Document:

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                                                                   Exhibit 10.11

                      TRANSITIONAL ADMINISTRATIVE AGREEMENT

      This Transitional Administrative Agreement (the "Agreement") is made and
entered into to be effective as of January 1, 2004 (the "Effective Date") by and
among ProCentury Corporation, an Ohio corporation ("ProCentury"), Evergreen
National Indemnity Corporation ("Evergreen"), and Continental Heritage Insurance
Company ("CHIC").

                                    RECITALS

A.    ProCentury is the sole shareholder of Century Surety Company, an Ohio
      domiciled property and casualty company ("Century").

B.    As of the date of this Agreement, Century is the controlling shareholder
      of Evergreen, which in turn is the sole shareholder of CHIC. Both
      Evergreen and CHIC are Ohio domiciled property and casualty companies.
      Evergreen and CHIC are hereinafter sometimes referred to collectively as
      the "Companies" and each individually as a "Company."

C.    The parties anticipate that, immediately prior to the effectiveness of,
      and in order to facilitate, ProCentury's initial public offering of common
      shares (the "IPO") which is presently anticipated to occur during the
      first calendar quarter of 2004, ProCentury shall divest itself of its
      ownership interest in the Companies, and such Companies shall cease to be
      part of ProCentury's insurance holding company system, through and as a
      result of a spin-off by ProCentury of the Companies to its pre-IPO voting
      shareholders (the "Spin-off").

D.    ProCentury (directly or through Century) historically has provided the
      Companies with all executive, managerial, supervisory, administrative,
      technical, claims handling, investment management, regulatory affairs,
      legal, accounting, financial reporting, professional and clerical services
      to operate their respective businesses (collectively, the "Services").

E.    To permit the Companies sufficient time to transition to independently
      operated companies, the Companies desire to engage ProCentury to provide
      certain Services to the Companies, and ProCentury desires to provide
      certain Services to the Companies, on the terms and conditions set forth
      herein.

F.    ProCentury and the Companies also wish to provide for certain other
      transitional matters on the terms and conditions set forth herein.

                             STATEMENT OF AGREEMENT

      The parties, in consideration of the mutual promises herein set forth, and
intending to be legally bound, do hereby agree as follows:
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            1. ENGAGEMENT; SERVICES. (A) As of the Effective Date, on the terms
and subject to the conditions described in this Agreement, each Company hereby
engages ProCentury, and ProCentury hereby accepts the engagement, to provide
such Services, from the menu of Services set forth in Section 1(B) below, as the
Companies shall request ProCentury to provide to one or both of the Companies
from time to time for the purpose of conducting their property and casualty
insurance businesses. ProCentury may, in its discretion and without notice to
the Companies, provide the Services directly or through any affiliate, including
Century. For the purposes of this Agreement, the performance of any Service by
or through an affiliate of ProCentury or such affiliate's employees, officers,
agents or representatives shall be deemed to be the performance of such Service
by ProCentury and its employees, officers, agents or representatives.

            (B) The Services shall include the following:

      (1)   maintenance of financing and accounting records and controls,
            including preparation and review of periodic financial statements
            and reports to be filed with insurance regulatory entities and those
            required to be prepared for any financial institutions or pursuant
            to indentures or other credit arrangements;

      (2)   cash management and investment services;

      (3)   billing and collection services and related record keeping and
            reports;

      (4)   tax management and administration, including filing of federal and
            state tax returns, tax reporting, examinations by governmental
            taxing authorities and tax planning;

      (5)   internal audit, compliance and control functions;

      (6)   human resource services;

      (7)   employee benefits services;

      (8)   legal department services;

      (9)   regulatory affairs services;

      (10)  payroll processing services;

      (11)  employee benefit plan access;

      (12)  mail room services;

      (13)  secretarial and other clerical services; and

      (14)  such other services as the Companies and ProCentury may agree to
            from time to time.

The Services to be performed by ProCentury during the initial term of this
Agreement (as provided for in Section 8(A) hereof) are all of those Services
identified in Section 1(B)(1) through Section 1(B)(13) above.

      At any time after the initial term of this Agreement, the Companies shall
have the right to eliminate particular Services upon not less than ninety (90)
days prior written notice to ProCentury. Unless expressly stated otherwise in
any such written notice, any such notice from or on behalf of one Company shall
apply to both Companies. The parties shall negotiate in good faith a reasonable
and customary decrease in the Administrative Fee (as defined in Section 7) upon
such elimination(s); provided, however, that nothing herein shall require a
decrease in the Administrative Fee if the elimination(s) are nominal or
immaterial in nature; and provided

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further, that for so long as ProCentury and the Companies are "affiliates"
within the meaning of Ohio Revised Code Section 3901.32, no decrease in the
Administrative Fee shall become effective until the parties have complied with
the notice requirements of Ohio Revised Code Section 3901.341.

      At any time, whether during or after the initial term of this Agreement,
the parties may negotiate and agree to add one or more Services pursuant to
Section 1(B)(14) above. Unless expressly agreed otherwise by the parties, such
additional Service(s) shall be provided to both Companies. The parties shall
negotiate in good faith a reasonable and customary increase in the
Administrative Fee upon such addition(s); provided, however, that nothing herein
shall require an increase in the Administrative Fee if the addition(s) are
nominal or immaterial in nature; and provided further, that for so long as
ProCentury and the Companies are "affiliates" within the meaning of Ohio Revised
Code Section 3901.32, no increase in the Administrative Fee shall become
effective until the parties have complied with the notice requirements of Ohio
Revised Code Section 3901.341.

      (C) Notwithstanding the foregoing, the parties understand and agree that
the Services rendered by ProCentury hereunder are not intended to, and do not,
include matters such as corporate acquisitions, divestitures and other major
nonrecurring special projects except as otherwise expressly agreed to by the
parties.

      (D) In providing the Services, ProCentury shall be responsible for
performing all ordinary operational functions of each Company (other than the
duties of President and Chief Financial Officer of each Company). ProCentury
shall have all authority necessary to carry out its duties under this Agreement
and shall act as an agent of each Company. ProCentury shall designate a Services
Coordinator to whom the Companies shall direct all comments and requests
regarding the Services, and all Services shall be performed under the
supervision and control of such Services Coordinator.

      (E) ProCentury shall provide the services of those employees necessary or
appropriate to provide the Services during the term of this Agreement. All such
persons shall be employees of ProCentury (or an affiliate thereof) and not of
either Company; provided, however, that, from and after the Spin-off, the
President and Chief Financial Officer of the Companies shall not be employed by
ProCentury (or an affiliate thereof) but each shall be an employee (and solely
the employee) of such Companies. If at any time the Companies reasonably
determine that the Services performed by any of the employees provided by
ProCentury are not satisfactory, the Companies shall so notify ProCentury's
Service Coordinator in writing and such Service Coordinator shall work with the
Companies in good faith to address the problem(s). ProCentury retains the right
to replace any person(s) performing Services with another person or persons of
comparable qualifications and skill without causing a breach of this Agreement.

      (F) During the term of this Agreement, ProCentury shall be entitled to
continue using its employees to conduct all of its business operations,
notwithstanding that such persons also shall be performing Services for the
Companies. To the extent reasonably possible, ProCentury and the Companies shall
jointly utilize the ProCentury employees who provide Services hereunder in a
cooperative manner consistent with the business interests and needs of both
parties.

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ProCentury shall direct its employees who perform Services to use all
commercially reasonable efforts to promote the general interests and economic
welfare of the Companies to the same extent as such employees do the same for
ProCentury and its affiliates other than the Companies.

      (G) The employees provided by ProCentury under this Agreement shall be
employees of ProCentury (or an affiliate thereof) and not of either Company.
Accordingly, ProCentury (or an affiliate thereof) shall be solely responsible
for filing all information and tax returns and issuing tax and other payroll
forms and reports with respect to wages paid to such employees. Neither Company
shall have any responsibility to provide any compensation or benefits to such
employees.

      2. TRADENAMES AND TRADEMARKS. Each Company hereby grants to ProCentury and
its affiliates (other than the Companies) a non-exclusive right to use its
corporate name, trade names, service marks and trade marks, together with any
stylized logos incorporating those names or marks, now or hereafter owned or
used by or in the business of each Company, but solely for the purpose of
performing and providing the Services under this Agreement.

      3. REINSURANCE AGREEMENTS; SOFTWARE LICENSING AGREEMENTS. (A) On or about
the Effective Date, the Companies shall enter into with Century, and ProCentury
shall cause Century to enter into with the Companies, one or more reinsurance
agreements for the purposes of allowing Century and the Companies to continue,
to the extent practicable and permissible under applicable law, their respective
insurance operations in a manner consistent with current and past business
practices.

      (B) On or about the Effective Date, the Companies shall enter into with
Century, and ProCentury shall cause Century to enter into with the Companies,
certain Software Licensing Agreements and Software Maintenance and Support
Agreements in the forms agreed to by the parties thereto.

      4. EXPENSE PAYMENTS. To the extent necessary for the purposes of carrying
out the Services, ProCentury (and its affiliates other than the Companies) shall
have authority to act as agent for each Company in collecting and disbursing
funds due to each Company and in paying expenses and other operating costs of
each Company.

      5. BOARD OF DIRECTORS' CONTROL. The officers and employees of ProCentury
(and those of its affiliates other than the Companies) and of each Company shall
be subject to the authority of their respective Boards of Directors. Each of the
Companies and ProCentury may appoint or elect its officers, subject at all times
to the power of its Board of Directors to appoint, elect or remove officers, in
accordance with its articles of incorporation, code of regulations, by-laws and
other governing documents, statutes or rules of law applicable to each
respective company.

      6. ALLOCATION OF COSTS AND EXPENSES. Except to the extent allocated under
other provisions of this Agreement, all out-of-pocket expenses incurred for
goods or services from third-party vendors or other unrelated parties that are
identifiable to one or both of the Companies, including without limitation legal
fees, audit fees, tax return preparation fees, travel

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expenses, stationery, supplies, automobiles, and items of a similar nature,
shall be charged to the Companies. All expenses allocated to the Companies under
this Section 6 shall be paid by the Companies not later than fifteen (15) days
after such expenses are invoiced.

      7. ADMINISTRATIVE FEE. In addition to the expense allocations in Section
6, the Companies shall pay an administrative fee to ProCentury (the
"Administrative Fee") to be determined as follows:

      (A) For all Services provided by ProCentury hereunder to either or both
Companies, the Companies shall pay to ProCentury an Administrative Fee in the
aggregate annual amount of Nine Hundred Thousand Dollars ($900,000.00), which
Administrative Fee shall be due and payable in four equal quarterly
installments, with each installment being due and payable on the first day of
each calendar quarter during which this Agreement is in effect. The
Administrative Fee shall be prorated on a daily basis for periods during which
this Agreement is in effect which constitute less than a full calendar quarter.

      (B) At the request of either party on or about the first year anniversary
of this Agreement, the Administrative Fee shall be reviewed in good faith by
both parties to determine if adjustments are necessary or appropriate. If the
actual usage of the Services compared to that reasonably anticipated by the
parties as of the date of this Agreement (based on historical usage), or any
other material increase or material decrease in the level of Services provided
to the Companies, has occurred, the parties shall renegotiate the Administrative
Fee in good faith. Any such adjustment must be agreed to in writing by both
parties.

      (C) In the event that, at any time during the term of this Agreement, the
combined annualized gross written premiums of the Companies exceed, or are
anticipated to exceed, Fifty Million Dollars ($50,000,000.00), ProCentury shall
have the right to increase the Administrative Fee; provided that the amount of
such increase shall be negotiated in good faith by the parties. Any such
increase must be agreed to in writing by both parties. In calculating the
annualized gross written premiums of the Companies for this purpose, premiums
for bail business shall be determined on a gross premium basis.

      (D) Any payment due under this Agreement which remains unpaid after the
due date shall accrue interest per annum at the rate equal to the prime rate of
interest listed in the Wall Street Journal (Midwest Edition) as part of its
daily report on money rates plus one percent (1%) on the date the payment was
due until the date it is paid.

      (E) Notwithstanding anything in this Section 7 or otherwise to the
contrary, for so long as ProCentury and the Companies are "affiliates" within
the meaning of Ohio Revised Code Section 3901.32, the Administrative Fee shall
be equal to an amount which is no greater than that permitted pursuant to Ohio
Revised Code Section 3901.34(A), and no adjustment in the Administrative Fee
shall become effective until the parties have complied with the notice
requirements of Ohio Revised Code Section 3901.341.

      8. TERM AND TERMINATION. (A) The initial term of this Agreement shall
begin on the Effective Date and end eighteen (18) calendar months after the
Effective Date, and, except as

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provided in Section 8(B) below, shall be automatically renewed for one six (6)
month renewal term.

      (B) This Agreement may be terminated prior to the end of the initial term
or the renewal term, as applicable, as follows:

            (1) By the Companies, at the end of the initial term, upon not less
than ninety (90) days advance written notice to ProCentury;

            (2) Automatically, if any party or any insurance company affiliate
of a party becomes the subject of a liquidation or similar proceeding commenced
under Chapter 3925, Ohio Revised Code; applies for or consents to the
appointment of a receiver; makes a general assignment for the benefit of
creditors' admits in writing its inability to pay debts as they mature; files a
petition or answer seeking a reorganization or arrangement with creditors under
any insolvency law; or if a decree of any court is entered adjudging the party
to be insolvent or approving a reorganization or arrangement under any
insolvency law (which decree is not set aside within thirty days after it is
entered);

            (3) Immediately upon the expiration of thirty (30) days after any
party receives written notice of a material breach of its obligations under this
Agreement from the other party and such material breach remains uncured after
expiration of such thirty (30) day notice period; or

            (4) After ProCentury and the Companies cease to be "affiliates"
within the meaning of Ohio Revised Code Section 3901.32, upon not less than one
hundred eighty days (180) days advance written notice by ProCentury, as to any
Company the voting stock of which ceases to be controlled by ProAlliance
Corporation.

      Except as provided in Section 8(B)(4) above or as otherwise expressly
agreed to in writing by the parties, the termination of this Agreement as to one
Company shall cause the termination of this Agreement as to both Companies.

      If not earlier terminated, this Agreement shall automatically terminate at
the end of the renewal term unless the parties agree in writing to an extension
hereof. Any termination of this Agreement shall not affect the right to payment
of accrued fees or reimbursement of expenses for actions taken prior to
termination, nor the rights and obligations of the parties under Section 9, 10
11, 16 and this Section 8, nor shall any termination of this Agreement cause a
termination of any of the reinsurance or software agreements provided for in
Section 3 hereof.

      9. RELATIONSHIP OF PARTIES. In the performance of Services under this
Agreement, ProCentury (and its affiliates other than the Companies) shall at all
times be acting and performing the same solely as an independent contractor and
not as a joint venturer with or partner of either Company. ProCentury will
determine the method, details and means of performing the Services called for
hereunder. ProCentury agrees to obtain or provide workers' compensation coverage
for its employees (and those of its affiliates other than the Companies)
performing Services hereunder and to hold harmless and indemnify the Companies
for any and

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all claims arising out of any injury, disability or death of any such employees.
To the extent required by the Companies, ProCentury shall provide evidence of
appropriate liability insurance for its own (and its affiliates other than the
Companies) employees and operations. Notwithstanding this Agreement, ProCentury
shall be permitted to enter into additional management, support and/or
administrative service arrangements with persons other than the Companies.

      10. ARBITRATION. Any controversy, claim or dispute arising out of or
relating to this Agreement or the breach, termination, enforceability or
validity of this Agreement shall be determined exclusively by binding
arbitration in the City of Columbus, Ohio. The arbitration shall be governed by
the rules and procedures of the American Arbitration Association (the "AAA")
under its Commercial Arbitration Rules and its Supplementary Procedures for
Large, Complex Disputes; provided that persons eligible to be selected as
arbitrators shall be limited to persons with not less than ten (10) years senior
executive experience in the property and casualty insurance industry. Any
arbitration proceeding shall be before one arbitrator mutually agreed to by the
parties to such proceeding (who shall have the credentials set forth above)
unless the amount in question exceeds $200,000, in which event, the arbitration
shall be by a panel of three arbitrators or, if the parties are unable to agree
to the arbitrator(s) within fifteen (15) business days of the initiation of the
arbitration proceedings, then by the AAA. Each of the parties hereby submits
unconditionally to the exclusive jurisdiction of the state and federal courts
located in the County of Franklin, State of Ohio for purposes of this provision,
waives objection to the venue of any proceeding in any such court or that any
such court provides an inconvenient forum and consents to the service of process
upon it in connection with any proceeding instituted under this Section 12 in
the same manner as provided for the giving of notice under this Agreement.
Judgment upon the award rendered may be entered in any court having
jurisdiction. All fees of the arbitrators shall be borne equally by the parties
to the arbitration. No arbitrator shall have power, by award or otherwise, to
vary any of the provisions of this Agreement.

      11. LIABILITY. ProCentury will endeavor to perform the Services in a
commercially reasonable manner; provided, however, that each Company agrees that
ProCentury's liability and the Companies sole and exclusive remedy pursuant to
any claim of any kind, including but not limited to a claim in contract,
negligence, professional malpractice or strict liability, against ProCentury or
any of its affiliates, shall be the re-performance of the services during the
term of this Agreement; provided, however, that if the Companies or either of
them incur damages which are a direct and proximate result or consequence of any
willful and wanton misconduct of ProCentury (or its affiliate(s)), ProCentury's
liability, if any, shall be limited to the greater of (a) direct actual damages;
or (b) an amount equal to the Administrative Fees actually received by
ProCentury for the particular Service(s) at issue. ALL OTHER REMEDIES OR DAMAGES
AT LAW OR IN EQUITY ARE WAIVED. NEITHER PARTY WILL BE LIABLE FOR CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER
BUSINESS INTERRUPTION DAMAGES, WHETHER IN TORT OR CONTRACT, UNDER ANY INDEMNITY
PROVISION OR OTHERWISE.

      12. COMPLETE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement, including
the exhibits hereto, contains the entire agreement between the parties and
supersedes

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all prior or contemporaneous discussions, negotiations, representations or
agreements relating to the subject matter. No changes or amendments to this
Agreement shall be effective or binding on either party unless made in writing
and signed by both parties. Any waiver of any provision hereof by a party shall
not constitute a continuing waiver or a waiver of any other provision hereof.
For so long as ProCentury and the Companies are "affiliates" within the meaning
of Ohio Revised Code Section 3901.32, no amendment to this Agreement shall
become effective until the parties have complied with the notice requirements of
Ohio Revised Code Section 3901.341.

      13. NO THIRD PARTY BENEFIT. This Agreement is intended for the exclusive
benefit of the parties to this Agreement and their respective successors and
assigns, and nothing contained in this Agreement shall be construed as creating
any rights or benefits in or to any third party.

      14. CAPTIONS. The captions of the various sections of this Agreement are
not part of the content or context of this Agreement, but are only labels to
assist in locating those sections, and shall be ignored in construing this
Agreement.

      15. FORCE MAJEURE. Notwithstanding any provision of this Agreement to the
contrary, either party's obligations under this Agreement shall be excused if
and to the extent that any delay or failure to perform such obligations is due
to fire or other casualty, material shortages, strikes or labor disputes, acts
of God or other causes beyond the reasonable control of such party.

      16. CONFIDENTIAL INFORMATION. ProCentury, on the one hand, and the
Companies, on the other, each acknowledge and agree that in connection with this
Agreement and the Services each will be exposed to information relating to the
other and the other's businesses, agents and customers that is confidential in
nature and/or proprietary, including trade secrets. During the term of this
Agreement and thereafter each (A) shall treat as confidential any and all
information disclosed or made known to it by the other (whether through actual
disclosure or observance) and all other information relating to the other and
its customers, agents and business; (B) shall not publish or disclose such
information in any manner or fashion to any third party without the other's
prior written consent, and (C) shall not use such information for any purpose
except in connection with performing or receiving the Services hereunder. The
confidential information and trade secrets of ProCentury and the Companies and
their respective customers include, without limitation, information relating to
ProCentury's and the Companies respective business methodologies, marketing,
insureds, agency contacts and agency relations, finances and operations
(including, without limitation, current or prospective customer lists, cost and
pricing figures and statistics, business projections, marketing strategies and
plans) not generally known to the public. The foregoing obligations do not apply
to any information that is or becomes generally known to the public apart from
disclosure by a party or its affiliates or its or their present or former
employees or agents, or which was known to or used by a party or its affiliates
in the conduct of its insurance operations prior to the Effective Date. At the
request of a party from time to time, the other party(ies) shall cause its (or
its affiliates') employees to execute a Confidentiality Agreement in a mutually
agreed upon form. Upon termination of this Agreement, each party and its
affiliates and its or their employees shall return to the other

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party(ies) all records, data, notes, reports, material and other documentation,
and all reproductions of the same, relating to such other party(ies). The
obligations of ProCentury and the Companies under this Section shall survive the
termination of this Agreement.

      17. SUCCESSORS. No party may assign any of its rights or obligations under
this Agreement without the written consent of the other party to this Agreement,
which consent may be withheld by such other party in its sole discretion. Except
as otherwise provided in this Agreement, this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by and against the respective
successors and assigns of each party to this Agreement.

      18. REPRESENTATIONS AND WARRANTIES. Each party hereby represents and
warrants to the other that (A) this Agreement is duly and validly authorized,
executed and delivered by such party and constitutes a legal, valid and binding
obligation enforceable against it in accordance with its terms, and (B) the
execution, delivery and performance of this Agreement do not and will not
violate or conflict with any of such party's obligations to any third parties or
violate any statute, regulation, rule of law, order, judgment or decree imposed
upon it by any applicable governmental authority.

      19. AGREEMENT JOINTLY PREPARED. The parties have participated jointly in
the negotiation and drafting of this Agreement and its Exhibits and each party
has been represented by competent legal counsel with respect thereto. In the
event any ambiguity or question of intent or interpretation arises hereunder,
this Agreement and its Exhibits shall be construed as if drafted jointly by the
parties and no presumption or burden of proof shall arise favoring or
disfavoring either party by virtue of authorship of any of the provisions of
this Agreement or its Exhibits.

      20. REGULATORY ACCESS TO BOOKS AND RECORDS; SAP COMPLIANCE. The parties
shall make the records relating to this Agreement available to the Ohio
Department of Insurance for its review as soon as is reasonably practicable
after receiving a request for such records. Charges or fees for services
performed shall be reasonable and in conformity with statutory accounting
principles consistently applied. The books, accounts and records shall be so
maintained as to clearly and accurately disclose the nature and details of the
transactions, including such accounting information as is necessary to support
the reasonableness of the charges or fees to the respective parties. The
requirements of this Section 20 shall apply for so long as ProCentury and the
Companies are "affiliates" within the meaning of Ohio Revised Code Section
3901.32.

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      IN WITNESS WHEREOF, each of the parties hereto has executed and delivered
this Transitional Administrative Agreement as of the Effective Date.

                                   SIGNATURES

                              PROCENTURY CORPORATION

                              By:_______________________________________
                              Its: President

                              EVERGREEN NATIONAL INDEMNITY COMPANY

                              By:_______________________________________
                              Its: President

                              CONTINENTAL HERITAGE INSURANCE COMPANY

                              By:_______________________________________
                              Its: President

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                                                                   Exhibit 10.12

                             LOSS PORTFOLIO TRANSFER
                              REINSURANCE CONTRACT
                               EFFECTIVE: 01/01/04

                                    Issued to

                             Century Surety Company
                                 Columbus, Ohio
                   (hereinafter referred to as the "Company")

                                       By

                      Evergreen National Indemnity Company
                                 Columbus, Ohio
                  (hereinafter referred to as the "Reinsurer")

ARTICLE I - BUSINESS REINSURED

By this Contract the Reinsurer agrees to reinsure the Ultimate Net Loss which
has accrued to the Company on losses occurring on or before the effective date
of this Contract under its policies, contracts and binders of insurance or
reinsurance (hereinafter called "policies") issued or renewed prior to the
effective date hereof and classified by the Company as Contract Surety Bonds and
Landfill Bonds, subject to the terms, conditions and limitations hereinafter set
forth.

ARTICLE II - TERM

This Contract shall become effective on January 1, 2004, and remain in force
until all outstanding loss and assignable loss adjustment expense covered under
this Contract has been settled or commuted in accordance with the provisions of
this Contract.

ARTICLE III - DEFINITIONS

A.    "Ultimate net loss" as used herein is defined as the sum or sums
      (including assignable loss adjustment expense, as hereinafter defined),
      and unrecoverable reinsurance for outstanding losses, including incurred
      but not reported losses paid by the Company in settlement of claims and in
      satisfaction of judgments rendered on account of such claims, after
      deduction of all salvage, all recoveries and all claims on inuring
      insurance or reinsurance; provided, however, that in the event of the
      insolvency of the Company, payment by the Reinsurer shall be made in
      accordance with the provisions of Article XIV. Nothing herein shall be
      construed to mean that losses under this Contract are not recoverable
      until the Company's ultimate net loss has been ascertained.

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B.    "Assignable loss adjustment expense" as used herein shall mean expenses
      assignable to the investigation, appraisal, adjustment, settlement,
      litigation, defense and /or appeal of specific claims, regardless of how
      such expenses are classified for statutory reporting purposes. Assignable
      loss adjustment expense shall include, but not be limited to, interest on
      judgments, expenses of outside adjusters, and declaratory judgment
      expenses or other legal expenses and costs incurred in connection with
      coverage questions and legal actions connected thereto, but shall not
      include office expenses or salaries of the Company's regular employees. If
      the Company elects or is forced to hire a claims handling company to
      manage its claims, then the cost of such shall be excluded from assignable
      loss adjustment expense.

ARTICLE IV - LOSS NOTICES, SETTLEMENTS AND PAYMENTS

A.    Losses shall be reported as hereinafter provided, except that the Company
      shall promptly notify the Reinsurer of any unusual circumstances affecting
      the Reinsurer's liability hereunder.

B.    All loss settlements made by the Company, provided they are within the
      terms of this Contract shall be binding upon the Reinsurer. The Reinsurer
      agrees to pay all amounts for which it may be liable as provided in
      Article VII.

ARTICLE V - SALVAGE AND SUBROGATION

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurer, and to prosecute all claims arising out of such right.

ARTICLE VI - REINSURANCE CONSIDERATION

As consideration for the reinsurance provided hereunder the Company shall
deliver to the Reinsurer in cash or in securities acceptable to the Reinsurer an
amount equal to the sum of the following:

      $457,394 representing case reserves as shown in Exhibit A known as of the
      effective date, net of treaty reinsurance;

      $999,546 representing incurred but not reported reserves ("IBNR") reserve
      agreed to by the parties.

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ARTICLE VII - REPORTS AND REMITTANCES

A.    Within 45 days after the end of each calendar quarter during the term of
      this Contract, the Company shall report to the Reinsurer the following:

      1.    Summary of paid losses and assignable loss adjustment expense paid
            during the quarter;

      2.    Summary of case outstanding losses and assignable loss adjustment
            expense as of the end of the quarter, including a report of the
            carried incurred by not reported amounts;

      3.    Any other information needed by the Reinsurer to evaluate this
            Contract which is reasonably available to the Company.

The loss information shall be segregated by line of business and accident
(report) year.

B.    The Reinsurer shall pay losses within 30 days after receipt of the
      Company's quarterly report or within 75 days after the end of each
      calendar quarter, whichever is later.

ARTICLE VIII - NON-PAYMENT OF PREMIUM

The Reinsurer may terminate this Contract with 30 days prior written notice, and
shall have no liability hereunder, in the event the Company fails to pay any
reinsurance consideration for any reason, including insolvency, within ten
business days of the date such consideration is due. The Company may avoid
termination by paying any and all amounts that are delinquent on or before the
effective date of termination.

ARTICLE IX - OFFSET

The Company and 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. The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise. However, in the
event of the insolvency of any party hereto, offset shall only be allowed in
accordance with applicable law.

ARTICLE X - ACCESS TO RECORDS (BRMA 1D)

The Reinsurer or its designated representatives shall have access at any
reasonable to all records of the Company which pertain in any way to this
reinsurance.

ARTICLE XI - NET RETAINED LINES (BRMA 32B)

A.    This Contract applies only to that portion of any policy which the Company
      retains net for its own account, and in calculating the amount of any loss
      hereunder and also

                                       3
<PAGE>
      in computing the amount or amounts in excess of which this Contract
      attaches, only loss or losses in respect of that portion of that portion
      of any policy which the Company retains net for its own account shall be
      included.

B.    The amount of the Reinsurer's liability hereunder in respect of any loss
      or losses shall not be increased by reason of the inability of the Company
      to collect from any other reinsurer(s), whether such inability arises from
      the insolvency of such other reinsurers(s) or otherwise.

ARTICLE XII - ERRORS AND OMISSIONS (BRMA 14F)

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

ARTICLE XIII - TAXES (BRMA 50B)

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

ARTICLE XIV - INSOLVENCY

A.    In the event of the insolvency of the reinsured companies, 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 with diminution because of the insolvency of the company or
      because the liquidator, receiver, conservator or statutory successor of
      the company has failed to pay all or a portion of any claim. It is agreed,
      however, that the liquidator, receiver, conservator or statutory successor
      of the company shall give written notice to the Reinsurer of the pendency
      of a claim against the company indicating the policy or bond reinsured
      which claim would involve a possible liability on the part of the
      Reinsurer within a reasonable time after such claim is filed in the
      conservation or liquidation proceeding or in the receivership, and that
      during the pendency of such claim, the Reinsurer may investigate such
      claim and interpose, at its own expense, in the proceeding where such
      claim is to be adjudicated, any defense or defenses that it may deem
      available to the company or its liquidator, receiver, conservator or
      statutory successor. The expense thus incurred by the Reinsurer shall be
      chargeable, subject to the approval of the Court, against the company as
      part of the expense of conservation or liquidation to the extent of a pro
      rata share of the benefit which may accrue to the company solely as a
      result of the defense undertaken by the Reinsurer.

                                       4
<PAGE>
B.    It is further understood and agreed that, in the event of the insolvency
      of one or more of the reinsured companies, the reinsurance under this
      Contract shall be payable directly by the Reinsurer to the company or to
      its liquidator, receiver or statutory successor, except as provided by
      Section 4118(a) of the New York Insurance Law or except (1) where this
      Contract specifically provides another payee of such reinsurance in the
      event of the insolvency of the company or (2) where the Reinsurer with the
      consent of the direct insured or insureds 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 obligations of the
      company to such payees.

ARTICLE XV - ARBITRATION

A.    As a condition precedent to any right of action, hereunder, in the event
      of any dispute or difference of opinion hereafter arising with respect to
      this Contract, it is hereby mutually agreed that such dispute or
      difference of opinion shall be submitted to arbitration. One Arbiter shall
      be chosen by the Company, the other by the Reinsurer, and an Umpire shall
      be chosen by the two Arbiters before they enter upon arbitration, all of
      whom shall be active or retired disinterest executive officers of
      insurance or reinsurance companies. In the event that either party should
      fail to choose an Arbiter within 30 days following a written request by
      the other party to do so, the requesting party may choose two Arbiters who
      shall in turn choose an Umpire before entering upon arbitration. If the
      two Arbiters fail to agree upon the selection of an Umpire within 30 days
      following their appointment, each Arbiter shall nominate three candidates
      within 10 days thereafter, two of whom the other shall decline, and the
      decision shall be made by drawing lots.

B.    Each party shall present its case to the Arbiters within 30 days following
      the date of appointment of the Umpire. The Arbiters shall consider this
      Contract as an honorable engagement rather than merely as a legal
      obligation and they are relieved of all judicial formalities and may
      abstain from following the strict rules of law. The decision of the
      Arbiters shall be final and binding on both parties; but failing to agree,
      they shall call in the Umpire and the decision of the majority shall be
      final and binding upon both parties. Judgment upon the final decision of
      the Arbiters may be entered in any court of competent jurisdiction.

C.    Each party shall bear the expense of its own Arbiter, and shall jointly
      and equally bear with the other the expense of the Umpire of the
      arbitration. In the event that the two Arbiters are chosen by one party,
      as above provided, the expense of the Arbiters, the Umpire and the
      arbitration shall be equally divided between the two parties.

D.    Any arbitration proceedings shall take place at a location mutually agreed
      upon by the parties to this Contract, but notwithstanding the location of
      the arbitration, all proceedings pursuant hereto shall be governed by the
      law of the State of Ohio.

                                       5
<PAGE>
ARTICLE XVI - SERVICE OF SUIT (BRMA 49D)

(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required by insurance regulatory authorities)

A.    It is agreed that in the event the Reinsurer fails to pay any amount
      claimed to be due hereunder, the Reinsurer, at the request of the Company,
      will submit to the jurisdiction of a court of competent jurisdiction
      within the United States. Nothing in this Article constitutes or should be
      understood to constitute a waiver of the 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.

B.    Further, pursuant to any statute of any state, territory or district of
      the United States which makes provision therefore, the Reinsurer hereby
      designates the Superintendent, Commissioner or Director of Insurance or
      other officer specified for the purpose in the statute, or his successor
      or successors in office, as its true and lawful attorney upon who 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.

ARTICLE XVII - GOVERNING LAW

The Contract shall be governed by and construed in accordance with the laws of
the State of Ohio.

ARTICLE XVIII - AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contact, Century
Surety Company shall be deemed the agent of the other reinsured companies for
the purposes of sending or receiving notices required by the terms and
conditions of this Contract, and for purposes of remitting or receiving any
monies due any party.

                                       6
<PAGE>
IN WITNESS WHEREOF, the parties hereto by their respective duly authorized
representatives have executed this Contract as of the dates undermentioned at:

Columbus, Ohio, this ________ day of ________________________ in the year _____.

                  _____________________________________________________
                  Century Surety Company

Columbus, Ohio, this ________ day of ________________________ in the year _____.

                  _____________________________________________________
                  Evergreen National Indemnity Company

                                       7

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