Document:

ptla-ex1044_21.htm

Exhibit 10.44

 

									
	

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
info@portola.com

www.portola.com
	
 
	
 
	
T: 650.246.7000

F: 650.246.7376
	
 
	
 
	
270 East Grand Avenue

South San Francisco, CA 94080

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Innovative Science. Patient Focused.

 

August 31, 2018

Tao Fu 

Portola Pharmaceuticals, Inc. 

270 East Grand Avenue 

South San Francisco, CA 94080

Dear Tao:

This letter sets forth the substance of the separation and consulting agreement (the “Agreement”) between you and Portola Pharmaceuticals, Inc. (the “Company”). 

1.Separation/Final Pay. You hereby tender your voluntary resignation from all positions you hold with the Company, effective as of September 21, 2018 (the “Separation Date”). On the Separation Date, the Company will pay you all accrued salary, and all accrued and unused vacation earned through the Separation Date, subject to standard payroll deductions and withholdings. 

2.Consulting. If you timely enter into this Agreement, allow it to become effective, and remain in compliance with its terms, then the Company will engage you as a consultant under the terms set forth below. 

a.Consulting Period. You will serve as a consultant to the Company beginning on the Separation Date and ending on March 1, 2019 (the “Consulting Period”), unless terminated earlier pursuant to Section 2(h). 

b.Consulting Services. As a consultant, you will be responsible for assisting the Company in any area of your expertise, as reasonably requested by the Company (the “Consulting Services”), not to exceed one (1) day per week or forty (40) hours per month. You will conduct the Consulting Services at a location and during times to be mutually agreed upon, and will exercise the highest degree of professionalism. You will be directed in all of your Consulting Services by either Interim Co-Presidents of the Company (or either of their designees). 

c.Compensation.

i.Cash Compensation. During the Consulting Period, the Company will pay you consulting fees equal to $350 per hour (the “Consulting Fees”). No part of the Consulting Fees will be subject to withholding for the payment of any social security, federal, state or any other employee payroll taxes. The Company will report the Consulting Fees by filing Form 1099-MISC with the Internal Revenue Service to the extent required by law. 

ii.Equity. During your employment with the Company, you were granted certain equity interests in the Company. During the Consulting Period, these interests will continue to vest under the existing terms as set forth in the governing equity agreements, with time vesting and performance-based vesting (as to the applicable milestones, if met) to continue during the Consulting Period. Except as provided in this Agreement, all rights and obligations with respect to your equity interests will be as set forth in the applicable agreements, grant notices and plan documents. You are encouraged to obtain independent tax advice concerning your options and how the terms of this Agreement may affect the tax treatment of your interest. 

d.Independent Contractor Status. You agree that during the Consulting Period, (i) you will be an independent contractor to the Company and not an employee of the Company, and (ii) the Company will not make payments for state or federal income tax, FICA (social security and Medicare), make unemployment insurance or disability insurance contributions, or obtain workers’ compensation insurance on your behalf. 

e.Protection of Information. You agree that during the Consulting Period and thereafter, you will not use or disclose any confidential or proprietary information or materials of the Company that you obtain or develop in the course of performing consulting services for the Company. Any and all work product you create in the course of performing consulting services for the 

 

Page 1

									
	

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
info@portola.com

www.portola.com
	
 
	
 
	
T: 650.246.7000

F: 650.246.7376
	
 
	
 
	
270 East Grand Avenue

South San Francisco, CA 94080

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Innovative Science. Patient Focused.

 

Company will be the sole and exclusive property of the Company. You hereby assign to the Company all right, title, and interest in all inventions, techniques, processes, materials, and other intellectual property developed in the course of performing consulting services for the Company. 

f.Limitations on Authority. You will have no responsibilities or authority as a consultant to the Company other than as provided above. You agree not to represent or purport to represent the Company in any manner whatsoever to any third party except with the prior written consent of either Interim Co-President of the Company or his/her designee. 

g.Standards of Conduct; Noncompetition. You agree not to engage in any conduct during the Consulting Period that is detrimental to the interests of the Company. You further agree during the Consulting Period that you will not, directly or indirectly, as an officer, director, employee, consultant, owner, manager, member, partner, or in any other capacity solicit, perform, or provide, or attempt to perform or provide Conflicting Services in the United States, nor will you assist another person to solicit, perform or provide or attempt to perform or provide Conflicting Services in the United States. You and the Company agree that for purposes of this Agreement, “Conflicting Services” means any product, service, or process or the research and development thereof, of any person or organization other than the Company that is substantially similar to or competitive with a product, service, or process, including the research and development thereof, of the Company. Notwithstanding the above, you will not be deemed to be engaged directly or indirectly in any Conflicting Services if you participate in any such business solely as a passive investor in up to one percent (1%) of the equity securities of a company or partnership, the securities of which are publicly traded. 

h.Termination of Consulting Period. Either you or the Company may terminate the Consulting Period, at any time and for any reason, upon thirty (30) days written notice to the other party. If the Company terminates the Consulting Period without Cause, then the Company will accelerate the vesting on your Company equity interests such that you will be deemed vested in all of the shares that would have vested had you remained a consultant through March 1, 2019. For purposes of this Agreement, Cause shall mean any of the following (as determined reasonably and in good faith by the Board): (i) commission of any felony or other crime involving fraud, dishonesty or moral turpitude; (ii) attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) material violation of any contract or agreement with the Company that causes material harm to the Company; or (iv) discovery of conduct during the term of your employment that would have constituted Cause for termination under the terms of your Severance Agreement. You agree that in the event the Company terminates the Consulting Agreement for Cause under the provision of this paragraph 2(h), then you will be required to disgorge all benefits provided to you under the Consulting Agreement, including the benefit of any additional stock rights that vested after the Separation Date. 

3.Expense Reimbursements. You agree that, within ten (10) days after the Separation Date, you will submit your final documented expense reimbursement statement reflecting all business expenses you incurred through the Separation Date, if any, for which you seek reimbursement. The Company will reimburse you for these expenses pursuant to its regular business practice. 

4.Return of Company Property. By the close of business on September 21, 2018, you agree to return to the Company all Company documents (and all copies thereof) and other Company property which you have in your possession or control, including, but not limited to, Company files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, customer lists, prospect information, pipeline reports, sales reports, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, computers, facsimile machines, mobile telephones, servers), credit cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part); provided, however, that you may retain such Company property that is necessary for your performance of the Consulting Services, subject to your prompt return of such information at the conclusion of the Consulting Period subject to agreement by either of the Interim Co-Presidents or his/her designee. 

5.Proprietary Information Obligations. You acknowledge and reaffirm your continuing obligations under your Proprietary Information and Inventions Agreement.

6.Nondisparagement. You agree not to disparage the Company, its officers, directors, employees, shareholders, and agents, in any manner likely to be harmful to its or their business, business reputation, or personal reputation, and the Company’s officers and members of the Board of Directors agree not to disparage you in any manner likely to be harmful to your personal, business or 

 

Page 2

									
	

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
info@portola.com

www.portola.com
	
 
	
 
	
T: 650.246.7000

F: 650.246.7376
	
 
	
 
	
270 East Grand Avenue

South San Francisco, CA 94080

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Innovative Science. Patient Focused.

 

professional reputations; provided that both you and the Company will respond accurately and fully to any request for information if required by legal process or in connection with a government investigation. In addition, nothing in this provision or this Agreement is intended to prohibit or restrain you in any manner from making disclosures that are protected under the whistleblower provisions of federal or state law or regulation. 

7.Release. In exchange for the consideration under this Agreement to which you would not otherwise be entitled, you hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date you sign this Agreement. This general release includes, but is not limited to: (a) all claims arising out of or in any way related to your employment with the Company or the termination of that employment; (b) all claims related to your compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the California Labor Code (as amended), the California Family Rights Act, the Age Discrimination in Employment Act (“ADEA”) and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, you are not releasing the Company hereby from any obligation to indemnify you pursuant to the Articles and Bylaws of the Company, any valid fully executed indemnification agreement with the Company, applicable law, or applicable directors and officers liability insurance. Also, excluded from this Agreement are any claims that cannot be waived by law. 

8.ADEA Release. You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you have under the ADEA, and that the consideration given for the waiver and releases you have given in this Agreement is in addition to anything of value to which you were already entitled. You further acknowledge that you have been advised, as required by the ADEA, that: (a) your waiver and release does not apply to any rights or claims that arise after the date you sign this Agreement; (b) you should consult with an attorney prior to signing this Agreement (although you may choose voluntarily not to do so); (c) you have twenty-one (21) days to consider this Agreement (although you may choose voluntarily to sign it sooner); (d) you have seven (7) days following the date you sign this Agreement to revoke this Agreement (in a written revocation sent to me); and (e) this Agreement will not be effective until the date upon which the revocation period has expired, which will be the eighth day after you sign this Agreement provided that you do not revoke it (the “Effective Date”). 

9.Section 1542 Waiver. In giving the release herein, which includes claims which may be unknown to you at present, you acknowledge that you have read and understand Section 1542 of the California Civil Code, which reads as follows: 

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” 

You hereby expressly waive and relinquish all rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to your release of claims herein, including but not limited to your release of unknown claims. 

10.Protected Rights. You understand that nothing in this Agreement limits your ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the California Department of Fair Employment and Housing, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”). You further understand this Agreement does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. While this Agreement does not limit your right to receive an award for information provided to the Securities and Exchange Commission, you understand and agree that, to maximum extent permitted by law, you are otherwise waiving any and all rights you may have to individual relief based on any claims that you have released and any rights you have waived by signing this Agreement. 

 

Page 3

									
	

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
info@portola.com

www.portola.com
	
 
	
 
	
T: 650.246.7000

F: 650.246.7376
	
 
	
 
	
270 East Grand Avenue

South San Francisco, CA 94080

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Innovative Science. Patient Focused.

 

11.No Voluntary Adverse Action; Cooperation. You agree that you will not voluntarily assist any person in bringing or pursuing any claim or action of any kind against the Company or its parents, subsidiaries, affiliates, officers, directors, employees or agents, unless pursuant to subpoena or other compulsion of law. In addition, you agree to cooperate fully with the Company in connection with its actual or contemplated defense, prosecution, or investigation of any claims or demands by or against third parties, or other matters arising from events, acts, or failures to act that occurred during the period of your employment by the Company. Such cooperation includes, without limitation, making yourself available to the Company upon reasonable notice, without subpoena, to provide accurate and complete information in witness interviews and deposition and trial testimony. The Company will reimburse you for reasonable out-of-pocket expenses you incur in connection with any such cooperation (excluding forgone wages, salary, or other compensation) and will make reasonable efforts to accommodate your scheduling needs. 

12.No Admissions. You understand and agree that the promises and payments in consideration of this Agreement shall not be construed to be an admission of any liability or obligation by the Company to you or to any other person, and that the Company makes no such admission. 

13.Representations. You hereby represent that you have been paid all compensation owed and for all hours worked, have received all the leave and leave benefits and protections for which you are eligible pursuant to the Family and Medical Leave Act, the California Family Rights Act, or otherwise, and have not suffered any on-the-job injury for which you have not already filed a workers’ compensation claim. You also represent and warrant that you are not entitled to any severance benefits from the Company in connection with your resignation of employment. 

14.Miscellaneous. This Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to its subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized officer of the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of California without regard to conflict of laws principles. Any ambiguity in this Agreement shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach. This Agreement may be executed in counterparts and facsimile signatures will suffice as original signatures. 

If this Agreement is acceptable to you, please sign below and return the original to me within twenty-one (21) days. The Company’s offer contained herein will automatically expire if you do not sign and return it within this timeframe. 

We wish you the best in your future endeavors. 

 

			
	
Sincerely,

	
 
	
 
	
 

	
By:
	
/s/ Mardi C. Dier

	
 
	
 
	
Mardi C. Dier

 

Interim Co-President and Chief Financial Officer

 

I have read, understand and agree fully to the foregoing Agreement:

 

	
	
/s/ Tao Fu

	
Tao Fu

	
 

	
September 6, 2018

	
Date

 

 

Page 4fnhc93018ex101

                                                                                                                       FHCF Supplement Layer                                 Reinsurance Contract                                  Effective:  June 1, 2018                          Federated National Insurance Company                                      Sunrise, Florida                                                                        _______________________    *****Portions of this document omitted pursuant to an application for an order for confidential  treatment pursuant to Rule 24b-2 under the Exchange Act. Confidential portions of this  document have been filed separately with the Securities and Exchange Commission.                                                     18\F7V1085       

 

                                Table of Contents                                   Article                                                                         Page       1       Classes of Business Reinsured                                          1      2       Commencement and Termination                                           1      3       Territory                                                              3      4       Exclusions                                                             3      5       Retention and Limit                                                    4      6       Other Reinsurance                                                      5      7       Definitions                                                            5      8       Loss Occurrence                                                        6      9       Loss Notices and Settlements                                           6     10       Cash Call                                                              7     11       Salvage and Subrogation                                                7     12       Reinsurance Premium                                                    7     13       Sanctions                                                              8     14       Late Payments                                                          8     15       Offset                                                                 9     16       Access to Records                                                      9     17       Liability of the Reinsurer                                             9     18       Net Retained Lines (BRMA 32E)                                         10     19       Errors and Omissions (BRMA 14F)                                       10     20       Currency (BRMA 12A)                                                   10     21       Taxes (BRMA 50B)                                                      10     22       Federal Excise Tax (BRMA 17D)                                         11     23       Foreign Account Tax Compliance Act                                    11     24       Reserves                                                              11     25       Insolvency                                                            12     26       Arbitration                                                           13     27       Service of Suit (BRMA 49C)                                            14     28       Severability (BRMA 72E)                                               14     29       Governing Law (BRMA 71B)                                              15     30       Confidentiality                                                       15     31       Non-Waiver                                                            16     32       Notices and Contract Execution                                        16     33       Intermediary                                                          17                    18\F7V1085                    

 

                             FHCF Supplement Layer                                 Reinsurance Contract                                  Effective: June 1, 2018                                  entered into by and between                           Federated National Insurance Company                                      Sunrise, Florida                          (hereinafter referred to as the "Company")                                             and                        The Subscribing Reinsurer(s) Executing the                         Interests and Liabilities Agreement(s)                                    Attached Hereto                          (hereinafter referred to as the "Reinsurer")        Article 1 - Classes of Business Reinsured   By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the  Company under its policies in force at the effective time and date hereof or issued or renewed at  or after that time and date, and classified by the Company as Property business, including but  not limited to, Dwelling Fire, Inland Marine, Mobile Home, Commercial and Homeowners  business (including any business assumed from Citizens Property Insurance Corporation),  subject to the terms, conditions and limitations hereinafter set forth.      Article 2 - Commencement and Termination   A.  This Contract shall become effective at 12:01 a.m., Eastern Standard Time, June 1, 2018,      with respect to losses arising out of loss occurrences commencing at or after that time and      date, and shall remain in force until 12:01 a.m., Eastern Standard Time, June 1, 2019.    B.  Notwithstanding the provisions of paragraph A above, the Company may terminate a      Subscribing Reinsurer's percentage share in this Contract at any time by giving written      notice to the Subscribing Reinsurer in the event any of the following circumstances occur:         1.  The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the          Subscribing Reinsurer's accounting system) at the inception of this Contract has been          reduced by 20.0% or more of the amount of surplus (or the applicable equivalent)          12 months prior to that date; or         2.  The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the          Subscribing Reinsurer's accounting system) at any time during the term of this          Contract has been reduced by 20.0% or more of the amount of surplus (or the          applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial     18\F7V1085   Page 1    

 

        statement filed with regulatory authorities and available to the public as of the          inception of this Contract; or         3.  The Subscribing Reinsurer's A.M. Best's rating has been assigned or downgraded          below A- and/or Standard & Poor's rating has been assigned or downgraded below          BBB+; or         4.  The Subscribing Reinsurer has become, or has announced its intention to become,          merged with, acquired by or controlled by any other entity or individual(s) not          controlling the Subscribing Reinsurer's operations previously; or         5.  A State Insurance Department or other legal authority has ordered the Subscribing          Reinsurer to cease writing business; or         6.  The Subscribing Reinsurer has become insolvent or has been placed into liquidation,          receivership, supervision, administration, winding-up or under a scheme of          arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings          have been instituted against the Subscribing Reinsurer for the appointment of a          receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in          bankruptcy, or other agent known by whatever name, to take possession of its assets          or control of its operations; or         7.  The Subscribing Reinsurer has reinsured its entire liability under this Contract without          the Company's prior written consent; or         8.  The Subscribing Reinsurer has ceased assuming new or renewal property or casualty          treaty reinsurance business; or         9.  The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is          compensated on a contingent basis or is otherwise provided with financial incentives          based on the quantum of claims paid; or        10.  The Subscribing Reinsurer has failed to comply with the funding requirements set forth          in the Reserves Article.    C.  The "term of this Contract" as used herein shall mean the period from 12:01 a.m., Eastern      Standard Time, June 1, 2018 to 12:01 a.m., Eastern Standard Time, June 1, 2019.       However, if this Contract is terminated, the "term of this Contract" as used herein shall      mean the period from 12:01 a.m., Eastern Standard Time, June 1, 2018 to the effective      time and date of termination.    D.  If this Contract is terminated or expires while a loss occurrence covered hereunder is in      progress, the Reinsurer's liability hereunder shall, subject to the other terms and conditions      of this Contract, be determined as if the entire loss occurrence had occurred prior to the      termination or expiration of this Contract, provided that no part of such loss occurrence is      claimed against any renewal or replacement of this Contract.         18\F7V1085   Page 2    

 

Article 3 - Territory   This Contract shall only apply to risks located in the State of Florida.      Article 4 - Exclusions   A.  This Contract does not apply to and specifically excludes the following:         1.  Reinsurance assumed by the Company under obligatory reinsurance agreements,           except business assumed by the Company from Citizens Property Insurance           Corporation.         2.  Hail damage to growing or standing crops.         3.  Business rated, coded or classified as Flood insurance or which should have been           rated, coded or classified as such.         4.  Business rated, coded or classified as Mortgage Impairment and Difference in           Conditions insurance or which should have been rated, coded or classified as such.         5.  Title insurance and all forms of Financial Guarantee, Credit and Insolvency.         6.  Aviation, Ocean Marine, Boiler and Machinery, Fidelity and Surety, Accident and           Health, Animal Mortality and Workers Compensation and Employers Liability.         7.  Errors and Omissions, Malpractice and any other type of Professional Liability           insurance.          8.  Loss and/or damage and/or costs and/or expenses arising from seepage and/or           pollution and/or contamination, other than contamination from smoke.  Nevertheless,           this exclusion does not preclude payment of the cost of removing debris of property           damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of           the Company's property loss under the applicable original policy.         9.  Loss or liability as excluded under the provisions of the "War Exclusion Clause"           attached to and forming part of this Contract.        10.  Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical           Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.        11.  Loss or liability from any Pool, Association or Syndicate and any assessment or           similar demand for payment related to the FHCF or Citizens Property Insurance           Corporation.        12.  Loss or 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, however denominated, established or           governed, which provides for any assessment of or payment or assumption by the    18\F7V1085   Page 3    

 

        Company of part or all of any claim, debt, charge, fee or other obligation of an insurer,          or its successors or assigns, which has been declared by any competent authority to          be insolvent, or which is otherwise deemed unable to meet any claim, debt, charge,          fee or other obligation in whole or in part.         13.  Losses in the respect of overhead transmission and distribution lines other than those           on or within 150 meters (or 500 feet) of the insured premises.        14.  Mold, unless resulting from a peril otherwise covered under the policy involved.        15.  Loss or liability as excluded under the provisions of the "Terrorism Exclusion" attached           to and forming part of this Contract.        16.  All property loss, damage, destruction, erasure, corruption or alteration of Electronic           Data from any cause whatsoever (including, but not limited to, Computer Virus) or loss           of use, reduction in functionality, cost, expense or whatsoever nature resulting           therefrom, unless resulting from a peril otherwise covered under the policy involved.             "Electronic Data" as used herein means facts, concepts and information converted to           a form usable for communications, interpretation or processing by electronic and           electromechanical data processing or electronically-controlled equipment and includes           programs, software and other coded instructions for the processing and manipulation           of data or the direction and manipulation of such equipment.              "Computer Virus" as used herein means a set of corrupting, harmful or otherwise           unauthorized instructions or code, including a set of maliciously-introduced,           unauthorized instructions or code, that propagate themselves through a computer           system network of whatsoever nature.             However, in the event that a peril otherwise covered under the policy results from any           of the matters described above, this Contract, subject to all other terms and           conditions, will cover physical damage directly caused by such listed peril.      Article 5 - Retention and Limit   A.  Subject further to the provisions of paragraph B below, the Company shall retain and be      liable for the first $297,000,000 of ultimate net loss arising out of any one loss occurrence.       The Reinsurer shall then be liable for the amount by which such ultimate net loss exceeds      the Company's retention, but the Reinsurer's liability for ultimate net loss (plus an allowance      for loss adjustment expense) shall not exceed $934,000,000 as respects all losses arising      out of loss occurrences commencing during the term of this Contract.    B.  The amounts provided for in paragraph A above are based on an estimate of the      Company's Florida Hurricane Catastrophe Fund ("FHCF") Mandatory layer.  Such amounts      shall be provisional, and shall be further adjusted to the Company's actual FHCF      Mandatory layer used in its Reimbursement Contract for the 2018/2019 hurricane season      beginning on June 1, 2018 (hereinafter the "Reimbursement Contract").       18\F7V1085   Page 4    

 

C.  Notwithstanding the provisions of paragraphs A and B above, the following shall apply:         1.  When the Company experiences ultimate net loss from one or two covered events           during the term of this Contract, the Company’s full retention shall be applied to each           of the covered events; and         2.  When the Company experiences ultimate net loss from more than two covered events           during the term of this Contract, the Company’s full retention shall be applied to each           of the two covered events causing the largest ultimate net loss for the Company.  For           each other covered event resulting in ultimate net loss, the Company’s retention shall           be reduced to one - third of its full retention and applied to all other covered events.     D.  No claim will be made under this Contract in any one loss occurrence unless at least two      risks insured or reinsured by the Company are involved in such loss occurrence.    E.  As part of the Reinsurer's limit of liability set forth in paragraphs A and B above, the      Reinsurer shall be liable for an amount equal to 5.0% of ultimate net loss paid or to be paid      by the Reinsurer as an allowance for loss adjustment expense incurred by the Company.      Article 6 - Other Reinsurance   The Company shall be permitted to carry other reinsurance, recoveries under which shall inure  solely to the benefit of the Company and be entirely disregarded in applying all of the provisions  of this Contract.      Article 7 - Definitions   A.  "Loss in excess of policy limits" and "extra contractual obligations" as used in this Contract      shall mean:         1.  "Loss in excess of policy limits" shall mean 90.0% of any amount paid or payable by           the Company in excess of its policy limits, but otherwise within the terms of its policy,           such loss in excess of the Company's policy limits having been incurred because of,           but not limited to, failure by the Company to settle within the policy limits or by reason           of the Company's 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 an action against its           insured or reinsured or in the preparation or prosecution of an appeal consequent           upon such an action.  Any loss in excess of policy limits that is made in connection           with this Contract shall not exceed 25.0% of the actual catastrophe loss.         2.  "Extra contractual obligations" shall mean 90.0% of any punitive, exemplary,           compensatory or consequential damages paid or payable by the Company, not           covered by any other provision of this Contract and which arise from the handling of           any claim on business subject to this Contract, such liabilities arising because of, but           not limited to, failure by the Company to settle within the policy limits or by reason of           the Company's 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 an action against its           insured or reinsured or in the preparation or prosecution of an appeal consequent    18\F7V1085   Page 5    

 

        upon such an action.  An extra contractual obligation shall be deemed, in all          circumstances, to have occurred on the same date as the loss covered or alleged to          be covered under the policy.  Any extra contractual obligations that are made in          connection with this Contract shall not exceed 25.0% of the actual catastrophe loss.        Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess      of policy limits or any extra contractual obligation incurred by the Company as a result of      any fraudulent and/or criminal act by any officer or director 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.    B.  "Policies" as used in this Contract shall mean all policies, contracts and binders of      insurance or reinsurance.    C.  "Ultimate net loss" as used in this Contract shall mean the sum or sums (including loss in      excess of policy limits and extra contractual obligations, as defined herein) paid or payable      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, whether collectible or not.  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.      Article 8 - Loss Occurrence   A.  "Loss occurrence" as used in this Contract shall mean the sum of individual insured losses      incurred under Policies resulting from the same covered event.    B.  "Covered event" as used in this Contract shall mean any one storm declared to be a      hurricane by the National Hurricane Center of the National Weather Service or any other      division of the National Weather Service, operated by the National Oceanographic and      Atmospheric Administration of the United States Government (NHC) which causes insured      losses in Florida.  A covered event begins when a hurricane causes damage in Florida      while it is a hurricane and continues throughout any subsequent downgrades in storm      status by the National Hurricane Center regardless of whether the hurricane makes landfall.       Any storm, including a tropical storm, which does not become a hurricane is not a covered      event.      Article 9 - Loss Notices and Settlements   A.  Whenever losses sustained by the Company are reserved by the Company for an amount      greater than 50.0% of the Company's retention hereunder and/or appear likely to result in a      claim under this Contract, the Company shall notify the Subscribing Reinsurers and shall      provide updates related to development of such losses.  The Reinsurer shall have the right      to participate in the adjustment of such losses at its own expense.    B.  All loss settlements made by the Company, provided they are within the terms of this      Contract and the terms of the original policy (with the exception of loss in excess of policy    18\F7V1085   Page 6    

 

    limits or extra contractual obligations coverage, if any, under this Contract), shall be binding      upon the Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable,      including the associated allowance for loss adjustment expense, upon receipt of reasonable      evidence of the amount paid by the Company.      Article 10 - Cash Call   Notwithstanding the provisions of the Loss Notices and Settlements Article, upon the request of  the Company, the Reinsurer shall pay any amount with regard to a loss settlement or  settlements (including the associated allowance for loss adjustment expense) that are  scheduled to be made (including any payments projected to be made) within the next 20 days  by the Company, subject to receipt by the Reinsurer of a satisfactory proof of loss.  Such agreed  payment shall be made within 10 days from the date the demand for payment was transmitted  to the Reinsurer.      Article 11 - 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 rights, if, in the Company's opinion, it is economically reasonable to  do so.      Article 12 - Reinsurance Premium   A.  As premium for reinsurance coverage provided by this Contract, the Company shall pay the      Reinsurer a premium equal to the product of the following (or a pro rata portion thereof in      the event the term of this Contract is less than 12 months):         1.  The final rate on line determined in accordance with the Company's Reimbursement           Contract; times         2.  The Company's actual limit under the FHCF Mandatory layer used in its           Reimbursement Contract.    B.  The Company shall pay the Reinsurer an annual deposit premium of *****, in four equal      installments of ***** on July 1 and October 1 of 2018, and on January 1 and April 1 of 2019.       However, in the event this Contract is terminated, there shall be no deposit premium      installments due after the effective date of termination.    C.  On or before May 31, 2019, the Company shall provide a report to the Reinsurer setting      forth the premium due hereunder for the term of this Contract, computed in accordance with    18\F7V1085   Page 7    

 

    paragraph A above, and any additional premium due the Reinsurer or return premium due      the Company shall be remitted promptly.      Article 13 - Sanctions   Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under  this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction  under United Nations resolutions or the trade or economic sanctions, laws or regulations of the  European Union, United Kingdom or United States of America that are applicable to either party.      Article 14 - Late Payments   A.  The provisions of this Article shall not be implemented unless specifically invoked, in      writing, by one of the parties to this Contract.    B.  In the event any premium, loss or other payment due either party is not received by the      intermediary named in the Intermediary Article (hereinafter referred to as the      "Intermediary") by the payment due date, the party to whom payment is due may, by      notifying the Intermediary in writing, require the debtor party to pay, and the debtor party      agrees to pay, an interest charge 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 which have expired since the due date or the last monthly           calculation, whichever the lesser; times         2.  1/365ths 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; times         3.  The amount past due, including accrued interest.        It is agreed that interest shall accumulate until payment of the original amount due plus      interest charges have been received by the Intermediary.    C.  The establishment of the due date shall, for purposes of this Article, be determined as      follows:         1.  As respects the payment of routine deposits and premiums due the Reinsurer, the due           date shall be as provided for in the applicable section of this Contract.  In the event a           due date is not specifically stated for a given payment, it shall be deemed due 30 days           after the date of transmittal by the Intermediary of the initial billing for each such           payment.         2.  Any claim or loss payment due the Company hereunder shall be deemed due 10 days           after the proof of loss or demand for payment is transmitted to the Reinsurer.  If such           loss or claim payment is not received within the 10 days, interest will accrue on the           payment or amount overdue in accordance with paragraph B above, from the date the           proof of loss or demand for payment was transmitted to the Reinsurer.      18\F7V1085   Page 8    

 

     3.  As respects any payment, adjustment or return due either party not otherwise           provided for in subparagraphs 1 and 2 of this paragraph C, the due date shall be as           provided for in the applicable section of this Contract.  In the event a due date is not           specifically stated for a given payment, it shall be deemed due 10 days following           transmittal of written notification that the provisions of this Article have been invoked.        For purposes of interest calculations only, amounts due hereunder shall be deemed paid      upon receipt by the Intermediary.    D.  Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from      contesting the validity of any claim, or from participating in the defense of any claim or suit,      or prohibiting either party from contesting the validity of any payment or from initiating any      arbitration or other proceeding in accordance with the provisions of this Contract.  If the      debtor party prevails in an arbitration or other proceeding, then any interest charges due      hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such      proceeding, then the interest charge on the amount determined to be due hereunder shall      be calculated in accordance with the provisions set forth above unless otherwise      determined by such proceedings.  If a debtor party advances payment of any amount it is      contesting, and proves to be correct in its contestation, either in whole or in part, the other      party shall reimburse the debtor party for any such excess payment made plus interest on      the excess amount calculated in accordance with this Article.    E.  Interest charges arising out of the application of this Article that are $1,000 or less from any      party shall be waived unless there is a pattern of late payments consisting of three or more      items over the course of any 12-month period.      Article 15 - Offset   The Company and the Reinsurer may offset any balance or amount due from one party to the  other under this Contract or any other contract heretofore or hereafter entered into between the  Company and the Reinsurer, whether acting as assuming reinsurer or ceding company.  The  provisions of this Article shall not be affected by the insolvency of either party.      Article 16 - Access to Records   The Reinsurer or its designated representatives shall have access at any reasonable time to all  records of the Company which pertain in any way to this reinsurance, provided the Reinsurer  gives the Company at least 15 days prior notice of request for such access.  However, a  Subscribing Reinsurer or its designated representatives 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.   "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not  contested in writing to the Company specifying the reason(s) why the payments are disputed.        Article 17 - Liability of the Reinsurer   A.  The liability of the Reinsurer shall follow that of the Company in every case and be subject      in all respects to all the general and specific stipulations, clauses, waivers and modifications    18\F7V1085   Page 9    

 

    of the Company's policies and any endorsements thereon.  However, in no event shall this      be construed in any way to provide coverage outside the terms and conditions set forth in      this Contract.    B.  Nothing herein shall in any manner create any obligations or establish any rights against      the Reinsurer in favor of any third party or any persons not parties to this Contract.      Article 18 - Net Retained Lines (BRMA 32E)   A.  This Contract applies only to that portion of any policy which the Company retains net for its      own account (prior to deduction of any underlying reinsurance specifically permitted in this      Contract), and in calculating the amount of any loss hereunder and also in computing the      amount or amounts in excess of which this Contract attaches, only loss or losses in respect      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 specific or general, any amounts which may have become due from      such reinsurer(s), whether such inability arises from the insolvency of such other      reinsurer(s) or otherwise.      Article 19 - 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 20 - Currency (BRMA 12A)   A.  Whenever the word "Dollars" or the "$" sign appears in this Contract, they shall be      construed to mean United States Dollars and all transactions under this Contract shall be in      United States Dollars.    B.  Amounts paid or received by the Company in any other currency shall be converted to      United States Dollars at the rate of exchange at the date such transaction is entered on the      books of the Company.      Article 21 - 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 hereon 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.      18\F7V1085   Page 10    

 

  Article 22 - Federal Excise Tax (BRMA 17D)   A.  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 Section 4371 of      the Internal Revenue Code) to the extent such premium is subject to the Federal Excise      Tax.    B.  In the event of any return of premium becoming due hereunder the Reinsurer will deduct      the applicable percentage from the return premium payable hereon and the Company or its      agent should take steps to recover the tax from the United States Government.      Article 23 - Foreign Account Tax Compliance Act   A.  To the extent the Reinsurer is subject to the deduction and withholding of premium payable      hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the      Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the      premium payable under this Contract.     B.  In the event of any return of premium becoming due hereunder, the return premium shall      be determined and paid in full without regard to any amounts deducted or withheld under      paragraph A of this Article.  In the event the Company or its agent recovers such premium      deductions and withholdings on the return premium from the United States Government,      the Company or its agent shall reimburse the Reinsurer for such amounts.      Article 24 - Reserves   A.  The Reinsurer agrees to fund its share of amounts, including but not limited to, the      Company's ceded unearned premium and outstanding loss and the allowance for loss      adjustment expense reserves (including all case reserves plus any reasonable amount      estimated to be unreported from known loss occurrences) (hereinafter referred to as      "Reinsurer's Obligations") by:         1.  Clean, irrevocable and unconditional letters of credit issued and confirmed, if           confirmation is required by the insurance regulatory authorities involved, by a bank or           banks meeting the NAIC Securities Valuation Office credit standards for issuers of           letters of credit and acceptable to said insurance regulatory authorities; and/or         2.  Escrow accounts for the benefit of the Company; and/or         3.  Cash advances;        if the Reinsurer:         1.  Is unauthorized in any state of the United States of America or the District of Columbia           having jurisdiction over the Company and if, without such funding, a penalty would           accrue to the Company on any financial statement it is required to file with the           insurance regulatory authorities involved; or    18\F7V1085   Page 11    

 

       2.  Has an A.M. Best Company's rating equal to or below B++ at the inception of this           Contract.        The Reinsurer, at its sole option, may fund in other than cash if its method and form of      funding are acceptable to the insurance regulatory authorities involved.    B.  With regard to funding in whole or in part by letters of credit, it is agreed that each letter of      credit will be in a form acceptable to insurance regulatory authorities involved, will be issued      for a term of at least one year and will include an "evergreen clause," which automatically      extends the term for at least one additional year at each expiration date unless written      notice of non-renewal is given to the Company not less than 30 days prior to said expiration      date.  The Company and the Reinsurer further agree, notwithstanding anything to the      contrary in this Contract, that said letters of credit may be drawn upon by the Company or      its successors in interest at any time, without diminution because of the insolvency of the      Company or the Reinsurer, but only for one or more of the following purposes:         1.  To reimburse itself for the Reinsurer's share of unearned premiums returned to           insureds on account of policy cancellations, unless paid in cash by the Reinsurer;         2.  To reimburse itself for the Reinsurer's share of losses and/or the allowance for loss           adjustment expense paid under the terms of policies reinsured hereunder, unless paid           in cash by the Reinsurer;         3.  To reimburse itself for the Reinsurer's share of any other amounts claimed to be due           hereunder, unless paid in cash by the Reinsurer;         4.  To fund a cash account in an amount equal to the Reinsurer's share of amounts,           including but not limited to, the Reinsurer's Obligations as set forth above, funded by           means of a letter of credit which is under non-renewal notice, if said letter of credit has           not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;         5.  To refund to the Reinsurer any sum in excess of the actual amount required to fund           the Reinsurer's share of amounts, including but not limited to, the Reinsurer's           Obligations as set forth above, if so requested by the Reinsurer.        In the event the amount drawn by the Company on any letter of credit is in excess of the      actual amount required for B(1), B(2) or B(4), or in the case of B(3), the actual amount      determined to be due, the Company shall promptly return to the Reinsurer the excess      amount so drawn.      Article 25 - Insolvency   A.  In the event of the insolvency of the Company, this reinsurance shall be payable directly to      the Company or to its liquidator, receiver, conservator or statutory successor on the basis of      the liability of the Company without diminution because of the insolvency of the Company or      because the liquidator, receiver, conservator or statutory successor of the Company has      failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver,      conservator or statutory successor of the Company shall give written notice to the    18\F7V1085   Page 12    

 

    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.    B.  Where two or more Subscribing 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 Contract as though such expense had been incurred by      the Company.    C.  It is further understood and agreed that, in the event of the insolvency of the Company, 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 26 - 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 disinterested executive officers of insurance or reinsurance companies or Lloyd's      London Underwriters.  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.    18\F7V1085   Page 13    

 

  C.  If more than one Subscribing Reinsurer is involved in the same dispute, all such      Subscribing Reinsurers shall, at the option of the Company, constitute and act as one party      for purposes of this Article and communications shall be made by the Company to each of      the Subscribing Reinsurers constituting one party, provided, however, that nothing herein      shall impair the rights of such Subscribing Reinsurers to assert several, rather than joint,      defenses or claims, nor be construed as changing the liability of the Subscribing Reinsurers      participating under the terms of this Contract from several to joint.    D.  Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with      the other the expense of the Umpire and 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.    E.  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 in which the Company has its      principal office.      Article 27 - Service of Suit (BRMA 49C)   (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 therefor, the Reinsurer hereby designates the party named in its Interests      and Liabilities Agreement, or if no party is named therein, 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.      Article 28 - Severability (BRMA 72E)   If any provision of this Contract shall be rendered illegal or unenforceable by the laws,  regulations or public policy of any state, such provision shall be considered void in such state,  but this shall not affect the validity or enforceability of any other provision of this Contract or the  enforceability of such provision in any other jurisdiction.      18\F7V1085   Page 14    

 

  Article 29 - Governing Law (BRMA 71B)   This Contract shall be governed by and construed in accordance with the laws of the State of  Florida.      Article 30 - 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, including all information obtained through any      audits and any claims information between the Company and the Reinsurer, and any      submission or other materials relating to any renewal (hereinafter referred to as      "Confidential Information") are proprietary and confidential to the Company.      B.  Except as provided for in paragraph C below, the Reinsurer shall not disclose any      Confidential Information to any third parties, including but not limited to the Reinsurer's      subsidiaries and affiliates, other insurance companies and their subsidiaries and affiliates,      underwriting agencies, research organizations, any unaffiliated entity engaged in modeling      insurance or reinsurance data, and statistical rating organizations.      C.  Confidential Information may be used by the Reinsurer only in connection with the      performance of its obligations or enforcement of its rights under this Contract and will only      be disclosed when required by (1) retrocessionaires subject to the business ceded to this      Contract, (2) regulators performing an audit of the Reinsurer's records and/or financial      condition, (3) external auditors performing an audit of the Reinsurer's records in the normal      course of business, or (4) the Reinsurer's legal counsel; provided that the Reinsurer      advises such parties of the confidential nature of the Confidential Information and their      obligation to maintain its confidentiality.  The Company may require that any third-party      representatives of the Reinsurer agree, in writing, to be bound by this Confidentiality Article      or by a separate written confidentiality agreement, containing terms no less stringent than      those set forth in this Article.  If a third-party representative of the Reinsurer is not bound, in      writing, by this Confidentiality Article or by a separate written confidentiality agreement, the      Reinsurer shall be responsible for any breach of this provision by such third-party      representative of the Reinsurer.    D.  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, to the extent legally permissible, and to      use its best efforts to assist the Company in maintaining the confidentiality provided for in      this Article.    E.  Any disclosure of Non-Public Personally Identifiable Information shall comply with all state      and federal statutes and regulations governing the disclosure of Non-Public Personally      Identifiable Information.  "Non-Public Personally Identifiable Information" shall be defined as      this term or a similar term is defined in any applicable state, provincial, territory, or federal      law.  Disclosing or using this information for any purpose not authorized by applicable law is      expressly forbidden without the prior consent of the Company.    18\F7V1085   Page 15    

 

  F.  The parties agree that any information subject to privilege, including the attorney-client      privilege or attorney work product doctrine (collectively "Privilege") shall not be disclosed to      the Reinsurer until, in the Company's opinion, such Privilege is deemed to be waived or      otherwise compromised by virtue of its disclosure pursuant to this Contract.  Furthermore,      the Reinsurer shall not assert that any Privilege otherwise applicable to the Confidential      Information has been waived or otherwise compromised by virtue of its disclosure pursuant      to this Contract.      G.  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 31 - Non-Waiver   The failure of the Company or Reinsurer to insist on compliance with this Contract or to exercise  any right, remedy or option hereunder shall not:  (1) constitute a waiver of any rights contained  in this Contract, (2) prevent the Company or Reinsurer from thereafter demanding full and  complete compliance, (3) prevent the Company or Reinsurer from exercising such remedy in  the future, nor (4) affect the validity of this Contract or any part thereof.      Article 32 - Notices and Contract Execution   A.  Whenever a notice, statement, report or any other written communication is required by this      Contract, unless otherwise specified, such notice, statement, report or other written      communication may be transmitted by certified or registered mail, nationally or      internationally recognized express delivery service, personal delivery, electronic mail, or      facsimile.  With the exception of notices of termination, first class mail is also acceptable.    B.  The use of any of the following shall constitute a valid execution of this Contract or any      amendments thereto:         1.  Paper documents with an original ink signature;         2.  Facsimile or electronic copies of paper documents showing an original ink signature;           and/or         3.  Electronic records with an electronic signature made via an electronic agent.  For the           purposes of this Contract, the terms "electronic record," "electronic signature" and           "electronic agent" shall have the meanings set forth in the Electronic Signatures in           Global and National Commerce Act of 2000 or any amendments thereto.    C.  This Contract may be executed in one or more counterparts, each of which, when duly      executed, shall be deemed an original.         18\F7V1085   Page 16    

 

Article 33 - Intermediary   Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance  intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business  hereunder.  All communications (including but not limited to notices, statements, premiums,  return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss  settlements) relating to this Contract will be transmitted to the Company or the Reinsurer  through the Intermediary.  Payments by the Company to the Intermediary will be deemed  payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed  payment to the Company only to the extent that such payments are actually received by the  Company.      In Witness Whereof, the Company by its duly authorized representative has executed this  Contract as of the date specified below:    This 28th day of March in the year 2018.    Federated National Insurance Company    /s/ Michael H. Braun       18\F7V1085   Page 17    

 

                                 War Exclusion Clause        As regards interests which at time of loss or damage are on shore, no liability shall attach hereto  in respect of any 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.       18\F7V1085                                                                                           

 

      Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)      1.   This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or       Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.    2.   Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or       liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against       Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:           I.  Nuclear reactor power plants including all auxiliary property on the site, or          II.  Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor             installations, and "critical facilities" as such, or          III.  Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material,"             and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or         IV.   Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other             products of nuclear fission.    3.   Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or       liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer,       from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and       which normally would be insured therewith except that this paragraph (3) shall not operate         (a)   where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or         (b)   where said insurance contains a provision excluding coverage for damage to property caused by or resulting from             radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only             apply provided the said radioactive contamination exclusion provision has been approved by the Governmental             Authority having jurisdiction thereof.    4.   Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or       liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer,       when such radioactive contamination is a named hazard specifically insured against.    5.   It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear       exposure is not considered by the Reassured to be the primary hazard.    6.   The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law       amendatory thereof.    7.   Reassured to be sole judge of what constitutes:         (a)   substantial quantities, and         (b)   the extent of installation, plant or site.    Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that         (a)   all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other             provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of             this Clause shall apply.         (b)   with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be             free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first             occurs whereupon all the provisions of this Clause shall apply.    12/12/57  N.M.A. 1119  BRMA 35B     18\F7V1085                                                                                                                    

 

                                Terrorism Exclusion                               (Property Treaty Reinsurance)        Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it  is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused  by, contributed to by, resulting from or arising out of or in connection with any act of terrorism,  as defined herein, regardless of any other cause or event contributing concurrently or in any  other sequence to the loss.    An act of terrorism includes any act, or preparation in respect of action, or threat of action  designed to influence the government de jure or de facto of any nation or any political division  thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public  or a section of the public of any nation by any person or group(s) of persons whether acting  alone or on behalf of or in connection with any organization(s) or government(s) de jure or  de facto, and which:         1.  Involves violence against one or more persons, or         2.  Involves damage to property; or         3.  Endangers life other than the person committing the action; or         4.  Creates a risk to health or safety of the public or a section of the public; or         5.  Is designed to interfere with or disrupt an electronic system.    This Contract also excludes loss, damage, cost or expense directly or indirectly caused by,  contributed to by, resulting from or arising out of or in connection with any action in controlling,  preventing, suppressing, retaliating against or responding to any act of terrorism.    Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this  Contract, in respect only of personal lines, this Contract will pay actual loss or damage (but not  related cost and expense) caused by any act of terrorism provided such act is not directly or  indirectly caused by, contributed to by, resulting from or arising out of or in connection with  radiological, biological, chemical, or nuclear pollution or contamination.         18\F7V1085                                                                                           

 

The Interests and Liabilities Agreements, constituting 30 pages in total, have been omitted in  accordance with Rule 24b-2 under the Exchange Act.  These pages have been filed separately  with the Securities and Exchange Commission.       18\F7V1085

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00289-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00289-of-00352.parquet"}]]