenses that are assessed against the
          Company because of alleged or actual bad faith or negligence on its
          part in the handling of any claim on the business reinsured hereunder
          brought by any principal, indemnitor, obligee or claimant (hereinafter
          referred to in this definition as "Principal") for which a contractual
          loss has been incurred by the Company.

     C.   The date on which an extra contractual obligation is incurred by the
          Company shall be deemed, in all circumstances, to be the date such
          extra contractual obligation claim combined with the underlying
          contractual claim meets the definition of loss discovered, as defined
          herein; it being understood that such extra contractual obligation
          claim is directly related to an underlying contractual claim. For the
          purposes of this Article, "underlying contractual claim" shall mean
          any claim made on business covered hereunder and for which a loss has
          been incurred by the Company.

     D.   However, coverage hereunder as respects extra contractual obligations
          shall not apply where the loss has been incurred due to the fraud of a
          member of the board of directors or a corporate officer of the Company
          or a Company employee with claim settlement authority acting
          individually or collectively or in collusion with any individual or
          corporation or any other organization or party involved in the
          presentation, defense or settlement of any surety claim covered
          hereunder nor shall it apply to non-claim related expenses.

     E.   Recoveries, collectibles or retention from any other form of insurance
          or reinsurance including, but not limited to, deductibles or
          self-insured retention which protect the Company against extra
          contractual obligations shall inure to the benefit of the Reinsurer
          and shall be deducted from the total amount of extra contractual
          obligations for purposes of determining the loss hereunder.

     F.   If any provisions of this Article shall be rendered illegal or
          unenforceable by the laws, regulations or public policy of any state,
          such provision shall be considered void in such state, but this shall
          not affect the validity or enforceability of any other provision of
          this Article or the enforceability of such provision on any other
          jurisdiction.

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<PAGE>
     G.   Extra contractual obligations shall not include losses arising solely
          out of any non-claim activity including but not limited to
          underwriting decisions of the Company, engineering or other services
          provided by the Company.

                                   ARTICLE XII

LOSS NOTICES AND SETTLEMENTS

     The Company shall provide the Reinsurer with written notice of all gross
incurred losses of $5,000,000 or more within 60 calendar days of establishing a
reserve or making a payment, or, that in the opinion of the Company, may involve
the Reinsurer under this Agreement, and of all subsequent developments
pertaining thereto that may materially affect the Reinsurer as well. Inadvertent
omission in dispatching the aforementioned notices shall in no way affect the
obligation of the Reinsurer under this Agreement, provided the Company informs
the Reinsurer of such omission promptly upon discovery.

     The Company shall have the right to settle all claims under its bonds, to
make any loan or advance, which amount shall be deemed a loss hereunder, or to
guarantee a loan or advance made by others to either the principal on such bond
or in any other manner it shall so desire. The settlements, provided they are
within the terms of this Agreement, shall be unconditionally binding on the
Reinsurer. Amounts due the Company hereunder in the settlement of losses and
loss expenses shall be payable by the Reinsurer immediately upon provision by
the Company of the documented settlement and/or loss amounts and expenses
subject to this Agreement.

     All salvages, recoveries or reimbursements, after deduction of expenses
applicable thereto, recovered or received subsequent to a loss settlement under
this Agreement shall be applied as if recovered or received prior to the
aforesaid settlement and all necessary adjustments shall be made by the parties
hereto.

                                  ARTICLE XIII

OFFSET

     The Company and the Reinsurer hereunder shall be entitled to deduct from
amounts due the other party under this Agreement any amounts due itself from the
other party under this Agreement.

                                   ARTICLE XIV

SALVAGE AND SUBROGATION

     Unless the Company and the Reinsurer agree to the contrary, the Company
shall enforce its right to salvage and/or subrogation and shall prosecute all
claims arising out of

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<PAGE>
such right to recover its loss from an obligee, indemnitor, or any other party
who caused or contributed to its loss or part thereof. Amounts recovered from
salvage and/or subrogation shall always be used to reimburse the excess
reinsurers (including the Company, should it carry a portion of excess coverage
net) in the reverse order of the participation in the loss before being used in
any way to reimburse the Company for the loss within its primary retention
hereunder.

     If the amount recovered from salvage and/or subrogation exceeds the
recovery expense, the recovery expense shall be borne by each party in
proportion to its benefits from the recovery. If the recovery expense exceeds
the amount recovered, the amount recovered (if any) shall be applied to the
reimbursement of recovery expense and the remaining expense as well as any
originally incurred loss expense shall be added to the ultimate net loss.

                                   ARTICLE XV

WARRANTIES

     The Company warrants that:

     A.   As respects Commercial Surety business, for any new commercial
          accounts written on and after January 1, 2002, or in force commercial
          accounts written with a limit of $25,000,000 or less and covered under
          this Agreement, the maximum limit, per commercial account, shall be no
          greater than $25,000,000.

          The Company also warrants a maximum limit of liability of $25,000,000
          as respects in force commercial accounts with a limit of $25,000,000
          or less, which are renewed on and after January 1, 2002.

          The Company warrants that, with respect to "renewed and in force
          commercial accounts with an aggregate limit in excess of $25,000,000"
          covered under this Agreement, the Reinsurer's maximum per principal
          limit shall not exceed $5,000,000. "Renewed and in force commercial
          accounts with an aggregate limit in excess of $25,000,000" shall mean
          any commercial account that, as of January 1, 2002, has an aggregate
          outstanding bond liability in excess of $25,000,000.

          Should a loss occur on "renewed and in-force commercial accounts with
          an aggregate limit in excess of $25,000,000" where the Company also
          writes contract bonds, the amount of loss that shall apply to the
          aggregate limit of liability for "renewed and in-force commercial
          accounts with an aggregate limit in excess of $25,000,000" shall be
          determined by multiplying the ratio of the total commercial losses for
          the principal divided by the sum of contract and commercial losses for
          the principal times the total loss for the principal to this
          Agreement.

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<PAGE>
          It is mutually understood and agreed by and between the Company and
          the Reinsurer that the limits described in this Warranty A. are not in
          addition to, but are included within, the limits stated in Retention
          and Limit Article of this Agreement.

     B.   As respects domestic contract surety business (limited to principals
          domiciled in the United States, Canada, and Puerto Rico covering bond
          business written for contracts located within these territories and
          other United States territories and jurisdictions):

          For all new contract surety accounts written on or after January 1,
          2002, the Company's maximum Aggregate Bonded Work Program limit shall
          not exceed $150,000,000 for any one principal, nor shall the Total
          Industry-wide Aggregate Work Program (bonded and unbonded) exceed
          $400,000,000 any one principal either as sole Surety account or as a
          Co-surety/Shared account. In the event that a new contract surety
          account written on or after January 1, 2002 also contains commercial
          exposure, the Company warrants that the maximum limit of commercial
          exposure shall not exceed 12.5% of the overall bonded exposure or
          $25,000,000, whichever is lesser.

          Effective June 30, 2003, for all contract surety accounts in force
          prior to January 1, 2002, the Company's maximum Aggregate Bonded Work
          Program limit shall not exceed $200,000,000 for any one principal, nor
          shall the Total Industry-wide Aggregate Uncompleted Work Program
          (bonded and unbonded) exceed $400,000,000 any one principal either as
          a sole Surety account or as a Co-surety/Shared account.

     C.   As respects international contract surety business produced and
          underwritten by the International Division (limited to principals
          domiciled in foreign countries except for Canada and Puerto Rico but
          which may conduct business in the United States):

          1.   The Company's maximum bonded aggregate liability on all bonds
               written in foreign countries shall not exceed $50,000,000 any one
               principal.

          2.   The sum of (a) the Company's portion of the bonded aggregate
               liability on all bonds written in foreign countries, and (b) the
               Company's portion of the aggregate bonded liability on all bonds
               written in the United States shall not exceed $75,000,000 any one
               principal.

     D.   All special acceptances made by reinsurers prior to the inception of
          this Agreement shall also apply to this Agreement whether or not the
          Reinsurer participated in the prior years agreements. It is mutually
          understood and

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<PAGE>
          agreed by and between the Company and the Reinsurer that any special
          acceptances made by reinsurers who participate in layers of
          reinsurance contracts above this Agreement shall also apply to this
          Agreement.

          However, it is mutually understood and agreed by and between the
          Company and the Reinsurer that any accounts subject to special
          acceptance as a result of the inclusion of commercial bonds in the
          definitions of "Aggregate bonded work program" and "Contract Surety
          business", or in Warranty B with respect to new contract accounts
          written on or after January 1, 2002, are not covered under this
          Agreement.

                                   ARTICLE XVI

DELAYS, ERRORS, OR OMISSIONS

     Inadvertent delays, errors, or omissions made in connection with this
Agreement or any transaction hereunder shall not relieve either party from any
liability that would have attached had such delay, error, or omission not
occurred, provided always that such error or omission is rectified immediately
upon discovery.

                                  ARTICLE XVII

ENTIRE AGREEMENT AND MODIFICATION

     This Agreement constitutes the entire agreement between the parties with
respect to the business reinsured hereunder and there are no understandings
between the parties other than as expressed herein. Any change or modification
to this Agreement shall be made by Endorsement to this Agreement, in writing,
signed by the parties, and said Endorsement shall form a part of this Agreement.

                                  ARTICLE XVIII

ACCESS TO RECORDS

     Upon reasonable notice, the Reinsurer, or its designated representative,
shall have access at any reasonable time to inspect and audit the books and
records of the Company which pertain in any way to this Agreement and it may
make copies of any records pertaining thereto, at its own expense. This right of
inspection, audit and information shall survive expiration of this Agreement and
shall run to the natural expiration of all liabilities reinsured hereunder.

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<PAGE>
                                   ARTICLE XIX

CONFIDENTIALITY

     The Reinsurer hereby acknowledges that the documents, information and data
provided to it by the Company, whether directly or through an authorized agent,
in connection with the placement, execution, or performance of this Agreement
(hereinafter called the "Confidential Information") are proprietary and
confidential to the Company. Confidential Information shall not include
documents, information or data that the Reinsurer can show: (i) is publicly
known or has become publicly known through no unauthorized act of the Reinsurer,
(ii) has been rightfully received from a third person without obligation of
confidentiality, or (iii) was known by the Reinsurer prior to the placement of
this Agreement without an obligation of confidentiality.

     The Reinsurer agrees not to disclose any Confidential Information; however,
this provision shall not apply to disclosures made by the Reinsurer, in the
ordinary course of business, to its retrocessionaires, auditors, accountants, or
regulatory agencies, arbitration panels or courts of law.

                                   ARTICLE XX

INSOLVENCY

     (If more than one reinsured Company is referenced in the Preamble to this
     Agreement, this Article shall apply severally to each such Company.)

     In the event of the insolvency of the Company, this reinsurance shall be
payable directly to the Company, or to its liquidator, receiver, conservator or
statutory successor 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 claim. It is agreed, however, that the liquidator,
receiver, conservator or statutory successor of the Company shall give written
notice to the Reinsurer of the pendency of a claim against the Company
indicating the policy or bond reinsured, which claim would involve a possible
liability on the part of the Reinsurer within a reasonable time after such claim
is filed in the conservation or liquidation proceeding or in the receivership,
and that during the pendency of such claim, the Reinsurer may investigate such
claim and interpose, at their own expense, in the proceeding where such claim is
to be adjudicated any defense or defenses that they 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.

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<PAGE>
     As to all reinsurance made, ceded, renewed or otherwise becoming effective
under this Agreement, the reinsurance shall be payable as set forth above by the
Reinsurer to the Company or to its liquidator, receiver, conservator or
statutory successor, except as provided by Sections 4118(a)(1)(A) and 1114(c) of
the New York Insurance Law or except (1) where the Agreement specifically
provides another payee in the event of the insolvency of the Company, or (2)
where the Reinsurer, with the consent of the direct insured or insureds, have
assumed such bond or policy obligations of the Company as direct obligations of
the Reinsurer to the payees under such policies and in substitution for the
obligations of the Company to such payees. Then, and in that event only, the
Company, with the prior approval of the certificate of assumption on New York
risks by the Superintendent of Insurance of the State of New York, is entirely
released from its obligation and the Reinsurer shall pay any loss directly to
payees under such bond or policy.

                                   ARTICLE XXI

ARBITRATION

     As a precedent to any right of action hereunder, if any dispute shall arise
between the parties to this Agreement with reference to the interpretation of
this Agreement or their rights with respect to any transaction involved, whether
such dispute arises before or after termination of this Agreement, such dispute,
upon the written request of either party, shall be submitted to three
arbitrators, one to be chosen by each party, and the third by the two so chosen.
If either party refuses or neglects to appoint an arbitrator within 30 days
after the receipt of written notice from the other party requesting it to do so,
the requesting party may appoint two arbitrators. If the two arbitrators fail to
agree in the selection of a third arbitrator within 30 days of their
appointment, each of them shall name two, of whom the other shall decline one
and the decision shall be made by drawing lots. All arbitrators shall be active
or retired disinterested, impartial officers of insurance or reinsurance
companies or Underwriters at Lloyd's, London not under the control of either
party to this Agreement.

     The arbitrators shall interpret this Agreement as an honorable engagement
and not as merely a legal obligation. They are relieved of all judicial
formalities and may abstain from following the strict rules of law. They shall
make their award with a view to effecting the general purpose of this Agreement
in a reasonable manner rather than in accordance with a literal interpretation
of the language. Each party shall submit its case to its arbitrator within
thirty days of the appointment of the third arbitrator.

     The decision in writing of any two arbitrators, when filed with the parties
hereto, shall be final and binding on both parties. Judgment may be entered upon
the final decision of the arbitrators in any court having jurisdiction. Each
party shall bear the expense of its own arbitrator and shall jointly and equally
bear with the other party the expense of the third arbitrator and of the
arbitration. The arbitrators are prohibited from awarding punitive, exemplary
and/or treble damages of whatever nature in connection with any arbitration
proceeding concerning this Agreement.

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<PAGE>
     Said arbitration shall take place in Chicago, Illinois unless some other
place is mutually agreed upon by the parties to this Agreement.

                                  ARTICLE XXII
TAXES

     The Company shall pay all taxes on premiums reported to the Reinsurer on
this Agreement.

                                  ARTICLE XXIII

FEDERAL EXCISE TAX

     (This Article applies to reinsurers domiciled outside the United States of
     America, excepting Underwriting Members of Lloyd's, London and other
     reinsurers exempt from Federal Excise Tax.)

     The Reinsurer shall allow for the purpose of paying Federal Excise Tax the
applicable percentage of the premium payable hereon (as imposed under Section
4371 of the Internal Revenue Service Code) to the extent such premium is subject
to such tax. In the event of any return of premium, the Reinsurer shall deduct
the aforesaid percentage from the return premium payable hereon and the Company
or its agent shall recover such tax from the United States Government.

                                  ARTICLE XXIV

CURRENCY

     Wherever the word "Dollars" and the sign "$" appear in this Agreement, they
shall be construed to mean United States Dollars, except in those cases where
the policies are issued by the Company in Canadian Dollars, in which case they
shall mean Canadian Dollars.

     In the event of the Company being involved in a loss requiring payment in
United States and Canadian Currency, the Company's retention and the amount
recoverable hereunder shall be apportioned to the two currencies in the same
proportion as the amount of ultimate net loss in each currency bears to the
total amount of ultimate net loss paid by the Company.

     For purposes of this Agreement, where the Company receives premiums or pays
losses in currencies other than United States or Canadian Currency, such
premiums and losses shall be converted into United States Dollars at the actual
rates of exchange at which these premiums and losses are entered in the
Company's books.

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Page 19 of 22
<PAGE>
                                   ARTICLE XXV

AGENCY

     For purposes of sending and receiving notices and payments required by this
Agreement, the reinsured company that is set forth first in the definition of
"Company" in the Preamble to this Agreement shall be deemed the agent of all
other reinsured companies referenced in the Preamble. In no event, however,
shall any reinsured company be deemed the agent of another with respect to the
terms of the Insolvency Article.

                                  ARTICLE XXVI

NOTICES

Any notice relating to this Agreement shall be in writing and shall be
sufficiently given if delivered by hand, certified mail, or via nationally
recognized overnight courier to the Reinsurer at the following address:

     Continental Casualty Company
     Attn.: Chief Financial Officer
     333 South Wabash Avenue
     Chicago, IL 60604

and to the Company at the following address:

     Western Surety Company
     Attn.: Chief Executive Officer
     Sioux Falls, South Dakota  57117-5077

                                  ARTICLE XXVII

CHOICE OF LAW

     This Agreement, including all matters relating to formation, validity and
performance thereof, shall be interpreted in accordance with the law of the
State of Illinois.

                                 ARTICLE XXVIII

SPECIAL PROVISION

At any time subsequent to the inception of this Agreement:

A.   should the ownership, control or management of the Company or the Reinsurer
     be altered or changed, in whole or in part, in such a way that receipt or
     payment of funds

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Page 20 of 22
<PAGE>
     or any other contemplated transaction under this Agreement would be
     prohibited by United States of America statute, regulation and/or other
     applicable law, or

B.   should the Company or the Reinsurer become subject to restrictions imposed
     by the United States government, so that receipt or payment of funds or any
     other contemplated transaction under this Agreement would be prohibited by
     United States of America statute, regulation and/or other applicable law,

the Company or the Reinsurer must immediately notify the other party of same in
writing via certified, registered, or internationally recognized overnight
courier service, and the obligation to pay or receive funds or otherwise perform
under this Agreement shall be suspended until such time as the Company or the
Reinsurer are authorized by applicable law, regulation, or license to perform
under this Agreement.

IN WITNESS WHEREOF the parties acknowledge that no intermediary is involved in
or brought about this transaction, and the parties hereto, by their authorized
representatives, have executed this Agreement:

on this       day of           2003

WESTERN SURETY COMPANY

By:
    ------------------------------------

Name:
      ----------------------------------

Title:
       ---------------------------------

and on this        day of           2003

UNIVERSAL SURETY OF AMERICA

By:
    ------------------------------------

Name:
      ----------------------------------

Title:
       ---------------------------------

Effective: 10/1/03
Page 21 of 22
<PAGE>
and on this        day of           2003

SURETY BONDING COMPANY OF AMERICA

By:
    ------------------------------------

Name:
      ----------------------------------

Title:
       ---------------------------------

and on this        day of           2003

CONTINENTAL CASUALTY COMPANY

By:
    ------------------------------------

Name:
      ----------------------------------

Title:
       ---------------------------------

Effective: 10/1/03
Page 22 of 22

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