Document:

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                                                                    Exhibit 10.1

                                 ADDENDUM NO. 1

                                     to the

                          WHOLE ACCOUNT NET QUOTA SHARE
                              REINSURANCE CONTRACT
                            EFFECTIVE: APRIL 1, 2003

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                       Liberty American Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                  Philadelphia Consolidated Holding Corporation
                        and are approved by the Reinsurer

IT IS HEREBY AGREED, effective January 1, 2004, with respect to business issued
or renewed on or after that date, that this Contract shall be amended as
follows:

1.    Mobile USA Insurance Company, Pinellas Park, Florida, and Liberty American
      Insurance Company, Pinellas Park, Florida, shall be deleted as named
      reinsureds under this Contract, and the term "Company," wherever it
      appears in this Contract, shall refer collectively to "Philadelphia
      Insurance Company, Philadelphia Indemnity Insurance Company, both of Bala
      Cynwyd, Pennsylvania, and any and all other companies which are now or may
      hereafter become member companies of Philadelphia Consolidated Holding
      Corporation and are approved by the Reinsurer."

2.    Paragraphs A and C of Article V - Retention and Limit - shall be deleted
      and the following substituted therefor:

      "A.   Except as provided below, as respects business subject to this
            Contract, the Company shall retain and be liable for 90.0% of its
            net liability. The Company shall cede to the Reinsurer and the
            Reinsurer agrees to accept 10.0% of the Company's net liability.

            On July 1, 2004, the Company shall have the option of increasing the
            percentage of its net liability ceded hereunder to a maximum of
            20.0% or decreasing the percentage of its net liability ceded
            hereunder to a minimum of 5.0% for the business issued or renewed on
            or after that date."

      "C.   Provided the Reinsurer's ratio of losses to premiums earned is
            greater than 63.0%, the Reinsurer's ratio of losses incurred to
            premiums earned (as defined in Article XI) for any one contract year
            shall not exceed any of the following, or so deemed:

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            1.    95.0% for Errors and Omissions Liability, Directors and
                  Officers Liability, Leasing or GAPP business, and Umbrella
                  Liability business combined; however, the losses incurred for
                  such business shall not exceed $180,000,000 in total;

            2.    95.0% for all other business subject to this Contract.

            The loss ratio applied to the business ceded for the entire current
            contract year shall be the actual loss ratio result for the total
            Business Reinsured for the entire contract year, without adjustment
            for different percentages of net liability ceded for different
            portions of the current contract year.

            The Company will retain and be liable for any loss in excess of
            these amounts."

3.    Article XIII - Reinsurer's Expense Allowance - shall be deleted and the
      following substituted therefor:

      "A.   The Reinsurer's expense allowance shall be determined based upon the
            amount of ceded net written premium collected during each contract
            year. Specifically, the Reinsurer's expense allowance shall be equal
            to the sum of the following:

            1.    3.80% of the first $100,000,000 or less of ceded net written
                  premium collected hereunder during the contract year; and

            2.    3.60% of the ceded net written premium collected hereunder
                  greater than $100,000,000 during the contract year.

      B.    If this Contract is not commuted within 13 months after the end of
            any contract year, the Reinsurer's expense allowance percentage for
            that contract year shall increase to 7.5%, and the Company shall pay
            the Reinsurer the additional amount due on January 31 of the year of
            the calculation for the applicable contract year, plus 4.0% interest
            from the original payment due dates.

      C.    If this Contract is not commuted within 25 months after the end of
            any contract year, the Reinsurer's expense allowance percentage for
            that contract year shall increase to 11.5%, and the Company shall
            pay the Reinsurer the additional amount due on January 31 of the
            year of the calculation for the applicable contract year, plus 4.0%
            interest from the original payment due dates."

The provisions of this Contract shall remain otherwise unchanged.

IN WITNESS WHEREOF, the Company by its duly authorized representative has
executed this Addendum as of the date undermentioned at:

Bala Cynwyd, Pennsylvania, this __21st__ day of __June__________ in the year
__2004__.

          Christopher J. Maguire, Executive Vice President & Chief Underwriting
          Officer
          Philadelphia Insurance Company
          Philadelphia Indemnity Insurance Company
          Mobile USA Insurance Company
          Liberty American Insurance Company

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                                 ADDENDUM NO. 1

                                     to the

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                            Federal Insurance Company
                               Warren, New Jersey
                                     through
                                 Chubb Re, Inc.
                            Bernardsville, New Jersey
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          WHOLE ACCOUNT NET QUOTA SHARE
                              REINSURANCE CONTRACT
                            EFFECTIVE: APRIL 1, 2003

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                       Liberty American Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                  Philadelphia Consolidated Holding Corporation
                        and are approved by the Reinsurer

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective January 1, 2004.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Addendum as of the date undermentioned at:

Bernardsville, New Jersey, this ___15th__ day of _____June___________ in the
year __2004__.

                Brian Hegarty, Managing Director_____
                Chubb Re, Inc. (for and on behalf of Federal Insurance Company)

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                                 ADDENDUM NO. 1

                                     to the

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                      Swiss Reinsurance America Corporation
                                Armonk, New York
                                     through
                       Swiss Re Underwriters Agency, Inc.
                              Calabasas, California
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          WHOLE ACCOUNT NET QUOTA SHARE
                              REINSURANCE CONTRACT
                            EFFECTIVE: APRIL 1, 2003

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                       Liberty American Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                  Philadelphia Consolidated Holding Corporation
                        and are approved by the Reinsurer

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective January 1, 2004.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Addendum as of the date undermentioned at:

Calabasas, California, this __18th_ day of ____June_____________ in the year
_2004___.

                 Jim Ehman, Senior Vice President__
                 Swiss Re Underwriters Agency, Inc.
                 (for Swiss Reinsurance America Corporation)

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                                                                    Exhibit 10.2

                         AMENDED REIMBURSEMENT CONTRACT

           (This Reimbursement Contract Supercedes All Prior Versions
                     with an Effecive Date of June 1, 2004)
                             EFFECTIVE: JUNE 1, 2004
                                   (CONTRACT)

                                     between

                    PHILADELPHIA INDEMNITY INSURANCE COMPANY
                                 BALA CYNWYD, PA
                                    (Company)

                                  NAIC # 18058

                                       and

THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH
ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (FHCF)

PREAMBLE

The Legislature of the State of Florida has enacted Section 215.555, Florida
Statutes "Statute", which directs the SBA to administer the FHCF. This Contract
is subject to the Statute and to any administrative rule adopted pursuant
thereto, and is not intended to be in conflict therewith.

In consideration of the promises set forth in this Contract, the parties agree
as follows:

ARTICLE I - SCOPE OF AGREEMENT

As a condition precedent to the SBA's obligations under this Contract, the
Company, an Authorized Insurer or an entity writing Covered Policies under
Section 627.351, Florida Statutes, in the State of Florida, shall report to the
SBA in a specified format the business it writes which is described in this
Contract as Covered Policies.

The terms of this Contract shall determine the rights and obligations of the
parties. This Contract provides reimbursement to the Company under certain
circumstances, as described herein, and does not provide or extend insurance or
reinsurance coverage to any person, firm, corporation or other entity. The SBA
shall reimburse the Company for its Ultimate Net Loss on Covered Policies in
excess of the Company's Retention as a result of each Loss Occurrence commencing
during the Contract Year, to the extent funds are available, all as hereinafter
defined.

ARTICLE II - PARTIES TO THE CONTRACT

This Contract is solely between the Company and the SBA which administers the
FHCF. In no instance shall any insured of the Company or any claimant against an
insured of the Company, or any other third party, have any rights under this
Contract, except as provided in Article XIV. The SBA will only disburse funds to
the Company, except as provided for in Article XIV of this Contract.

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                                     2004K

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ARTICLE III - TERM

This Contract shall apply to Loss Occurrences which commence during the period
from 12:01 a.m., Eastern Time, June 1, 2004, to 12:01 a.m., Eastern Time, June
1, 2005 (Contract Year).

The Company must designate a coverage level and, make the required selections on
pages 19 and 20 within this Contract. Note: Due to 2004 legislation, which has
just become law, a Company has a transitional option which can be selected by
executing Schedule 1, which is provided with and is a part of this Contract. The
Company shall return this fully executed Contract (two originals) to the FHCF
Administrator so that the Contract is received by the FHCF Administrator no
later than 5 p.m., Central Time, June 1, 2004. Failure to do so will result in a
referral to the Office of Insurance Regulation within the Department of
Financial Services for administrative action. Furthermore, the Company's
coverage level under this Contract will be deemed as follows:

(1)   For Companies that are a member of a National Association of Insurance
      Commissioners (NAIC) group, the same coverage level selected by the other
      Companies of the same NAIC group shall be deemed. If executed Contracts
      for none of the members of an NAIC group have been received by the FHCF
      Administrator, the coverage level from the prior Contract Year shall be
      deemed.

(2)   For Companies that are not a member of an NAIC group under which other
      Companies are active participants in the FHCF, the coverage level from the
      prior Contract Year shall be deemed.

(3)   For New Participants that are a member of an NAIC group, the same coverage
      level selected by the other Companies of the same NAIC group shall be
      deemed.

(4)   For New Participants, as that term is defined in Article V(21) herein,
      that are not a member of an NAIC group under which other Companies are
      active participants in the FHCF, the 45% coverage level shall be deemed.

The SBA shall not be liable for Loss Occurrences which commence after the
effective time and date of expiration or termination. Should this Contract
expire or terminate while a Loss Occurrence covered hereunder is in progress,
the SBA shall be responsible for such Loss Occurrence in progress in the same
manner and to the same extent it would have been responsible had the Contract
expired the day following the conclusion of the Loss Occurrence in progress.

ARTICLE IV - LIABILITY OF THE FHCF

(1)   The SBA shall reimburse the Company, with respect to each Loss Occurrence
      commencing during the Contract Year for the "Reimbursement Percentage"
      elected, this percentage times the amount of Ultimate Net Loss paid by the
      Company in excess of the Company's Retention, plus 5% of the reimbursed
      losses for Loss Adjustment Expense Reimbursement.

(2)   The Reimbursement Percentage will be 45% or 75% or 90%, at the Company's
      option as elected under ARTICLE XVIII herein.

(3)   The aggregate liability of the FHCF with respect to all Reimbursement
      Contracts covering this contract year shall not exceed the limit set forth
      under Section 215.555(4)(c)1., Florida Statutes. For specifics regarding
      loss reimbursement calculations, see section (3)(c) of ARTICLE X herein.

(4)   Reimbursement amounts shall not be reduced by reinsurance paid or payable
      to the Company from other sources.

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                                     2004K

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(5)   After the end of each calendar year, the SBA shall notify insurers of the
      estimated Borrowing Capacity and the Balance of the Fund as of December
      31. In May and October of each year, the SBA shall publish in the Florida
      Administrative Weekly a statement of the FHCF's estimated Borrowing
      Capacity and the projected Balance of the Fund as of December 31.

(6)   The obligation of the SBA with respect to all Contracts covering a
      particular Contract Year shall not exceed the Balance of the Fund as of
      December 31 of that Contract Year, together with the maximum amount the
      SBA is able to raise through the issuance of revenue bonds or other means
      available to the SBA under Section 215.555, Florida Statutes, up to the
      limit in accordance with Section 215.555(4)(c)1., Florida Statutes. The
      obligations and the liability of the SBA are more fully described in Rule
      19-8.013, Florida Administrative Code (F.A.C.). If Reimbursement Premiums
      are used for debt service in the event of a temporary shortfall in the
      collection of emergency assessments, then the amount of the Premiums so
      used will be reimbursed to the SBA when sufficient emergency assessments
      are received.

ARTICLE V - DEFINITIONS

(1)   ACTUAL CLAIMS-PAYING CAPACITY OF THE FHCF

      This term means the sum of the Balance of the Fund as of December 31 of a
      Contract Year, plus any reinsurance purchased by the FHCF, plus the amount
      the SBA is able to raise through the issuance of revenue bonds up to the
      limit in accordance with Section 215.555(4)(c)1. and (6), Florida
      Statutes.

(2)   ACTUARIALLY INDICATED

      This term means, with respect to Premiums paid by Companies for
      reimbursement provided by the FHCF, an amount determined in accordance
      with the definition provided in Section 215.555(2)(a), Florida Statutes.

(3)   ADDITIONAL LIVING EXPENSE (ALE)

      ALE losses covered by the FHCF are not to exceed 40 percent of the insured
      value of a Residential Structure or its contents based on the coverage
      provided in the policy. Fair rental value, loss of use, loss of rents, or
      business interruption losses are not covered by the FHCF.

(4)   ADMINISTRATOR

      This term means the entity with which the SBA contracts to perform
      administrative tasks associated with the operations of the FHCF. The
      present Administrator is Paragon Strategic Solutions Inc., 3600 American
      Boulevard West, Minneapolis, Minnesota 55431. The telephone number is
      (800) 689-3863, and the facsimile number is (800) 264-0492.

(5)   AUTHORIZED INSURER

      This term is defined in Section 624.09(1), Florida Statutes.

(6)   BORROWING CAPACITY

      This term means the amount of funds which are able to be raised by the
      issuance of revenue bonds or through other financing mechanisms, less bond
      issuance expenses and reserves.

(7)   CITIZENS PROPERTY INSURANCE CORPORATION (CITIZENS)

      This term means an entity formed under Section 627.351(6), Florida
      Statutes and refers to both Citizens Property Insurance Corporation High
      Risk Account and Citizens Property Insurance Corporation Personal Lines
      and Commercial Lines Accounts.

(8)   CONTRACT

      This term means this Reimbursement Contract for the current Contract Year.

(9)   COVERED EVENT

      This term means any one storm declared to be a hurricane by the National
      Hurricane Center, which causes insured losses in Florida, both while it is
      still a hurricane and throughout any

                                       18                                 FHCF-
                                     2004K

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      subsequent downgrades in storm status by the National Hurricane Center.
      Any storm, including a tropical storm, which does not become a hurricane
      is not a Covered Event.

(10)  COVERED POLICY OR COVERED POLICIES

      (a)   Covered Policy, as defined in Section 215.555(2)(c), Florida
            Statutes, is further clarified to mean only that portion of a
            binder, policy or contract of insurance (Policy Contract) that
            insures real or personal property located in the State of Florida to
            the extent such Policy Contract insures a Residential Structure, as
            defined in definition (26) herein, or the contents of a Residential
            Structure, located in the State of Florida, or ALE coverage as
            defined in definition (3) herein.

      (b)   Due to the specialized nature of the definition of Covered Policies,
            Covered Policies are not limited to only one line of business in the
            Company's annual statement required to be filed by Section 624.424,
            Florida Statutes. Instead, Covered Policies are found in several
            lines of business on the Company's annual statement. Covered
            Policies will at a minimum be reported in the Company's statutory
            annual statement as:

                  -     Fire

                  -     Allied Lines

                  -     Farmowners Multiple Peril

                  -     Homeowners Multiple Peril

                  -     Commercial Multiple Peril (non liability portion,
                        covering condominiums and apartments)

                  -     Inland Marine

            Note that where particular insurance exposures are reported on an
            annual statement is not dispositive of whether or not the exposure
            is a Covered Policy.

      (c)   This definition applies only to the first-party property section of
            Policy Contracts pertaining strictly to the structure, its contents,
            appurtenant structures, or ALE coverage.

      (d)   Covered Policy also includes any collateral protection insurance
            policy covering personal residences which protects both the
            borrower's and the lender's financial interest, in an amount at
            least equal to the coverage for the dwelling in place under the
            lapsed homeowner's policy, if such policy can be accurately reported
            as required in Section 215.555(5), Florida Statutes. A Company will
            be deemed to be able to accurately report data if the required data,
            as specified in the Premium Formula adopted in Section 215.555(5),
            Florida Statutes, is available.

      (e)   See Article VI of this Contract for specific exclusions.

(11)  ESTIMATED CLAIMS-PAYING CAPACITY OF THE FHCF

      This term means the sum of the projected Balance of the Fund as of
      December 31 of a Contract Year, plus any reinsurance purchased by the
      FHCF, plus the most recent estimate of the Borrowing Capacity of the FHCF,
      determined pursuant to Section 215.555(4)(c), Florida Statutes.

(12)  EXCESS POLICIES

      This term, for the purposes of the FHCF, means a policy that provides
      insurance protection for large commercial property risks that provides a
      layer of coverage above a primary layer (which is insured by a different
      insurer) that acts much the same as a very large deductible.

(13)  FLORIDA DEPARTMENT OF FINANCIAL SERVICES (DEPARTMENT )

      This term means that Florida regulatory agency charged with regulating the
      Florida insurance market and administering the Florida Insurance Code.

(14)  FLORIDA INSURANCE CODE

      This term means those chapters in Section 624.01, Florida Statutes, which
      are designated as the Florida Insurance Code.

(15)  FORMULA OR THE PREMIUM FORMULA

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      This term means the Formula approved by the SBA for the purpose of
      determining the Actuarially Indicated Premium to be paid to the FHCF. The
      Premium Formula is defined as an approach or methodology which leads to
      the creation of premium rates. The resulting rates are therefore
      incorporated as part of the Premium Formula.

(16)  FUND BALANCE OR BALANCE OF THE FUND AS OF DECEMBER 31

      These terms mean the "Net assets: Unrestricted" as indicated on the
      unconsolidated FHCF Statement of Net Assets for the then current Contract
      Year, to which is added: reported FHCF losses (including Loss Adjustment
      Expense) for the then current Contract Year, whether paid or unpaid by
      FHCF, as of December 31, and from which is subtracted: any reinsurance
      recovered prior to, or recoverable as of, December 31; any obligations
      paid or expected to be paid with bonding proceeds or receipts from
      emergency assessments; amounts needed for administration for the then
      current State of Florida fiscal year which have not been spent and which
      are not reflected on the FHCF Statement of Net Assets; and the amount of
      undispersed mitigation funds appropriated for the then current State of
      Florida fiscal year.

(17)  INSURER GROUP

      For purposes of the coverage option election in Section 215.555(4)(b),
      Florida Statutes, Insurer Group means the group designation assigned by
      the National Association of Insurance Commissioners (NAIC) for purposes of
      filing consolidated financial statements. A Company is a member of a group
      as designated by the NAIC until such Company is assigned another group
      designation or is no longer a member of a group recognized by the NAIC.

(18)  LOSS OCCURRENCE

      This term means the sum of individual insured losses incurred under
      Covered Policies resulting from the same Covered Event. "Losses" means
      direct incurred losses under Covered Policies and excludes Loss Adjustment
      Expenses.

(19)  LOSS ADJUSTMENT EXPENSE REIMBURSEMENT

      (a)   Loss Adjustment Expense Reimbursement shall be 5% of the reimbursed
            losses under this Contract as provided in Article IV, pursuant to
            Section 215.555(4)(b)1., Florida Statutes.

      (b)   To the extent that loss reimbursements are limited to the Payout
            Multiple applied to each Company, the 5% Loss Adjustment Expense is
            included in the total Payout Multiple applied to each Company.

(20)  NEW PARTICIPANT(S)

      This term means all Companies which are granted a certificate of authority
      by the Department after the beginning of the FHCF's Contract Year on June
      1 and begin writing Covered Policies on or after the beginning of the
      Contract Year, or which already have a certificate of authority and begin
      writing Covered Policies on or after the beginning of the Contract Year. A
      Company that removes exposure from either Citizens entity, as that term is
      defined in (7) above, pursuant to an assumption agreement effective after
      June 1 and had written no other Covered Policies on or before June 1 is
      also considered a New Participant.

(21)  OFFICE OF INSURANCE REGULATION

      This term means that office within the Department of Financial Services
      and which was created in Section 20.121(3), Florida Statutes.

(22)  PAYOUT MULTIPLE

      This term means the multiple as calculated in accordance with Section
      215.555(4)(c), Florida Statutes, unless the transitional option provided
      under Schedule 1 of this contract is chosen by June 1, 2004, which is
      derived by dividing the Claims-Paying Capacity of the FHCF by the total
      industry Reimbursement Premium for the FHCF for the Contract Year billed
      as of December 31 of the Contract Year. The multiple is finally determined
      once

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      Reimbursement Premiums have been billed as of December 31 and the amount
      of bond proceeds has been determined.

(23)  PREMIUM

      This term means the same as Reimbursement Premium.

(24)  PROJECTED PAYOUT MULTIPLE

      The Projected Payout Multiple is used to calculate a Company's projected
      payout pursuant to Section 215.555(4)(d)2.b., Florida Statutes, unless the
      transitional option provided under Schedule 1 of this contract is chosen
      by June 1, 2004. The Projected Payout Multiple is derived by dividing the
      estimated single season Claims-Paying Capacity of the FHCF by the
      estimated total industry Reimbursement Premium for the FHCF for the
      Contract Year. The Company's Reimbursement Premium as paid to the SBA for
      the Contract Year is multiplied by the Projected Payout Multiple to
      estimate the Company's coverage from the FHCF for the Contract Year.

(25)  REIMBURSEMENT PREMIUM

      This term means the Premium determined by multiplying each $1,000 of
      insured value reported by the Company in accordance with Section
      215.555(5)(b), Florida Statutes, by the rate as derived from the Premium
      Formula, as described in Rule 19-8.028, F.A.C.

(26)  RESIDENTIAL STRUCTURES

      This term means dwelling units used as a home or residence for other than
      transient occupancy, as that term is defined in Section 83.43(10), Florida
      Statutes. These include the primary structure and appurtenant structures
      insured under the same policy and any other structures covered under
      endorsements associated with a policy covering a residential structure,
      the principal function of which at the time of loss was as a primary or
      secondary residence. COVERED RESIDENTIAL STRUCTURES DO NOT INCLUDE any
      structures listed under Article VI herein.

(27)  RETENTION

      The Company's Retention means the amount of hurricane losses incurred by
      the Company below which the Company is not entitled to reimbursement from
      the FHCF. The Company is eligible for reimbursement only after its paid
      covered losses exceed its Retention. The Company's Retention is
      established in accordance with the provisions of Section 215.555(2)(e),
      Florida Statutes, unless the transitional option provided under Schedule 1
      of this contract is chosen by June 1, 2004. The Company's Retention shall
      be determined by multiplying the Retention Multiple by the Company's
      Reimbursement Premium for the Contract Year.

(28)  RETENTION MULTIPLE

      (a)   The Retention Multiple is applied to the Company's Reimbursement
            Premium to determine the Company's Retention. The Retention Multiple
            for the 2004-2005 Contract Year shall be equal to $4.5 billion,
            divided by the estimated total industry Reimbursement Premium at the
            90% reimbursement percentage level for the Contract Year as
            determined by the SBA unless the transitional option provided under
            Schedule 1 of this contract is chosen by June 1, 2004.

      (b)   The Retention Multiple as determined under (28)(a) above shall be
            adjusted to reflect the

            reimbursement percentage elected by the Company under this Contract
            as follows:

            1.    If the Company elects a 90% reimbursement percentage, the
                  adjusted Retention Multiple is 100% of the amount determined
                  under (28)(a) above;

            2.    If the Company elects a 75% reimbursement percentage, the
                  adjusted Retention Multiple is 120% of the amount determined
                  under (28)(a) above; or

            3.    If the Company elects a 45% reimbursement percentage, the
                  adjusted Retention Multiple is 200% of the amount determined
                  under (28)(a) above.

(29)  ULTIMATE NET LOSS

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      (a)   This term means all losses of the Company under Covered Policies,
            prior to the application of the Company's FHCF Retention and
            reimbursement percentage, and excluding loss adjustment expense,
            arising from each Loss Occurrence during the Contract Year,
            provided, however, that the Company's loss shall be determined in
            accordance with the deductible levels reported to the FHCF for the
            exposure sustaining the loss.

      (b)   Salvages and all other recoveries, excluding reinsurance recoveries,
            shall be first deducted from such loss to arrive at the amount of
            liability attaching hereunder.

      (c)   All salvages, recoveries or payments recovered or received
            subsequent to a loss settlement under this Contract shall be applied
            as if recovered or received prior to the aforesaid settlement and
            all necessary adjustments shall be made by the parties hereto.

      (d)    Nothing in this clause shall be construed to mean that losses under
             this Contract are not recoverable until the Company's Ultimate Net
             Loss has been ascertained.

      (e)    The SBA shall be subrogated to the rights of the Company to the
             extent of its reimbursement of the Company. The Company agrees to
             assist and cooperate with the SBA in all respects as regards such
             subrogation. The Company further agrees to undertake such actions
             as may be necessary to enforce its rights of salvage and
             subrogation, and its rights, if any, against other insurers as
             respects any claim, loss, or payment arising out of a Covered
             Event.

ARTICLE VI - EXCLUSIONS

This Contract does not provide reimbursement for:

(1)   Any losses not defined as being within the scope of a Covered Policy.

(2)   Any policy which excludes wind or hurricane coverage.

(3)   Any Excess Policy or deductible buy-back policy that requires individual
      ratemaking.

(4)   Any liability of the Company attributable to losses for fair rental value,
      loss of use, loss of rents, or business interruption.

(5)   Any collateral protection policy that does not meet the definition of
      Covered Policy as defined in Article V(10) herein.

(6)   Any reinsurance assumed by the Company.

(7)   Any exposure for: hotels, motels, timeshares, or other similar structures
      that are rented out daily, weekly, or monthly; homeowner associations, if
      no habitational structures are insured under the policy; shelters, camps
      or retreats; vacant properties insured under a commercial policy; and
      boats insured under a separate policy or endorsement.

(8)   Commercial healthcare facilities and nursing homes, unless the facility is
      part of a structure primarily consisting of other residences.

(9)   Any exposure under commercial policies covering only appurtenant
      structures or structures that do not function as a habitational structure
      (e.g. a policy covering only the pool of an apartment complex).

(10)  Personal contents in a commercial storage facility covered under a policy
      that covers only those personal contents.

(11)  Policies covering only Additional Living Expense.

(12)  Any liability of the Company for extra contractual obligations and excess
      of original policy limits liabilities.

(13)  Losses in excess of the sum of the Balance of the Fund as of December 31
      of the Contract Year and the amount the SBA is able to raise through the
      issuance of revenue bonds or by the use of other financing mechanisms, up
      to the limit pursuant to Section 215.555(4)(c), Florida Statutes.

(14)  Any liability assumed by the Company from Pools, Associations, and
      Syndicates. Exception: Covered Policies assumed from Citizens under the
      terms and conditions of an

                                       18                                 FHCF-
                                     2004K

<PAGE>

      executed assumption agreement between the Authorized Insurer and Citizens
      are covered by this Contract.

(15)  All 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, which
      provides for any assessment of or payment or assumption by the Company of
      part or all of any claim, debt, charge, fee, or other obligation of an
      insurer, or its successors or assigns, which has been declared by any
      competent authority to be insolvent, or which is otherwise deemed unable
      to meet any claim, debt, charge, fee or other obligation in whole or in
      part.

(16)  Any liability of the Company for loss or damage caused by or resulting
      from nuclear reaction, nuclear radiation, or radioactive contamination
      from any cause, whether direct or indirect, proximate or remote, and
      regardless of any other cause or event contributing concurrently or in any
      other sequence to the loss.

(17)  The FHCF does not provide coverage for water damage which is generally
      excluded under property insurance contracts and has been defined to mean
      flood, surface water, waves, tidal water, overflow of a body of water, or
      spray from any of these, whether or not driven by wind.

ARTICLE VII - MANAGEMENT OF CLAIMS AND LOSSES

The Company shall investigate and settle or defend all claims and losses. All
payments of claims or losses by the Company within the terms and limits of the
appropriate coverage parts of Covered Policies shall be binding on the SBA,
subject to the terms of this Contract, including the provisions in Article XIII
relating to inspection of records and examinations.

ARTICLE VIII - LOSS REIMBURSEMENT ADJUSTMENTS

(1)   OFFSETS

      Section 215.555(4)(d)1., Florida Statutes, provides the SBA with the right
      to offset amounts due and payable to the SBA from the Company against any
      reimbursement amounts due and payable to the Company from the SBA as a
      result of the liability of the SBA.

(2)   REIMBURSEMENT ADJUSTMENTS

      Section 215.555(4)(d) and (e), Florida Statutes, provides the SBA with the
      right to seek the return of excess loss reimbursements or advances which
      have been paid to the Company along with interest thereon. Excess loss
      reimbursements or advances are those payments or advances made to the
      Company by the SBA on the basis of incorrect exposure submissions or
      resubmissions, incorrect calculations of Reimbursement Premiums or
      Retentions, payments in excess of the projected payout, incorrect Proof of
      Loss Reports, incorrect calculation of reinsurance recoveries, or
      subsequent readjustment of policyholder claims, including subrogation and
      salvage, or any combination of the foregoing. The Company will be sent an
      invoice showing the due date for adjustments along with the interest due
      thereon through the due date. The applicable interest rate for interest
      credits, and for interest charges for adjustments beyond the Company's
      control, will be the average rate earned by the SBA for the FHCF for the
      first five months of the Contract Year. The applicable interest rate for
      interest charges due to adjustments resulting from incorrect exposure
      submissions or Proof of Loss Reports will accrue at this rate plus 3%.
      Interest will continue to accrue if not paid by the due date.

ARTICLE IX - REIMBURSEMENT PREMIUM

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                                     2004K

<PAGE>

(1)   The Company shall, in a timely manner, pay the SBA its Reimbursement
      Premium for the Contract Year. The Reimbursement Premium for the Contract
      Year shall be calculated in accordance with Section 215.555, Florida
      Statutes, with any rules promulgated thereunder, and with Article X(2).

(2)   Since the calculation of the Actuarially Indicated Premium assumes that
      the Companies will pay their Reimbursement Premiums timely, interest
      charges will accrue under the following circumstances. A Company may
      choose to estimate its own Premium installments. However, if the Company's
      estimation is less than the provisional Premium billed, an interest charge
      will accrue on the difference between the estimated Premium and the final
      Premium. If a Company estimates its first installment, the Administrator
      shall bill that estimated Premium as the second installment as well, which
      will be considered as an estimate by the Company. No interest will accrue
      regarding any provisional Premium if paid as billed by the FHCF's
      Administrator, except in the case of an estimated second installment as
      set forth in this Article. Also, if a Company makes an estimation that is
      higher than the provisional Premium billed but is less than the final
      Premium, interest will not accrue. If the Premium payment is not received
      from a Company when it is due, an interest charge will accrue on a daily
      basis until the payment is received. Interest will also accrue on Premiums
      resulting from submissions or resubmissions finalized after December 1 of
      the Contract Year. An interest credit will be applied for any Premium
      which is overpaid as either an estimate or as a provisional Premium.
      Interest shall not be credited past December 1 of the Contract Year. The
      applicable interest rate for interest credits will be the average rate
      earned by the SBA for the FHCF for the first five months of the Contract
      Year. The applicable interest rate for interest charges will accrue at
      this rate plus 3%.

ARTICLE X - REPORTS AND REMITTANCES

(1)   EXPOSURES

      (a)   If the Company writes Covered Policies on or before June 1 of the
            Contract Year, the Company shall report to the SBA, unless otherwise
            provided in Rule 19ER04-2 (19-8.029), F.A.C., no later than the
            statutorily required date of September 1 of the Contract Year, by
            ZIP Code or other limited geographical area as specified by the SBA,
            its insured values under Covered Policies as of June 30 of the
            Contract Year as outlined in the Data Call adopted for the Contract
            Year under Rule 19ER04-2 (19-8.029), F.A.C., and other data or
            information in the format specified by the SBA.

      (b)   If the Company first begins writing Covered Policies after June 1
            but prior to December 1 of the Contract Year, the Company shall
            report to the SBA, no later than March 1 of the Contract Year, by
            ZIP Code or other limited geographical area as specified by the SBA,
            its insured values under Covered Policies as of December 31 of the
            Contract Year as outlined in the Supplemental Instructions for New
            Participants section of the Data Call adopted for the Contract Year
            under Rule 19ER04-2 (19-8.029), F.A.C., and other data or
            information in the format specified by the SBA.

      (c)   If the Company first begins writing Covered Policies on or after
            December 1 but through and including May 31 of the Contract Year,
            the Company shall not report its exposure data for the Contract Year
            to the SBA.

      (d)   The requirement that a report is due on a certain date means that
            the report shall be in the physical possession of the FHCF's
            Administrator in Minneapolis no later than 5 p.m. on the due date.
            If the applicable due date is a Saturday, Sunday or legal holiday,
            then the actual due date will be the day immediately following the
            applicable due date which is not a Saturday, Sunday or legal
            holiday. For purposes of the timeliness of the submission, neither
            the United States Postal Service postmark nor a postage meter date
            is in any way determinative. Reports sent to the SBA in

                                       18                                 FHCF-
                                     2004K

<PAGE>

            Tallahassee, Florida, will be returned to the sender. Reports not in
            the physical possession of the FHCF's Administrator by 5 p.m.,
            Central Time, on the applicable due date are late.

      (e)   Pursuant to the provisions of Section 215.557, Florida Statutes, the
            reports of insured values under Covered Policies by ZIP Code
            submitted to the SBA pursuant to Section 215.555, Florida Statutes,
            are confidential and exempt from the provisions of Section
            119.07(1), Florida Statutes, and Section 24(a), Art. I of the State
            Constitution.

(2)   REIMBURSEMENT PREMIUM

      (a)   If the Company writes Covered Policies on or before June 1 of the
            Contract Year, the Company shall pay the FHCF its Reimbursement
            Premium in installments due on or before August 1, October 1, and
            December 1 of the Contract Year in amounts to be determined by the
            FHCF. However, if the Company's Reimbursement Premium for the prior
            Contract Year was less than $5,000, the Company's full provisional
            Reimbursement Premium, in an amount equal to the Reimbursement
            Premium paid in the prior year, shall be due in full on or before
            August 1 of the Contract Year. The Company will be invoiced for
            amounts due, if any, beyond the provisional Reimbursement Premium
            payment, on or before December 1 of the Contract Year. In addition,
            if a company has been placed under regulatory supervision by a State
            or control of the Company has been transferred through any legal or
            regulatory proceeding to a state regulator or court appointed
            receiver or rehabilitator (referred to in the aggregate as "State
            action"), the full annual provisional Reimbursement Premium as
            billed and any outstanding balances will be due on August 1, or the
            date that such State action occurs after August 1 and before May 31
            of the Contract Year.

      (b)   A New Participant that first begins writing Covered Policies prior
            to December 1 of the Contract Year shall pay the FHCF a provisional
            Reimbursement Premium of $1,000 upon execution of this Contract. The
            Administrator shall calculate the Company's actual Reimbursement
            Premium for the period based on its actual exposure as of December
            31 of the Contract Year, as reported on or before March 1. To
            recognize that New Participants have limited exposure during this
            period, the actual Premium as determined by processing the Company's
            exposure data shall then be divided in half, the provisional Premium
            shall be credited, and the resulting amount shall be the total
            Premium due for the Company for the remainder of the Contract Year.
            However, if that amount is less than $1,000, then the Company shall
            pay $1,000. The Premium payment is due no later than May 1 of the
            Contract Year. The Company's Retention and coverage will be
            determined based on the total Premium due as calculated above.

      (c)   A New Participant that first begins writing Covered Policies on or
            after December 1 but through and including May 31 of the Contract
            Year shall pay the FHCF a final Reimbursement Premium of $1,000 upon
            execution of this Contract.

      (d)   The requirement that the Reimbursement Premium is due on a certain
            date means that the Premium shall be in the physical possession of
            the FHCF no later than 5 p.m., Eastern Time, on the due date
            applicable to the particular installment. If remitted by check to
            the FHCF's Post Office Box, the check shall be physically in the
            Post Office Box 550261, Tampa, FL 33655-0261, as set out on the
            invoice sent to the Company. If remitted by check by hand delivery,
            the check shall be physically on the premises of the FHCF's bank in
            Tampa, Florida, as set out on the invoice sent to the Company. If
            remitted electronically, the wire transfer shall have been completed
            to the FHCF's account at its bank in Tampa, Florida, as set out on
            the invoice sent to the Company. If the applicable due date is a
            Saturday, Sunday or legal holiday, then the actual due date will be
            the day immediately following the applicable due date which is not a
            Saturday, Sunday or legal holiday. For purposes of the timeliness of
            the remittance, neither the United States Postal Service postmark
            nor a postage meter date is in any way

                                       18                                 FHCF-
                                     2004K

<PAGE>

            determinative. Premium checks sent to the SBA in Tallahassee,
            Florida, or to the FHCF's Administrator in Minneapolis, Minnesota,
            will be returned to the sender. Reimbursement Premiums not in the
            physical possession of the FHCF by 5 p.m., Eastern Time, on the
            applicable due date are late.

(3)   CLAIMS AND LOSSES

      (a)   IN GENERAL

            1.    Claims and losses resulting from Loss Occurrences commencing
                  during the Contract Year shall be reported by the Company and
                  reimbursed by the FHCF as provided herein and in accordance
                  with the Statute, this Contract, and any rules adopted
                  pursuant to the Statute. For a Company participating in a
                  quota share primary insurance agreement(s) with Citizens
                  Property Insurance Corporation High Risk Account, Citizens and
                  the Company shall report only their respective portion of
                  losses under the quota share primary insurance agreement(s).
                  Pursuant to Section 215.555(4)(c), Florida Statutes, the SBA
                  is obligated to pay for losses not to exceed the Actual
                  Claims-Paying Capacity of the FHCF, up to the limit in
                  accordance with Section 215.555(4)(c)1., Florida Statutes, for
                  any one Contract Year.

      (b)   LOSS REPORTS

            1.    At the direction of the SBA, the Company shall report its
                  projected Ultimate Net Loss from each Loss Occurrence to
                  provide information to the SBA in determining any potential
                  liability for possible reimbursable losses under the Contract
                  on the Interim Loss Report, Form FHCF-L1A, as adopted in Rule
                  19ER04-2 (19-8.029), F.A.C.

            2.    No later than December 31 of the Contract Year, the Company
                  shall report to the FHCF its Ultimate Net Loss, incurred and
                  paid, with respect to each Loss Occurrence during the Contract
                  Year on the Proof of Loss Report, Form FHCF-L1B, as adopted in
                  Rule 19ER04-2 (19-8.029), F.A.C.

            3.    Quarterly thereafter until all claims and losses resulting
                  from the Loss Occurrence(s) are fully discharged, the Company
                  shall render to the FHCF revised Proof of Loss Reports with
                  respect to each Loss Occurrence. If the Company's Retention
                  must be recalculated as the result of an exposure
                  resubmission, and if the recalculated Retention changes the
                  FHCF's reimbursement obligations, then the Company shall
                  submit additional Proof of Loss Reports for recalculation of
                  the FHCF's obligations.

            4.    The SBA will determine and pay, as soon as practicable after
                  receiving Proof of Loss Reports described and adopted in Rule
                  19ER04-2 (19-8.029), F.A.C. the reimbursement amount due based
                  on losses paid by the Company to date and adjustments to this
                  amount based on subsequent quarterly information. The
                  adjustments to reimbursement amounts shall require the SBA to
                  pay, or the Company to return, amounts reflecting the most
                  recent determination of losses.

            5.    Initial or quarterly reports received on or before the due
                  date for that report will be reimbursed within 30 days
                  following the due date or as soon as practicable after the
                  receipt of the report and verification of the reported losses.
                  Those received after the initial or quarterly reporting due
                  date will be reimbursed within 30 days following the due date
                  or as soon as practicable after the receipt of the report and
                  verification of the reported losses.

            6.    If a Covered Event occurs during the Contract Year, but after
                  December 31, at the direction of the SBA, Companies shall file
                  an Interim Loss Report within 30 days after the Covered Event
                  and Proof of Loss Reports quarterly thereafter. Subparagraphs
                  3-6 above regarding Proof of Loss Reports shall apply.

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                                     2004K

<PAGE>

            7.    All loss reports received will be compared with the FHCF's
                  exposure data to establish the facial reasonableness of the
                  reports. Preliminarily, the FHCF will examine the reported
                  losses to determine whether reported losses exceed reported
                  exposure in the affected counties; whether the Company has
                  reported a low concentration of exposure in the affected
                  counties; and whether the Ultimate Net Loss as a percentage of
                  exposure in affected counties is significantly higher than the
                  average. Companies meeting these tests for reasonableness will
                  be scheduled for reimbursement. Companies not meeting these
                  tests for reasonableness will be handled on a case-by-case
                  basis and will be contacted to provide specific information
                  regarding their individual book of business.

      (c)   LOSS REIMBURSEMENT CALCULATIONS

            1.    In general, the Company's paid Ultimate Net Losses must exceed
                  its FHCF Retention before any reimbursement is payable from
                  the FHCF. Each Company sustaining reimbursable losses will
                  receive the amount of reimbursement due under the Contract up
                  to the amount of the Company's payout. If more than one
                  Covered Event occurs in any one Contract Year, any
                  reimbursements due from the FHCF shall take into account the
                  Company's Retention for each Covered Event. However, the
                  Company's reimbursements from the FHCF for all Covered Events
                  occurring during the Contract Year shall not exceed, in
                  aggregate, the Projected Payout Multiple or Payout Multiple,
                  as applicable, times the individual Company's Reimbursement
                  Premium for the Contract Year.

            2.    In determining reimbursements under this Contract, the SBA
                  shall:

                  a.    First, reimburse Companies qualified as limited
                        apportionment companies under Section 627.351(2)(b)3.,
                        Florida Statutes, for the amount (if any) of
                        reimbursement due under the individual Company's
                        Contract, but not to exceed the lesser of $10 million or
                        an amount equal to 10 times the individual Company's
                        Reimbursement Premium for the Contract Year. This
                        provision does not apply if the projected Balance of the
                        Fund as of December 31 of the Contract Year, exclusive
                        of any bonding capacity of the FHCF, exceeds $2 billion.
                        Further, if the Company is a member of an NAIC group,
                        the Company may not receive reimbursement under this
                        provision if any other member of the NAIC group has
                        received reimbursement under this provision.

                  b.    Next, reimburse each of the Companies for the amount (if
                        any) of reimbursement due under the individual Company's
                        Contract, but not to exceed for all Loss Occurrences, an
                        amount equal to the Projected Payout Multiple or the
                        Payout Multiple, as applicable, times the individual
                        Company's Reimbursement Premium for the Contract Year.
                        For a limited apportionment company, any amount payable
                        under this provision shall be reduced by the amount (if
                        any) payable under (a) above.

                  c.    Thereafter, pursuant to Section 215.555(4)(d)2.c.,
                        Florida Statutes, establish the prorated reimbursement
                        level at the highest level for which any remaining fund
                        balance or bond proceeds (as limited by Section
                        215.555(4)(c), Florida Statutes) are sufficient to
                        reimburse entities created pursuant to Section
                        627.351(6), Florida Statutes, for reimbursable losses
                        exceeding the amounts payable pursuant to (b) above for
                        the Contract Year. The proration shall be determined
                        based on each entity's share of their aggregate
                        reimbursable losses exceeding the amounts payable
                        pursuant to (b) above. Any additional reimbursements
                        pursuant to this paragraph shall not include losses
                        under an entity's FHCF Retention and will be at the 90%
                        Reimbursement Percentage. In order to determine the
                        amount available for additional reimbursements, the SBA
                        will review reported loss information from all Companies
                        and determine

                                       18                                 FHCF-
                                     2004K

<PAGE>

                        that all Companies which received payments for
                        reimbursable losses but which did not exceed their
                        projected payout have settled all, or substantially all,
                        of their claims eligible for reimbursement. The SBA will
                        then determine the remaining amount of Claims-Paying
                        Capacity available for such additional reimbursements.
                        Such additional reimbursement amounts shall not be
                        limited due to the transitional provision created for
                        the 2004-2005 Contract Year.

            3.    Reserve established. When a Covered Event occurs in a
                  subsequent Contract Year when reimbursable losses are still
                  being paid for a Covered Event in a previous Contract Year,
                  the SBA will establish a reserve for the outstanding
                  reimbursable losses for the previous Contract Year, based on
                  the length of time the losses have been outstanding, the
                  amount of losses already paid, the percentage of incurred
                  losses still unpaid, and any other factors specific to the
                  loss development of the Covered Events involved.

      (d)   COMMUTATION

            1.    Not less than 36 months or more than 60 months after the end
                  of the Contract Year, the Company shall report to the FHCF all
                  claims and losses, both reported and unreported, for the
                  Contract Year which are not finally settled and which may be
                  reimbursable losses under this Contract. The Company and the
                  SBA or their respective representatives may, by mutual
                  agreement, determine the capitalized value of all claims and
                  losses, both reported and unreported, resulting from Loss
                  Occurrences commencing during the Contract Year, and the
                  Company shall provide the SBA with a copy of a written opinion
                  on such capitalized value by the Company's certifying actuary.
                  Payment by the SBA of its portion of any amount or amounts so
                  mutually agreed and certified by the Company's certifying
                  actuary shall constitute a complete and final release of the
                  SBA in respect of all claims and losses, both reported and
                  unreported, under this Contract.

            2.    If agreement on capitalized value cannot be reached within 60
                  days after the Company reports its claims and losses to the
                  FHCF, the Company and the SBA may mutually appoint an actuary
                  or appraiser to investigate, determine and capitalize such
                  claims or losses. If both parties then agree, the SBA shall
                  pay its portion of the amount so determined to be the
                  capitalized value of such claims or losses.

            3.    If the parties fail to agree, then any difference shall be
                  settled by a panel of three actuaries, one to be chosen by
                  each party and the third by the two so chosen. If either party
                  does not appoint an actuary within 30 days, the other party
                  may appoint two actuaries. If the two actuaries fail to agree
                  on the selection of a third actuary within 30 days of their
                  appointment, each of them shall name two, of whom the other
                  shall decline one and the decision shall be made by drawing
                  lots. All the actuaries shall be regularly engaged in the
                  valuation of property claims and losses and shall be members
                  of the Casualty Actuarial Society and of the American Academy
                  of Actuaries. None of the actuaries shall be under the control
                  of either party to this Contract. Each party shall submit its
                  case to its actuary within 30 days of the appointment of the
                  third actuary. The decision in writing of any two actuaries,
                  when filed with the parties hereto, shall be final and binding
                  on both parties.

            4.    The reasonable and customary expense of the actuaries and of
                  the commutation (as a result of 2. and 3. above) shall be
                  equally divided between the two parties. Said commutation
                  shall take place in Tallahassee, Florida, unless some other
                  place is mutually agreed upon by the Company and the SBA.

(4)   ADVANCES

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                                     2004K

<PAGE>

      (a)   The SBA may make advances for loss reimbursements as defined herein,
            at market interest rates, to the Company in accordance with Section
            215.555(4)(e), Florida Statutes. The market interest rate shall be
            the average rate earned by the SBA for the FHCF for the first five
            months of the Contract Year. All interest charged will commence on
            the date the SBA issues a check for an advance and will cease at
            midnight on the date upon which the FHCF has received the Company's
            Proof of Loss Report for the Covered Event for which the advance was
            issued qualifying the Company for reimbursement equal to or
            exceeding the amount(s) of the advance(s). If it is determined that
            the Company received funds in excess of those to which it was
            entitled, the interest as to those sums will not cease on the date
            of the receipt of the Proof of Loss Report but will continue until
            the Company reimburses the FHCF for the overpayment. The Company's
            final reimbursement shall be reduced by an amount equal to the
            amount of the advance(s) and the interest thereon. The specific type
            of advances enumerated in the Statute follow.

            1.    Advances to Companies to prevent insolvency.

                  a.    Section 215.555(4)(e)1., Florida Statutes, provides that
                        the SBA shall advance to the Company amounts necessary
                        to maintain the solvency of the Company, up to 50
                        percent of the SBA's estimate of the reimbursement due
                        to the Company. In determining insolvency for this
                        advance, a Company will be considered insolvent if it is
                        unable to pay its policyholders for justifiable claims.

                  b.    The requirements for an advance to a Company to prevent
                        insolvency are that the Company demonstrates that it is
                        likely to qualify for reimbursement, that the Company
                        demonstrates that the immediate receipt of moneys from
                        the SBA is likely to prevent the Company from becoming
                        insolvent, and that the Company provides the information
                        in (4)(b) below to aid in the SBA's determination to
                        grant an advance.

                  c.    The SBA's final decision regarding an application for an
                        advance to prevent insolvency shall be based on whether
                        or not, considering the totality of the circumstances,
                        including the SBA's obligations to provide reimbursement
                        for all Covered Events occurring during the Contract
                        Year, granting an advance is essential to allowing the
                        entity to continue to pay additional claims for a
                        Covered Event in a timely manner.

            2.    Advances to entities created pursuant to Section 627.351(6),
                  Florida Statutes.

                  a.    Section 215.555(4)(e)2., Florida Statutes, provides that
                        the SBA may advance to an entity created pursuant to
                        Section 627.351(6), Florida Statutes, up to 90% of the
                        lesser of the SBA's estimate of the reimbursement due or
                        the entity's share of the actual aggregate Reimbursement
                        Premium for that Contract Year, multiplied by the
                        current available liquid assets of the FHCF.

                  b.    The requirements for an advance to entities created
                        pursuant to Section 627.351(6), Florida Statutes are
                        that the entity must demonstrate to the SBA that the
                        advance is essential to allow the entity to pay claims
                        for a Covered Event and that the entity provides the
                        information in (4)(b) below to aid in the SBA's
                        determination to grant an advance.

                  c.    The SBA must determine that its assets are sufficient
                        and sufficiently liquid to fulfill its obligations to
                        other Companies under the Contract prior to granting an
                        advance.

            3.    Advances to limited apportionment companies.

                  a.    Section 215.555(4)(e)3., Florida Statutes, provides that
                        the SBA may advance the amount of estimated
                        reimbursement payable to limited apportionment
                        companies.

                                       18                                 FHCF-
                                     2004K

<PAGE>

                  b.    The requirement for an advance to limited apportionment
                        companies is that they make an application to the SBA
                        and provide the SBA with a report of their exposures and
                        losses in order to determine Retention levels and loss
                        reimbursements payable.

                  c.    The SBA must determine that its assets are sufficient
                        and sufficiently liquid to fulfill its obligations to
                        other Companies under the Contract prior to granting an
                        advance.

      (b)   Companies shall request a specific amount for the advance from the
            SBA and, for those Companies or entities designated in (4)(a)1. and
            (4)(a)2. above, shall provide the SBA with the following
            information, determined in accordance with statutory accounting
            principles, which are the rules and procedures governing insurer
            financial reporting for regulatory purposes:

            1.    Current assets;

            2.    Current liabilities other than liabilities due to the Covered
                  Event;

            3.    Current liabilities due to the Covered Event, paid and unpaid,
                  submitted on the Proof of Loss Report, Form FHCF-L1B, as
                  adopted in Rule 19ER04-2 (19-8.029), F.A.C.;

            4.    Evidence of estimated Retention breached by payment of paid
                  losses from the Covered Event;

            5.    Current surplus as to policyholders;

            6.    Estimate of expected liabilities due to the Covered Event;

            7.    Estimate of other expected liabilities not due to the Covered
                  Event;

            8.    Amount of reinsurance available to pay claims for the Covered
                  Event under other reinsurance treaties;

            9.    Estimated amount of payout from the FHCF, determined in
                  accordance with Section 215.555(4)(b), Florida Statutes. This
                  estimate is necessarily predicated on the Company's Premium
                  which in turn is predicated on its exposure. Therefore, if the
                  Covered Event occurs in June, July, or August, the Company
                  will need to provide its exposure data prior to September 1 in
                  order that the appropriate calculations may be made.

      (c)   The information outlined herein shall be supplied in the form of a
            letter, signed by two executive officers of the Company, with the
            supporting information attached.

      (d)   In determining whether or not to grant an advance, the SBA shall:

            1.    Carefully review and consider all the information submitted by
                  such Companies;

            2.    Consult with all relevant regulatory agencies seeking all
                  relevant information about the Company's financial and
                  solvency condition;

            3.    Carefully review its currently available liquid assets; and

            4.    Review the damage caused by the Covered Event and when that
                  Covered Event occurred.

      (e)   Any amount advanced by the SBA shall be used by the Company only to
            pay claims of its policyholders for the Covered Event or Covered
            Events which have precipitated the immediate need to continue to pay
            additional claims as they become due. The advance is a reimbursement
            which allows the Company to continue to pay claims in a timely
            manner.

(5)   DELINQUENT PREMIUM PAYMENTS

      Failure to submit a Premium or Premium installment when due is a violation
      of the terms of this Contract and Section 215.555, Florida Statutes.
      Interest on late payments shall be due as set forth in Article IX(2) of
      this Contract.

(6)   INADEQUATE DATA SUBMISSIONS

      If exposure data or other information required to be reported by the
      Company under the terms of this Contract is not received by the FHCF in
      the format specified by the FHCF and

                                       18                                 FHCF-
                                     2004K

<PAGE>

      is inadequate to the extent that the FHCF requires resubmission of data,
      the Company will be required to pay the FHCF a resubmission fee of $1,000.
      The $1,000 fee is also applicable to exposure resubmissions made as a
      result of examinations of the Company's exposure and claims data.

(7)   DELINQUENT SUBMISSIONS

      Failure to submit an exposure submission or resubmission when due is a
      violation of the terms of this Contract and Section 215.555, Florida
      Statutes.

ARTICLE XI - TAXES

In consideration of the terms under which this Contract is issued, the Company
agrees to make no deduction in respect of the Premium herein when making premium
tax returns to the appropriate authorities. Should any taxes be levied on the
Company in respect of the Premium herein, the Company agrees to make no claim
upon the SBA for reimbursement in respect of such taxes.

ARTICLE XII - ERRORS AND OMISSIONS

Any inadvertent delay, omission, or error on the part of the SBA shall not be
held to relieve the Company from any liability which would attach to it
hereunder if such delay, omission, or error had not been made.

ARTICLE XIII - INSPECTION OF RECORDS

The Company shall allow the SBA to inspect, examine, and verify, at reasonable
times, all records of the Company relating to the Covered Policies under this
Contract, including Company files concerning claims, losses, or legal
proceedings regarding subrogation or claims recoveries which involve this
Contract, including premium, loss records and reports involving exposure data on
Covered Policies and applicable ceded reinsurance contracts. All discovered
errors, inadvertent omissions, and typographical errors associated with the data
reporting of insured values shall be corrected to reflect the proper values.
This right shall survive the termination of this Contract. The Company shall
retain its records in accordance with the requirements for records retention
regarding exposure reports and claims reports outlined herein, and in any
administrative rules adopted pursuant to Section 215.555, Florida Statutes.
Companies writing covered collateral protection policies, as defined in
definition (10) of Article V herein, must be able to provide documentation that
the policy covers personal residences, protects both the borrower's and lender's
interest, and that the coverage is in an amount at least equal to the coverage
for the dwelling in place under the lapsed homeowner's policy.

(1)   EXAMINATION REQUIREMENTS FOR EXPOSURE VERIFICATION

      The Company shall retain complete and accurate records, in policy level
      detail, of all exposure data submitted to the SBA in any Contract Year
      until the SBA has completed its examination of the Company's exposure
      submissions. The Company shall also retain complete and accurate records
      of any completed exposure examination for any Contract Year in which the
      Company incurred losses until the completion of the loss reimbursement
      examination for that Contract Year. The records to be retained shall
      include the exam file which supports the exposure reported to the SBA and
      any other information which would allow for a complete examination of the
      Company's reported exposure data. The exam file shall be prepared
      according to the SBA Exam File Specifications outlined in the Data Call.
      The Company must also have available, at the time of the examination, a
      copy of its underwriting manual, a copy of its rating manual, and staff to
      respond to the questions of the SBA or its agents. The Company is also
      required to retain declarations pages and policy applications to support
      reported exposure. To meet the requirement that the application

                                       18                                 FHCF-
                                     2004K

<PAGE>

      must be retained, the Company may retain either the actual application or
      may retain the actual application in an electronic format.

(2)   EXAMINATION REQUIREMENTS FOR LOSS REPORTS

      The Company shall retain complete and accurate records of all reported
      losses and/or advances submitted to the SBA until the SBA has completed
      its examination of the Company's reimbursable losses. The records to be
      retained are set forth as part of the Proof of Loss Report, Form FHCF-L1B,
      adopted in Rule 19ER04-2 (19-8.029), F.A.C. The Company must also retain
      the required exposure exam file for the Contract Year in which the loss
      occurred, and must have available any other information which would allow
      for a complete examination of the Company's losses.

(3)   EXAMINATION PROCEDURES

      (a)   The FHCF will send an examination notice to the Company providing
            the commencement date of the examination, the site of the
            examination, any accommodation requirements of the examiner, and the
            reports and data which must be assembled by the Company and
            forwarded to the FHCF upon request. The Company shall be prepared to
            choose one location in which to be examined, unless otherwise
            specified by the SBA.

      (b)   The reports and data are required to be forwarded to the FHCF as set
            forth in an examination notice letter. The information is then
            forwarded to the examiner. If the FHCF receives accurate and
            complete records as requested, the examiner will contact the Company
            to inform the Company as to what policies or other documentation
            will be required once the examiner is on site. Any records not
            required to be provided to the examiner in advance shall be made
            available at the time the examiner arrives on site.

      (c)   At the conclusion of the examiner's work and the management review
            of the examiner's report, findings, recommendations, and work
            papers, the FHCF will forward a preliminary draft of the examination
            report to the Company and require a response from the Company by a
            date certain as to the examination findings and recommendations.

      (d)   If the Company accepts the examination findings and recommendations,
            and there is no recommendation for resubmission of the Company's
            exposure data, the examination report will be finalized and the exam
            file closed.

      (e)   If the Company disputes the examiner's findings, the areas in
            dispute will be resolved by a meeting or a conference call between
            the Company and FHCF management.

      (f)1. The recommendation of a loss reimbursement examination could require
            the Company to resubmit its loss reports or exposure data.

         2. If the recommendation of the examiner is to resubmit the Company's
            exposure data for the Contract Year in question, then the FHCF will
            send the Company a letter outlining the process for resubmission and
            including a deadline to resubmit. The resubmission will include a
            data file to be submitted to the FHCF's Administrator and an exam
            file to be submitted to the offices of the SBA. The resubmission is
            also required to be accompanied by a detailed written description of
            the specific changes made to the resubmitted data. Once the
            resubmission is received by the FHCF's Administrator, the FHCF's
            Administrator calculates a revised Reimbursement Premium for the
            Contract Year which has been examined. The SBA shall then review the
            resubmission with respect to the examiner's findings, and accept the
            resubmission or contact the Company with any questions regarding the
            resubmission. Once the SBA has accepted the resubmission as a
            sufficient response to the examiner's findings, the FHCF's
            Administrator will send the Company an invoice for any Reimbursement
            Premium and interest due or to refund Reimbursement Premium, as the
            case may be. Once the resubmission has been approved, the exam file
            is closed.

                                       18                                 FHCF-
                                     2004K

<PAGE>

         3. If the recommendation of the examiner is either to resubmit the
            Company's exposure data for the Contract Year in question or giving
            the option to pay the estimated Premium difference, then the FHCF
            will send the Company a letter outlining the process for
            resubmission or for paying the estimated Premium difference and
            including a deadline for the resubmission or the payment to be
            received by the FHCF's Administrator. If the Company chooses to
            resubmit, the same procedures outlined in Article XIII(3)(f)2.
            apply.

      (g)   If the Company continues to dispute the examiner's findings and/or
            recommendations and no resolution of the disputed matters is
            obtained through discussions between the Company and FHCF
            management, then the process within the SBA is at an end and further
            administrative remedies may be obtained under Chapter 120, Florida
            Statutes.

      (h)   The examiner's list of errors is made available in the examination
            report sent to the Company. Given that the examination was based on
            a sample of the Company's policies rather than the whole universe of
            the Company's Covered Policy exposure, the error list is not
            intended to provide a complete list of errors but is intended to
            indicate what Covered Policy information needs to be reviewed and
            corrected throughout the Company's book of Covered Policy business
            to ensure more complete and accurate reporting in the resubmission
            if required and for any future submissions.

(4)   COSTS OF THE EXAMINATIONS

      The costs of the examinations shall be borne by the SBA. However, in order
      to remove any incentive for a Company to delay preparations for an
      examination, the SBA shall be reimbursed by the Company for any
      examination expenses incurred in addition to the usual and customary
      costs, which additional expenses were incurred as a result of the
      Company's failure, despite proper notice, to be prepared for the
      examination or as a result of a Company's failure to provide requested
      information. All requested information must be complete and accurate. The
      Company shall be notified of any administrative remedies which may be
      obtained under Chapter 120, Florida Statutes.

ARTICLE XIV - INSOLVENCY OF THE COMPANY

Participating insurers must notify the FHCF immediately upon becoming insolvent.
Pursuant to Section 215.555(4)(g), Florida Statutes, the FHCF is required to pay
the "net amount of all reimbursement moneys" due an insolvent insurer to the
Florida Insurance Guaranty Association for the benefit of Florida policyholders.

ARTICLE XV - TERMINATION

The FHCF and the obligations of both parties under this Contract can be
terminated only as may be provided by law or applicable rules.

ARTICLE XVI - VIOLATIONS

Pursuant to the provisions of Section 215.555(10), Florida Statutes, any
violation of the terms of this Contract by the Company constitutes a violation
of the Insurance Code of the State of the Florida. Pursuant to the provisions of
Section 215.555(11), Florida Statutes, the SBA is authorized to take any action
necessary to enforce any administrative rules adopted pursuant to Section
215.555, Florida Statutes, and the provisions and requirements of this Contract.

ARTICLE XVII - APPLICABLE LAW

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                                     2004K

<PAGE>

(1)   APPLICABLE LAW: This Contract shall be governed by and construed according
      to the laws of the State of Florida in respect of any matter relating to
      or arising out of this Contract.

(2)   NOTICE OF RIGHTS: Pursuant to Chapter 120, Florida Statutes, and the
      Uniform Rules of Procedure, codified as Chapters 28-101 through 28-111,
      F.A.C., a person whose substantial interests are affected by a decision of
      the SBA regarding the FHCF may request a hearing within 21 days shall have
      waived his or her right to a hearing. The hearing may be a formal hearing
      or an informal hearing pursuant to the provisions of Sections 120.569 and
      120.57, Florida Statutes. The petition must be filed (received) in the
      office of the Agency Clerk, General Counsel's Office, State Board of
      Administration of Florida, P.O. Box 13300, Tallahassee, FL 32317-3300,
      within the 21 day period.

ARTICLE XVIII - REIMBURSEMENT CONTRACT ELECTIONS

REIMBURSEMENT PERCENTAGE

For purposes of determining reimbursement (if any) due the Company under this
Contract and in accordance with the Statute, the Company has the option to elect
a 45% or 75% or 90% reimbursement percentage under this Contract. If the Company
is a member of an NAIC group, all members must elect the same reimbursement
percentage, and the individual executing this Contract on behalf of the Company,
by placing his or her initials in the box under (a) below, affirms that the
Company has elected the same reimbursement percentage as all members of its NAIC
group. If the Company is an entity created pursuant to Section 627.351, Florida
Statutes, the Company must elect the 90% reimbursement percentage. The Company
shall not be permitted to change its reimbursement percentage during the
Contract Year. The Company shall be permitted to change its reimbursement
percentage at the beginning of a new Contract Year, but may not reduce its
reimbursement percentage if a Covered Event required the issuance of revenue
bonds, until the bonds have been fully repaid.

The Reimbursement Percentage elected by the Company for the prior Contract Year
effective June 1, 2003 was as follows: Philadelphia Indemnity Insurance Company
- 90%

(a)   NAIC GROUP AFFIRMATION: Initial the following box if the Company is part
      of an NAIC Group:

                                      CJM

(b)   REIMBURSEMENT PERCENTAGE ELECTION: The Company hereby elects the following
      Reimbursement Percentage for the Contract Year from 12:01 a.m., Eastern
      Time, June 1, 2004, to 12:01 a.m., Eastern Time, June 1, 2005, (the
      individual executing this Contract on behalf of the Company shall place
      his or her initials in the box to the left of the percentage elected for
      the Company):

            [   ]  45%    OR     [   ]  75%    OR    [CJM]  90%

                                       18                                 FHCF-
                                     2004K

<PAGE>

REPORTING EXPOSURE FOR A SINGLE STRUCTURE, WITH A MIX OF COMMERCIAL HABITATIONAL
AND COMMERCIAL NON-HABITATIONAL EXPOSURE, WRITTEN ON A COMMERCIAL POLICY

This section is applicable to all Companies with exposure for single structures
with a mix of commercial habitational and commercial non-habitational exposure
written under a Commercial Policy. If the Company does not write this type of
exposure and this section DOES NOT apply, please initial the N/A box below which
completes this ARTICLE. If the Company DOES write this type of exposure, please
read and complete the remainder of this ARTICLE.

                                      [  ]
                                      N/A

COMMERCIAL-RESIDENTIAL CLASS CODE

If a single structure is used for both habitational and non-habitational
purposes and the structure has a commercial-residential class code (based on a
classification plan on file with and reviewed by the Administrator), the entire
exposure for the structure should be reported to the FHCF under the Data Call,
and the FHCF will reimburse losses for the entire structure as well.

COMMERCIAL  NON-RESIDENTIAL/BUSINESS CLASS CODE

If a single structure is used for both habitational and non-habitational
purposes and the structure has a commercial non-residential or business class
code (based on a classification plan on file with and reviewed by the
Administrator), the habitational portion of that structure should be identified
and reported to the FHCF under the Data Call.

However, in recognition of the unusual nature of commercial structures with
incidental habitational exposure and the hardship some companies may face in
having to carve out such incidental habitational exposure, as well as the losses
to such structures, the FHCF will accommodate these companies by allowing them
to exclude the entire exposure for the single structure from their Data Call
submission, providing the following two conditions are met:

(1)   The decision to not carve out and report the incidental habitational
      exposure shall apply to all such structures insured by the Company; and

(2)   If the incidental habitational exposure is not reported to the FHCF, the
      Company agrees it shall not report losses to the structure and the FHCF
      shall not reimburse any losses to the structure.

Initial the CARVING box below if the Company is able to carve out and report its
incidental habitational exposure, OR, if this requirement presents a hardship,
the Company must communicate its decision to not carve out and to not report the
incidental exposure by having the individual executing this Contract on behalf
of the Company placing his or her initials in the NOT CARVING bow below.

                            [  ]                            [CJM]
                           CARVING       OR              NOT CARVING

By initialing the CARVING OR NOT CARVING box above, the Company is making an
irrevocable decision for the corresponding Contract Year Data Call submission
and any subsequent submissions.

                                       18                                 FHCF-
                                     2004K

<PAGE>

IMPORTANT NOTE: SINCE THIS ELECTION WILL IMPACT YOUR DATA CALL SUBMISSION,
PLEASE SHARE THIS DECISION WITH THE INDIVIDUAL(S) RESPONSIBLE FOR COMPILING YOUR
DATA CALL S

ARTICLE XIX - SIGNATURES

APPROVED BY:

Florida Hurricane Catastrophe Fund
By: State Board of Administration of the State of Florida

By: Linda Letta, General Counsel for                                   7/12/2004
    Coleman Stipanovich                                                   Date
    Executive Director

Approved as to legality:

By: Thomas A. Bink, General Counsel                                   7/12/2004
    Linda Lettera                                                        Date
    General Counsel
    FL Bar ID#311911

Philadelphia Indemnity Insurance Company

                              COMPANY

By: Christopher J. Maguire, Executive VP & Chief Underwriting Officer 5/26/2004
                               Name/Title                               Date

                                       18                                 FHCF-
                                     2004K

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