Document:

August
      3,
      2007           

    

    

    Jacqueline
      Nevilles

    5900
      Granite Glen Ct

    Granite
      Bay, CA 95746

    

    Dear
      Jacqueline:

    

    We
      are
      very pleased to invite you to join Wherify Wireless, Inc. (the “Company”). This
      letter shall serve to set forth the terms of employment offered to you by the
      Company and to acknowledge your acceptance of the employment on such terms
      as
      detailed below. This letter (“Agreement”) shall become effective upon the
      mutually agreed upon start date of your employment with the
      Company.

    

    Duties
      and Responsibilities.
      You
      shall serve as Treasurer and Chief Financial Officer of the Company with
      functional responsibility over the Company’s financial, human resources and
      investor relations’ functions. You shall render such business and professional
      services in the performance of your duties, consistent with your position and
      the Bylaws of the Company and as shall reasonably be assigned to you by the
      Company’s Chief Executive Officer and/or the Board of Directors. You shall
      report directly to the Chief Executive Officer. This offer is for a full time
      position, located at the headquarters of the Company in San Mateo, California.
      

     

    Compensation.
      During
      the period beginning as of the Effective Time the Company shall pay you as
      compensation for your services an initial annual base compensation of $175,000.
      Thereafter, your compensation shall be subject to periodic review and
      adjustment, at least annually, by the Chief Executive Officer. Your salary
      shall
      be paid in accordance with the Company’s customary payroll practice, subject to
      applicable withholding. You also have the ability to earn $75,000 bonus
      annually. Your milestones for the bonus will be established by the Chief
      Executive Officer in conjunction with the Board of Directors. The Company has
      full discretion to pay up to 50% of any bonus in registered stock.

     

    Benefits
      and Vacation.
      You
      will be eligible to receive the Company’s standard 

    employee
      benefits package, including its medical insurance, dental insurance, vision
      insurance and disability insurance, and to accrue paid vacation and holidays
      under the Company’s vacation plan. Your vacations shall be scheduled at a
      mutually agreeable time for the Company and yourself, provided that you shall
      receive not less than 10 days of paid vacation per year and such days shall
      accrue if not used as provided by company policy.

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Director
      and Officer Insurance.
      The
      Company shall obtain and maintain coverage for you under a director and officer
      insurance policy during the term of your employment that is equal to or
      comparable to the same coverage to the Company’s other executive officers and in
      amount and upon terms customary to similarly situated companies. 

     

    Expenses.
      The
      Company shall reimburse you for reasonable travel and other expenses incurred
      by
      you in the furtherance of or in connection with the performance of your duties
      on behalf of the Company in accordance with the Company’s expense reimbursement
      policy as in effect from time to time. 

     

    Stock
      Option.
      The
      senior management of the Company will recommend that the Board of Directors
      grant you an option to purchase up to 500,000 shares of the Company’s Common
      Stock under the terms of the Company’s 2004 Stock Option Plan and shall be
      exercisable for a period of ten (10) years. Options typically are granted at
      the
      next meeting of the Company’s Board of Directors following your commencement of
      employment. The exercise price for this option will be the fair market value
      of
      the Company’s Common Stock on the grant date of such option. Each stock option
      grant will be in the form of incentive stock options in the maximum amount
      permitted by applicable law. Following your formal written acceptance of the
      stock option grant, the option will vest in accordance with the following
      schedule:

    

    (i)
      the
      option will vest with respect to twenty five percent of the total number of
      shares purchasable upon exercise of the option (25% of the total option grant)
      after 12 months of continuous employment; and 

    (ii)
      the
      option will vest with respect to an additional 1/48th of the option shares
      and
      has an exercise price of $.016. 

    

    Employee
      Confidential Information and Inventions Agreement.
      To
      enable the Company to safeguard its proprietary and confidential information,
      it
      is a condition of employment that you agree to sign the Company’s standard form
      of “Employee Confidential Information and Inventions Agreement.” A copy of this
      Agreement will be forwarded to you for your review. We understand that you
      are
      likely to have signed similar agreements with prior employers, and wish to
      impress upon you that the Company does not want to receive the confidential
      or
      proprietary information of others, and will support you in respecting your
      lawful obligations to prior employers.

     

    At-Will
      Employment.
      Should
      you decide to accept our offer, you will be an “at-will” employee of the
      Company. This means that either you or the Company may terminate the employment
      relationship with or without cause at any time. Participation in any stock
      option, benefit, compensation or incentive program does not change the nature
      of
      the employment relationship, which remains “at-will”.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Voluntary
      Termination; Termination for Cause. In
      the
      event that your employment with the Company is terminated voluntarily by you
      or
      for Cause by the Company, then (i) all options which have been vested shall
      continue to be exercisable in accordance with the terms of the Company’s stock
      option plan and applicable legal requirements; (ii) all payments of Base Salary
      accrued but unpaid on the date of termination, as well as all expenses incurred
      to the date of termination, shall be due and payable to within the required
      timeframe allowed by law and all further compensation by the Company to you
      hereunder shall terminate as of the date of termination; and (iii) you shall
      be
      entitled to continue medical and dental insurance coverage for yourself and
      your
      dependents, at your expense, at the same level of coverage as was provided
      to
      you under the Company’s insurance plan immediately prior to termination (“Health
      Care Coverage”) by electing COBRA continuation coverage (“COBRA”) in accordance
      with applicable law.

     

    Termination
      without Cause or resignation as a result of Constructive
      Termination.
      In the
      event that your employment with the Company is terminated by the Company without
      Cause or through your resignation as a result of Constructive Termination,
      then
      (i) all options which have been vested shall continue to be exercisable in
      accordance with the terms of the Company’s stock option plan and applicable
      legal requirements; (ii) all payments of Base Salary accrued but unpaid on
      the
      date of termination, as well as all expenses incurred to the date of
      termination, shall be due and payable to you immediately; (iii) unvested options
      will forfeit back to the Company on the date of termination; (iv) the Company
      will pay to you a severance payment, in a lump sum, equal to your Base Salary
      for a period of (6) months and (v) the Company shall be responsible for all
      costs relating to maintaining your Health Care Coverage for you and you
      dependents under COBRA during the severance period. The company shall continue
      medical and dental insurance coverage for yourself and your dependents, at
      their
      expense, in accordance with applicable COBRA law. 

    

    Complete
      Offer and Agreement.
      This
      letter contains our complete understanding and agreement regarding the terms
      of
      your employment by the Company. There are no other, different or prior
      agreements or understandings on this or related subjects. Changes to the terms
      of your employment can be made only in a writing signed by you and an authorized
      executive of the Company, although it is understood that the Company may, from
      time to time, in its sole discretion, adjust the salaries, incentive
      compensation and benefits paid to you and its other employees, as well as job
      titles, locations, duties, responsibilities, assignments and reporting
      relationships.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    Start
      Date; Acceptance of Offer.
      We hope
      that you will accept this offer, and begin your full-time employment at Wherify
      by August 6, 2007. If our offer is acceptable to you, please sign the enclosed
      copy of this letter in the space indicated and return it to me at your earliest
      convenience.

     

    Jacque,
      our team was impressed by your accomplishments and potential, and we are
      enthusiastic at the prospect of your joining us. I look forward to your
      contributions to the growth and success of Wherify.

     

    Sincerely,

    

    

    

    Vincent
      Sheeran

    Chief
      Executive Officer

    

     

    

     

    ACCEPTANCE
      OF EMPLOYMENT OFFER:

     

    I
      accept
      the offer of employment by Wherify Wireless, Inc. on the terms described in
      this
      letter.

     

    

     

    Signature:
      __________________________________________

                                              
      Jacqueline Nevilles

     

    Date: ______________

     

    My
      start
      date will be: __________________________________EXHIBIT 10.1

                              MANAGEMENT AGREEMENT

                                     between

                          CastlePoint Insurance Company

                                       and

                           Tower Risk Management Corp.

         This Agreement, entered into as of July 1, 2007 (the "Agreement") by
and between CASTLEPOINT INSURANCE COMPANY, a property and casualty insurance
company domiciled in New York (the "Company"), and TOWER RISK MANAGEMENT CORP.,
a New York corporation ("Manager"), each having offices located at 120 Broadway,
New York, N.Y. 10271.

PREAMBLE

         WHEREAS, Company desires to appoint Manager as its manager for
performing underwriting and claims and other services with respect to certain
business, which includes but is not limited to Brokerage Business and business
that is not Specialty Program Business and Insurance Risk-Sharing Business or
Traditional Program Business, as set forth in this Agreement; and

         WHEREAS, Manager desires to perform such responsibilities;

         NOW, THEREFORE, Company and Manager, in consideration of the mutual
promises herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, agree as follows:

1.       Appointment.

         Company does hereby nominate, constitute, and appoint Manager as
non-exclusive manager for: (i) the soliciting, underwriting, quoting, binding,
issuing, and servicing of such of the Company's insurance policies as the
Company determines for time-to-time on Exhibit A (such insurance and any
policies, contracts, binders, endorsements, certificates, agreements, or
evidence of insurance, individually and collectively, will be referred to as
"Policy" or "Policies" hereunder), which business includes, but is not limited
to, Brokerage Business and business that is not Specialty Program Business and
Insurance Risk Sharing Business or Traditional Program Business.

2. Authority. Manager is authorized to:

         2.1 Issue, or direct Company to issue, Policies subject to: (i) the
scope and limits granted in Exhibit A attached hereto; (ii) the terms and
conditions (including exclusions) of forms of Policies prescribed by Company;
(iii) applicable state insurance laws, rules, and regulations; (iv) the
underwriting guidelines approved by Company; (v) Company's ultimate right to
veto the solicitation, underwriting, quoting, binding, and issuing of any Policy
by Manager; (vi) Company's ultimate right to cancel any Policy subject to
applicable governmental regulatory requirements for cancellation and
non-renewal; (vii) Company's ultimate right to veto the appointment by Manager
of any agent, broker or producer, and the ultimate power of Company to cancel
any such agency pursuant to Section 2.4; (viii) Company's right to approve all
advertising with respect to the Policies in which Company's name is used.

                                  Page 1 of 16
<PAGE>

         2.2 Collect, account, receipt for, and remit premiums on Policies that
Manager writes on behalf of Company in accordance with Section 2.1 and to retain
its provisional management fee and policy billing fees, if any, out of premiums
so collected. Manager agrees to pay all costs and expenses of collection from
insureds where premiums to be received by Manager pursuant to this Agreement are
not paid in full by the insured. Manager agrees that all premiums, including
return premiums received by Manager, are Company's property and will be paid
over to the Company.

         2.3 Secure or obtain agents and producers to produce business. Company
appointments will follow upon Manager providing evidence that the agents and
producers are lawfully licensed to transact the type of insurance they are
expected to write, are not serving on Company's or Manager's board of directors
and complete Company's appointment process. The agents and producers must meet
the applicable compliance regulations for licensure.

         2.4      Terminate agents and producers.

         2.5      Investigate and settle claims as provided in Section 10 below
and establish reserves for such claims.

         2.6 Purchase and maintain in effect treaty and facultative reinsurance
to limit Company's exposure on the Policies to the net amounts outlined in
Exhibit A. Company shall reimburse Manager for the Company's proportionate
share, but not greater than 15% of catastrophe reinsurance costs attributable to
the business written by it.

3.       Performance.

         3.1 Manager hereby accepts the foregoing appointment and agrees
faithfully to perform the duties thereof in a professional manner as an agent of
Company and to obey promptly such reasonable instructions as it may receive from
time to time from Company in accordance with this Agreement.

         3.2 If Manager commits a material breach of this Agreement, Company
may, as one remedy but not as an exclusive remedy, require its own employees or
designated representatives to carry out Manager's duties hereunder. Manager
shall reimburse Company for Company's reasonable expenses, including salaries,
incurred for having Company's employees or representatives perform such duties
or, at Company's option, Manager shall pay such employees or representatives
directly. Such reimbursement or direct payments shall be made by Manager within
five (5) days after Manager's receipt of invoices of such expenses.

                                  Page 2 of 16
<PAGE>

4.       Fees.

          Manager shall receive a management fee quarterly for the foregoing
services ("Management Fees") during each calendar year of this agreement (or
part thereof) equal to (A) the management fee percentage for such year (as set
forth below) (the "Management Fee Percentage") times (B) the amount of Subject
Written Premium on Policies managed by Manager for Company, net of return
premiums. "Subject Written Premium" shall mean direct written premium net of
specific, aggregate and property catastrophe excess of loss reinsurance costs.
It is expressly agreed that the Management Fee Percentage payable to the manager
shall be reduced by any expenses attributable to boards, bureaus and taxes that
are required to be paid by Company. The provisional Management Fee Percentage
shall be 34%.

         Such Management Fee Percentage shall be subject to adjustment until all
losses for a given year have been settled (or deemed settled as set forth
below). Within sixty (60) days following the end of each year, Company shall
calculate the Net Loss Ratio for each year that remains open and shall forward
copies of such calculations to Manager. The Management Fee Percentage shall be
increased nine-tenths of a percentage point for every percentage point by which
the Net Loss Ratio is below 61% up to a maximum Management Fee Percentage of
36%, and decreased nine-tenths of a percentage point for every percentage point
by which the Net Loss Ratio exceeds 61%, subject to a minimum Management Fee
Percentage of 31% as follows:

             Net Loss Ratio                  Management Fee Percentage
             --------------                  -------------------------
             64.33% or higher                    31.0
             64                                  31.3
             63                                  32.2
             62                                  33.1
             61                                  34.0
             60                                  34.9
             59                                  35.8
             58.78 or lower                      36.0

The parties will settle amounts due within ten (10) days thereafter. The Net
Loss Ratio for each year shall be deemed to be finalized six (6) years following
the close of such year or at any time before six (6) years by mutual agreement
of the parties.

         For the purposes of this paragraph 4, "Net Loss Ratio" shall mean, for
any period of time, the ratio of Net Losses incurred during such period to Net
Premium Earned for such period, where "Net Losses" means, for any period of
time, any and all amounts that the Company is required to pay to or on behalf of
insureds for insurance claims made under its Policies including loss adjustment
expenses, after the application of any applicable reinsurance.

5.       Territory.

         Manager's authority to solicit, quote, underwrite, bind, issue, or
service Policies extends only to insureds or prospective insureds located in the
states specified in Exhibit A attached hereto, subject to: (i) the applicable
licensing authority of Company, (ii) Company having made and received approval
of all necessary regulatory filings and (iii) Manager obtaining licenses if
required for activities conducted by Manager pursuant to this Agreement.

                                  Page 3 of 16
<PAGE>

6. Representations and Warranties of Manager. On the effective date hereof,
during the term of this Agreement, and for any period described in Section 14.5,
Manager hereby represents and warrants to Company as follows:

         6.1 Laws and Licenses. Manager has complied and will comply with all
applicable laws, rules, and regulations. Manager shall provide current copies of
Manager's licenses, which will be maintained in Company's records. Company will
appoint Manager in all applicable states. Manager will obtain and maintain at
its own expense all licenses required for it to perform this Agreement.

         6.2 No Breach. This Agreement is a valid and binding obligation of
Manager. The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein will not breach or conflict with Manager's
by-laws or certificate of incorporation, nor with any agreement, covenant, or
understanding (oral or written) to which Manager is bound, and will not
adversely affect the application for issuance or the validity of any license of
Manager.

         6.3 Status. Manager is a duly organized and validly existing
corporation in the State of New York.

         6.4 Authorization. The execution, delivery, and performance of this
Agreement by Manager have been duly and properly authorized by it.

7. Representations and Warranties of Company. On the effective date hereof,
during the term of this Agreement, and for any period described in Section 14.5,
each Company hereby represents and warrants to Manager as follows:

         7.1 Laws and Licenses. Company has complied and will comply with all
applicable laws, rules and regulations and shall, whenever necessary, obtain and
maintain at its own expense all licenses required for it to perform this
Agreement.

         7.2 No Breach. This Agreement is a valid and binding obligation of
Company. The execution and delivery of this Agreement and the consummation of
the transactions contemplated herein will not breach or conflict with Company's
by-laws or articles of incorporation, nor with any agreement, covenant, or
understanding (oral or written) to which Company is bound, and will not
adversely affect the application for issuance or the validity of any license of
Company.

         7.3 Status. Company is a duly organized and validly existing
corporation in the State of New York.

         7.4 Authorization. The execution, delivery, and performance of this
Agreement by Company have been duly and properly authorized by it.

                                  Page 4 of 16
<PAGE>

8. Duties and Responsibilities. Subject to Company's supervision and
instructions, Manager agrees to perform the following duties and services in
addition to those otherwise enumerated in this Agreement with regards to
Policies it manages hereunder:

         8.1 Solicit, underwrite, quote, bind, issue, secure proper
countersignature when required by applicable laws, and service Policies on
behalf of Company.

         8.2 Cancel Policies issued or underwritten by Manager in accordance
with the terms of the Policies and applicable state regulations.

         8.3 Issue Policies only on forms approved by Company and filed with and
approved by regulatory authorities wherever such filing and approval is
required.

         8.4 Underwrite and issue Policies in accordance with the premium rates
and underwriting criteria and guidelines as approved by Company.

         8.5      Investigate and settle claims as provided in Section 10 below
and establish reserves for such claims.

         8.6 Maintain at Manager's expense data processing systems and
equipment, an office or offices and a staff of employees sufficient in number
and qualifications to perform the duties set forth in this Agreement.

         8.7 Pay to Company any fines imposed by regulatory authorities,
taxation authorities, and their agents for data collection and advisory
organizations, due to late filing or poor quality of data provided by Manager.

         8.8 Pay to Company any fines imposed by regulatory authorities upon
Company due to the use of unapproved forms or rates by Manager or due to other
market conduct violations caused by Manager's willful misconduct.

         8.9 Maintain separately for Company and each other insurer with which
Manager does business, complete and current records and accounts, including
underwriting files, which Manager shall retain in accordance with Section 12 and
any applicable laws.

         8.10 Refund within sixty (60) days of the end of each calendar month,
return commissions on Policy cancellations or premium reduction, in each case at
the same rate at which such commissions were originally retained.

         8.11 Collect, account and receipt for premiums on Policies that Manager
writes on behalf of Company in accordance with Section 2.1, and return premiums
to policyowners, as necessary. Manager shall promptly remit premiums collected
on Company's behalf, less return premium, reinsurance costs and Management Fees,
to Company.

         8.12 Hold all monies, including premiums, return premiums, and monies
received by Manager, in a fiduciary capacity for Company. Except as otherwise
authorized by this Agreement, Manager shall maintain such monies in a separate
and segregated bank account in a bank that is a member of the Federal Reserve
System and is insured by the Federal Deposit Insurance Corporation. This account
shall not be used for any purpose other than payments to or on behalf of
Company. Any investment income produced from this bank account is the property
of Manager.

                                  Page 5 of 16
<PAGE>

         8.13     Comply with all regulatory requirements including, but not
limited to, the cancellation, non-renewal, or conditional renewal of policies.

         8.14 Return upon demand after termination of this Agreement, all unused
Policies, forms, and other property furnished to Manager by Company. Such items
remain the property of Company. Manager shall fully cooperate with and assist
Company in recovering such items from third parties, if any.

         8.15     Exercise Manager's authority through authorized employees of
Manager or its affiliates.

         8.16     Exercise exclusive and independent control of Manager's time
and conduct.

9.       Limitations of Authority.

         Notwithstanding the foregoing, all underwriting services provided to
Company by Manager shall be based upon the written criteria, standards and
guidelines of Company which shall retain the final authority over underwriting
decisions including, but not limited to, acceptance, rejection, cancellation and
termination of risks.

10.      Claims.

         10.1 Manager shall or shall arrange to investigate, negotiate, and
settle all Policy claims or losses on behalf of Company; however, Manager shall
obtain the prior approval of Company before handling and settling any Policy
claim or loss which is in excess of One Hundred Thousand Dollars ($100,000)
gross incurred loss. Manager shall determine coverage for claims; however,
Manager shall obtain the prior written approval of Company for the handling of
litigation in which the Company is named as a defendant or claims in which
Manager seeks declaratory relief on behalf of Company. All claims or losses
shall be reported in monthly statements pursuant to Section 11 below. In
addition, Manager shall immediately notify Company in writing of any claim or
loss as Company requests upon receiving notice or knowledge of: (i) any Policy
claim or loss in excess of Two Hundred Fifty Thousand Dollars ($250,000) gross
incurred loss; or (ii) any loss regardless of incurred dollar amount involving
the following: fatalities; brain stem/brain damage injuries; spinal cord
injuries; heart attacks; severe, non-accumulative hearing loss; severe,
non-accumulative vision loss; amputation of major body part; paraplegia;
quadriplegia; serious burns (i.e. second or third degree and/or burns over 50%
of the body); non-union, compound, comminuted, serious fractures; injury to the
spine or pervasive nerve damage; class action suits; allegations of criminal
conduct by an insured or allegations of criminal conduct by an insured or
allegations of criminal conduct on the insured's premises; bad faith claims or
suits; demands in excess of policy limits; actual or alleged violations of the
Deceptive Trade Practices Act; actual or alleged violations of the applicable
State Insurance Codes; actual or alleged violation of law by Manager; or
litigation naming Company as a defendant. In determining gross incurred loss,
Manager shall consider the facts and circumstance of the claim or loss,
Manager's analysis of the insured's liability for the claim or loss, Manager's
analysis of damages resulting from the claim or loss and Manager's analysis of
the applicability of coverage for the claim or loss. These individually reported
claims or losses should be updated semi-annually and more frequently upon the
occurrence of any material change in any claim or loss or any information
previously reported to Company. Company shall be immediately notified if Manager
is closing a file on a reported claim or loss and of the reason for this file
closure. Failure to promptly notify Company of claims under this Section 10.1
shall be considered a material breach of this Agreement and subject to all the
remedies provided herewith.

                                  Page 6 of 16
<PAGE>

         10.2 Whenever Manager shall deem it prudent to engage legal counsel or
loss adjusters to protect Company's interest regarding claims or losses, such
services shall be provided only by qualified attorneys-at-law and/or licensed
loss adjusters selected by Manager, who have substantial experience in the
handling of claims litigation of the type involved. Upon execution of this
Agreement, Manager shall submit to Company for approval a list of the attorneys
and loss adjusters it intends to use. Such list shall be considered approved
unless Company objects to any of such firms or individuals within fourteen (14)
days after receipt of such list. Any provision hereof to the contrary
notwithstanding, it is agreed that, with respect to any claim or loss of any
amount, Manager shall promptly furnish Company, or its designee, any additional
claim or loss information requested by Company with respect to a claim or loss
pertaining to any Policy covered by this Agreement, and it is further agreed
with respect to any claim or loss of any amount as follows:

                  a. Company may assign an attorney of its own choice to assume
         the defense of any claim or loss reported to Company and, in the event
         an attorney has already been employed by Manager, the service of such
         attorney which has already been employed by Manager shall be terminated
         by Manager forthwith and Manager shall waive any conflict of interest
         that may have been created by such attorney's employment by Manager.

                  b. In the event that Company is named as a defendant in any
         lawsuit, Manager shall, as soon as it has notice or knowledge of such
         lawsuit, immediately give written notice thereof to Company accompanied
         by a copy of the complaint and any court papers related to such
         lawsuit.

         10.3 All claims services provided to Company by Manager shall be based
upon the written criteria, standards and guidelines of Company which shall
retain the final authority over claims decisions including, but not limited to,
payment and non-payment of claims.

         10.4 The Company will establish a bank account to fund claim payments
on its policies managed by Manager. Manager shall be made an authorized
signatory on, and shall pay claims out of such account. Manager shall not be
obligated to pay claims unless such account is sufficiently funded by the
Company.

11. Accounting and Reporting Procedures.

         Manager shall:

         Within thirty (30) days after the end of each month, remit to Company
all premiums collected on Policies issued under the terms of this Agreement,
less the provisional management fee due to Manager in accordance with Exhibit A
attached hereto. Manager may not offset balances due to Company hereunder
against balances due Manager under any other contract with Company;

                                  Page 7 of 16
<PAGE>

                  On behalf of Company supply accounting, underwriting, and
claim bordereaux with copies to Company, pursuant to these terms and conditions;

                  With regard to business placed by Manager with Company
hereunder, furnish to Company, in electronic format, within thirty (30) days
after the end of each quarter a report of written, earned, and unearned
premiums; losses and loss adjustment expenses paid and outstanding; loss and
loss adjustment expenses incurred; commissions earned by Manager;

                  Provide detail and summary reports, in an electronic or
printed medium, as are required to meet all reporting requirements of state
regulatory or taxation authorities, their managers for data collection, and
advisory organizations including but not limited to:

                  a. Within thirty (30) days of the close of the calendar
         quarter: direct premiums (written and earned); in force premiums;
         policy counts (written and in force); direct losses and loss adjustment
         expenses including subrogation (paid and reserved); number of claims
         open, closed with payment, and closed without payment; as prescribed by
         state regulatory authorities.

                  b. Within thirty (30) days of the close of the calendar
         quarter: direct written premium, losses, and loss adjustment expense
         including subrogation (paid and reserved) transaction data as
         prescribed by advisory organizations providing loss cost and policy
         forms.

                  c. Thirty (30) days prior to the prescribed deadline: the
         reports of direct premiums (written and earned), losses, and loss
         adjustment expenses including salvage and subrogation (paid and
         reserved) as required by state regulatory data collection agents,
         including but not limited to financial calls, unit statistical data,
         summary statistical data, and detailed claim information for National
         Council on Compensation Insurance (NCCI), Insurance Services Office
         (ISO), and National Association of Independent Insurers (NAII), and
         various state-specific reporting requirements as necessary.

                  By the first business day of February of each year, Manager
shall provide Company with any information Company may require in order to
complete its statutory financial statements for the prior year. Company shall
notify Manager of the material information required by December 31 of the prior
year.

12. Books and Records.

         Manager shall keep such books and records as may be (i) reasonably
requested by Company; or (ii) required by law, rulings, or orders of the
insurance departments of the states having jurisdiction over: (a) Manager or
Manager's business or (b) any Policies. Manager shall make such books and
records available for examination, audit, and copying by the insurance
departments of such states and by Company, or by their authorized
representatives. Company shall have the right to examine and review at any
reasonable time all books, records, files, and papers, including, but not by way
of limitation, claim files and underwriting files maintained and kept by Manager
which relate to this Agreement and the Policies. Manager shall institute and
maintain retention and disposal systems for claim files and underwriting files
in accordance with procedures and requirements as prescribed by law. All books
and records of Manager shall be maintained at the principal place of business of
Manager and shall be complete, accurate, and up-to-date, and shall reflect all
monies paid or received by Agent and all transactions of Manager pursuant to
this Agreement. Anything to the contrary notwithstanding, all of the books,
records, files, and papers maintained and kept by Manager relating to
underwriting and claims matters involving this Agreement or the Policies, shall
be and remain the sole and exclusive property of Company except that upon
termination of this Agreement, all right, title, and interest in and to all
Policy renewals or expirations and all records with respect to renewals and
expirations shall automatically and irrevocably transfer to and vest in Manager
provided Manager has accounted for and has made payments of all amounts due
Company and continues to do so.

                                  Page 8 of 16
<PAGE>

13.      Indemnification.

         13.1 Manager shall indemnify and hold harmless Company from and against
all losses, damages, costs, expenses, claims, fines, penalties, or liabilities
of any description suffered by Company with respect to Manager on any Policies
issued or underwritten by Manager, including, without limitation, any attorney's
fees, in connection with or arising out of: (i) any violations by Manager of
laws, rules, or regulations to which it is subject; (ii) any material breach of
any warranty or representation of Manager made in this Agreement or any other
material breach of this Agreement by Manager; or (iii) any willful misconduct,
gross negligence, or misrepresentation, of Manager or of it officers, directors,
employees, agents, sub-producers, or independent contractors.

         13.2 Company shall indemnify and hold harmless Manager from and against
all losses, damages, costs, expenses, claims, fines, penalties, or liabilities
of any description suffered by Manager with respect to Company on any Policies
issued or underwritten by Company, including, without limitation, any attorney's
fees, in connection with or arising out of: (i) any violations by Company of
laws, rules, or regulations to which it is subject; (ii) any breach of any
warranty or representation of Company made in this Agreement or any other breach
of this Agreement by Company; or (iii) any alleged or actual misconduct,
negligence, misrepresentation, or other acts or failures to act of Company or of
it officers, directors, employees, agents, sub-producers, or independent
contractors.

14. Termination of Agreement.

         14.1 This Agreement shall continue until terminated in accordance with
Sections 14.2 through 14.6 below.

         14.2 This Agreement may be terminated immediately by either party upon
giving written notice to the other party via electronic, certified or registered
mail in the event of:

                  a. The misappropriation by either party of any funds or
         property belonging to the other party;

                  b. The fraud, gross negligence, or willful misconduct of the
         other party;

                                  Page 9 of 16
<PAGE>

                  c. The license or certificate of authority of the other party
         in their state of domicile is canceled, non-renewed or suspended by any
         public authority;

                  d. An assignment by the other party for the benefit of
         creditors; the dissolution or liquidation of the other party; the
         appointment of a conservator, receiver, or liquidator for a substantial
         part of the other party's property; the institution of bankruptcy,
         insolvency, or similar proceedings by or against the other party;

                  e. Material breach by the other party of any provision of this
         Agreement;

                  f. If any law or regulation of the federal, state, or local
         government of any jurisdiction in which the other party is doing
         business shall render illegal or invalid any transaction contemplated
         by this Agreement, or any term of this Agreement, this Agreement may be
         terminated insofar as it applies to such jurisdiction by either party
         giving notice to the other party to such effect or by either party
         giving notice to the other party to such effect;

                  g. Change in ownership of ten percent (10%) or more of the
         outstanding voting stock of the other party, sale or transfer of the
         other party's assets, merger of the other party, or change or
         resignation of any principal officer or director of the other party;

                  h. The licenses required of the other party for it to perform
         under this Agreement expire, are terminated, or are not valid pursuant
         to the law of the State in which the other party is transacting
         business on behalf of either party.

         14.3 This Agreement may be terminated at any time by the Company if the
Reinsurance covering the business under this agreement is cancelled, terminated
or expired.

         14.4 This Agreement may be terminated at any time by mutual written
agreement, or upon sixty (60) days prior written notice by either Company or
Manager.

         14.5 If at any time either party sends notice of termination to the
other party as provided in Section 14.2 above or the Agreement is otherwise
terminated as provided herein, the Manager shall not solicit, underwrite, quote,
bind, or issue any Policies or renew any existing Policies for which the
inception date or renewal date falls after the effective date of termination of
this Agreement, nor shall Manager cancel and rewrite any existing Policies.

         14.6 Unless otherwise indicated by this Agreement or either party
otherwise notifies the other party in writing, Manager's duties and
responsibilities under this Agreement shall survive termination of this
Agreement until such time as all Policies issued, underwritten, or serviced by
Manager pursuant to this Agreement have expired and all known losses under such
Policies have been paid or settled, have run off or otherwise have been disposed
of in the judgment of Company, all incurred but not reported loss reserves have
been reduced to zero, and any amounts owed to Company by others has been paid.
The only compensation Manager shall receive for its performance of its duties
hereunder (both during and after the term of this Agreement) is set forth in
Section 4.

                                 Page 10 of 16
<PAGE>

         14.7 Upon termination of the Agreement, Manager shall, unless notified
in writing to the contrary by Company:

                  a. Continue to represent Company for the purpose of servicing
         Policies placed by Manager with Company which are in force on, or
         renewed at Company's election, or as required by law, after the date of
         termination of this Agreement, and Manager shall continue to receive
         its normal compensation for such services.

                  b. Issue and countersign appropriate endorsements on Policies
         in force, provided that without prior written approval of Company, such
         endorsement shall not increase nor extend Company's liability nor
         extend the term of any Policy.

                  c. Collect and receipt for premiums and retain commissions out
         of premiums collected as full compensation.

         14.8     Any notice issued pursuant to this Section shall be effective
on the day after it is received by Manager.

15. Suspension of Manager's Authority.

         15.1 In lieu of terminating this Agreement, Company may give written
notice to Manager that Company is immediately suspending Manager's authority in
its entirety or in any particular state to bind new or renewal business, change
any existing Policy and/or settle any claim during the pendency of any of the
following events:

                  a. Manager is delinquent in payment of any monies due Company;

                  b. Any dispute exists between Manager and Company regarding
         the existence of any of the events listed in Section 14.2;

         15.2 Such suspension shall remain in effect until such delinquency is
cured or dispute is resolved and Manager receives written notification from
Company to that effect. If such delinquency is not cured within fifteen (15)
days from the date of receipt of written notification by Manager of such
delinquency, Company may exercise its right to terminate this Agreement under
Section 14.2.

         15.3 Unless otherwise notified in writing to the contrary by Company,
Manager's obligation under this Agreement shall continue during the suspension
of Manager's authority under this Agreement.

         15.4 Any notice of suspension issued pursuant to this Section shall be
effective immediately.

16. Ownership of Expirations.

         The use and control of expirations of the Policies will remain the
property of Manager; and Company will not, without consent of Manager, (a) refer
or communicate to any other agent or broker, Company's records of insureds,
expiration dates and other material information relating to specific risks
except for loss or claims information specifically requested by the insured or
the insured's authorized representative nor (b) use such material information
relating to specific risks for purposes of solicitation.

                                 Page 11 of 16
<PAGE>

17. Mediation; Arbitration and Injunctive Relief.

         17.1 If any dispute arises between Company and Manager with reference
to the interpretation, performance, or breach of this Agreement (whether the
dispute arises before or after termination of this Agreement) such dispute, if
not resolved by the parties, must be submitted to non-binding mediation. If such
dispute is not resolved by non-binding mediation within sixty (60) days it will
then be submitted for decision to a panel of three arbitrators. Notice
requesting arbitration will be in writing and sent certified or registered mail,
return receipt requested.

         17.2 One arbitrator shall be chosen by each party and the two
arbitrators shall, before instituting the hearing, choose an impartial third
arbitrator who shall preside at the hearing. If either party fails for any
reason to appoint its arbitrator within thirty (30) days after being requested
to do so by the other party, the latter, after ten (10) days notice by certified
or registered mail of its intention to do so, may appoint the second arbitrator.
If the two arbitrators are unable to agree upon the third arbitrator within
thirty (30) days of their appointment, the third arbitrator shall be selected
from a list of six individuals (three named by each arbitrator) by a judge of
the United States District Court having jurisdiction over the geographical area
in which the arbitration is to take place, or if that court declines to act, the
state court having general jurisdiction in such area.

         17.3 All arbitrators shall be active or retired disinterested officials
of insurance or reinsurance companies not under the control or management of
either party to this Agreement and will not have personal or financial interests
in the result of the arbitration.

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

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

         17.6 The panel shall interpret this Agreement as an honorable
engagement rather than merely a legal obligation and shall make its decision
considering the custom and practice of the applicable insurance and reinsurance
businesses within sixty (60) days following the termination of the hearing
unless the parties consent to an extension. Judgment upon the award may be
entered in any court having jurisdiction thereof.

         17.7 Punitive damages will not be awarded. The arbitrators may,
however, at their discretion award such other costs and expenses as they deem
appropriate, including but not limited to attorneys' fees, the cost of
arbitration, and arbitrators' fees, to the extent permitted by law.

                                 Page 12 of 16
<PAGE>

         17.8 It is understood and agreed that in the event of any breach or
threatened breach, Company may apply to a court of competent jurisdiction for,
and shall be entitled to, injunctive relief from such court, without the
requirement of posting a bond or proof of damages, designed to cure existing
breaches and to prevent a future occurrence or threatened future occurrence of
like breaches on the part of Manager. It is further understood and agreed that
the remedies and recourses herein provided shall be in addition to, and not in
lieu of, any other remedy or recourse which is available to Company either at
law or in equity in the absence of this paragraph including without limitation
the right to damages.

18. Miscellaneous.

18.1 This Agreement may be revised by mutual agreement of Manager and Company
and such revision shall be evidenced by a written agreement duly executed by
authorized representatives of Manager and Company, which specifies the effective
date thereof. Any amendment to which section 1505 of the New York Insurance Laws
is applicable shall be resubmitted to the Superintendent of Insurance in
accordance with the provisions of that section.

18.2 Manager shall not have authority to represent Company on any exclusive
basis with respect to any policy form, line, or class or subclass of business,
unless otherwise authorized in writing by Company.

18.3 Manager shall not commit Company to any expenses or obligations not
specifically provided for herein without the prior written permission of
Company. Company shall reimburse Manager for expenses and costs incurred by
Manager which are not in the ordinary course of business and which Company has
specifically approved.

18.4 Company shall have the right to oversee and supervise the operation of this
Agreement, including but not limited to the right at all reasonable times to
have access to and to copy at Company's expense Manager's books and records as
they relate to this Agreement, which rights shall survive the termination or
expiration of this Agreement. The director or commissioner of insurance of any
state where Manager issues Policies on behalf of Company shall have at all
reasonable times the right of access to all books, records, and bank account of
Manager in a form usable by such official.

18.5 During the term of this Agreement, Manager shall obtain and maintain in
full force and effect, at its expense, fidelity insurance with a minimum policy
limit of $1,000,000, errors and omissions insurance with a minimum policy limit
of $2,000,000, directors and officers insurance with a minimum policy limit of
$2,000,000, and general liability insurance with a minimum policy limit of
$1,000,000 and on such terms as are reasonably acceptable to Company. Manager
shall furnish Company with copies of the certificates of insurance for such
insurance, and shall not cancel or amend any such insurance without Company's
prior written consent.

18.6 Manager shall provide to Company, copies of its quarterly financial reports
and annual audited financial reports.

                                 Page 13 of 16
<PAGE>

18.7 If Manager fails in any respect to fulfill its duties and responsibilities
under this Agreement, then the expense incurred by Company in order to fulfill
Manager's duties and responsibilities under this Agreement will be fully
reimbursed by Manager.

18.8 This Agreement may not be directly or indirectly assigned by either party
in whole or in part, nor may Manager appoint a sub managing general Manager.

18.9 Any provision of this Agreement which conflicts with applicable law or
regulation will be amended to the minimum extent necessary to effectuate
compliance with such law or regulation.

18.10 Manager is an independent contractor, not an employee of Company, and
nothing in this Agreement shall be construed to create an employer/employee
relationship between Company and Manager.

18.11    This Agreement shall be construed in accordance with the laws of the
State of New York.

18.12 Neither Company nor Manager shall disclose material details of this
Agreement and the Policies without the prior consent of the other party.
However, this restriction will not apply to disclosures made by Company or
Manager to its agents, producers, shareholders, policyholders, auditors,
accountants, arbitrators, legal counsel, or other third parties as required in
the ordinary course of business, nor to disclosures required by arbitration
panels, governmental agencies, regulatory authorities, or courts of law.

18.13 Failure of either party to enforce compliance with any term or condition
of this Agreement shall not constitute a waiver of such term or condition. No
waiver of any breach or default hereunder shall be valid unless in writing and
signed by the party giving such waiver, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.

18.14 Manager acknowledges and agrees that it will benefit from this Agreement
and that a breach by it of the covenants contained herein would cause Company
irreparable damages that could not adequately be compensated for only by
monetary compensation. Manager shall notify Company in writing via electronic,
certified or registered mail, within five (5) days if there is a change in
ownership of ten percent (10%) or more of the outstanding voting stock of
Manager, sale or transfer of all Manager's assets, merger of Manager, or change
of any principal officer or director of Manager including, but not limited to,
resignation.

18.15 Any notice or other communications required or permitted hereunder shall
be sufficiently given if sent by electronic, certified or registered mail,
postage prepaid, if to Company, addressed to Tower Risk Management Corp., 120
Broadway, 31st Floor, New York, New York, 10271, Attention: Stephen Kibblehouse,
General Counsel, and if to Company addressed to CastlePoint Insurance Company.,
120 Broadway, 30th Floor, New York, NY 10271, Attention: General Counsel or such
other address as notified by either party to the other.

18.16 Notwithstanding any other provisions of this Agreement, the business and
affairs of Company shall be managed by its board of directors, and, to the
extent delegated by the board, by its appropriately authorized officers. The
board of directors and officers of Manager shall not have any management
prerogatives with respect to the business affairs and operations of the Company.

                                 Page 14 of 16
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.

                                                 TOWER RISK MANAGEMENT CORP.

                                                 By:     /s/ Frank Colalucci
                                                    ----------------------------
                                                 Title: Sr VP and CFO

                                                 CASTLEPOINT INSURANCE COMPANY

                                                 By:     /s/  Joel Weiner
                                                    ----------------------------
                                                 Title:    Sr VP and CFO

                                 Page 15 of 16
<PAGE>

EXHIBIT A

SCHEDULE OF AUTHORITY
---------------------

Manager is only authorized to accept or bind business, as defined in Section A
below, subject to the amounts and stipulations indicated below. Amounts in
excess of the authorized limits or classifications must be referred to Company
for review and approval prior to binding.

         A. GROSS NET WRITTEN PREMIUM LIMIT. A maximum of $100,000,000 unless
Manager obtains the prior written consent of Company. Gross Net Written Premium
shall mean gross written premium of Company less returned premium for
cancellations and reductions.

         B. POLICY LIMITS, COVERAGE CLASSIFICATIONS AND MAXIMUM NET LINES (after
treaty and facultative reinsurance).

<TABLE>
<CAPTION>

         --------------------------------------------- -------------------------------- -----------------------------
<S>                                                    <C>                              <C>
         Coverage                                      Limit                            Maximum Net Lines
         --------------------------------------------- -------------------------------- -----------------------------
         Property                                      $50 Million or TBA               $1 Million per risk/per
         (including Equipment Breakdown)                                                occurrence
         --------------------------------------------- -------------------------------- -----------------------------
         General Liability and Auto Liability          $1 Million per Occurrence / $2   $1 Million per occurrence
                                                       Million Aggregate
         --------------------------------------------- -------------------------------- -----------------------------
         Workers' Compensation                         Statutory                        $1 Million per occurrence
         Employer's Liability                          $1 Million
         --------------------------------------------- -------------------------------- -----------------------------
         Excess and Umbrella Liability                 $10 Million                      $250,000 per occurrence
         --------------------------------------------- -------------------------------- -----------------------------

</TABLE>

The above coverages are provided on ISO forms and on certain independent
manuscript forms to be agreed.

Other classifications of insurance may be written on Company's insurance
policies subject to Company's prior approval.

         C. TERRITORIAL LIMITATIONS. Manager shall not issue any policy in any
jurisdiction other than the authorized states defined as those states in which
Company is licensed and has filed and approved rates and policies. Company at
its own discretion may limit or revoke Manager's authority as regards any
particular state.

                                 Page 16 of 16

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