Document:

exv10w48

Exhibit 10.48

			
	 	 	 
	$1,500,000
	 	Date: June 16, 2009

AMENDED AND RESTATED PROMISSORY NOTE

     FOR VALUE RECEIVED, Patriot Risk Management Inc. (the “Borrower”) promises to pay to Steven M.
Mariano (the “Lender”) at 401 E. Las Olas Blvd., Suite 1540, Ft. Lauderdale, FL 33301, or at such
other place as the Lender may direct, the sum of one million five hundred thousand dollars
($1,500,000) (the “Principal Amount”), in United States currency, together with interest at
the time and in the amounts provided herein.

     This amendment revises the Note, such Note shall remain the promissory note of Borrower,
issued pursuant to agreement between the Borrower and the Lender. The Note shall be non-negotiable.

     Upon agreement by both Lender and Borrower, the note, a true and correct of which is attached,
shall be amended as follows:

	 	2.	 	Repayment Date. This Note shall be payable on demand by the
Lender subject to the cash flow requirements of the Borrower.

     All other provisions of the Note, as attached as Exhibit A, shall remain unamended and as set
forth in the Note.

     DATED this 16th day of June, 2009

	 	 	 	 	 
	BORROWER

PATRIOT RISK MANAGEMENT, INC.

 	 	 
	By:  	/s/ Theodore G. Bryant
 	 	 
	 	Theodore G. Bryant 	 	 
	 	Secretary 	 	 
	 

	 	 	 	 	 
	 	LENDER

 	 
	 	By:  	/s/ Steven M. Mariano
 	 
	 	 	Steven M. Mariano 	 
	 	 	 	 
	 

 

 

Exhibit A

 

 

			
	$l,500,000
	 	Date: June 26, 2008

PROMISSORY NOTE

     FOR VALUE RECEIVED, Patriot Risk Management, Inc. (the “Borrower”) promises to pay to Steven
M. Mariano (the “Lender”) at 401 E. Las Olas Blvd., Suite 1540, Ft. Lauderdale, FL. 33301, or at
such other place as the Lender may direct, the sum of one million five hundred thousand dollars
($1,500,000) (the “Principal Amount”), in United States currency, together with interest at
the time and in the amounts provided herein.

     This Note is the promissory note of Borrower, issued pursuant to agreement between the
Borrower and the Lender. This Note shall be non-negotiable.

	1.	 	Interest. The unpaid portion of the Principal Amount shall bear interest (“Interest”)
computed from the date hereof, at eight percent (8%) which varies daily to three percent (3%)
above the New York Prime Rate as published in the Wall Street Journal.
	 
	2.	 	Repayment Date. The Principal Amount of this Note, together with Interest accrued
thereon, shall be due and payable six (6) months after the date set forth above, that is to
say no later than 5:00 p.m. on January 2, 2009. Interest shall be payable monthly and the
Principal Amount shall be repaid in its entirety on January 2, 2009.
	 
	3.	 	Guarantee Fee. Borrower shall pay Lender $60,000 as a loan origination and personal
guarantee fee as a result of Lender obtaining these funds, and personally guaranteeing full
repayment, from an underlying loan instrument between Lender and Aleritas Capital Corporation.
This represents four percent (4%) of the principal amount and comports with previous personal
guarantee fee paid by Borrower to Lender for similar personal guarantees provided on previous
financial transactions between Borrower and Lender. This Guarantee Fee has been approved by
Borrower’s Board of Directors.
	 
	4.	 	Prepayment. This Note may be prepaid, at the option of the Borrower, in whole or in
part, at any time or from time to time, without premium or penalty. Any such payment shall be
applied first to payment of Interest accrued and unpaid, and then to payment of the Principal
Amount outstanding and unpaid.
	 
	5.	 	Events of Default. The occurrence of any of the following shall, at the option of the
Lender, constitute an Event of Default:

 

 

	 	A.	 	Voluntary Liquidation, Rehabilitation, Receivership, Bankruptcy, Etc. If the
Borrower makes an assignment for the benefit of creditors; or if any action is brought
by or against the Borrower seeking its liquidation, rehabilitation or receivership under
applicable bankruptcy laws; or its dissolution or liquidation of its assets or seeking
the appointment of a trustee, interim trustee, receiver or other custodian for any of
the Borrower’s property; or the Borrower commences a voluntary case under the Federal
Bankruptcy Code; or if any reorganization or arrangement proceeding is instituted by the
Borrower for the settlement, readjustment, composition or extension of any of its debts
upon any terms; or if any action or petition is otherwise brought by or against the
Borrower seeking similar relief or alleging that it is insolvent or unable to pay its
debts as they mature;
	 
	 	B.	 	Involuntary Liquidation, Rehabilitation, Receivership, Bankruptcy. Etc. If
any action is brought against the Borrower seeking its liquidation, rehabilitation or
receivership under applicable bankruptcy laws; or seeking the dissolution of the Borrower
or liquidation of the Borrower’s assets or seeking the appointment of a trustee, interim
trustee, receiver or other custodian for any of its property; and such action is
consented to or acquiesced in by the Borrower, or is not dismissed, vacated or stayed
within ninety (90) days of the date upon which it was instituted; or if any proceeding
under the Federal Bankruptcy Code is instituted against the Borrower and (i) an Order for
relief is entered in such proceeding, or (ii) such, proceeding is consented to or
acquiesced in by the Borrower or is not dismissed, vacated or stayed within ninety (90)
days of the date upon which it was instituted; or if any reorganization or arrangement
proceeding is instituted against the Borrower for the settlement, readjustment,
composition or extension of any of its debts upon any terms, and such proceeding is
consented to or acquiesced in by the Borrower or is not dismissed, vacated or stayed
within ninety (90) days of the date upon which it was instituted; or if any action or
petition is otherwise brought against the Borrower seeking similar relief or alleging
that it is insolvent, unable to pay its debts as they mature, or generally not paying its
debts as they become due, and such action or petition is consented to or acquiesced in by
the Borrower or is not dismissed, vacated or stayed within ninety (90) days of the date
upon which it was brought; or
	 
	 	C.	 	Failure to Make Punctual Payment. Failure of the Borrower to punctually
make payment of any amount payable hereunder to the Lender, whether of the Principal
Amount or Interest thereon, within ten (10) days of the date the same becomes due and
payable, whether at maturity or by acceleration.

	6.	 	Acceleration and Other Remedies. Upon the occurrence of an Event of Default, as
defined above:

 

 

	 	A.	 	Any of the obligations hereunder may, at the option of the Lender and without
presentment, demand, notice or protest of any kind (all of which are hereby expressly
waived), be declared due and payable, whereupon such obligations shall become due and
payable;
	 
	 	B.	 	The Lender may, at its option, and without notice or demand of any kind, exercise
from time to time any and all rights and remedies available to it under applicable law or
in equity; or
	 
	 	C.	 	The Borrower shall pay all costs and expenses (including reasonable attorneys’
fees) incurred by the Lender in enforcing its rights hereunder after maturity or
acceleration hereof. In the event any claim under this Note is referred to an attorney
for collection, or collected by or through an attorney at law, the Borrower will be
liable to the Lender for all expenses incurred in seeking to collect the
obligations or monies or to enforce its rights hereunder, including, without limitation,
reasonable attorneys’ fees.
	 
	 	D.	 	Notwithstanding the above, Borrower shall have ninety (90) days within
which to cure any Event of Default under this promissory note. This period within which
to cure shall begin to run on the date Lender sends written notification to Borrower of
an Event of Default.

	7.	 	Waiver. The Borrower hereby waives presentment, demand, protest, notice of dishonor
and notice of default.
	 
	8.	 	Governing Law. The Borrower agrees that this Note shall be governed and construed in
accordance with the laws of the State of Florida.
	 
	9.	 	Headings. The headings contained herein are solely for the convenience of the parties
and shall be given no effect in the interpretation and construction of this Note.

     DATED this 26th day of June, 2008

	 	 	 	 	 
	 	BORROWER

PATRIOT RISK MANAGEMENT, INC.

 	 
	 	By:  	/s/ Theodore G. Bryant
 	 
	 	 	Theodore G. Bryant 	 
	 	 	Secretaryexv10w67

EXHIBIT
10.67

FLORIDA, GEORGIA & NEW JERSEY

PRIMARY TRADITIONAL MARKET

WORKERS’ COMPENSATION QUOTA SHARE REINSURANCE CONTRACT

issued to

GUARANTEE INSURANCE COMPANY

Fort Lauderdale, Florida

	 	 	 
	Effective: January 1, 2009

	 	Document Draft Date:
February 10, 2009
	Ullico Casualty Tracking No.:                    

	 	DRAFT Contract with Firm Order Terms

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FLORIDA, GEORGIA & NEW JERSEY

PRIMARY TRADITIONAL MARKET

WORKERS’ COMPENSATION QUOTA SHARE REINSURANCE CONTRACT

TABLE OF CONTENTS

	 	 	 	 	 
	Article	 	Page
	                   Preamble
	 	4	 
	      1              Business Covered
	 	4	 
	      2              Retention and Limit
	 	5	 
	      3              Term
	 	5	 
	      4              Special Termination
	 	6	 
	      5              Territory
	 	7	 
	      6              Exclusions
	 	7	 
	      7              Special Acceptance
	 	10	 
	      8              Premium
	 	10	 
	      9              Other Reinsurance
	 	11	 
	      10            Reports and Remittances
	 	11	 
	      11            Ceding Commission
	 	12	 
	      12            Definitions
	 	12	 
	      13            Extra Contractual Obligations/Excess of Policy Limits
	 	14	 
	      14            Net Retained Liability
	 	15	 
	      15            Original Conditions
	 	15	 
	      16            Salvage and Subrogation
	 	15	 
	      17            No Third Party Rights
	 	16	 
	      18            Loss Settlements
	 	16	 
	      19            Commutation
	 	16	 
	      20            Sunset
	 	18	 
	      21            Late Payments
	 	18	 
	      22            Offset
	 	19	 
	      23            Currency
	 	20	 
	      24            Unauthorized Reinsurance
	 	20	 
	      25            Taxes
	 	22	 
	      26            Access to Records
	 	23	 
	      27            Confidentiality
	 	23	 
	      28            Indemnification
and Errors and Omissions
	 	24	 
	      29            Insolvency
	 	25	 
	      30            Arbitration
	 	26	 
	      31            Service of Suit
	 	28	 
	      32            Agency
	 	29	 
	      33            Governing Law
	 	29	 
	      34            Entire Agreement
	 	30	 
	      35            Non-Waiver
	 	30	 
	      36            Change in Administrative Practices
	 	30	 

	 	 	 
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	 	Document Draft Date: February 10, 2009
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FLORIDA, GEORGIA & NEW JERSEY

PRIMARY TRADITIONAL MARKET

WORKERS’ COMPENSATION QUOTA SHARE REINSURANCE CONTRACT

TABLE OF CONTENTS

	 	 	 	 	 
	Articles	 	 	 
	(Cont’d)	 	Page
	      37               Intermediary
	 	30	 
	      38               Mode of Execution
	 	30	 
	    Company Signing Block
	 	31	 

Attachments

	 	 	 
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	 	Document Draft Date: February 10, 2009
	Ullico Casualty Tracking No.:                    

	 	DRAFT Contract with Firm Order Terms

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WORKERS’ COMPENSATION QUOTA SHARE REINSURANCE CONTRACT

(the “Contract”)

issued to

GUARANTEE INSURANCE COMPANY

Fort Lauderdale, Florida

(the “Company”)

by

ULLICO CASUALTY COMPANY

Washington, D.C.

(the “Reinsurer”)

PREAMBLE

	A.	 	In the event any affiliated companies are to be reinsured hereunder, whenever the word
“Company” is used in this Contract, such term shall be held to include any or all of the
affiliated companies which are or may hereafter be under common control, provided that notice
be given to the Reinsurer of any such newly affiliated companies which may hereafter come
under common control as soon as practicable with full particulars as to how such affiliation
is likely to affect this Contract. In the event of either party maintaining that such
affiliation calls for alteration in existing terms, and an agreement for alteration not being
arrived at, then the business of such newly affiliated company is covered at existing terms
only for a period of 45 days after notice by either party that it does not wish to cover such
business.

	B.	 	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 hereto, shall apply to
the affiliated companies comprising the Company as a group and not separately to each of the
affiliated companies.

ARTICLE 1

BUSINESS COVERED

This Contract is to indemnify the Company in respect of the liability that may accrue to the
Company as a result of loss or losses under Policies classified by the Company as Traditional
Workers’ Compensation and/or Employers Liability (including losses arising from the United States
Longshore and Harbor Workers’ Compensation Act, Jones Act, Federal Employers Liability Act, and
any other Federal Act), for risks and exposures principally domiciled in

 
	 	 	 
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Florida, Georgia and New Jersey, first written or renewed during the term of this Contract by or on
behalf of the Company, subject to the terms and conditions herein contained.

ARTICLE 2

RETENTION AND LIMIT

	A.	 	The Company shall cede, and the Reinsurer shall accept as reinsurance, a 68.00% share of all
business reinsured hereunder. The Reinsurer shall pay to the Company the Reinsurer’s quota
share of losses under the Policies, Loss Adjustment Expense, Extra Contractual Obligations and
Loss in
Excess of Policy Limits covered under this Contract, subject to a maximum limit of $680,000
(being 68.0% of $1,000,000), inclusive of original deductibles, each and every Loss
Occurrence.

	B.	 	The Company shall retain (net and un-reinsured elsewhere) no less than a 5.0% share of the
business reinsured hereunder, unless the express written consent of the Reinsurer is obtained
to retain a lesser amount.

	C.	 	The Reinsurer’s Absolute Aggregate Limit, for all Losses, Loss Adjustment Expenses, Extra
Contractual Obligations and Loss in Excess of Policy Limits covered under this Contract shall
be that amount which represents 90.0% of the Gross Earned Premium Income.

ARTICLE 3

TERM

	A.	 	This Contract shall take effect at 12:01 a.m., Local Standard Time at the place of the loss,
January 1, 2009, applying to Loss Occurrences commencing at or after that time and date, on
policies written or renewed by the Company with an effective time and date at or after that
time and date, and shall remain in effect until 12:01 a.m., Local Standard Time at the place
of the loss, January 1, 2010. There is no coverage for Loss Occurrences or policies written
after January 1, 2010.

	B.	 	This Contract may be terminated at any time at the mutual agreement of both the Company and
the Reinsurer. The Company shall provide the Reinsurer with the opportunity to renew this
Contract, at terms no less favorable to the Reinsurer then are contained herein, for a period
of no less than two (2) years beyond the time at which any loans or investments made by the
Reinsurer, and/or the Reinsurer’s parent organization, to the Company or its parent
organization, have been repaid in full.

	C.	 	The Reinsurer shall have no liability for Loss Occurrences commencing at or after expiration
or termination of this Contract or for Loss Occurrences commencing before the inception of
this Contract.

 
	 	 	 
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	D.	 	However, upon mutual agreement between the Company and the Reinsurer, the Reinsurer shall
remain liable hereunder in respect of Policies in force prior to expiration or termination,
until the termination, natural expiration or renewal of such Policies, whichever occurs first,
but in no event to exceed 12 months plus odd time.

	E.	 	In the event this Contract expires or terminates on a run-off basis, the Reinsurer’s
liability hereunder shall continue if the Company is required by statute or regulation to
continue coverage, until the earliest date on which the Company may cancel the Policy, but
not to exceed 12 months plus odd time. All terms and conditions of this Contract shall
continue in force during such run-off period.

ARTICLE 4

SPECIAL TERMINATION

	A.	 	The Company may terminate the Reinsurer’s percentage share in this Contract at any time by
giving written notice to the Reinsurer in the event of any of the following circumstances:

	 	1.	 	The Reinsurer ceases underwriting operations.
	 
	 	2.	 	A state insurance department or other legal authority orders the Reinsurer to cease
writing business, or the Reinsurer is placed under regulatory supervision.
	 
	 	3.	 	The Reinsurer has become insolvent or has been placed into liquidation or
receivership (whether voluntary or involuntary), or there have been instituted against it
proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator,
trustee in bankruptcy, or other agent known by whatever name, to take possession of its
assets or control of its operations.
	 
	 	4.	 	The Reinsurer’s policyholders’ surplus (or the equivalent under the Reinsurer’s
accounting system) as reported in such financial statements of the Reinsurer as
designated by the Company falls below fifty million dollars ($50,000,000). This paragraph
shall not apply should the Reinsurer have an A.M. Best’s rating of “A+” or better.
	 
	 	5.	 	The Reinsurer has merged with or has become acquired or controlled by any company,
corporation, or individual(s) not controlling the Reinsurer’s operations at the inception
of this Contract.
	 
	 	6.	 	The Subscribing Reinsurer has retroceded its entire liability under this Contract
without the Company’s prior written consent. Reinsurer has been assigned an A.M. Best’s
rating of less than “B+”.

	 	 	 
	Effective: January 1, 2009

	 	Document Draft Date:
February 10, 2009
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	B.	 	Termination shall be effected on a run-off or cut-off basis as set forth in the
Term Article, at the sole discretion of the Company. The reinsurance premium due the Reinsurer
hereunder shall be pro rated based on the period of the Reinsurer’s participation hereon, and
the Reinsurer shall immediately return any excess reinsurance premium received. In the event
that the Company decides to terminate this Contract on a cut-off basis, then as of the cut-off
date determined by the Company:

	 	1.	 	The Reinsurer’s portion of the reinsurance premium shall be the Earned Premium
through the cut-off date and the Company’s portion of the reinsurance premium shall be
the Unearned Premium as of this same cut-off date; and
	 
	 	2.	 	The Reinsurer shall be responsible for all claims with an occurrence date equal to
or earlier than the cut-off date and the Company shall be responsible for all claims with
an occurrence date after this same cut-off date.

ARTICLE 5

TERRITORY

The territorial limits of this Contract shall be identical with those of the Company’s Policies
written and issued for risks and exposures principally domiciled in the States of Florida, Georgia
and New Jersey.

ARTICLE 6

EXCLUSIONS

This Contract shall not apply to and specifically excludes:

	 	1.	 	Assumed reinsurance, except 100% of business ceded by fronting insurance companies.
	 
	 	2.	 	Liability of the Company arising by contract, operation of law, or otherwise, from
its participation or membership, whether voluntary or involuntary, in any Insolvency
Fund. “Insolvency Fund” includes any guaranty fund, insolvency fund, plan, pool,
association, fund or other arrangement, howsoever denominated, established or governed,
that 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, that has been declared by any competent authority to be insolvent, or that is
otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole
or in part.
	 
	 	3.	 	Loss or liability accruing to the Company directly or indirectly from any insurance
written by or through any pool, association, or syndicate, including pools,

	 	 	 
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	 	 	 	associations,
or syndicates in which membership by the Company is required under any statutes or
regulations.
	 
	 	4.	 	Loss or damage which is occasioned by war, invasion, hostilities, acts of foreign enemies,
civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation
by order of any government or public authority. Nevertheless, this Exclusion shall not apply
to loss or damage occasioned by riots, strikes, civil commotion, vandalism, malicious damage,
and Acts of Terrorism.
	 
	 	5.	 	All loss or liability of the Company excluded by the “Nuclear Risk Exclusion” attached
hereto.
	 
	 	6.	 	Manufacturing, packaging, handling, shipping or storage of explosives, explosive substances
intended for use as an explosive, ammunitions, fuses, arms, or fireworks; however, this
exclusion shall not apply to the incidental packaging, handling or storage of same in
connection with the sale or transportation by owner operators of such substances.
	 
	 	7.	 	Loss arising from Professional Sports Teams. For the purpose of this Exclusion,
“Professional Sports Team” shall mean an organization of greater than 15 people (including
athletes, coaches, and staff) that exists for the purpose of competing in regularly scheduled
sporting events and whose members are receiving compensation from the organization at the
time of the Occurrence.
	 
	 	8.	 	Loss sustained by Commercial Airline Personnel on board the aircraft and arising while the
aircraft is In Flight. The following definitions shall apply to this Exclusion:

	 	a.	 	“Commercial Airline” shall mean an organization in the business of transporting
passengers and/or goods by aircraft;
	 
	 	b.	 	“Personnel” shall mean employees of the Commercial Airline acting within the scope
of their employment; and
	 
	 	c.	 	“In Flight” shall mean from the time the door(s) close for departure to the time
the door(s) open for arrival.

	 	9.	 	Liability arising out of, or resulting as a consequence of, insureds principally involved in
the manufacture, distribution, installation, testing, remediation, removal, storage,
disposal, sale, use of or exposure to asbestos.
	 
	 	10.	 	Railroads, except scenic railways, and access lines and industrial aid owner operations when
written as an incidental part of an insured’s overall operations.
	 
	 	11.	 	Chemical or petrochemical manufacturing.
	 
	 	12.	 	Underground mining.

	 	 	 
	Effective: January 1, 2009

	 	Document Draft Date:
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	 	13.	 	Loss arising from the intentional wrecking or demolition of buildings or structures in
excess of three stories.
	 
	 	14.	 	Losses arising from the United States Longshore and Harbor Workers’ Compensation Act, Jones
Act, Federal Employers Liability Act, Maritime Employers Liability Act, and any other federal
act if the payroll for such business is greater than 10% of the total payroll for the original
insured’s total operations including such business.
	 
	 	15.	 	Actual or alleged loss, liability, damage, injury, defense cost, cost or expense directly or
indirectly caused by, contributed to by, resulting from, arising out of or in connection with
any “acts of terrorism” as defined in the Terrorism Risk Insurance Program Reauthorization Act
of 2007 (the “Act”), including acts of war, invasion, acts of foreign enemies, hostilities or
warlike operation (whether war be declared or not), civil war, rebellion, revolution,
insurrection, or civil commotion assuming the proportions of or amounting to an uprising,
military or usurped power, regardless of any other cause or event contributing concurrently or
in any sequence to the loss and regardless of the location of the loss, liability, damage,
injury, defense, cost or expense.
	 
	 	 	 	Also excluding actual or alleged loss, liability, damage, injury, defense cost or expense
directly or indirectly caused by, contributed to by, resulting from, arising out of or in
connection with any action taken in controlling, preventing, suppressing, retaliating against,
or responding to an act of terrorism as defined in the Act, regardless of the location of the
loss, liability, damage, injury, defense, cost or expense.
	 
	 	 	 	Notwithstanding the above and subject otherwise to the terms, conditions and limitations of
this Contract, this Contract will pay actual loss or damage caused by an act of terrorism which
does not meet the definition of “act of terrorism” as defined in the Act, but in no event will
this Contract provide coverage for loss, damage, cost or expense directly or indirectly caused
by, contributed to by, resulting from, arising out of or in connection with biological,
chemical or nuclear explosion, pollution, contamination and/or fire following therefrom.
	 
	 	 	 	In the event any portion of this exclusion is found to be invalid or unenforceable, the
remainder shall remain in full force and effect.
	 
	 	16.	 	Financial Guarantee and Insolvency.
	 
	 	17.	 	Risks with known occupational disease exposures per NCCI D&E codes.
	 
	 	18.	 	Construction of bridges, tunnels or dams.
	 
	 	19.	 	Firefighters and police officers.

	 	 	 
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	 	20.	 	Trucks hauling explosives or ammunition (local or long distance hauling) — all
employees.
	 
	 	21.	 	Manufacturing, packing, handling, shipping or storage of natural or artificial fuel
gases, butane, propane, gasoline, or liquefied petroleum gas; however, this exclusion
shall not apply to the incidental packing, handling or storage of same in connection with
the sale of such substances.
	 
	 	22.	 	Gas or oil burner installation NOC.
	 
	 	23.	 	Gasoline Service Stations tank installations.
	 
	 	24.	 	Blasting of rock.
	 
	 	25.	 	Sewer construction — all operations.
	 
	 	26.	 	Gas main, steam main, or water main construction or connection construction.
	 
	 	27.	 	Boat manufacturing — F classes.
	 
	 	28.	 	Banks and trust company employees of contracting agencies in bank service: guards,
patrols, messengers or armored car crews.
	 
	 	29.	 	Detective agencies.
	 
	 	30.	 	Patrol agencies only in regard to armed guard services.
	 
	 	31.	 	Alternative Market business including PEO’s and Policyholder controlled captives.
	 
	 	32.	 	Risks principally domiciled in any State other than Florida, Georgia or New Jersey.

ARTICLE 7

SPECIAL ACCEPTANCE

Business that is not within the scope of this Contract may be submitted to the Reinsurer for
special acceptance hereunder, and such business, if accepted by the Reinsurer shall be covered
hereunder, subject to the terms and conditions of this Contract, except as modified by the special
acceptance.

ARTICLE 8

PREMIUM

The Company shall cede and pay to the Reinsurer its proportionate share of the Gross Earned Premium
Income of the Company.

	 	 	 
	Effective: January 1, 2009

	 	Document Draft Date:
February 10,
2009
	Ullico Casualty Tracking No.:                    

	 	DRAFT Contract with Firm Order Terms

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ARTICLE 9

OTHER REINSURANCE

The Company is permitted to have excess of loss treaty reinsurance, recoveries under which shall
inure to the benefit of this Contract.

ARTICLE 10

REPORTS AND REMITTANCES

	A.	 	Within 30 days after the end of each month, the Company shall provide the following
information to the Reinsurer with reports being provided at the insurance Policy level:

	 	1.	 	ceded Gross Earned Premium Income for the month;
	 
	 	2.	 	the ceding commission as provided for in this Contract;
	 
	 	3.	 	ceded paid loss and Loss Adjustment Expense during the month;
	 
	 	4.	 	ceded subrogation or other recoveries during the month;
	 
	 	5.	 	ceded outstanding losses and Loss Adjustment Expense.

	 	 	The Company shall remit the positive balance of (1) less (2) less (3), plus (4), 45 days after
the end of each month. Negative balances shall be remitted by the Reinsurer as promptly as
possible after receipt of the Company’s report but in no event later than 15 days after
receipt of the Company’s report.
	 
	B.	 	Should the amount recoverable under this Contract equal $250,000 (being 36.76% of $680,000,
which is the Reinsurer’s maximum limit of each and every Loss Occurrence) or more as respects
any one loss, the Company may give the Reinsurer notice of payment made or its intention to
make payment on a certain date. If the Company has paid the loss, payment shall be made by
the Reinsurer within three (3) working days of the Reinsurer’s receipt of notice of payment.
If the Company intends to pay the loss by a certain date and has submitted a proof of loss or
similar document, payment shall be due from the Reinsurer 24 hours prior to that date,
provided the Reinsurer has a period of five working days after receipt of said notice to
dispatch the payment. Cash loss amounts specifically remitted by the Reinsurer as set forth
herein shall be credited to the next monthly account.
	 
	C.	 	The Company shall also provide the Reinsurer with such other information as may be required
by the Reinsurer, at the insurance Policy level, for completion of its NAIC annual statements
or as may be required to assure and confirm compliance with the terms of this Contract,
including but not limited to Policy effective and expiration date, insured Policyholder
State, class codes, experience modification factors and the like.

	 	 	 
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ARTICLE 11

CEDING COMMISSION

The Reinsurer shall allow the Company a 23.50% commission on all premiums ceded to the Reinsurer.
The Company shall allow the Reinsurer return commission on return premiums at the same rate.

ARTICLE 12

DEFINITIONS

	A.	 	“Loss Occurrence” means each and every disaster, casualty, accident, or loss or series of
disasters, casualties, accidents or losses arising out of one event. As respects a Loss
Occurrence involving Occupational Disease or Other Disease or Cumulative Trauma, the following
shall apply:

	 	1.	 	Per Event Coverage. As respects losses arising from Occupational Disease or
Other Disease, regardless of the specific kind or class, suffered by employees of one or
more employers, all such losses sustained by the Company from one event shall, together
with losses not classified as Occupational Disease or Other Disease, be deemed to be a
single “Loss Occurrence.”
	 
	 	2.	 	Per Employee Coverage. As respects losses arising from Occupational Disease
or Other Disease or Cumulative Trauma suffered by a single employee, and not covered
under subparagraph (1) above, the date that the Loss Occurrence commences shall be
determined as follows:

	 	a.	 	If the case is compensable under the Workers’ Compensation Law, the
date of the beginning of the disability for which compensation is payable.
	 
	 	b.	 	If the case is not compensable under the Workers’ Compensation Law,
the date that disability due to said disease actually began.
	 
	 	c.	 	If the claim is made after employment has ceased, the date of cessation
of such employment.

	 	3.	 	Per Employer Coverage. As respects losses arising from Occupational Disease
or Other Disease or Cumulative Trauma of the same specific kind or class, suffered by
multiple employees of the same employer, and not covered under subparagraphs (1) or (2)
above, all such losses sustained by the Company within a Policy year shall be aggregated
and considered as constituting one “Loss Occurrence” hereunder and the inception date of
the Policy year in which losses occur shall be deemed to be the date of the Loss
Occurrence.

	 	 	 
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	B.	 	“Gross Earned Premium Income” means gross earned manual premium adjusted for experience and
schedule credit/debit modifications, State/NCCI safety credit and other allowable credits,
premium discount, deductible credits, expense constants, Policy fees, cancellations and
audits.

	C.	 	“Loss Adjustment Expense” means costs and expenses incurred by the Company in connection
with the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a
specific claim or loss, or alleged loss, including but not limited to:

	 	1.	 	court costs;
	 
	 	2.	 	costs of supersedeas and appeal bonds;
	 
	 	3.	 	monitoring counsel expenses;
	 
	 	4.	 	legal expenses and costs incurred in connection with coverage questions and legal
actions connected thereto, including but not limited to declaratory judgment actions;
	 
	 	5.	 	post-judgment interest;
	 
	 	6.	 	pre-judgment interest, unless included as part of an award or judgment;
	 
	 	7.	 	a pro rata share of salaries and expenses of Company field employees, calculated in
accordance with the time occupied in adjusting such loss, and expenses of other Company
employees who have been temporarily diverted from their normal and customary duties and
assigned to the field adjustment of losses covered by this Contract; and
	 
	 	8.	 	subrogation, salvage and recovery expenses.

	 	 	“Loss Adjustment Expense” does not include salaries and expenses of the Company’s employees,
except as provided in subparagraph (7) above, and office and other overhead expenses.
	 
	D.	 	“Policy(ies)” means any binder, policy, or contract of insurance or reinsurance issued,
accepted or held covered provisionally or otherwise, by or on behalf of the Company.
	 
	E.	 	“Occupational Disease,” “Other Disease” and “Cumulative Trauma” shall be defined by the
applicable state or federal statutes, regulations, or case law having jurisdiction over such
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ARTICLE 13

EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS

	A.	 	This Contract shall cover 90% of any Extra Contractual Obligations, as provided in the
Retention and Limit Article. “Extra Contractual Obligations” shall be defined as those
liabilities not covered under any other provision of this Contract and that 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 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.

	B.	 	This Contract shall cover 90% of any Loss in Excess of Policy Limits, as provided in the
Retention and Limit Article. “Loss in Excess of Policy Limits” shall be defined as Loss in
excess of the Policy limit, having been incurred because of, but not limited to, 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.

	C.	 	An Extra Contractual Obligation and/or Loss in Excess of Policy Limits shall be deemed to
have occurred on the same date as the loss covered under the Company’s Policy, and shall
constitute part of the original loss.

	D.	 	For the purposes of the Loss in Excess of Policy Limits coverage hereunder, the word “Loss”
means any amounts for which the Company would have been contractually liable to pay had it
not been for the limit of the original Policy.

	E.	 	Loss Adjustment Expense in respect of Extra Contractual Obligations and/or Loss in Excess of
Policy Limits shall be covered hereunder in the same manner as other Loss Adjustment Expense.

	F.	 	However, this Article shall not apply where the loss has been incurred due to fraud of 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.

	G.	 	Recoveries from any form of insurance or reinsurance, that protects the Company against
claims which are the subject matter of this Article, shall inure to the benefit of the
Reinsurer, to the extent collected, and shall be deducted from the total amount of Extra
Contractual Obligations and Loss in Excess of Policy Limits for purposes of determining the
loss hereunder. The Company shall in good faith attempt to collect any recoveries due under
this paragraph.

	 	 	 
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	H.	 	In no event shall coverage be provided to the extent not permitted under law.

ARTICLE 14

NET RETAINED LIABILITY

	A.	 	This Contract applies only to that portion of any Policy that the Company retains net for its
own account (prior to deduction of any reinsurance that inures solely to the benefit of the
Company).

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

ARTICLE 15

ORIGINAL CONDITIONS

All reinsurance under this Contract shall be subject to the same rates, terms, conditions, waivers
and interpretations, and to the same modifications and alterations as the respective Policies of
the Company. However, in no event shall this be construed in any way to provide coverage outside
the terms and conditions set forth in this Contract.

ARTICLE 16

SALVAGE AND SUBROGATION

	A.	 	Salvages and all recoveries (including amounts due from all reinsurances that inure to the
benefit of this Contract, whether recovered or not), shall be first deducted from such loss
to arrive at the amount of liability attaching hereunder.

	B.	 	All salvages, recoveries or payments recovered or received subsequent to loss settlement
hereunder shall be applied as if recovered or received prior to the aforesaid settlement, and
all necessary adjustments shall be made by the parties hereto.

	 	 	 
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ARTICLE 17

NO THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall
any insured, claimant or other third party have any rights under this Contract except as
may be expressly provided otherwise herein.

ARTICLE 18

LOSS SETTLEMENTS

	A.	 	Other than as described in Article 28 for certain individual claims,
the Company shall adjust, settle or compromise all claims and losses. The Reinsurer
shall have the right, but not the obligation, to assist the Company (at the
Reinsurer’s own cost) in the settlement, adjustment or compromise of any claim or
loss, including the right to participate in the defense of any claim, suit or
proceeding involving this Contract or the Policies reinsured by this Contract.

	B.	 	As respects losses subject to this Contract, all loss settlements made
by the Company, whether under strict Policy terms or by way of compromise other
than Ex-Gratia Settlements which are covered hereunder only as provided in
paragraph C below, and any Extra Contractual Obligations and/or Loss in Excess of
Policy Limits, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay
or allow, as the case may be, its share of each such settlement as provided in
accordance with the Reports and Remittances Article.

“Ex-Gratia Settlements,” as used in this Contract, will mean all settlements of
losses not covered under the express terms of the Policies, which are primarily
motivated by a customer business relationship. “Ex-Gratia Settlements” will not
include settlements of losses which arise from court decisions or other judicial
acts or orders.

	C.	 	Any Ex-Gratia Settlement made by the Company on a loss subject to this
Contract shall be binding on the Reinsurer, provided the Company has submitted the
settlement to the Reinsurer and received the Reinsurer’s agreement to the
settlement. If the Ex-Gratia Settlement is accepted by the Reinsurer, it shall be
subject to the terms of this Contract.

ARTICLE 19

COMMUTATION

	A.	 	Except as defined and described in Paragraph E of this Article, this
Article will only take effect should the parties hereto mutually agree to commute
one or any number of the

	 	 	 
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	 	 	Workers’ Compensation losses under this Contract. There will be no obligation on the part of
either party to so commute.

	B.	 	Should the Company become liable for any loss hereunder, and be required to make periodic
payments to or otherwise set up on its books reserves for such loss, at any time after seven
years following the date of such loss and upon mutual agreement of the Company and the
Reinsurer, said loss (including Loss Adjustment Expenses) may be commuted. If the value of
said loss, including amounts falling to the share of the Reinsurer, cannot be agreed upon by
the parties to this Contract, said value may be determined by employing one of the following:

	 	1.	 	A present value calculation based on the following criteria:

	 	a.	 	In respect of all unindexed benefits, the present value calculation shall
be determined based upon an annual discount equal to the five-year U.S. Treasury
note rate at the time of commutation.
	 
	 	b.	 	In respect of all future medical costs, the present value calculation
shall be based upon the Company’s evaluation of long term medical care and
rehabilitation requirements, using an annual discount equal to the five-year U.S.
Treasury note rate at the time of commutation, and an annual escalation equal to the
Medical Care Consumer Price Index (CPI-MC) at the time of commutation.
	 
	 	c.	 	Where applicable, impaired life expectancy, survivors’ life expectancy,
as well as remarriage probability shall be reflected in the calculation by employing
tables required by statute.

	 	2.	 	The Company may determine the present value by purchasing (or obtaining a quotation
for) an annuity from any A. M. Best’s Class VIII IIA+II rated or better annuity writer,
with an AAA rating by Standard & Poor’s.

	C.	 	The Reinsurer’s proportion of the amount determined will be considered its total liability
for such loss and the lump sum payment thereof shall constitute a complete release of both
parties from liability hereunder for the commuted losses.
	 
	D.	 	This Article shall survive the expiration or termination of this Contract.

	E.	 	In addition to the ability to commute any one or any group of individual claims, the parties
to this Contract may also, upon mutual agreement and understanding, commute this entire
Contract. Such commutation shall include specific rights, duties and consideration that are
mutually agreeable to both the Company and the Reinsurer. Such whole Contract commutation
shall be considered and negotiated in good faith by both parties in the event that the
Company consummates an Initial Public Offering during the term of this Contract. In the event
of such whole Contract commutation, both parties will use their best efforts to complete such
commutation within ninety (90) days from the initial notice by one of the parties as to the
intent to commute the Contract.

	 	 	 
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ARTICLE 20

SUNSET

Notwithstanding the provisions of paragraph C of the Indemnification and Errors and Omissions
Article of this Contract, coverage hereunder shall apply only to Loss Occurrences notified by
Company to the Reinsurer, with full particulars, within 84 months from the effective date of this
Contract. Notice of an event shall include:

	 	1.	 	The approximate time and location of the Loss Occurrence.
	 
	 	2.	 	The date of loss as established under this Contract.
	 
	 	3.	 	The names of any original insureds that have been identified by the Company, at the
time of notice, as being involved in the Loss Occurrence.
	 
	 	4.	 	The current indemnity, medical and expense reserves delineated by the original
insured.
	 
	 	5.	 	The total payments made by the Company, delineated by original insured.

ARTICLE 21

LATE PAYMENTS

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

	 	1.	 	The number of full days that have expired since the overdue date or the last
monthly calculation, whichever the lesser; times
	 
	 	2.	 	1/365th of the sum of the six-month United States Treasury Bill rate as quoted in
The Wall Street Journal on the first business day of the month for which the calculation
is made, plus 1%; times
	 
	 	3.	 	The amount past due, including accrued interest.

	 	 	Interest shall accumulate until payment of the original amount due plus interest penalties has
been received by the party to whom payment is due.

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

	 	 	 
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	 	1.	 	Payments from the Reinsurer to the Company shall be due on the date on which the
demand for payment (including delivery of bordereaux or quarterly or monthly reports) is
received by the Reinsurer, and shall be overdue 30 days thereafter.
	 
	 	2.	 	Payments from the Company to the Reinsurer shall be due on the dates specified
within this Contract. Payments shall be overdue 30 days thereafter except for the first
installment of premium, if applicable, which shall be overdue 60 days from inception or
30 days from final line-signing, whichever the later. Reinstatement premium, if
applicable, shall have as a due date the date when the Company receives payment for the
claim giving rise to such reinstatement premium, and payment shall be overdue 30 days
thereafter. In the event a due date is not specifically stated for a given payment, the
overdue date shall be 30 days following the date of billing.

	C.	 	If the information contained in the Company’s demand for payment is insufficient or not in
accordance with the conditions of this Contract, then within 30 days the Reinsurer shall
request from the Company all additional information necessary to validate its claim and the
payment due date as defined in paragraph B shall be deemed to be the date upon which the
Reinsurer received the requested additional information. This paragraph is only for the
purpose of establishing when a payment is overdue, and shall not alter the provisions of the
Loss Settlements Article, the Reports and Remittances Article, or other pertinent contractual
stipulations.

	D.	 	Should the Reinsurer dispute a claim presented by the Company and the timeframes set out in
paragraph B be exceeded, interest as stipulated in paragraph A shall be payable for the entire
overdue period, but only for the amount of the final settlement with the Reinsurer.

	E.	 	In the event arbitration is necessary to settle a dispute, the panel shall have the authority
to make a determination awarding interest to the prevailing party. Interest, if any, awarded
by the panel shall supersede the interest amounts outlined herein.

	F.	 	Any interest owed pursuant to this Article may be waived by the party to which it is owed.
Waiver of such interest, however, shall not affect the waiving party’s rights to other
interest amounts due as a result of this Article.

ARTICLE 22

OFFSET

The Company and the Reinsurer, each at its option, may offset any balance or balances, whether on
account of premiums, claims and losses, loss expenses or salvages due from one party to the other
under this Contract; provided, however, that in the event of the insolvency of a party hereto,
offsets shall only be allowed in accordance with applicable statutes and regulations.

	 	 	 
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ARTICLE 23

CURRENCY

	A.	 	Where the word “Dollars” and/or the sign “$” appear in this Contract, they shall mean United
States Dollars.

	B.	 	For purposes of this Contract, where the Company receives premiums or pays losses in
currencies other than United States Dollars, such premiums or losses shall be converted into
United States Dollars at the actual rates of exchange at the time of receipt or payment by the
Company.

ARTICLE 24

UNAUTHORIZED REINSURANCE

	A.	 	This Article applies only to a Reinsurer who does not qualify for full credit with any
insurance regulatory authority having jurisdiction over the Company’s reserves.

	B.	 	The Company agrees, in respect of its Policies or bonds falling within the scope of this
Contract, that when it files with its insurance regulatory authority, or sets up on its books
liabilities as required by law, it shall forward to the Reinsurer a statement showing the
proportion of such liabilities applicable to the Reinsurer. The “Reinsurer’s Obligations”
shall be the Reinsurer’s proportionate share of:

	 	1.	 	unearned premium (if applicable);
	 
	 	2.	 	known outstanding losses that have been reported to the Reinsurer and Loss
Adjustment Expense relating thereto;
	 
	 	3.	 	losses and Loss Adjustment Expense paid by the Company but not recovered from the
Reinsurer;
	 
	 	4.	 	losses incurred but not reported (“IBNR”) and Loss Adjustment Expense relating
thereto. The Company shall set such IBNR in reasonable manner, consistent with standards
and practices as promulgated by the Casualty Actuarial Society as of the date such IBNR
is set.

	C.	 	The Reinsurer’s Obligations shall be funded by funds withheld, cash advances, Trust
Agreement or a Letter of Credit (LOC). The Reinsurer shall have the option of determining the
method of funding provided it is acceptable to the insurance regulatory authorities having
jurisdiction over the Company’s reserves.

	D.	 	When funding by an LOC, the Reinsurer agrees to apply for and secure timely delivery to the
Company of a clean, irrevocable and unconditional LOC issued by a bank and containing
provisions acceptable to the insurance regulatory authorities having jurisdiction

	 	 	 
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		 	over the Company’s reserves in an amount equal to the Reinsurer’s Obligations. Such LOC 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 (or such other
time period as may be required by insurance regulatory authorities), prior to any expiration
date the issuing bank shall notify the Company by certified or registered mail that the
issuing bank elects not to consider the LOC extended for any additional period.

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

	 	1.	 	to reimburse the Company for the Reinsurer’s Obligations, the payment of which is
due under the terms of this Contract and that has not been otherwise paid;
	 
	 	2.	 	to make refund of any sum that is in excess of the actual amount required to pay
the Reinsurer’s Obligations under this Contract (or in excess of 102% of the Reinsurer’s
Obligations, if funding is provided by a Trust Agreement);
	 
	 	3.	 	to fund an account with the Company for the Reinsurer’s Obligations. Such cash
deposit shall be held in an interest bearing account separate from the Company’s other
assets, and interest thereon not in excess of the prime rate shall accrue to the benefit
of the Reinsurer. Any taxes payable on accrued interest shall be paid out of the assets
in the account that are in excess of the Reinsurer’s Obligations (or in excess of 102% of
the Reinsurer’s Obligations, if funding is provided by a Trust Agreement). If the assets
are inadequate to pay taxes, any taxes due shall be paid by the Reinsurer;
	 
	 	4.	 	to pay the Reinsurer’s share of any other amounts the Company claims are due under
this Contract.

	F.	 	If the amount drawn by the Company is in excess of the actual
amount required for E(1) or
E(3), or in the case of E(4), the actual amount determined to be due, the Company shall
promptly return to the Reinsurer the excess amount so drawn. All of the foregoing shall be
applied without diminution because of insolvency on the part of the Company or the Reinsurer.

	G.	 	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.

	H.	 	At annual intervals, or more frequently at the request of the Reinsurer or at the discretion
of the Company, but never more frequently than quarterly, the Company shall prepare a

	 	 	 
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	 	 	specific statement of the Reinsurer’s Obligations for the sole purpose of amending the LOC or
other method of funding, in the following manner:

	 	1.	 	If the statement shows that the Reinsurer’s Obligations exceed the balance of the
LOC as of the statement date, the Reinsurer shall, within 30 days after receipt of the
statement, secure delivery to the Company of an amendment to the LOC increasing the
amount of credit by the amount of such difference. Should another method of funding be
used, the Reinsurer shall, within the time period outlined above, increase such funding
by the amount of such difference.
	 
	 	2.	 	If, however, the statement shows that the Reinsurer’s Obligations are less than the
balance of the LOC (or that 102% of the Reinsurer’s Obligations are less than the trust
account balance if funding is provided by a Trust Agreement), 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 LOC reducing the
amount of credit available by the amount of such excess credit. Should another method of
funding be used, the Company shall, within the time period outlined above, decrease such
funding by the amount of such excess.

	I.	 	At the inception of this Contract, the Company understands, agrees and stipulates that the
Reinsurer is an Authorized Reinsurer, and as of that date, is not subject to any
collateralization requirements or obligations. The Reinsurer understands and agrees that
should the Reinsurer become an Unauthorized Reinsurer (i.e. does not qualify for credit with
the insurance regulatory authority having jurisdiction over the Company’s reserves) at any
time during the Term of this Contract, the Reinsurer shall be subject to the collateralization
requirements and obligations described in Paragraphs A-H of this Article.

ARTICLE 25

TAXES

	A.	 	In consideration of the terms under which this Contract is issued, the Company undertakes
not to claim any deduction of the premium hereon when making Canadian tax returns or when
making tax returns, other than Income or Profits Tax returns, to any state or territory of
the United States of America or to the District of Columbia.

	B.	1.	 	The Reinsurer has agreed to allow, for the purpose of paying the Federal Excise Tax, the applicable percentage of the premium payable hereon (as imposed under the Internal
Revenue Code) to the extent such premium is subject to Federal Excise Tax.
	 
	 	2.	 	In the event of any return of premium becoming due hereunder, the Reinsurer shall
deduct the applicable percentage of the premium from the amount of the return, and the
Company or its agent should take steps to recover the Tax from the U.S. Government.

	 	 	 
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     ARTICLE 26

ACCESS TO RECORDS

The Reinsurer or its duly authorized representatives shall have the right to visit the offices of
the Company to inspect, examine, audit, copy, and verify any of the Policy, accounting or claim
files or other relevant records (“Records”) relating to business reinsured under this Contract
during regular business hours after giving five working days’ prior notice. This right shall be
exercisable during the term of this Contract or after the expiration of this Contract.
Notwithstanding the above, the Reinsurer shall not have any right of access to the Records of the
Company if it is not current in all undisputed payments due the Company.

ARTICLE 27

CONFIDENTIALITY

	A.	 	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 and execution of this Contract (“Confidential Information”) are proprietary and
confidential to the Company. Confidential Information shall not include documents,
information or data that the Reinsurer can show:

	 	1.	 	are publicly known or have become publicly known through no unauthorized act of the
Reinsurer;
	 
	 	2.	 	have been rightfully received from a third person without obligation of
confidentiality; or
	 
	 	3.	 	were known by the Reinsurer prior to the placement of this Contract without an
obligation of confidentiality.

	B.	 	Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential
Information to any third parties, including any affiliated companies (except to the extent
necessary to enable affiliated companies or third parties engaged by the Reinsurer to perform
services related to this Contract on behalf of the Reinsurer), except:

	 	1.	 	when required by retrocessionaires subject to the business ceded to this Contract;
	 
	 	2.	 	when required by regulators performing an audit of the Reinsurer’s records and/or
financial condition; or
	 
	 	3.	 	when required by external auditors performing an audit of the Reinsurer’s records
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	 	4.	 	when required by attorneys or arbitrators in connection with an actual
or potential dispute hereunder; or
	 
	 	5.	 	when required by the Reinsurer’s internal reinsurance operations.

	 	 	Further, the Reinsurer agrees not to use any Confidential Information for any purpose not
related to the performance of its obligations or enforcement of its rights under this Contract
or for the Reinsurer’s internal reinsurance operations.

	C.	 	Notwithstanding the above, in the event that the Reinsurer is required by court order, other
legal process or any regulatory authority to release or disclose any or all of the
Confidential Information, the Reinsurer agrees to provide the Company with written notice of
same at least 10 days prior to such release or disclosure and to use its best efforts to
assist the Company in maintaining the confidentiality provided for in this Article.

	D.	 	The provisions of this Article shall extend to the officers, directors and employees of the
Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

ARTICLE 28

INDEMNIFICATION AND ERRORS AND OMISSIONS

	A.	 	The Reinsurer is reinsuring, to the amount herein provided, the obligations of the Company
under any original insurance or reinsurance. Except as noted in Paragraph D of this Article,
the Company shall be the sole judge as to:

	 	1.	 	what shall constitute a claim or loss covered under any original insurance or
reinsurance written by the Company;
	 
	 	2.	 	the Company’s liability thereunder;
	 
	 	3.	 	the amount or amounts that it shall be proper for the Company to pay thereunder.

	B.	 	The Reinsurer shall be bound by the judgment of the Company as to the obligation(s) and
liability(ies) of the Company under any original insurance or reinsurance.

	C.	 	Except for the conditions as provided for in the Sunset Article, any inadvertent error,
omission or delay in complying with the terms and conditions of this Contract shall not be
held to relieve either party hereto from any liability that would attach to it hereunder if
such error, omission or delay had not been made, provided such error, omission or delay is
rectified immediately upon discovery.

	D.	 	For claims or losses of a particular size or nature, as listed below, the Company shall look
to the Reinsurer for approval (to the extent such approval is not prohibited by applicable
State law or regulation) and assistance in the (a) determination of what shall constitute a
claim or loss covered under the original insurance or reinsurance written by the Company,

	 	 	 
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	 	(b)	 	Company’s liability thereunder and/or (c) amount or amounts that should be deemed proper for
the Company to pay:

	 	i)	 	Any claim or loss for which the ultimate cost (including losses, Loss Adjustment
Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits), assuming
the absence of all reinsurances that may be applicable, is at any time estimated to be
in excess of five hundred thousand dollars ($500,000);
	 
	 	ii)	 	Any claim, suit, notice or loss involving or alleging any of the following:

	 	1.	 	Death
	 
	 	2.	 	2nd- or 3rd degree burns over more than 25% of the body
	 
	 	3.	 	Amputation
	 
	 	4.	 	Spinal Cord injuries (including Paraplegia or Quadriplegia)
	 
	 	5.	 	Permanent Impairment
	 
	 	6.	 	2nd or later Surgeries
	 
	 	7.	 	Post-Traumatic Stress
	 
	 	8.	 	Any mode of public or private transportation
	 
	 	9.	 	Bath Faith

The Reinsurer’s approval and/or assistance in the determination of coverage, liability or
payment amounts shall not be unduly withheld, nor shall such approval or assistance be provided
in a manner or timeframe so as to adversely affect the economic outcome of any claim or loss. In
addition, the Reinsurer’s approval and assistance shall be requested with respect to external or
third party activity and shall not restrict the Company’s internal accounting or reserving
activities.

ARTICLE 29

INSOLVENCY

	A.	 	If more than one reinsured company is referenced within the definition of “Company” in the
Preamble to this Contract, this Article will apply severally to each such company. Further,
this Article and the laws of the domiciliary state will apply in the event of the insolvency
of any company covered hereunder. In the event of a conflict between any provision of this
Article and the laws of the domiciliary state of any company covered hereunder, that
domiciliary state’s laws will prevail.

	B.	 	In the event of the insolvency of the Company, this reinsurance (or the portion of any risk
or obligation assumed by the Reinsurer, if required by applicable law) shall be payable
directly to the Company, or to its liquidator, receiver, conservator or statutory successor,
either: (1) on the basis of the liability of the Company, or (2) on the basis of claims filed
and allowed in the liquidation proceeding, whichever may be required by applicable statute,
without diminution because of the insolvency of the Company or because the liquidator,

	 	 	 
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	 	 	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 that may accrue
to the Company solely as a result of the defense undertaken by the Reinsurer.

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

	D.	 	As to all reinsurance made, ceded, renewed or otherwise becoming effective under this
Contract, 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
Section 4118(a)(1)(A) of the New York Insurance Law, provided the conditions of 1114(c) of
such law have been met, if New York law applies) or except (1) where the Contract 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, 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. 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, or with the prior
approval of such other regulatory authority as may be applicable, is entirely released from
its obligation and the Reinsurer shall pay any loss directly to payees under such Policy.

ARTICLE 30

ARBITRATION

	A.	 	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
registered mail, return receipt requested.

			
	 	 	 
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	B.	 	If the amount in dispute is less than $100,000, unless the arbitration notice includes a
demand for rescission of this Contract, the dispute shall be resolved by a sole arbitrator and
the following procedures shall apply:

	 	a.	 	The sole arbitrator shall be chosen by mutual agreement of the parties within 15
business days after the demand for arbitration. If the parties have not chosen an
arbitrator within the 15 business days after the receipt of the arbitration notice, the
arbitrator shall be chosen in accordance with the Neutral Arbitrator Selection Procedure
modified for a single arbitrator, established by the AIDA Reinsurance and Insurance
Arbitration Society — U.S. (ARIAS) and in force on the date the arbitration is demanded.
The nominated arbitrator must be available to read any written submissions and hear
testimony within 60 calendar days of being chosen.

	 	b.	 	Within 10 business days after the arbitrator has been appointed, the parties shall
be notified of deadlines for the submission of briefs and documentary evidence, as
determined by the arbitrator. There shall be no discovery or hearing unless the parties
agree to engage in limited discovery and/or a hearing. Also, the arbitrator can
determine, without the consent of the parties, that a limited hearing is necessary.

	 	c.	 	The arbitrator shall render a decision no later than 10 business days from the
later of the date on which the briefs are submitted or the close of the hearing, if any.
The decision of the arbitrator shall be in writing and shall be final and binding.

	C.	 	If the amount in dispute is equal to or greater than $100,000, or if the arbitration notice
includes a demand for rescission of this Contract, the following procedures shall apply:

	 	1.	 	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 30 days after being
requested to do so by the other party, the latter, after 10 days’ notice by certified or
registered mail of its intention to do so, may appoint the second arbitrator.

	 	2.	 	If the two arbitrators are unable to agree upon the third arbitrator within 30 days
of their appointment, the third arbitrator shall be selected by the American Arbitration
Association.

	 	3.	 	Within 45 days after notice of appointment of all arbitrators, the panel shall meet
and determine timely periods for briefs, discovery procedures and schedules for hearings.
Unless the panel agrees otherwise, arbitration shall take place in Fort Lauderdale,
Florida, but the venue may be changed when deemed by the panel to be in the best interest
of the arbitration proceeding.

	 	4.	 	The panel shall make its decision within 60 days following the termination of the
hearings. The decision of any two arbitrators when rendered in writing shall be final and
binding.

			
	 	 	 
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	 	5.	 	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.

	D.	 	All arbitrators shall be disinterested active or former executives of insurance or
reinsurance companies or Underwriters at Lloyd’s, London, with expertise or experience in the
area being arbitrated. If a member of the panel dies, becomes disabled or is otherwise
unwilling or unable to serve, a substitute shall be selected in the same manner as the
departing member was chosen and the arbitration shall continue.

	E.	 	The panel shall be relieved of all judicial formality and shall not be bound by the strict
rules of procedure and evidence. Notwithstanding anything to the contrary in this Contract,
the arbitrators may at their discretion, consider underwriting and placement information
provided by the Company to the Reinsurer, as well as any correspondence exchanged by the
parties that is related to this Contract. The panel is empowered to grant interim relief, as
it may deem appropriate.

	F.	 	The arbitrator(s) shall interpret this Contract as an honorable engagement rather than as
merely a legal obligation considering the custom and practice of the applicable insurance and
reinsurance business.

	G.	 	Judgment upon the award may be entered in any court having jurisdiction thereof.

	H.	 	Except as provided in subparagraph C(5) above, the 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.

	I.	 	Punitive damages shall not be assessed against either party.

ARTICLE 31

SERVICE OF SUIT

	A.	 	This Article applies only to those Reinsurers not domiciled in the United States of America,
and/or not authorized in any state, territory and/or district of the United States of America
where authorization is required by insurance regulatory authorities.

	B.	 	This Article shall not be read to conflict with or override the obligations of the parties
to arbitrate their disputes as provided for in the Arbitration Article. This Article is
intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award,
not as an alternative to the Arbitration Article for resolving disputes arising out of this
Contract.

	C.	 	In the event of the failure of the Reinsurer to pay any amount claimed to be due hereunder,
the Reinsurer, at the request of the Company, shall submit to the jurisdiction of a court of
competent jurisdiction within the United States. Nothing in this Article constitutes or

			
	 	 	 
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	 	 	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. The Reinsurer, once the
appropriate court is selected, whether such court is the one originally chosen by the Company
and accepted by Reinsurer or is determined by removal, transfer, or otherwise, as provided
for above, shall comply with all requirements necessary to give said court jurisdiction and,
in any suit instituted against the Reinsurer upon this Contract, shall abide by the final
decision of such court or of any appellate court in the event of an appeal.

	D.	 	Service of process in such suit may be made upon Messrs. Mendes and Mount, 750 Seventh
Avenue, New York, New York 10019-6829, or another party specifically designated in the
applicable Interests and Liabilities Agreement attached hereto. The above-named are authorized
and directed to accept service of process on behalf of the Reinsurer in any such suit.

	E.	 	Further, pursuant to any statute of any state, territory or district of the United States
that makes provision therefor, the Reinsurer hereby designates the Superintendent,
Commissioner or Director of Insurance, or other officer specified for that purpose in the
statute, or his successor or successors in office, as its true and lawful attorney upon whom
may be served any lawful process in any action, suit or 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 32

AGENCY

For purposes of sending and receiving notices and payments required by this Contract, Guarantee
Insurance Company shall be deemed the agent of all other reinsured Companies referenced in this
Contract. In no event, however, shall any reinsured Company be deemed the agent of another with
respect to the terms of the Insolvency Article.

ARTICLE 33

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws
of the State of Florida, exclusive of conflict of law rules. However, with respect to credit for
reinsurance, the rules of all applicable states shall apply.

			
	 	 	 
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ARTICLE 34

ENTIRE AGREEMENT

This Contract sets forth all of the duties and obligations between the Company and the Reinsurer
and supersedes any and all prior or contemporaneous written agreements with respect to matters
referred to in this Contract. The Contract may not be modified or changed except by an amendment to
this Contract in writing signed by both parties.

ARTICLE 35

NON-WAIVER

The failure of the Company or the Reinsurer to insist on compliance with this Contract or to
exercise any right or remedy hereunder shall not constitute a waiver of any rights or remedy
contained herein nor stop either party from thereafter demanding full and complete compliance nor
prevent either party from exercising such rights or remedy in the future.

ARTICLE 36

CHANGE IN ADMINISTRATIVE PRACTICES

The Company shall use its best efforts to maintain and be in compliance with the underwriting
policies and guidelines and risk acceptance practices in effect as of the inception of this
Contract, and shall not make any changes to such guidelines, practices or policies without the
express written prior approval of the Reinsurer.

ARTICLE 37

INTERMEDIARY

This contract was negotiated directly between the Company and the Reinsurer in good faith, on equal
footing and at arm’s length, and did not involve or include the services of a Reinsurance
Intermediary.

ARTICLE 38

MODE OF EXECUTION

	A.	 	This Contract may be executed by:

	 	1.	 	an original written ink signature of paper documents;

			
	 	 	 
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	 	2.	 	an exchange of facsimile copies showing the original written ink signature of
paper documents;

	 	3.	 	electronic signature technology employing computer software and a digital signature
or digitizer pen pad to capture a person’s handwritten signature in such a manner that
the signature is unique to the person signing, is under the sole control of the person
signing, is capable of verification to authenticate the signature and is linked to the
document signed in such a manner that if the data is changed, such signature is
invalidated.

	B.	 	The use of any one or a combination of these methods of execution shall constitute a legally
binding and valid signing of this Contract. This Contract may be executed in one or more
counterparts, each of which, when duly executed, shall be deemed an original.

IN WITNESS WHEREOF, the Company has caused this Contract to be executed by its
duly authorized representative(s) this 26th
day of March, in the year of                     .

Signed in Washington, D.C.

	 	 	 	 	 	 	 
	ATTEST:	 	GUARANTEE INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Theodore G. Bryant	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	Secretary and General Counsel	 	 
	 
	 	 	 	 	 	 
	 

	 	Reference:	 	 	 	 
	 

	 	 	 	 	 	 

IN WITNESS WHEREOF, the Reinsurer has caused this Contract to be executed by its duly authorized
representative(s) this 26 day of March, in the year of 2009.

Signed in Washington, DC

	 	 	 	 	 	 	 
	ATTEST:	 	ULLICO CASUALTY COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Aronowitz
	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	President	 	 
	 
	 	 	 	 	 	 
	 

	 	Reference:	 	 
	 
	 	 	 	 
	 	 

			
	 	 	 
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FLORIDA, GEORGIA & NEW JERSEY

PRIMARY TRADITIONAL MARKET

WORKERS’ COMPENSATION QUOTA SHARE REINSURANCE CONTRACT

NUCLEAR RISK EXCLUSION

     This Agreement does not apply to Loss Occurrences arising from, whether directly or indirectly,
whether proximate or remote:

	 	a)	 	Any Nuclear Facility, Nuclear Hazard or Nuclear Reactor;

	 	b)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear Radiation or
radioactive contamination, all whether controlled or uncontrolled; or

	 	c)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear Radiation or
radioactive contamination, all whether controlled or uncontrolled, caused directly or
indirectly by, contributed to or aggravated by an Event;

	 	d)	 	Any Spent Fuel or Waste;
	 
	 	e)	 	Any Fissionable Substance; or
	 
	 	f)	 	Any nuclear device or bomb.

As used in this Exclusion:

“Fissionable Substance” means;

any prescribe substance that is, or from which can be obtained, a substance capable of
releasing atomic energy by nuclear fission.

“Nuclear Facility” means;

any Nuclear Reactor,

any apparatus designed or used to sustain nuclear fission in a self-supporting chain
reaction or to contain a critical mass of plutonium, thorium and uranium or any one or
more of them;

any equipment or device designed or used for (i) separating the isotopes of plutonium,
thorium and uranium or any one or more of them, (ii) processing or utilizing spent fuel,
or (iii) handling, processing or packaging Waste;

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

any equipment or device used for the processing, fabricating or alloying of plutonium,
thorium or uranium enriched in the isotope uranium 233 or in the isotope uranium 235, or
any one or more of them if at any time the total amount of such material in the custody
of the Insured at the premised where such equipment or device is located consists of or
contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or
more than 250 grams of uranium 235;

any structure, basin, excavation, premises or place prepared or used for the storage or
disposal of Waste or Radioactive Material, and includes the site on which any of the
foregoing is located, all operations conducts on such site and all premises used for
such operations;

“Nuclear Hazard” means: the radioactive, toxic, explosive or other hazardous properties of
Radioactive Material or Nuclear Material.

“Nuclear Material” means Source Material, Special Nuclear Material or Byproduct Material.

“Nuclear Reactor” means any apparatus designed or used to sustain nuclear fission in a
self-supporting chain reaction or to contain a critical mass of fissionable material.

“Radioactive Material” means uranium, thorium, plutonium, neptunium, their respective derivatives
and compounds, radioactive isotopes of other elements and any other substances that the Atomic
Energy Control Board may, by regulation designate as being prescribed substances capable of
releasing atomic energy, or as being requisite for the production, use or application of atomic
energy.

“Source Material,” “Special Nuclear Material”, and “Byproduct Material” have the meanings given
them in the Atomic Energy Act of 1954 or in any law amendatory thereof.

“Spent Fuel” means any fuel element or fuel component, solid or liquid, which has been sued or
exposed to radiation in the Nuclear Reactor.

“Waste” means any waste material (i) containing Byproduct Material and (ii) resulting from the
operation by any person or organization of any Nuclear Facility.

			
	 	 	 
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