Document:

exv10w25

 

EXHIBIT
10.25

CONFIDENTIAL TREATMENT REQUESTED

LICENSE AGREEMENT

     This License Agreement (the “Agreement”) is made and entered into by and between Transmeta
Corporation, a Delaware corporation having its principal place of business at 3990 Freedom Circle,
Santa Clara, CA 95054, U.S.A. (“Transmeta”), and Culture.Com Technology Limited, a Hong Kong
corporation having a correspondence address at The Penthouse, Culturecom Centre, 47 Hung To Road,
Kwun Tong, Kowloon, Hong Kong (“Culturecom”).

RECITALS

     A. Transmeta develops and sells software-based microprocessors and related hardware and
software technologies, including the Crusoe and Efficeon line of microprocessors. The Crusoe and
Efficeon microprocessors utilize certain proprietary Transmeta software, known as the Code Morphing
Software, which is used to dynamically optimize and translate x86 instructions.

     B. Concurrently with the execution of this Agreement, Transmeta and Culturecom are entering
into an Asset Purchase Agreement (“Asset Purchase Agreement”) pursuant to which Culturecom is
purchasing from Transmeta certain assets related to the Crusoe line of microprocessors.

     C. Culturecom desires to acquire from Transmeta and Transmeta desires to grant to Culturecom
certain exclusive licenses with respect to the Crusoe line of microprocessors.

     D. Culturecom also desires to acquire from Transmeta and Transmeta desires to grant to
Culturecom certain exclusive and non-exclusive licenses to the Efficeon line of microprocessors.

     E. Culturecom also desires to acquire from Transmeta and Transmeta desires to grant to
Culturecom certain licenses to use Transmeta’s Code Morphing Software solely for use in connection
with Culturecom’s sale and support of the Crusoe and Efficeon microprocessors.

     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the
parties hereto agree as follows:

1. DEFINITIONS

     All capitalized terms used and not otherwise defined in this Agreement will have the meanings
ascribed to such terms in the Asset Purchase Agreement.

     1.1 “Asset Purchase Agreement” is defined in Recital A., above.

     1.2 “Authorized Sublicensee” is defined in Section 6.1.

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

 

     1.3 “China” means The People’s Republic of China, including Hong Kong, Macau and all other
special administrative regions within the People’s Republic of China. For the avoidance of doubt,
China does not include Taiwan.

     1.4 “Closing” will have the meaning ascribed to that term in the Asset Purchase Agreement.

     1.5 “Closing Date” will have the meaning ascribed to that term in the Asset Purchase
Agreement.

     1.6 “CMS Marks” means the trademarks identified in Exhibit E.

     1.7 “Code Morphing Software” or “CMS” means Transmeta’s proprietary software that is used to
dynamically optimize and translate x86 instructions.

     1.8 “Crusoe Ancillary Technology” means (a) those items identified as Crusoe Ancillary
Technology in the Asset Purchase Agreement; and (b) Transmeta’s documentation, reference designs,
tools and manufacturing information for the Crusoe Product specified in Exhibit A-3. Those
items specified in Exhibit A-3 are licensed under this Agreement and are not transferred
under the Asset Purchase Agreement.

     1.9 “Crusoe CMS Version” means a version of the Code Morphing Software that operates in
connection with the Crusoe Product, as identified in Exhibit A-2.

     1.10 “Crusoe Design Deliverables” means the Crusoe Specific Design Deliverables and the Crusoe
General Design Deliverables.

     1.11 “Crusoe General Design Deliverables” means the design information and documentation
describing the design of the Crusoe Product listed in Exhibit A-1.

     1.12 “Crusoe IPR” means Transmeta IPR which is incorporated in the Crusoe Design Deliverables
as delivered by Transmeta to Culturecom hereunder, or which is incorporated in the Crusoe Product
in the form distributed by Transmeta as of the Closing Date, but excluding any Transmeta IPR that
is transferred to Culturecom under the Asset Purchase Agreement. For avoidance of doubt, Crusoe
IPR includes only those Transmeta Patent Rights that are infringed by the Crusoe Design
Deliverables (excluding the Crusoe VLIW processor instruction set architecture documentation) as
delivered by Transmeta to Culturecom hereunder, or by the Crusoe Product in the form distributed by
Transmeta as of the Closing Date.

     1.13 “Crusoe Licensed Product” means and is limited to (a) Crusoe Products; (b) any standalone
microprocessor chip that is a modification to the Crusoe Product, is developed by Culturecom or an
Authorized Sublicensee under this Agreement, and implements the same or substantially the same
native instruction set as the Crusoe Product; and (c) any system on a chip that includes a
microprocessor core that is a modification of the core in the Crusoe Product, is developed

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

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by Culturecom or an Authorized Sublicensee under this Agreement, and implements the same or
substantially the same native instruction set as the Crusoe Product.

     1.14 “Crusoe Product” means Transmeta’s Crusoe microprocessor chip, revision 2.1, as
implemented as a standalone chip and not as a system on a chip. For the avoidance of doubt, the
Crusoe Product does not include the Crusoe CMS Version.

     1.15 “Crusoe Specific Design Deliverables” will have the meaning ascribed to that term in the
Asset Purchase Agreement.

     1.16 “Culturecom Affiliate” means any entity that is a direct or indirect parent or subsidiary
of Culturecom or is under common control with Culturecom. For purposes of this Agreement, control
means having ownership of more than fifty percent (50%) of the equity securities entitled to vote
for the election of directors (or, in the case of an entity that is not a corporation, for the
election of the corresponding managing authority).

     1.17 “Culturecom Crusoe Product Customer” means any customer that purchases a Crusoe Licensed
Product from Culturecom or any Authorized Sublicensee.

     1.18 “Culturecom Efficeon Product Customer” means any customer that purchases an Efficeon
Licensed Product or from Culturecom or any Authorized Sublicensee.

     1.19 “Efficeon Ancillary Technology” means Transmeta’s documentation, reference designs, tools
and manufacturing information for the Efficeon Product specified in Exhibit B-3.

     1.20 “Efficeon CMS Version” means a version of the Code Morphing Software that operates in
connection with the Efficeon Product, as identified in Exhibit B-2.

     1.21 “Efficeon Design Deliverables” means the design information and documentation describing
the design of the Efficeon Product listed in Exhibit B-1.

     1.22 “Efficeon IPR” means Transmeta IPR which is incorporated in the Efficeon Design
Deliverables as delivered by Transmeta to Culturecom hereunder, or which is incorporated in the
Efficeon Product in the form distributed by Transmeta as of the Closing Date. For avoidance of
doubt, Efficeon IPR includes only those Transmeta Patent Rights that are infringed by the Efficeon
Design Deliverables as delivered by Transmeta to Culturecom hereunder, or by the Efficeon Product
in the form distributed by Transmeta as of the Closing Date.

     1.23 “Efficeon Licensed Product” means and is limited to (a) 130nm generation versions of the
Efficeon Product; and (b) any 130nm generation system on a chip that includes a microprocessor core
that is the same as the core in the Efficeon Product. The Efficeon Licensed Product does not
include, and specifically excludes, any products that are components, modules or otherwise
implement less than the full microprocessor functionality of the Efficeon Product.

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

3

 

     1.24 “Efficeon Product” means Transmeta’s 130nm generation Efficeon microprocessor chip,
revision 1.3, as implemented as a standalone chip and not as a system on a chip. For the avoidance
of doubt, the Efficeon Product does not include the Efficeon CMS Version.

     1.25 “Efficeon Product License Term” means a period of three (3) years commencing as of the
Closing Date.

     1.26 “knowledge” will have the meaning ascribed to that term in the Asset Purchase Agreement.

     1.27 “TransChina” means TransChina Corporation, a Delaware corporation.

     1.28 “TransChina Affiliate” means any entity that is a direct or indirect parent or subsidiary
of TransChina, or is under common control with such entity.

     1.29 “Transmeta Ancillary Technology” means the Crusoe Ancillary Technology and the Efficeon
Ancillary Technology.

     1.30 “Transmeta IPR” means all patent rights (including rights in patent applications), mask
work rights, copyrights, rights in trade secrets and know-how, and any other intellectual property
rights recognized in any country or jurisdiction in the world owned by or licensed to Transmeta as
of the Closing Date, which intellectual property rights Transmeta has the right to license to
Culturecom, as contemplated by this Agreement, without the payment of compensation of any kind to
any third party; provided, that “Transmeta IPR” excludes any and all rights in and to trademarks,
trade names, logos, service marks, other designations of source and design patents and design
patent applications.

     1.31 “Transmeta Patent Rights” means all patent rights (including rights in patent
applications) that are included in the definition of Transmeta IPR.

2. LICENSE FOR CRUSOE PRODUCT

     2.1 License Grant. Subject to Culturecom’s compliance with the terms and conditions
of this Agreement, Transmeta hereby grants to Culturecom, during the term of this Agreement (which
term shall be perpetual except if early terminated under Section 11.2), a nontransferable (except
as provided in Section 12.1), worldwide, royalty-bearing license (without the right to sublicense,
except to Authorized Sublicensees, as specified in Section 6.1) under all of the Crusoe IPR:

          (a) to use the Crusoe Design Deliverables internally at Culturecom for the sole purpose of
developing Crusoe Licensed Products;

          (b) on an exclusive basis (except as provided in Section 2.2) to make or have made the Crusoe
Licensed Products; and

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

4

 

          (c) on an exclusive basis (except as provided in Section 2.2), to distribute and sell the
Crusoe Licensed Products.

     For avoidance of doubt, the licenses granted in this Section 2.1 do not give Culturecom any
rights under Transmeta’s intellectual property rights in or to software, except that Culturecom may
use the Crusoe VLIW processor instruction set architecture (ISA) documentation on a non-exclusive
basis to independently develop software implementations that are compatible with the ISA. However,
the right to use the ISA documentation does not include any rights in or to the software
implementation itself, regardless of whether the software implementation is suggested by, given as
an example in, required by or otherwise implicated by the ISA documentation.

     2.2 Exclusivity Exceptions. Culturecom acknowledges and agrees the license rights
granted to Culturecom under Section 2.1 will not be deemed to limit Transmeta from using any
technology that comprises the Crusoe Product or from exercising any of the Crusoe IPR (or from
granting to a third party the right to use such technology or from granting to a third party a
license under any such Crusoe IPR) to design, develop, manufacture, sell, distribute or otherwise
exploit any products based on such technology, as long as Transmeta (and such third parties)
prohibits and does not during the term of this Agreement manufacture, or permit the manufacture of,
any microprocessor product that implements the same or substantially the same native instruction
set as the Crusoe Product, except by or through Culturecom or any Authorized Sublicensees. Without
limiting the generality of the preceding sentence, Culturecom acknowledges and agrees that (a)
Transmeta expressly retains the right to meet (both directly or indirectly through third parties)
its existing contractual obligations for the Crusoe product lines, and (b) Transmeta may license,
distribute or otherwise provide to third parties components, modules or other portions of
technology that comprise the Crusoe Product or the Crusoe IPR without expressly prohibiting their
use in a microprocessor product that implements the same or substantially the same native
instruction set as the Crusoe Product, so long as such technology or Crusoe IPR represents
significantly less than the full microprocessor functionality of the Crusoe Product; both (a) and
(b) without liability or obligation to Culturecom of any kind.

     2.3 Exercise of Have Made Rights. Culturecom acknowledges that any exercise of its
“have made” rights under Section 2.1 is expressly contingent upon Culturecom entering into a
written agreement with its contract manufacturer(s), which agreement contains provisions that
protect Crusoe IPR to at least the same extent as the terms and conditions of this Agreement.

     2.4 Reservation of Rights. No rights or licenses are granted in the Crusoe Product or
to Transmeta IPR by implication, estoppel or otherwise, except as expressly set forth herein.
Culturecom’s rights in the Crusoe Product and to Transmeta IPR are limited to those expressly
granted in this Agreement. Culturecom’s rights granted under this Section 2 do not include any
Transmeta IPR that is not incorporated in the Crusoe Product in the form distributed by Transmeta
as of the Closing Date. For avoidance of doubt, any Transmeta patent rights that would not be
infringed by the Crusoe Product in the form distributed by Transmeta as of the Closing Date are not
licensed to Culturecom under this Section 2.

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

5

 

3. LICENSE FOR EFFICEON PRODUCT

     3.1 License Grant. Subject to Culturecom’s compliance with the terms and conditions
of this Agreement, Transmeta hereby grants to Culturecom, during the term of this Agreement (which
term shall be perpetual except if early terminated under Section 11.2), a nontransferable (except
as provided in Section 12.1), royalty-bearing license (without the right to sublicense, except to
Authorized Sublicensees, as specified in Section 6.1) under all of the Efficeon IPR:

          (a) to use the Efficeon Design Deliverables internally at Culturecom for the sole purpose of
developing Efficeon Licensed Products;

          (b) on an exclusive basis (except as provided in Section 3.2), during the Efficeon Product
License Term, to make or have made Efficeon Licensed Products that are standalone microprocessor
chips in China;

          (c) on a non-exclusive basis, during the Efficeon Product License Term to make or have made
Efficeon Licensed Products that are systems on a chip in China, and after the Efficeon Product
License Term, to make or have made the Efficeon Licensed Products (including both standalone
microprocessor chips and systems on a chip) in China;

          (d) on a non-exclusive basis, during and after the Efficeon Product License Term, to make or
have made the Efficeon Licensed Products in Taiwan;

          (e) on an exclusive basis (except as provided in Section 3.2), during the Efficeon Product
License Term, to distribute and sell those Efficeon Licensed Products that are standalone
microprocessor chips only to Chinese Market Purchasers and/or Chinese Domestic Companies; and

          (f) on a non-exclusive basis, after the Efficeon Product License Term, to distribute and sell
those Efficeon Licensed Products that are standalone microprocessor chips only to Chinese Market
Purchasers and/or Chinese Domestic Companies; and

          (g) on a non-exclusive basis, during and after the Efficeon Product License Term, to
distribute and sell those Efficeon Licensed Products that are systems on a chip only to Chinese
Market Purchasers and/or Chinese Domestic Companies.

     “Chinese Market Purchaser” means an entity that (i) purchases the Efficeon Licensed
Product from Culturecom solely for incorporation into a value-added product (e.g., a computer)
designed by the entity; (ii) takes delivery of the Efficeon Licensed Product at a location in the
China Environs and incorporates the Efficeon Licensed Product into the value-added product at a
location in the China Environs; and (iii) sells the value-added product only to end users of the
value-added product located in China. “China Environs” means Indonesia, Malaysia,
Singapore, Vietnam, Thailand, Cambodia, Laos, Korea and Taiwan, provided that Culturecom has
obtained the applicable export licenses and government approvals.

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

6

 

     “Chinese Domestic Company” means an entity that (i) purchases the Efficeon Licensed
Product from Culturecom solely for incorporation into a value-added product (e.g., a computer)
designed by the entity and sold under any of the entity’s brand names; and (ii) for which more than
fifty percent (50%) of the total combined voting power of the entity’s outstanding securities are
(a) publicly traded on a recognized Chinese stock exchange (as of the date hereof, meaning the Hong
Kong stock exchange, the Shanghai stock exchange and the Shenzhen stock exchange) or (b) owned by
Chinese nationals or (c) owned by corporations registered in China that have not received any
foreign (i.e., non-China) investment, as evidenced by classification of the corporation as a
Chinese domestic company on the entity’s Chinese business license. For example, as of the date
hereof, Chinese Domestic Company includes Lenovo; but does not include Dell, HP or any of their
Chinese subsidiaries; any distributor or reseller of the Efficeon Licensed Product that does not
design its own value-added product even if it is a Chinese domestic company; or any international
procurement office.

     For avoidance of doubt, the licenses granted in this Section 3.1 do not give Culturecom any
rights to use Transmeta’s intellectual property rights to create sub-130nm generation
microprocessors. However, they also do not prohibit Culturecom from creating sub-130nm generation
microprocessors so long as Culturecom does not use Transmeta’s intellectual property rights in
doing so.

     3.2 Exclusivity Exceptions. Culturecom acknowledges and agrees the license rights
granted to Culturecom under Section 3.1 will not be deemed to limit Transmeta from using any
technology that comprises the Efficeon Product or from exercising any of the Efficeon IPR (or from
granting to a third party the right to use such technology or from granting to a third party a
license under any such Efficeon IPR), during the Efficeon Product License Term or thereafter, to
design, develop, manufacture, sell, distribute or otherwise exploit any products based on such
technology (including, without limitation, the Efficeon Product), as long as Transmeta (and such
third parties) prohibits and does not during the Efficeon Product License Term (a) manufacture, or
permit the manufacture of any 130nm generation Efficeon Product in China except by Culturecom or
any Authorized Sublicensee or (b) distribute and sell, or permit the distribution and sale of, any
130nm generation Efficeon Product to any customers located in China, except by or through
Culturecom or any Authorized Sublicensees. Without limiting the generality of the preceding
sentence, Culturecom acknowledges and agrees that Transmeta expressly retains the right, during the
Efficeon Product License Term or thereafter, to manufacture, distribute and sell (both directly or
indirectly through third parties) any 90nm generation Efficeon Product anywhere, including in
China, without liability or obligation to Culturecom of any kind.

     3.3 Exercise of Have Made Rights. Culturecom acknowledges that any exercise of its
“have made” rights under Section 3.1 is expressly contingent upon Culturecom entering into a
written agreement with its contract manufacturer(s), which agreement contains provisions that
protect Efficeon IPR to at least the same extent as the terms and conditions of this Agreement.

     3.4 Reservation of Rights. No rights or licenses are granted in the Efficeon Product
or to Transmeta IPR by implication, estoppel or otherwise, except as expressly set forth herein.

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

7

 

Culturecom’s rights in the Efficeon Product and to Transmeta IPR are limited to those
expressly granted in this Agreement. Culturecom’s rights granted under this Section 3 do not
include any Transmeta IPR that is not incorporated in the Efficeon Product in the form distributed
by Transmeta as of the Closing Date. For avoidance of doubt, any Transmeta patent rights that
would not be infringed by the Efficeon Product in the form distributed by Transmeta as of the
Closing Date are not licensed to Culturecom under this Section 3.

     3.5 Extension to Sub-130nm Geometries. Upon Culturecom’s request, the parties will
negotiate in good faith entering into a license or other collaborative agreement under which
Culturecom would have the right to manufacture and/or sell a 90nm or other sub-130nm generation of
the Efficeon Product. While the foregoing requires the parties to use good faith efforts to enter
into an agreement, it shall not be deemed to obligate either party to enter into any such
agreement.

     3.6 Extension in Geography. Upon Culturecom’s request, provided that Culturecom has
met all of the Milestones set forth in Section 6.5, the parties will negotiate in good faith
entering into a license or other collaborative agreement to expand the geographic scope of this
Agreement. While the foregoing requires the parties to use good faith efforts to enter into an
agreement, it shall not be deemed to obligate either party to enter into any such agreement.

4. LICENSE FOR CRUSOE CMS VERSION AND EFFICEON CMS VERSION

     4.1 License Grant for Efficeon CMS Version. Subject to Culturecom’s compliance with
the terms and conditions of this Agreement, Transmeta hereby grants to Culturecom, during the term
of this Agreement, a non-exclusive, nontransferable (except as provided in Section 12.1),
royalty-free license (without the right to sublicense, except to Authorized Sublicensees as
specified in Section 6.1):

          (a) to copy and distribute the Efficeon CMS Version, in binary code form, solely to Culturecom
Efficeon Product Customers; and

          (b) to use the Efficeon CMS Version, in binary code form, to support use of the Efficeon CMS
Version and the Efficeon Licensed Products by Culturecom Efficeon Product Customers.

     4.2 License Grant for Crusoe CMS Version. Subject to Culturecom’s compliance with the
terms and conditions of this Agreement, Transmeta hereby grants to Culturecom, during the term of
this Agreement, a non-exclusive, nontransferable (except as provided in Section 12.1), royalty-free
license (without the right to sublicense, except to Authorized Sublicensees as specified in Section
6.1):

          (a) to copy and distribute the Crusoe CMS Version, in binary code form, solely to Culturecom
Crusoe Product Customers; and

          (b) to use the Crusoe CMS Version, in binary code form, to support use of the Crusoe CMS
Version and the Crusoe Licensed Products by Culturecom Crusoe Product Customers.

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

8

 

     4.3 License Agreement for Crusoe CMS Version and Efficeon CMS Version. Culturecom may
not distribute the Crusoe CMS Version or the Efficeon CMS Version to any Culturecom Efficeon
Product Customer or Culturecom Crusoe Product Customer (collectively, “Culturecom Customers”)
unless each such Culturecom Customer is subject to a written license agreement with Culturecom
(each, a “Culturecom License Agreement”) that protects Transmeta and Transmeta’s intellectual
property rights to at least the same degree as Transmeta’s standard license agreement for the Code
Morphing Software, a copy of which is attached to this Agreement as Exhibit C. Without
limiting the foregoing, each Culturecom License Agreement must, at a minimum: (a) name Transmeta
as an express third-party beneficiary under the Culturecom License Agreement, with a right to
enforce the terms of the Culturecom License Agreement directly against the Culturecom Customer; (b)
prohibit the Culturecom Customer from disassembling, decompiling or reverse engineering the binary
code of the Crusoe CMS Version or the Efficeon CMS Version, as applicable; (c) make no
representations or warranties on behalf of Transmeta; and (d) contain provisions that protect
Transmeta’s Confidential Information in a manner that is consistent, in scope and extent, with the
provisions of Section 9 hereof. Culturecom will use its commercially reasonable efforts to enforce
the terms of each Culturecom License Agreement and will promptly notify Transmeta of any material
breach of such agreement of which Culturecom becomes aware.

     4.4 Limitations on License. Culturecom may not use, copy or modify the Crusoe CMS
Version or the Efficeon CMS Version, except as expressly set forth in Section 4.1 or 4.2, as
applicable. Culturecom may not transfer, sublicense, rent, lease or otherwise distribute the
Crusoe CMS Version or the Efficeon CMS Version to any third party, except as expressly set forth in
Section 4.1 or 4.2, as applicable. Without limiting the generality of the preceding sentence,
Culturecom will not distribute or otherwise make available the Crusoe CMS Version or the Efficeon
CMS Version to any party that is not a Culturecom Crusoe Product Customer or a Culturecom Efficeon
Product Customer, as the case may be. Culturecom acknowledges that the Crusoe CMS Version and the
Efficeon CMS Version constitute and contain trade secrets of Transmeta and its licensors, and, in
order to protect such trade secrets and other interests that Transmeta and its licensors may have
in the Crusoe CMS Version and the Efficeon CMS Version, Culturecom agrees not to disassemble,
decompile or reverse engineer the Crusoe CMS Version and the Efficeon CMS Version nor permit any
third party to do so, except to the minimum extent permitted by applicable law.

     4.5 Reservation of Rights. No rights or licenses are granted in the Crusoe CMS
Version and the Efficeon CMS Version by implication, estoppel or otherwise, except as expressly set
forth herein. Culturecom’s rights in the Crusoe CMS Version and the Efficeon CMS Version are
limited to those expressly granted in this Agreement.

     4.6 Source Code Escrow for Code Morphing Software. Within thirty (30) calendar days
following the Closing Date, the parties will enter into a source code escrow agreement
substantially in the form set forth in Exhibit D hereto (“Escrow Agreement”). Culturecom
will pay the escrow agent’s fees for establishing and maintaining the Escrow Agreement. The Escrow
Agreement will require Transmeta to deposit into escrow the items specified in Exhibit F
(collectively, the “Escrowed Items”). The Escrow Agreement will provide Culturecom with the right
to obtain the

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

9

 

Escrowed Items solely in the event of the occurrence of any of the following conditions: (i)
Transmeta ceases its entire business with no successor; or (ii) any bankruptcy trustee or
debtor-in-possession with respect to Transmeta, or the estate created upon the bankruptcy of
Transmeta, rejects the Services Agreement (each, a “Release Condition”). Upon release of the
Escrowed Items from escrow, Culturecom will have the right to use such Escrowed Items, without the
right to sublicense except to Authorized Sublicensees (as specified in Section 6.1), solely for the
purposes of (a) enabling Culturecom to make modifications, derivative works and enhancements of the
Crusoe CMS Version and the Efficeon CMS Version to support Culturecom’s authorized use of the
Crusoe CMS Version and the Efficeon CMS Version pursuant to Sections 4.1 and 4.2 hereof, and (b)
enabling Culturecom to support Culturecom’s authorized use of the other Escrowed Items as set forth
in this Agreement and the Asset Purchase Agreement.

     4.7 Trademark License for CMS Marks. Subject to Culturecom’s compliance with the
terms and conditions of this Agreement, Transmeta hereby grants to Culturecom, during the term of
this Agreement, a non-exclusive, non-transferable license (without the right to sublicense, except
to Authorized Sublicensees as specified in Section 6.1) to use the CMS Marks solely in connection
with Culturecom’s marketing, promotion, and distribution of the Efficeon CMS Version and the Crusoe
CMS Version, as permitted under Sections 4.1 and 4.2 of this Agreement, respectively. Any use of
the CMS Marks by Culturecom must correctly attribute ownership of such mark to Transmeta and must
be in accordance with applicable law and Transmeta’s then-current trademark usage guidelines
provided to Culturecom in writing. Culturecom acknowledges and agrees that Transmeta owns the CMS
Marks and that any and all goodwill and other proprietary rights that are created by or that result
from Culturecom’s use of the CMS Marks hereunder inure solely to the benefit of Transmeta.
Culturecom will at no time contest or aid in contesting the validity or ownership of the CMS Marks
or take any action in derogation of Transmeta’s rights therein, including, without limitation,
applying to register any trademark, trade name or other designation that is confusingly similar to
any CMS Mark.

5. LICENSE FOR ANCILLARY TECHNOLOGY

     5.1 Crusoe Ancillary Technology. Subject to Culturecom’s compliance with the terms
and conditions of this Agreement, Transmeta hereby grants to Culturecom, during the term of this
Agreement, a non-exclusive, nontransferable (except as provided in Section 12.1), worldwide,
royalty-free license (without the right to sublicense, except to Authorized Sublicensees as
specified in Section 6.1), under all Transmeta IPR incorporated in the Crusoe Ancillary Technology:

          (a) to use the Crusoe Ancillary Technology to make, have made, use, test and support the
Crusoe Licensed Products;

          (b) subject to Section 5.3, to modify and create versions of the Crusoe Ancillary Technology
that are customized for the Crusoe Licensed Products that Culturecom will manufacture (and have
manufactured) and sell pursuant to this Agreement;

          (c) to use the Culturecom-customized Crusoe Ancillary Technology in connection with marketing
and promoting the Crusoe Licensed Products; and

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidential
request. Omissions are designated as * * *. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

10

 

          (d) to distribute and sublicense the Culturecom-customized Crusoe Ancillary Technology to
potential and current Culturecom Customers.

     5.2 Efficeon Ancillary Technology. Subject to Culturecom’s compliance with the terms
and conditions of this Agreement, Transmeta hereby grants to Culturecom, during the term of this
Agreement, a non-exclusive, nontransferable (except as provided in Section 12.1), royalty-free
license (without the right to sublicense, except to Authorized Sublicensees as specified in Section
6.1), under all Transmeta IPR incorporated in the Efficeon Ancillary Technology:

          (a) to use the Efficeon Ancillary Technology to make, have made, use, test and support the
Efficeon Licensed Products;

          (b) subject to Section 5.3, to modify and create versions of the Efficeon Ancillary Technology
that are customized for the Efficeon Licensed Products that Culturecom will manufacture (and have
manufactured) and sell pursuant to this Agreement;

          (c) to use the Culturecom-customized Efficeon Ancillary Technology in connection with
marketing and promoting the Efficeon Licensed Products; and

          (d) to distribute and sublicense the Culturecom-customized Efficeon Ancillary Technology to
potential and current Culturecom Customers.

     5.3 Customization Conditions. Culturecom will ensure that, except as expressly
authorized in this Agreement or otherwise agreed to in writing by Transmeta, it will delete or
remove (or cause to be deleted or removed) all references to Transmeta or to any Transmeta
products, product features or product specifications that are included in or that appearing on or
in the Transmeta Ancillary Technology (other than those items of Transmeta Ancillary Technology
identified in Exhibits A-3 or B-3 as “configuration tools”) as delivered by
Transmeta to Culturecom hereunder, including, without limitation, any an all Transmeta trademarks,
product names, trade names, logos, proprietary notices and other designations of source or
attributions. Culturecom will be solely responsible for the content of the Culturecom-customized
Crusoe Ancillary Technology and the Culturecom-customized Efficeon Ancillary Technology
(collectively, the “Culturecom-customized Ancillary Technology”) and will indemnify and hold
harmless Transmeta from any against any claims, damages, losses and liabilities incurred by
Transmeta arising out of or resulting from Culturecom’s use, marketing, promotion, distribution or
any other exploitation of the Culturecom-customized Ancillary Technology (or any portion or
component thereof).

     5.4 Limitations on License. Culturecom may not use or copy the Transmeta Ancillary
Technology except as expressly set forth in Sections 5.1 and 5.2. To the extent any Transmeta
Ancillary Technology consists of software or firmware in binary code, Culturecom acknowledges that
such software or firmware constitutes and contains trade secrets of Transmeta and its licensors.
Accordingly, in order to protect such trade secrets and other interests that Transmeta and its
licensors may have in such software and firmware, Culturecom expressly agrees not to disassemble,
reverse engineer and/or reverse compile such software or firmware, except to the minimum extent
permitted by applicable law.

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

11

 

     5.5 Reservation of Rights. No rights or licenses are granted in the Transmeta
Ancillary Technology by implication, estoppel or otherwise, except as expressly set forth herein.
Culturecom’s rights in the Transmeta Ancillary Technology are limited to those expressly granted in
this Agreement.

6. OTHER OBLIGATIONS AND RIGHTS

     6.1 Sublicensing. Culturecom may sublicense the license rights granted to Culturecom
under Sections 2.1, 3.1, 4.1, 4.2, 4.6, 4.7, 5.1 and 5.2 only to Culturecom Affiliates, TransChina
and TransChina Affiliates; provided; that, in each instance, Culturecom has requested and
obtained Transmeta’s approval, such approval not be unreasonably withheld or delayed (each,
individually, an “Authorized Sublicensee” and, collectively, the “Authorized Sublicensees”);
provided, further, that Culturecom executes a written sublicense agreement with the
Authorized Sublicensee (the “Sublicense Agreement”) that protects Transmeta and Transmeta’s
intellectual property rights to at least the same degree as the terms and conditions of this
Agreement. Without limiting the foregoing, the Sublicense Agreement must: (i) name Transmeta as
an express third-party beneficiary thereunder with the right to enforce the terms of the Sublicense
Agreement directly against the Authorized Sublicensee; and (ii) contain provisions that protect
Transmeta’s Confidential Information in a manner that is consistent, in scope and extent, with the
provisions of Section 9 hereof. Culturecom will be jointly and severally liable with the
Authorized Sublicensee for any breach by the Authorized Sublicensee of the terms of the Sublicense
Agreement. As of the Closing Date, Transmeta approves of the following as Authorized Sublicensees:
Culturecom Holdings, Ltd., a Bermuda company; TransChina, a Delaware corporation; and TransChina
China Ltd., a People’s Republic of China corporation.

     6.2 Delivery. Promptly following the Closing, Transmeta will deliver or make
available to Culturecom: (i) the items specified in Exhibits A-1 and B-1 that
comprise the Crusoe General Design Deliverables and the Efficeon Design Deliverables, in an
appropriate and reasonable medium and in the appropriate format(s) for each such item; (ii) the
items specified in Exhibits A-3 and B-3 that comprise the Crusoe Ancillary
Technology and the Efficeon Ancillary Technology, in an appropriate and reasonable medium and in
the appropriate format(s) for each such item; and (iii) a copy of the Crusoe CMS Version and the
Efficeon CMS Version, in binary code form (the items described in the preceding clauses (i) to
(iii) are referred to collectively as the “Transmeta Deliverables”). Except as set forth in
Section 4.6 or as otherwise agreed to in writing by the parties or the Services Agreement,
Transmeta will have no obligation to provide Culturecom with any updates, enhancements or
improvements to the to any of the Transmeta Deliverables, or with any engineering services, support
services or training with respect to the use of any of the foregoing, regardless of whether
Culturecom is able to successfully manufacture or have manufactured a Crusoe Licensed Product or an
Efficeon Licensed Product.

     6.3 Third-Party Technology. Culturecom acknowledges and agrees that, except as
expressly provided in this Agreement, it will be solely responsible for obtaining, at Culturecom’s
expense, a license for any third-party technology or products necessary to make and have
manufactured the Efficeon Product. To Transmeta’s knowledge, Exhibit B-4 is a complete
listing of

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

12

 

all third party technology or products used by Transmeta that is necessary to make or have
manufactured the Efficeon Product as of the date hereof.

     6.4 No Branding Rights. The parties acknowledge and agree that, except as expressly
set forth in Section 4.7, nothing in this Agreement will be deemed to grant to either party any
rights or licenses in any of the other party’s trademarks, trade names, logos, service marks or
other designations of source.

     6.5 Milestones. Culturecom will: (a) manufacture (or have manufactured) at any
foundry in China or Taiwan one (1) or more functional prototypes of the Crusoe Product within one
(1) year following receipt of all applicable export control-related approvals for China or Taiwan,
as applicable; and (b) manufacture (or have manufactured) at any foundry in China one (1) or more
functional prototypes of the Crusoe Product within two (2) year following receipt of all applicable
export control-related approval for China or Taiwan, as applicable (the foregoing clauses (a) and
(b), the “Milestones”). Except as provided in this Section 6.5, if Culturecom does not satisfy
either Milestone, then within thirty (30) calendar days following notice from Transmeta with
respect to such a failure, as Transmeta’s sole remedy for such failure, Culturecom shall pay
Transmeta one million dollars (US$1,000,000) (“Milestone Failure Payment”); provided,

however, that if Culturecom’s failure to satisfy a Milestone directly results from any material
breach by Transmeta to timely perform the Services as defined in the [design transfer] SOW to the
Services Agreement, then the time period for satisfying the Milestone shall be extended by the
number of days by which Transmeta was late in performing its Services.

     6.6 Marketing Indemnity. Culturecom will be responsible for its efforts to
commercialize the Crusoe Licensed Products and the Efficeon Licensed Products under this Agreement
and will indemnify and hold harmless Transmeta from any against any claims, damages, losses and
liabilities incurred by Transmeta arising out of or resulting from Culturecom’s use, marketing,
promotion, distribution or any other exploitation of the Crusoe Licensed Products or the Efficeon
Licensed Products (or any portion or component thereof).

     6.7 TSMC Manufacturing. As of the Closing, subject to TSMC’s approval and at no
additional cost to Culturecom, Transmeta will authorize TSMC to use Transmeta’s mask sets for the
Crusoe Product and for the Efficeon Product for the purpose of manufacturing Crusoe Products and
Efficeon Products for Culturecom as authorized under this Agreement. Transmeta retains title to
the mask sets.

7. PAYMENT

     7.1 License Fee. In partial consideration for the license rights granted by Transmeta
under Sections 2.1 and 3.1, Culturecom will pay Transmeta a one-time license fee equal to ten
million dollars (US$10,000,000) (the “License Fee”). The License Fee will be deposited into the
Escrow Fund no later than the twenty-first (21st) Business Day following the execution
of the Asset Purchase Agreement. Culturecom shall, on the Closing Date, authorize the Escrow Agent
to deliver the License Fee to Transmeta. The License Fee is in addition to the Cash Consideration
delivered under the Asset Purchase Agreement. The License Fee is non-refundable and
non-recoupable, and

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

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is not creditable against royalties which may become payable by Culturecom under Section 7.2.
Payment of the License Fee is guaranteed by Culturecom Holdings, Ltd., as specified in that certain
Guarantee agreement entered into between Transmeta and Culturecom Holdings, Ltd. on the same date
as this Agreement. If the Closing has not occurred by the Termination Date (as defined in the
Asset Purchase Agreement), Transmeta shall authorize the Escrow Agent to return the License Fee to
Culturecom. 

     7.2 Royalties. Culturecom will pay Transmeta non-refundable royalties equal to * * *
of Culturecom’s or its Authorized Sublicensee’s Net Sales (defined herein) from Culturecom’s or its
Authorized Sublicensee’s sales of the Crusoe Licensed Products and the Efficeon Licensed Products.
For purposes hereof “Net Sales” means the sales price received by Culturecom or its Authorized
Sublicensee from a third-party buyer in a bona fide, arm’s-length transaction, excluding any
packing, shipping, insurance charges, import, export, excise, sales, use, value-added taxes, and
customs duties, and reduced, in each case, by actual returns and discounts actually given (other
than discounts related to the manner and terms of payment). Royalties will accrue upon the earlier
of the date of shipment or the date of invoice. No royalty will accrue for units of the Crusoe
Licensed Products or the Efficeon Licensed Products shipped as a replacement for any defective
products or shipped by Culturecom or its Authorized Sublicensee as sample shipments without any
charge to a Culturecom Customer.

     7.3 Payment Terms. Within * * * after: (i) the end of each calendar quarter during
the term of this Agreement in which the royalty accrues and (ii) the termination of this Agreement,
Culturecom will submit to Transmeta the payment of royalties due as shown in the Royalty Report
(defined in Section 7.7). All payments specified in this Agreement shall be made in U.S. dollars
by wire transfer to the bank account to be separately designated in writing by Transmeta.

     7.4 Interest and Other Payment Terms. Any payments made * * * after the applicable
due date will incur interest at the rate of * * *.

     7.5 Taxes. All amounts payable by Culturecom under this Agreement are net amounts and
are payable in full, without deduction for taxes or duties of any kind. Culturecom will be
responsible for, and will promptly pay, all taxes and duties of any kind (including, but not
limited to, sales, use and withholding taxes) associated with this Agreement or the royalty
payments made by Culturecom hereunder, except for taxes based on Transmeta’s net income. If
Transmeta is required to collect, or pays on Culturecom’s behalf, any taxes or duties for which
Culturecom is responsible, then Culturecom will pay or reimburse Transmeta, as the case may be, for
all such amounts. If Culturecom pays any withholding taxes based on the payments made by
Culturecom to Transmeta hereunder, then Culturecom will furnish Transmeta with written
documentation of all such tax payments, including receipts and other customary documentation.

     7.6 Records. For a period of one (1) year after the later date that each royalty
payment is due or is made under this Agreement, Culturecom will maintain complete and accurate
books, records and accounts as are reasonably necessary to verify the royalty payments made by
Culturecom hereunder.

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

14

 

     7.7 Reports. Within * * * after (i) the end of each calendar quarter during the term
of this Agreement and (ii) the termination of this Agreement, Culturecom will furnish to Transmeta
a written report specifying the royalties owed for the relevant period (each such report, a
"Royalty Report”). If no royalties are due, that fact will be shown on such Royalty Report. The
content, form and format of such Royalty Reports will be as mutually agreed to by the parties.

     7.8 Audit. During the term of this Agreement and for a period of * * *, upon at least
thirty (30) calendar days prior written notice to Culturecom, Transmeta will have the right to
authorize a certified public accounting firm, as reasonably approved by Culturecom, to audit
Culturecom’s books, records, and accounts, and other relevant information for the purpose of
verifying the accuracy of the amount of royalties reported by Culturecom pursuant to Section 7.7;
provided that such audit shall be conducted during Culturecom’s normal business hours of Culturecom
and no more frequently than once a year. If the accounting firm concludes that additional amounts
were owed during the audited period, Culturecom will pay such additional amounts plus interest
calculated in accordance with Section 7.4 within * * * of the date Transmeta delivers the
accounting firm’s written report to Culturecom. Transmeta will pay the fees and expenses charged
by the accounting firm; provided however, if the audit discloses that the royalties payable by
Culturecom for the audited period are * * *, then Culturecom will reimburse Transmeta for * * *.

8. WARRANTIES

     8.1 Mutual Warranties. Each party represents and warrants to the other party that it
has the necessary corporate power, right and authority to enter into this Agreement, to carry out
its obligations under this Agreement, and to grant the rights herein granted.

     8.2 Warranty Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 8.1, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, TRANSMETA SPECIFICALLY AND EXPRESSLY DISCLAIMS ANY AND ALL
WARRANTIES OR CONDITIONS WITH RESPECT TO THE CRUSOE PRODUCT, EFFICEON PRODUCT, CRUSOE DESIGN
DELIVERABLES, EFFICEON DESIGN DELIVERABLES, CRUSOE CMS VERSION, EFFICEON CMS VERSION, TRANSMETA
ANCILLARY TECHNOLOGY AND ALL TRANSMETA DELIVERABLES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE,
INCLUDING ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, QUALITY OR NON-INFRINGEMENT.

9. CONFIDENTIAL INFORMATION

     9.1 Confidential Information. “Transmeta Confidential Information” means: (i) the
Crusoe General Design Deliverables, Efficeon Design Deliverables, Crusoe CMS Version, Efficeon CMS
Version, Transmeta Ancillary Technology, and all Transmeta Deliverables; and (ii) any business or
technical information that Transmeta desires to protect against unauthorized use or disclosure
that: (a) is disclosed in writing and is identified and/or marked by Transmeta as “confidential
information” at the time of disclosure; or (b) is disclosed in any other manner and,

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

15

 

under the circumstances of disclosure or due to the nature of the information, a person
exercising reasonable business judgment would understand to be confidential or proprietary. In
addition to the foregoing, the terms and conditions of this Agreement will be deemed to be the
confidential information of both parties.

     9.2 Use and Disclosure Restrictions. Culturecom will not use any Transmeta
Confidential Information except for the purposes of exercising its rights hereunder, and will not
disclose any Transmeta Confidential Information to any third party except to Authorized
Sublicensees and their respective employees and contractors (including Culturecom’s or any
Authorized Sublicensee’s foundries) as is reasonably required in connection with the exercise of
its rights hereunder (and, in case of any contractors, only subject to binding use and disclosure
restrictions at least as protective as those set forth herein to be executed in writing by such
contractors). Culturecom will use all reasonable efforts to protect and to maintain the
confidentiality of all Transmeta Confidential Information in its possession or control by using the
efforts that Culturecom ordinarily uses with respect to its own proprietary information of similar
nature and importance, but in no event less than reasonable efforts.

     9.3 Exclusions. The obligations set forth in Section 9.2 will not apply to any
information that: (i) is or becomes generally known to the public through no fault or breach of
this Agreement by Culturecom; (ii) Culturecom can document was rightfully known to Culturecom at
the time of disclosure without an obligation of confidentiality; (iii) Culturecom can document was
independently developed by Culturecom without use of any Transmeta Confidential Information; or
(iv) Culturecom rightfully obtains from a third party without restriction on use or disclosure.

     9.4 Disclosure of Agreement. Nothing in this Agreement will restrict either party
from disclosing the terms of this Agreement: (i) pursuant to the order or requirement of a court,
administrative agency, or other governmental body, provided that the party required to make such a
disclosure gives reasonable notice to the other party, to the extent reasonably practicable, so
that the other party may contest such an order or requirement; (ii) on a confidential basis to its
legal or professional financial advisors; (iii) as required under applicable securities
regulations; and (iv) subject to execution of reasonable and customary written confidentiality
agreements consistent with the restrictions set forth herein, to present or future providers of
capital and/or potential investors in or acquirers of such party or its assets associated with the
subject matter of this Agreement.

10. LIMITATIONS OF LIABILITY

     10.1 Exclusion of Damages. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY
INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF USE, DATA,
BUSINESS, PROFITS, OR GOODWILL) IN CONNECTION WITH, ARISING OUT OF, OR RELATING TO THIS AGREEMENT
OR THE USE, PERFORMANCE OR OPERATION OF THE CRUSOE LICENSED PRODUCTS, EFFICEON LICENSED PRODUCTS,
CRUSOE CMS VERSION, EFFICEON CMS VERSION, TRANSMETA ANCILLARY TECHNOLOGY OR TRANSMETA DELIVERABLES,
WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON CONTRACT,

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

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WARRANTY, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY OR OTHERWISE, AND WHETHER OR NOT
TRANSMETA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIMITATIONS IN THIS SECTION 10.1
SHALL NOT APPLY TO EITHER PARTY’S BREACH OF THE CONFIDENTIALITY OBLIGATIONS OF SECTION 9;
CULTURECOM’S UNAUTHORIZED USE OF ANY TRANSMETA DELIVERABLES, TECHNOLOGY OR INTELLECTUAL PROPERTY
RIGHTS; OR CULTURECOM’S INDEMNITY OBIGATION UNDER SECTION 6.6.

     10.2 Total Liability. IN NO EVENT WILL EITHER PARTY’S TOTAL LIABILITY TO THE OTHER
PARTY AND TO ANY OTHER PARTY IN CONNECTION WITH, ARISING OUT OF, OR RELATING TO THIS AGREEMENT,
FROM ALL CAUSES OF ACTION AND THEORIES OF LIABILITY, EXCEED * * *. THE LIMITATIONS IN THIS SECTION
10.2 SHALL NOT APPLY TO EITHER PARTY’S BREACH OF THE CONFIDENTIALITY OBLIGATIONS OF SECTION 9;
CULTURECOM’S UNAUTHORIZED USE OF ANY TRANSMETA DELIVERABLES, TECHNOLOGY OR INTELLECTUAL PROPERTY
RIGHTS; CULTURECOM’S FAILURE TO PAY AMOUNTS DUE UNDER THIS AGREEMENT; OR CULTURECOM’S INDEMNITY
OBIGATION UNDER SECTION 6.6.

     10.3 Acknowledgment. Each party acknowledges that the other party has entered into
this Agreement in reliance on the above limitations of liability, and that the same constitutes a
material basis of the bargain between the parties. The parties have agreed that the limitations
specified above will survive any termination of this Agreement and will apply even if any limited
remedy specified in this Agreement is found to have failed of its essential purpose.

11. TERMINATION

     11.1 Term. This Agreement (and all of Culturecom’s license rights hereunder) will
commence as of the Closing Date and will remain in force unless terminated in accordance with
Section 11.2.

     11.2 Termination for Cause. Either party may terminate this Agreement if the other
party breaches any material term or condition of this Agreement and fails to cure such breach
within thirty (30) calendar days following receipt of written notice from the non-breaching party.

     11.3 No Termination for Change of Control. Transmeta expressly acknowledges that it
will have no right to terminate this Agreement or any of the license rights granted to Culturecom
hereunder as a result of Transmeta undergoing a Change of Control (as defined herein). For
purposes hereof, “Change of Control” of Transmeta means (i) a change in ownership or control of
Transmeta effected through the direct or indirect acquisition by any person or related group of
persons; (ii) a merger or consolidation in which Transmeta is not the surviving entity; (iii) the
sale, transfer or other disposition of all or substantially all of the assets of Transmeta; or (iv)
any reverse merger in which Transmeta is a party.

     11.4 Effect of Termination. Upon the termination of this Agreement by either party
pursuant to Section 11.2: (i) all licenses and rights granted to Culturecom hereunder will

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

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immediately terminate; and (ii) Culturecom will promptly return to Transmeta the Crusoe
General Design Deliverables, Efficeon Design Deliverables, Crusoe CMS Version, Efficeon CMS
Version, Transmeta Ancillary Technology and Transmeta Deliverables, and other Transmeta
Confidential Information in Culturecom’s possession or control and provide Transmeta with an
officer’s written certification, certifying to Culturecom’s compliance with the foregoing
obligation.

     11.5 Survival. The rights and obligation of the parties under Sections 7, 8, 9, 10,
11.4, 11.5 and 12 will survive any termination of this Agreement.

12. GENERAL

     12.1 Assignment. Culturecom may not assign or transfer this Agreement, or any of the
rights or licenses granted to Culturecom hereunder by operation of law or otherwise, without the
express prior written consent of Transmeta, which consent will not be unreasonably withheld, except
that Culturecom may assign or transfer this Agreement without consent to an Authorized Sublicensee
provided that Culturecom provides written notice to Transmeta within ten (10) days of the
assignment or transfer, identifying the Authorized Sublicensee and providing a certification of
compliance with export control if applicable. Any attempted assignment or transfer without such
consent will be null and of no effect. Transmeta may assign or transfer this Agreement in its sole
discretion. Subject to the foregoing, this Agreement will be binding upon and will inure to the
benefit of, and be enforceable by the parties’ respective successors and permitted assigns. For
purposes of this Section 12.1, (a) a Change of Control of Culturecom will be deemed to be an
assignment; and (b) a Change of Control of Culturecom means (i) a change in ownership or control of
Culturecom effected through the direct or indirect acquisition by any entity or related group of
entities of beneficial ownership of securities possessing more than fifty percent (50%) of the
total combined voting power of Culturecom’s outstanding securities; (ii) a merger or consolidation
in which Culturecom is not the surviving entity; (iii) the sale, transfer or other disposition of
all or substantially all of the assets of Culturecom; or (iv) any reverse merger in which
Culturecom is a party.

     12.2 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of California without regard to conflicts of laws rules or principles.
The parties expressly disclaim the application of the U.N. Convention on Contracts for the
International Sale of Goods.

     12.3 Compliance with Laws. Each party will comply with all laws and regulations
applicable to such party’s performance of this Agreement. Without limiting the generality of the
foregoing, each party will comply fully with all relevant export laws and regulations of the United
States and all other countries having competent jurisdiction (“Export Laws") to ensure that neither
the Crusoe Licensed Products, Efficeon Licensed Products, Crusoe CMS Version, Efficeon CMS Version,
Transmeta Ancillary Technology, Transmeta Deliverables nor any direct product of any of the
foregoing or any technical data related thereto is: (i) exported or re-exported directly or
indirectly in violation of Export Laws; or (ii) used for any purposes prohibited by the Export
Laws, including, but not limited to, nuclear, chemical, or biological weapons proliferation.

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

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     12.4 Equitable Relief. Culturecom acknowledges and agrees that any breach of Section
9 or any breach of this Agreement with respect to Transmeta’s intellectual property rights in and
to the Crusoe Product, Efficeon Product, Crusoe CMS Version, Efficeon CMS Version, Transmeta
Ancillary Technology, Transmeta Deliverables or other Transmeta Confidential Information may cause
Transmeta to incur irreparable harm and significant injury that would be difficult to ascertain and
would not be compensable by damages alone. Accordingly, Culturecom acknowledges and agrees that,
in addition to any and all remedies that Transmeta may have at law or otherwise with respect to
such a breach, Transmeta will have the right to obtain specific performance, injunction or other
appropriate equitable relief.

     12.5 Severability. In the event that it is determined by a court of competent
jurisdiction that any provision of this Agreement is invalid, illegal, or otherwise unenforceable,
such provision will be enforced as nearly as possible in accordance with the stated intention of
the parties, while the remainder of this Agreement will remain in full force and effect and bind
the parties according to its terms.

     12.6 Waiver. No failure by either party to exercise or enforce any of its rights
under this Agreement will act as a waiver of such rights, and no waiver of a breach in a particular
situation will be held to be a waiver of any other or subsequent breach.

     12.7 Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given,
made and received (i) when delivered personally or (ii) three (3) business days after deposit with
an internationally recognized express courier. All notices shall be sent to the address set forth
as follows (or to such other address or person as may be designated by a party by giving written
notice to the other party pursuant to this Section):

	 
	If to Culturecom:

	 

	Culture.com Technology Limited

	The Penthouse, Culturecom Centre

	47 Hung To Road, Kwun Tong,

	Kowloon, Hong Kong

	Attention: Mr. Frank W.T. Cheung, Chairman and CEO

	 

	Telephone No.: (852) 2950-8811

	Facsimile No.: (852) 2345-3882

	 

	With a copy, which will not constitute notice, given in the manner prescribed

above, to:

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

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	Coblentz, Patch, Duffy & Bass LLP

	One Ferry Building, Suite 200

	San Francisco, California 94111

	USA

	Attention: Paul J. Tauber

	Telephone No.: (415) 391-4800

	Facsimile No.: (415) 989-1663

	 

	If to Transmeta:

	 

	Transmeta Corporation

	3990 Freedom Circle

	Santa Clara, CA 95054

	Attention: General Counsel

	Telephone No.: (408) 919-3000

	Facsimile No.: (408) 919-6564

	 

	With a copy, which will not constitute notice, given in the manner prescribed

above, to:

	 

	Fenwick & West LLP

	Silicon Valley Center

	801 California Street

	Mountain View, CA 94041

	Attention: Mark A. Leahy

	Telephone No.: (650) 988-8500

	Facsimile No.: (650) 938-5200

Any party may alter its notice address by notifying the other parties of such change of address in
conformity with the provisions of this section.

     12.8 Entire Agreement. This Agreement, including its exhibits, and the Asset Purchase
Agreement constitute the complete and exclusive understanding and agreement between the parties
relating to the subject matter hereof and supersede all contemporaneous and prior understandings,
agreements and communications (both written and oral) relating to its subject matter. No
modifications, alterations or amendments will be effective unless in writing signed by duly
authorized representatives of both parties.

     12.9 Counterparts. This Agreement may be executed in multiple counterparts, each of
which will be deemed an original, but all of which together will constitute one and the same
instrument.

     12.10 Confirmation of Culturecom’s License Rights. The parties acknowledge that the
licenses granted in this Agreement to Culturecom are licenses for “intellectual property” as
defined in Section 101(56) of the U.S. Bankruptcy Code (the “Bankruptcy Code”), that this Agreement
is

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

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governed by Section 365(n) of the Bankruptcy Code. Without limiting the foregoing, the
parties agree that in the event that any bankruptcy proceeding is filed by or against Transmeta,
and the bankruptcy trustee or debtor-in-possession rejects this Agreement, then Culturecom will
have the right to exercise all rights provided in Section 365(n) of the Bankruptcy Code, including
the right to retain its license rights granted hereunder and any agreement supplementary and/or
ancillary to this Agreement, including, but not limited to, the Escrow Agreement, subject to
Culturecom’s ongoing payment of royalties payable hereunder.

     12.11 Jurisdiction; Service of Process. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement may be brought against any
of the parties only in the courts of the State of California, County of Santa Clara, or, if it has
or can acquire the necessary jurisdiction, in the United States District Court for the Northern
District of California. Each of the parties consents to the exclusive jurisdiction of such courts
(and the appropriate appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the preceding sentence may
be served on any party anywhere in the world.

[signature page follows]

 

			
	* * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information
subject to the confidential request. Omissions are designated as * * *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.

21

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered
by their duly authorized representatives.

	 	 	 	 	 	 	 	 	 
	CULTURE.COM TECHNOLOGY LIMITED	 	 	 	TRANSMETA CORPORATION
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Frank W. T. Cheung
	 	 	 	By:
	 	/s/ Arthur L. Swift
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Frank W. T. Cheung
	 	 	 	Name:
	 	Arthur L. Swift
	Title:

	 	Chairman and Chief Executive Officer
	 	 	 	Title:
	 	President and CEO
	Date:

	 	27th May, 2005
	 	 	 	Date:
	 	5-26-05

	 	 	 
	EXHIBITS
	 	 
	 
	 	 
	Exhibit A-1

	 	Crusoe General Design Deliverables
	 
	 	 
	Exhibit A-2

	 	Crusoe CMS Version
	 
	 	 
	Exhibit A-3

	 	Licensed Crusoe Ancillary Technology
	 
	 	 
	Exhibit B-1

	 	Efficeon Design Deliverables
	 
	 	 
	Exhibit B-2

	 	Efficeon CMS Version
	 
	 	 
	Exhibit B-3

	 	Efficeon Ancillary Technology
	 
	 	 
	Exhibit B-4

	 	Efficeon Third-Party Technology
	 
	 	 
	Exhibit C

	 	Transmeta Code Morphing Software License Agreement
	 
	 	 
	Exhibit D

	 	Source Code Escrow Agreement
	 
	 	 
	Exhibit E

	 	CMS Marks
	 
	 	 
	Exhibit F

	 	Escrowed Items

[signature page to License Agreement]

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

22

 

Exhibit A-1

Crusoe General Design Deliverables

The Crusoe Design Deliverables are the following materials for the Crusoe Product:

	 	o	 	Layout/GDS2 file
	 
	 	o	 	Timing information and descriptions
	 
	 	o	 	Crusoe Verilog Code
	 
	 	o	 	Crusoe Schematics
	 
	 	o	 	Crusoe VLIW processor instruction set architecture documentation (ISA)
	 
	 	o	 	But excluding any of the above that are Crusoe Specific Design Deliverables
under the Asset Purchase Agreement

The Crusoe Design Deliverables do not include the following:

	 	o	 	Simulators or emulators of the processor
	 
	 	o	 	For the following third party items, Culturecom is solely responsible for
obtaining, at Culturecom’s expense, a license to transfer these items to Culturecom and
for Culturecom to use these items post-transfer. If Culturecom obtains the third party
vendor’s consent for Transmeta to transfer the relevant item to Culturecom before
Closing, then the item will be transferred to Culturecom simultaneously with the
transfer of the Crusoe Design Deliverables. If Culturecom does not obtain this consent
before Closing, then these items will not be transferred to Culturecom:

	 	1.	 	* * *.
	 
	 	2.	 	* * *.

	 	o	 	The Crusoe Design Deliverables may include the following technology that may be
deemed proprietary to a third party. Culturecom is solely responsible for obtaining,
at Culturecom’s expense, any license (if any) for Culturecom to use these items
post-transfer.

	 	1.	 	* * *.
	 
	 	2.	 	* * *.

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

23

 

Exhibit A-2

Crusoe CMS Version

The “Crusoe CMS Version” is the Crusoe-CMS version * * *.

Deliverables for the Crusoe CMS Version are the following:

	 	•	 	CMS Binary image including:

	 	o
	 	Licensed CMS version and on-ROM backup CMS
	 
	 	o
	 	Default OEM configuration table
	 
	 	o
	 	CMS bootloader

The Crusoe CMS Version excludes the following, except where specifically provided in this
Agreement:

	 	o
	 	Crusoe Code Morphing Software source code
	 
	 	o
	 	Simulators or emulators of the processor or CMS

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

24

 

Exhibit A-3

Licensed Crusoe Ancillary Technology

Configuration Tools

	 	•	 	* * *
	 
	 	•	 	* * *

Materials Related to Manufacturing

	 	•	 	* * *
	 
	 	•	 	* * *

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

25

 

Exhibit B-1

Efficeon Design Deliverables

The Efficeon Design Deliverables are the following materials for the Efficeon Product:

	 	o
	 	Layout/GDS2 file
	 
	 	o
	 	Timing information and descriptions
	 
	 	o
	 	Efficeon Verilog Code
	 
	 	o
	 	Efficeon Schematics

The Efficeon Design Deliverables do not include the following:

	 	o
	 	Simulators or emulators of the processor
	 
	 	o
	 	Efficeon VLIW processor instruction set architecture documentation (ISA)
	 
	 	o
	 	For the following third party items, Culturecom is solely responsible for
obtaining, at Culturecom’s expense, a license to transfer these items to Culturecom and
for Culturecom to use these items post-transfer. If Culturecom obtains the third party
vendor’s consent for Transmeta to transfer the relevant item to Culturecom before
Closing, then the item will be transferred to Culturecom simultaneously with the
transfer of the Efficeon Design Deliverables. If Culturecom does not obtain this
consent before Closing, then these items will not be transferred to Culturecom:

	 	1.	 	* * *.
	 
	 	2.	 	* * *.
	 
	 	3.	 	* * *.
	 
	 	4.	 	* * *

	 	o
	 	The Efficeon Design Deliverables may include the following technology that may
be deemed proprietary to a third party. Culturecom is solely responsible for
obtaining, at Culturecom’s expense, any license (if any) for Culturecom to use these
items post-transfer.

	 	1.	 	* * *.
	 
	 	2.	 	* * *.

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

26

 

Exhibit B-2

Efficeon CMS Version

The “Efficeon CMS Version” is the Efficeon-CMS version * * *

Deliverables for the Efficeon CMS Version are the following:

	 	•	 	CMS Binary image including:

	 	o
	 	Licensed CMS version and on-ROM backup CMS
	 
	 	o
	 	Default OEM configuration table
	 
	 	o
	 	CMS bootloader

The Efficeon CMS Version excludes the following, except where specifically provided in this
Agreement:

	 	o
	 	Efficeon Code Morphing Software source code
	 
	 	o
	 	Simulators or emulators of the processor or CMS

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and

Exchange Commission.

27

 

Exhibit B-3

Efficeon Ancillary Technology

Documents relating to the Efficeon Product/Efficeon CMS Version only:

	 	•	 	Compatibility Reports
	 
	 	•	 	Efficeon data sheets and data book
	 
	 	•	 	Efficeon Application notes, where appropriate
	 
	 	•	 	Efficeon System Design Guide
	 
	 	•	 	Efficeon BIOS Programmer’s Guide
	 
	 	•	 	The Efficeon Ancillary Technology specifically excludes any rights to the
following, except where specifically provided in the agreements:

	 	o
	 	Any documents relating to Efficeon processor versions or CMS versions other
than those licensed by Culturecom
	 
	 	o
	 	Any documents relating to 90nm Efficeon versions
	 
	 	o
	 	Code Morphing Software source code
	 
	 	o
	 	Efficeon VLIW processor instruction set architecture documentation or ISA
	 
	 	o
	 	Simulators or emulators of the processor

Reference Designs or Boards

	 	•	 	Efficeon 29x29 reference design: “Riviera” engineering board reference board

	 	o
	 	Including, as applicable, schematics, layout, BOM, and manufacturing instructions
	 
	 	o
	 	Documentation

	 	•	 	Hydrant: Debug and configuration interface board for Macraigor

	 	o
	 	Including, as applicable, schematics, layout, BOM, and manufacturing instructions
	 
	 	o
	 	Documentation

	 	•	 	Package design database for Efficeon 29x29mm package only
	 
	 	•	 	Socket Design for 29x29 package only

	 	o
	 	Socket Mechanical specifications
	 
	 	o
	 	Elastomer technical information
	 
	 	o
	 	Socket design and vendor information

Configuration Tools

	 	•	 	* * *
	 
	 	•	 	* * *

Materials Related to Manufacturing

	 	•	 	* * *
	 
	 	•	 	* * *
	 
	 	•	 	* * *
	 
	 	•	 	* * *

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

28

 

	 	•	 	* * *
	 
	 	•	 	Board designs (including as applicable, schematics, layout, BOM, and manufacturing
instructions) or contact information for the third party vendor for the following boards:

	 	o	 	* * *
	 
	 	o	 	* * *
	 
	 	o	 	* * *

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

29

 

Exhibit B-4

Efficeon Third-Party Technology

1. Third party circuit designs included in the Efficeon Product:

	•	 	* * *.
	 
	•	 	* * *

2. * * * included in the Efficeon Product:

          The design information for the Efficeon Product (“Efficeon Design Information”) contains
certain * * *. Transmeta cannot deliver the Efficeon Design Information containing * * * without
Culturecom having appropriate consent from * * *. If Culturecom does not obtain permission from *
* * before Closing, then Transmeta will deliver the Efficeon Design Information without * * *.

          The Efficeon Design Information embeds certain information (e.g. design rules) provided by * *
* may be deemed proprietary by * * *.

3. BIOS used with the Efficeon Product

	•	 	* * *

4. CAD tools

          Design information for chips, boards and packages will include various electronic files. Some
electronic files include information for controlling CAD tools or otherwise editing or modifying
data (“Scripts”). Some electronic files include design information or verification information
(“Design Data Files”). Some electronic files include design information for generic components
provided by a CAD tool vendor (“Vendor Library Files”). The Scripts, Design Data Files and Vendor
Library Files may be formatted or structured in a manner specified by one or more CAD tools and
deemed proprietary by one or more CAD tool vendors (“CAD Formats”). The Scripts, Design Data Files
and Vendor Library Files may reference commands, library components or other interfaces deemed
proprietary by one or more CAD tool vendors (“CAD Interfaces”). Transmeta does not represent that
it owns or controls the intellectual property (if any) associated with the CAD Formats and CAD
Interfaces embedded in, used by or referenced in the Scripts, Design Data Files and Vendor Library
Files or that Culturecom will have all intellectual property rights necessary to use such CAD
Formats or CAD Interfaces. The CAD tools used by Transmeta for the Efficeon Product and the Crusoe
Product are listed below.

4.a. Third Party CAD Tools used in chip design

* * *:

* * *

* * *

* * *

* * *

* * *

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

30

 

* * *

* * *

* * *

* * *

* * *

* * *:

* * *

* * *

* * *

* * *

* * *

* * *

* * *:

* * *

* * *:

* * *

* * *:

* * *

* * *:

* * *

4.b. Third Party * * * used for board and package design

* * *

* * *

5. Limitation on Disclosure. The parties acknowledge that it is not feasible to produce a
complete listing of all third party technology or products used by Transmeta that is necessary to
make or have manufactured the Efficeon Product. Accordingly, this listing is limited to third
party technology that is incorporated in the Efficeon Product and third party CAD tools used to
design the Efficeon Product. The omission of any other third party technology or products shall
not be construed as a breach of Section 6.3.

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

31

 

Exhibit C

Transmeta Code Morphing Software License Agreement

* * *

[Six-page Agreement]

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

32

 

Exhibit D

Source Code Escrow Agreement

Account Number ______________________

This Preferred Escrow Agreement (“Agreement”) is effective ______, 200______(the “Effective
Date”), among DSI Technology Escrow Services, Inc. (“DSI”), ______(“Depositor”), and
______(“Preferred Beneficiary”), who collectively may be referred to in this Agreement
as the parties (the “Parties”).

A. Depositor and Preferred Beneficiary have entered into a license agreement under which Depositor
is licensing to Preferred Beneficiary a certain software product (the “Licensed Software”). (Such
agreement is referred to in this Agreement as the “License Agreement”.)

B. Depositor desires to avoid the disclosure to Preferred Beneficiary of the source code for the
Licensed Software, except under the limited circumstances specified in this Agreement.

C. Accordingly, Depositor and Preferred Beneficiary desire to establish an escrow with DSI to
provide for the retention, administration and controlled access of the source code for the Licensed
Software.

D. The Parties desire this Agreement to be supplementary to the License Agreement pursuant to 11
United States Code (the “Bankruptcy Code”), Section 365(n).

ARTICLE 1  —  DEPOSITS

1.1 Obligation to Make Deposit. Upon the execution of this Agreement by the Parties,
Depositor shall deliver to DSI those materials that Depositor is required to deposit with DSI, as
identified in the License Agreement, or, if, not identified in the License Agreement, as identified
in Exhibit A. In either case, the materials to be deposited with DSI by Depositor will be referred
to herein as the “Deposit Materials”. If Exhibit A is applicable, it is to be prepared and signed
by Depositor and Preferred Beneficiary. DSI shall have no obligation to either party with respect
to the preparation, accuracy, execution or delivery of Exhibit A.

1.2 Identification of Tangible Media. Prior to the delivery of the Deposit Materials to
DSI, Depositor shall conspicuously label for identification each document, magnetic tape, disk, or
other tangible medium upon which the Deposit Materials are written or stored. Additionally,
Depositor shall complete Exhibit B to this Agreement by listing each such tangible media by the
item label description, the type of media and the quantity. Exhibit B shall be signed by Depositor
and delivered to DSI with the Deposit Materials. Unless and until Depositor makes the initial
deposit with DSI, DSI shall have no obligation with respect to this Agreement, except the
obligation to notify the Parties regarding the status of the account as required in Section 2.2
below.

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

33

 

1.3 Acceptance of Deposit. When DSI receives the Deposit Materials, DSI will conduct a
deposit inspection. If DSI determines upon completion of the deposit inspection that the labeling
of the tangible media matches the item descriptions and quantity on Exhibit B, then DSI will date
and sign Exhibit B and mail a copy thereof to Depositor and Preferred Beneficiary. If DSI
determines that the labeling does not match the item descriptions or quantity on Exhibit B, DSI
will: (a) note the discrepancies in writing on Exhibit B; (b) date and sign Exhibit B with the
exceptions noted; and (c) mail a copy of Exhibit B to Depositor and Preferred Beneficiary, as so
annotated. DSI’s acceptance of the deposit occurs upon the signing of Exhibit B by DSI. Delivery
of the signed Exhibit B to Preferred Beneficiary is Preferred Beneficiary’s notice that the Deposit
Materials have been received and accepted by DSI. Other than DSI’s inspection of the Deposit
Materials, DSI shall have no obligation to verify the accuracy, completeness, functionality,
performance or non-performance of the Deposit Materials. No acceptance by DSI of delivery of any
Deposit Materials under this Section 1.3 shall relieve Depositor of its obligation under this
Agreement to fully tender to DSI the Deposit Materials.

1.4 Depositor’s Representations. Depositor represents as follows:

	 	a.	 	Depositor lawfully possesses all of the Deposit Materials deposited with DSI;
	 
	 	b.	 	With respect to all of the Deposit Materials, Depositor has the right and
authority to grant to DSI and Preferred Beneficiary the rights as provided in this
Agreement;
	 
	 	c.	 	As of the Effective Date, the Deposit Materials are not the subject of a lien
or encumbrance; however, any liens or encumbrances made after the execution of this
Agreement will not prohibit, limit, or alter the rights and obligations of DSI under
this Agreement;
	 
	 	d.	 	The Deposit Materials consist of those materials identified either in the
License Agreement or Exhibit A, as the case may be; and
	 
	 	e.	 	The Deposit Materials are readable and useable in their current form or, if any
portion of the Deposit Materials is encrypted, the decryption tools and decryption keys
have also been deposited.

1.5 Available Verification Services. Upon receipt of a written request from Preferred
Beneficiary, DSI and Preferred Beneficiary may enter into a separate agreement pursuant to which
DSI will agree, upon certain terms and conditions, to inspect the Deposit Materials for the purpose
of verifying its accuracy, completeness, sufficiency and quality. Depositor shall reasonably
cooperate with DSI by providing its facilities, computer software systems, and technical and
support personnel for verification whenever reasonably necessary. If a verification is elected
after the Deposit Materials have been delivered to DSI, then only DSI, or at DSI’s election, an
independent contractor or company selected by DSI, may perform the verification; provided, that any
such independent contractor or company: (i) is approved in advance in writing by Depositor, such
approval not to be

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

34

 

unreasonably withheld or delayed; and (ii) is bound by a reasonable and customary confidentiality
agreement entered into with DSI.

1.6 Removal of Deposit Materials. The Deposit Materials may be removed and/or exchanged
only on written instructions signed by Depositor and Preferred Beneficiary, or as otherwise
provided in this Agreement.

ARTICLE 2  — CONFIDENTIALITY AND RECORD KEEPING

2.1 Confidentiality. DSI shall have the obligation to reasonably protect the
confidentiality of the Deposit Materials. Except as provided in this Agreement, DSI shall not
disclose, transfer, make available or use the Deposit Materials. DSI shall not disclose the terms
of this Agreement to any third party. If DSI receives a subpoena or any other order from a court
or other judicial tribunal pertaining to the disclosure or release of the Deposit Materials, DSI
will immediately notify the Parties to this Agreement unless prohibited by law. It shall be the
responsibility of Depositor and/or Preferred Beneficiary to challenge any such order; provided,
however, that DSI does not waive its rights to present its position with respect to any such order.
DSI will not be required to disobey any order from a court or other judicial tribunal, including,
but not limited to, notices delivered pursuant to Section 7.7 below.

2.2 Status Reports. DSI will issue to Depositor and Preferred Beneficiary a report
profiling the account history semi-annually.

ARTICLE 3  —  RIGHT TO MAKE COPIES

3.1 Right to Make Copies. DSI shall have the right to make copies of the Deposit Materials
as reasonably necessary to perform this Agreement. DSI shall copy all copyright, nondisclosure,
and other proprietary notices and titles contained on the Deposit Materials onto any copies made by
DSI. With all Deposit Materials submitted to DSI, Depositor shall provide any and all instructions
as may be necessary to duplicate the Deposit Materials including, but not limited to, the hardware
and/or software needed. Any copying expenses incurred by DSI as a result of a request to copy will
be borne by the party requesting the copies. Alternatively, DSI may notify Depositor requiring its
reasonable cooperation in promptly copying the Deposit Materials in order for DSI to perform this
Agreement.

ARTICLE 4  — RELEASE OF DEPOSIT

4.1 Release Conditions. As used in this Agreement, “Release Condition” shall mean the
occurrence of any of the Release Conditions identified in the License Agreement.

4.2 Filing For Release. If Preferred Beneficiary believes in good faith that a Release
Condition has occurred, Preferred Beneficiary may provide to DSI written notice of the occurrence
of the Release Condition and a request for the release of the Deposit Materials. Within five (5)
business days of receipt of a written notice, DSI shall provide a copy of the notice to Depositor.
DSI will

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

35

 

promptly notify the Parties unless DSI acknowledges or discovers independently, or through the
Parties, its need for additional documentation or information in order to comply with this Section.
Such need for additional documentation or information may extend the time period for DSI’s
performance under this section.

4.3 Contrary Instructions. From the date DSI mails the notice requesting release of the
Deposit Materials, Depositor shall have ten (10) business days to deliver to DSI contrary
instructions (“Contrary Instructions”). Contrary Instructions shall mean the written representation
by Depositor that a Release Condition has not occurred or has been cured. Upon receipt of Contrary
Instructions, DSI shall send a copy to Preferred Beneficiary by commercial express mail.
Additionally, DSI shall notify both Depositor and Preferred Beneficiary that there is a dispute to
be resolved pursuant to Section 7.4 or 7.5 of this Agreement. Subject to Section 5.2 of this
Agreement, DSI will continue to store the Deposit Materials without release pending: (a) joint
instructions from Depositor and Preferred Beneficiary; (b) dispute resolution pursuant to Section
7.4 or 7.5; or (c) an order from a court of competent jurisdiction.

4.4 Release of Deposit. If DSI does not receive Contrary Instructions from the Depositor,
DSI is authorized to release the Deposit Materials to the Preferred Beneficiary or, if more than
one beneficiary is registered to the deposit, to release a copy of the Deposit Materials to the
Preferred Beneficiary. In addition, DSI shall comply with all dispute resolution orders issued by
an arbitrator or court of competent jurisdiction pursuant to Section 7.4 or 7.5, as applicable,
requiring release of the Deposit Materials. However, DSI is entitled to receive any fees due DSI
before making the release. Any copying expenses will be chargeable to Preferred Beneficiary. This
Agreement will automatically terminate upon the release of the Deposit Materials held by DSI in
accordance with the terms of this Section 4.4.

4.5 Right to Use Following Release. Upon execution of this Agreement by the Parties,
Depositor hereby grants to Preferred Beneficiary a nonexclusive, nontransferable license, during
the term of the License Agreement, to use, copy and modify the Deposit Materials, solely as
specified in Section 4.6 of the License Agreement. Preferred Beneficiary will have no right to use
the Deposit Materials except as specified in the foregoing license grant. Preferred Beneficiary
shall maintain the released Deposit Materials in strict confidence. The license rights granted in
this Section 4.5 will survive termination of this Agreement, but only in the event this Agreement
terminates pursuant to Section 4.4.

ARTICLE 5  —  TERM AND TERMINATION

5.1 Term of Agreement. The initial term of this Agreement is for a period of one year.
Thereafter, this Agreement shall automatically renew from year-to-year unless: (a) Depositor and
Preferred Beneficiary jointly instruct DSI in writing that the Agreement is terminated; (b) DSI
instructs Depositor and Preferred Beneficiary in writing ninety (90) days after its renewal date,
that the Agreement is terminated for nonpayment in accordance with Section 5.2; or (c) DSI provides
Depositor and Preferred Beneficiary with at least sixty (60) days written notice of its intent to
terminate this Agreement, for any reason, other than for nonpayment. If the Deposit Materials are

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

36

 

subject to another escrow agreement with DSI, DSI reserves the right, after the initial one year
term, to adjust the anniversary date of this Agreement to match the then prevailing anniversary
date of such other escrow arrangements.

5.2 Termination for Nonpayment. In the event of the nonpayment of fees owed to DSI, DSI
shall provide written notice of delinquency to all Parties to this Agreement. Any party to this
Agreement shall have the right to make the payment to DSI to cure the default. If the past due
payment is not received in full by DSI within one (1) month of the date of such notice, then DSI
shall have the right to terminate this Agreement at any time thereafter by sending written notice
of termination to all Parties. DSI shall have no obligation to take any action under this
Agreement so long as any payment due to DSI remains unpaid.

5.3 Disposition of Deposit Materials Upon Termination. Subject to the foregoing
termination provisions, and upon termination of this Agreement, DSI shall destroy, return, or
otherwise deliver the Deposit Materials in accordance with Depositor’s instructions. If there are
no instructions, DSI may, at its sole discretion, destroy the Deposit Materials or return them to
Depositor. DSI shall have no obligation to destroy or return the Deposit Materials if the Deposit
Materials are subject to another escrow agreement with DSI or have been released to the Preferred
Beneficiary in accordance with Section 4.4.

5.4 Survival of Terms Following Termination. Upon termination of this Agreement, the
following provisions of this Agreement shall survive:

	 	a.	 	Depositor’s Representations (Section 1.4);
	 
	 	b.	 	The obligations of confidentiality with respect to the Deposit Materials;
	 
	 	c.	 	The obligation to pay DSI any fees and expenses due;
	 
	 	d.	 	The provisions of Articles 5, 7, and 8; and
	 
	 	e.	 	Any provisions in this Agreement that specifically state they survive the
termination of this Agreement.

ARTICLE 6  —  DSI’S FEES

6.1 Fee Schedule. DSI is entitled to be paid its standard fees and expenses applicable to
the services provided. DSI shall notify the party responsible for payment of DSI’s fees at least
sixty (60) days prior to any increase in fees. For any service not listed on DSI’s standard fee
schedule, DSI will provide a quote prior to rendering the service, if requested.

6.2 Payment Terms. DSI shall not be required to perform any service, including release of
any Deposit Materials under Article 4, unless the payment for such service and any outstanding
balances owed to DSI are paid in full. Fees are due within thirty (30) days following receipt of
DSI’s invoice

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

37

 

by the party responsible for payment of DSI’s fees. If invoiced fees are not paid, DSI may
terminate this Agreement in accordance with Section 5.2.

ARTICLE 7  —  LIABILITY AND DISPUTES

7.1 Right to Rely on Instructions. DSI may act in reliance upon any instruction,
instrument, or signature reasonably believed by DSI to be genuine. DSI may assume that any
officer, partner or similarly authorized individual of a party to this Agreement who gives any
written notice, request, or instruction has the authority to do so. DSI will not be required to
inquire into the truth or evaluate the merit of any statement or representation contained in any
notice or document. DSI shall not be responsible for failure to act as a result of causes beyond
the reasonable control of DSI.

7.2 Indemnification. Depositor and Preferred Beneficiary each agree to indemnify, defend
and hold harmless DSI from any and all claims, actions, damages, arbitration fees and expenses,
costs, attorney’s fees and other liabilities incurred by DSI relating in any way to this escrow
arrangement, except where it is adjudged that DSI materially breached this Agreement or acted with
gross negligence or willful misconduct.

7.3 Limitation of Liability. With the exception of Exclusions (defined herein): (i) in no
event will DSI be liable for any incidental, indirect, special, exemplary, punitive or
consequential damages (including loss of data, revenue, and/or profits), costs or expenses
(including legal fees and expenses), whether foreseeable or unforeseeable, that may arise out of or
in connection with this Agreement; and (ii) in no event shall the collective liability of DSI
exceed ten times the fees paid under this Agreement. For purposes of this Agreement “Exclusions”
means claims based on acts of gross negligence, or any personal injury or property damage claims
(excluding the Deposit Materials), or any claims of intellectual property rights infringement.

7.4 Dispute Resolution by Arbitration. Except as expressly specified in Section 7.5 below,
any dispute relating to or arising from this Agreement shall be submitted to, and settled by
arbitration by, a single arbitrator chosen by the San Francisco Regional Office of the American
Arbitration Association in accordance with the Commercial Rules of the American Arbitration
Association. The arbitrator shall apply California law. Unless otherwise agreed by Depositor and
Preferred Beneficiary, arbitration will take place in San Francisco, California, U.S.A. Any court
having jurisdiction over the matter may enter judgment on the award of the arbitrator. Service of
a petition to confirm the arbitration award may be made by First Class mail or by commercial
express mail, to the attorney for the party or, if unrepresented, to the party at the last known
business address. If, however, Depositor and/or Preferred Beneficiary refuses to submit to
arbitration, the matter shall not be submitted to arbitration and DSI may submit the matter to any
court of competent jurisdiction for an interpleader or similar action. Any costs of arbitration
incurred by DSI, including reasonable attorney’s fees and costs, shall be divided equally and paid
by Depositor and Preferred Beneficiary.

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

38

 

7.5 Dispute Resolution by Bankruptcy Court. Notwithstanding the terms of Section 7.4
hereof, any dispute regarding Preferred Beneficiary’s entitlement to the Deposit Materials during
the pendency of a bankruptcy case filed by or against Depositor, shall be resolved before the U.S.
Bankruptcy Court with jurisdiction over such case, rather than by arbitration under Section 7.4
hereof.

7.6 Controlling Law. This Agreement is to be governed and construed in accordance with the
laws of the State of California, without regard to its conflict of law provisions.

7.7 Notice of Requested Order. If any party intends to obtain an order from the arbitrator
or any court of competent jurisdiction that may direct DSI to take, or refrain from taking any
action, that party shall:

	 	a.	 	Give DSI at least five (5) business days’ prior to notice of the hearing;
	 
	 	b.	 	Include in any such order that, as a precondition to DSI’s obligation, DSI be paid
in full for any past due fees and be paid for the reasonable value of the services
to be rendered pursuant to such order; and
	 
	 	c.	 	Ensure that DSI not be required to deliver the original (as opposed to a copy)
of the Deposit Materials if DSI may need to retain the original in its possession to
fulfill any of its other escrow duties.

ARTICLE 8  —  GENERAL PROVISIONS

8.1 Entire Agreement. This Agreement, which includes the exhibits described herein,
embodies the entire understanding among the Parties with respect to its subject matter and
supersedes all previous communications, representations or understandings, either oral or written,
with respect to its subject matter. DSI is not a party to the License Agreement between Depositor
and Preferred Beneficiary and has no knowledge of any of the terms or provisions of any such
License Agreement. DSI’s only obligations to Depositor or Preferred Beneficiary are as set forth
in this Agreement. No amendment or modification of this Agreement shall be valid or binding unless
signed by all the Parties hereto, except that Exhibit A need not be signed by DSI, Exhibit B need
not be signed by Preferred Beneficiary, and Exhibit C need not be signed by any party hereto.

8.2 Notices. All notices, invoices, payments, deposits and other documents and
communications shall be given to the Parties at the addresses specified in the attached Exhibit C.
It shall be the responsibility of the Parties to notify each other as provided in this Section in
the event of a change of address. The Parties shall have the right to rely on the last known
address of the other Parties. Any correctly addressed notice or last known address of the other
Parties that is relied on herein that is refused, unclaimed, or undeliverable because of an act or
omission of the party to be notified as provided herein shall be deemed effective as of the first
date that said notice was refused, unclaimed, or deemed undeliverable by the postal authorities by
mail, through messenger or commercial express delivery services. Unless otherwise provided in this
Agreement, all documents and communications may be delivered by First Class mail.

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

39

 

8.3 Severability. In the event any provision of this Agreement is found to be invalid,
voidable or unenforceable, the Parties agree that unless it materially affects the entire intent
and purpose of this Agreement, such invalidity, voidability or unenforceability shall affect
neither the validity of this Agreement nor the remaining provisions herein, and the provision in
question shall be deemed to be replaced with a valid and enforceable provision most closely
reflecting the intent and purpose of the original provision.

8.4 Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the Parties. However, DSI shall have no obligation in
performing this Agreement to recognize any successor or assign of Depositor or Preferred
Beneficiary unless DSI receives clear, authoritative and conclusive written evidence of the change
of Parties.

8.5 Waiver. Any term of this Agreement may be waived by the party entitled to the benefits
thereof, provided that any such waiver must be in writing and signed by the party against whom the
enforcement of the waiver is sought. No waiver of any condition, or breach of any provision of
this Agreement, in any one or more instances, shall be deemed to be a further or continuing waiver
of such condition or breach. Delay or failure to exercise any right or remedy shall not be deemed
the waiver of that right or remedy.

8.6 Regulations. Depositor and Preferred Beneficiary are responsible for and warrant
compliance with all applicable laws, rules and regulations, including but not limited to customs
laws, import, export, and re-export laws and government regulations of any country from or to which
the Deposit Materials may be delivered in accordance with the provisions of this Agreement.

8.7 Attorney’s Fees. In any litigation or other proceeding by which one party either seeks
to enforce its rights under this Agreement (whether in contract, tort, or both) or seeks
declaration of any rights or obligations under this Agreement, the prevailing party shall be
awarded reasonable attorneys’ fees, together with any costs and expenses, to resolve the dispute
and to enforce final award or judgment.

8.8 No Third Party Rights. This Agreement is made solely for the benefit of the Parties to
this Agreement and their respective permitted successors and assigns, and no other person or entity
shall have or acquire any right by virtue of this Agreement unless otherwise agreed to by all the
Parties hereto.

8.9 Authority to Sign. Each of the Parties herein represents and warrants that the
execution, delivery, and performance of this Agreement has been duly authorized and signed by a
person who meets statutory or other binding approval to sign on behalf of its business organization
as named in this Agreement.

8.10 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.

 

			
	* * *	 	Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the
confidential request. Omissions are designated as * * *. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission.

40

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date
by their duly authorized representatives.

	 	 	 	 	 	 	 
	 	 	 
	Depositor	 	Preferred Beneficiary
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	 	 	DSI Technology Escrow Services, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

 

			
	* * *	 	 Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

41

 

EXHIBIT A

MATERIALS TO BE DEPOSITED

Account Number                     

Depositor represents to Preferred Beneficiary that Deposit Materials delivered to DSI shall consist
of the following:

	 	 	 	 	 	 	 
	 	 	 
	Depositor	 	Preferred Beneficiary
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 

 

			
	* * *	 	 Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

42

 

	 	 	 	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 

 

			
	* * *	 	 Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

43

 

EXHIBIT B

DESCRIPTION OF DEPOSIT MATERIALS

Depositor Company Name                                                             

Account Number                                                                                

Product Name Version

(Product Name will appear as the Exhibit B Name on Account History report)

DEPOSIT MATERIAL DESCRIPTION:

	 	 	 	 	 
	Quantity	 	Media Type & Size	 	Label Description of Each Separate Item
	 
	___

	 	Disk 3.5” or ___	 	 
	 
	 	 	 	 
	___

	 	DAT tape ___mm	 	 
	 
	 	 	 	 
	___

	 	CD-ROM	 	 
	 
	 	 	 	 
	___

	 	Data cartridge tape ___	 	 
	 
	 	 	 	 
	___

	 	TK 70 or ___tape	 	 
	 
	 	 	 	 
	___

	 	Magnetic tape ___	 	 
	 
	 	 	 	 
	 

	 	Documentation	 	 
	 
	 	 	 	 
	 

	 	Other                     	 	 

	 	 	 
	PRODUCT DESCRIPTION:
	 
	 	 
	Environment
	 	 
	 

	 	 

DEPOSIT MATERIAL INFORMATION:

Is the media or are any of the files encrypted? Yes / No If yes, please include any passwords
and the decryption tools.

	 	 	 	 	 	 	 
	Encryption tool name

	 	 	 	Version	 	 
	 

	 	 
	 	 	 	 

	 	 	 	 	 	 	 
	Hardware required
	 	 	 	 	 	 
	 	 	 

	 	 	 	 	 	 	 
	Software required
	 	 	 	 	 	 
	 	 	 

	 	 	 	 	 	 	 
	Other required information
	 	 	 	 	 	 
	 	 	 

	 	 	 	 	 	 	 
	I certify for Depositor that the above described

Deposit Materials have been transmitted to DSI:	 	DSI has accepted the above

materials (any exceptions are noted above):
	 
	Signature

	 	 	 	Signature	 	 
	 

	 	 
	 	 	 	 
	Print Name

	 	 	 	Print Name	 	 
	 

	 	 
	 	 	 	 
	Date

	 	 	 	Date Accepted	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Exhibit B#	 	 
	 

	 	 	 	 	 	 

 

			
	* * *	 	 Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

44

 

EXHIBIT C

DESIGNATED CONTACT

Account Number                                         

Notices, deposit material returns and

communications

should be addressed to:

If to Preferred Beneficiary:

Culture.com Technology Limited

The Penthouse, Culturecom Centre

47 Hung To Road, Kwun Tong,

Kowloon, Hong Kong

Attention: Mr. Frank W.T. Cheung, Chairman and CEO

Telephone No.: (852) 2950-8811

Facsimile No.: (852) 2345-3882

With a copy, which will not constitute notice, given in the manner

prescribed above, to:

Coblentz, Patch, Duffy & Bass LLP

One Ferry Building, Suite 200

San Francisco, California 94111

USA

Attention: Paul J. Tauber

Telephone No.: (415) 391-4800

Facsimile No.: (415) 989-1663

If to Depositor:

Transmeta Corporation

3990 Freedom Circle

Santa Clara, CA 95054

Attention: General Counsel

Telephone No.: (408) 919-3000

Facsimile No.: (408) 919-6564

 

			
	** *	 	 Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

45

 

With a copy, which will not constitute notice, given in the manner

prescribed above, to:

Fenwick & West LLP

Silicon Valley Center

801 California Street

Mountain View, CA 94041

Attention: Mark A. Leahy

Telephone No.: (650) 988-8500

Facsimile No.: (650) 938-5200

Fees for this agreement will be paid by

(check box): Preferred Beneficiary

Requests from Depositor or Preferred Beneficiary to change the designated contact should be given
in writing by the designated contact or an authorized employee of Depositor or Preferred
Beneficiary.

DSI has two Operations Centers to service you. All invoice fee remittances to DSI Agreements,
Deposit Materials and notices to should be addressed to:

DSI should be addressed to (select location):

	 	 	 	 	 
	q Attn: Client Services

9265 Sky Park Court, Suite 202

San Diego, CA 92123

Telephone: (858) 499-1600

Facsimile: (858) 694-1919	 	DSI Technology Escrow Services, Inc.

PO Box 45156

San Francisco, CA 94145-0156
	 
	 	 	 	 
	E-mail: clientservices@dsiescrow.com
	 	 	 	 
	 
	 	 	 	 
	or
	 	 	 	 
	q Attn: Client Services

2100 Norcross Parkway, Suite 150

Norcross, GA 30071

Telephone: 770-239-9200
	 	 	 	 

 

			
	***	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

46

 

	 	 	 	 	 
	Facsimile: 770-239-9201

	 	Date:	 	 
	 

	 	 	 	 

E-mail: clientservices@dsiescrow.com

 

			
	*  * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

47

 

Exhibit E

CMS Marks

	•	 	Transmeta Code Morphing Software

	•	 	Transmeta CMS

 

			
	*  * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately
with the Securities and Exchange.
Commission

48

 

Exhibit F

Escrowed Items

	•	 	Source code of the Crusoe CMS Version and the Efficeon CMS Version

	•	 	Source code for those items of Transmeta Ancillary Technology identified in Exhibits
A-3 or B-3 as “configuration tools.”

	•	 	Simulators and emulators for the Crusoe Product, the Efficeon Product, the Crusoe CMS
Version and the Efficeon CMS Version

	•	 	CMS compilation toolchain necessary to build the Crusoe CMS Version and the Efficeon CMS
Version

	•	 	x86 tests that are Transmeta property (excludes TLC, third party suites, and other
infrastructure)

	•	 	Debugger for the Crusoe CMS Version and the Efficeon CMS Version

	•	 	Performance analysis tuning tools

 

			
	*  * *	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as *
* *. A complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.

49exv10w1

 

Exhibit 10.1

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

 

 

Table of Contents

	 	 	 	 	 	 	 
	Article	 	 	 	Page
	I

	 	Classes of Business Reinsured
	 	 	1	 
	II

	 	Term
	 	 	1	 
	III

	 	Territory (BRMA 51A)
	 	 	1	 
	IV

	 	Exclusions
	 	 	2	 
	V

	 	Retention and Limit
	 	 	4	 
	VI

	 	Reinstatement
	 	 	4	 
	VII

	 	Definitions
	 	 	5	 
	VIII

	 	Other Reinsurance
	 	 	6	 
	IX

	 	Florida Hurricane Catastrophe Fund
	 	 	7	 
	X

	 	Loss Occurrence
	 	 	7	 
	XI

	 	Loss Notices and Settlements
	 	 	8	 
	XII

	 	Salvage and Subrogation
	 	 	9	 
	XIII

	 	Reinsurance Premium
	 	 	9	 
	XIV

	 	Late Payments
	 	 	10	 
	XV

	 	Offset (BRMA 36D)
	 	 	11	 
	XVI

	 	Access to Records (BRMA 1D)
	 	 	11	 
	XVII

	 	Liability of the Reinsurer
	 	 	11	 
	XVIII

	 	Net Retained Lines (BRMA 32E)
	 	 	11	 
	XIX

	 	Errors and Omissions (BRMA 14F)
	 	 	12	 
	XX

	 	Currency (BRMA 12A)
	 	 	12	 
	XXI

	 	Taxes (BRMA 50C)
	 	 	12	 
	XXII

	 	Federal Excise Tax (BRMA 17A)
	 	 	12	 
	XXIII

	 	Reserve Requirements
	 	 	13	 
	XXIV

	 	Insolvency
	 	 	14	 
	XXV

	 	Arbitration
	 	 	15	 
	XXVI

	 	Service of Suit
	 	 	16	 
	XXVII

	 	Agency Agreement
	 	 	16	 
	XXVIII

	 	Governing Law
	 	 	17	 
	XXIX

	 	Confidentiality
	 	 	17	 
	XXX

	 	Severability
	 	 	17	 
	XXXI

	 	Intermediary (BRMA 23A)
	 	 	17	 
	 

	 	Schedule A	 	 	 	 

 

 

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

(hereinafter referred to collectively as the “Company”)

by

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the “Reinsurer”)

Article I — Classes of Business Reinsured

By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies, contracts and binders of insurance or reinsurance (hereinafter called
“policies”) in force at the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Property business, subject to the terms, conditions and limitations
set forth herein and in Schedule A attached to and forming part of this Contract.

Article II — Term

	A.	 	This Contract shall become effective on June 1, 2004, with respect to losses arising out of
loss occurrences commencing on or after that date, and shall remain in force until May 31,
2005, both days inclusive.

	B.	 	If this Contract expires while a loss occurrence covered hereunder is in progress, the
Reinsurer’s liability hereunder shall, subject to the other terms and conditions of this
Contract, be determined as if the entire loss occurrence had occurred prior to the expiration
of this Contract, provided that no part of such loss occurrence is claimed against any renewal
or replacement of this Contract.

Article III — Territory (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the Company’s
policies.

Page 1

 

 

Article IV — Exclusions

This Contract does not apply to and specifically excludes the following:

	 	1.	 	Assumed reinsurance except for a 50.0% quota share of the First American Property
and Casualty Insurance Company Florida Homeowners Program produced and underwritten by
Mobile Homeowners Insurance Agencies, Inc.
	 
	 	2.	 	Financial guarantee and insolvency.
	 
	 	3.	 	Nuclear risks as defined in the “Nuclear Incident Exclusion Clause — Physical
Damage — Reinsurance (U.S.A.)” and the “Nuclear Incident Exclusion Clause — Physical
Damage — Reinsurance (Canada)” attached to and forming part of this Contract.
	 
	 	4.	 	Loss or damage caused by or resulting from war, invasion, hostilities, acts of
foreign enemies, civil war, rebellion, insurrection, military or usurped power, or
martial law or confiscation by order of any government or public authority, but this
exclusion shall not apply to loss or damage covered under a standard policy with a
standard War Exclusion Clause.
	 
	 	5.	 	Loss or liability excluded under the provisions of the “Pools, Associations and
Syndicates Exclusion Clause” attached to and forming part of this Contract.
	 
	 	6.	 	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, however 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.
	 
	 	7.	 	Losses in respect of overhead transmission and distribution lines and their
supporting structures other than those on or within 300 meters (or 1,000 feet) of the
insured premises. It is understood and agreed that public utilities extension and/or
suppliers extension and/or contingent business interruption coverages are not subject to
this exclusion, provided that these are not part of a transmitters’ or distributors’
policy.
	 
	 	8.	 	Accident and Health, Casualty, Fidelity and/or Surety business.
	 
	 	9.	 	Pollution and seepage coverages excluded under the provisions of the “Pollution and
Seepage Exclusion Clause (BRMA 39A)” attached to and forming part of this Contract.
	 
	 	10.	 	Notwithstanding any other provision to the contrary within this Contract or any
amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense
directly or indirectly caused by, contributed to by, resulting from, or arising

Page 2

 

	 	 	 	out of or in connection with any act of terrorism, as defined herein, regardless of any
other cause or event contributing concurrently or in any other sequence to the loss.
	 
	 	 	 	An “act of terrorism” includes any act, or preparation in respect of action, or threat of
action, designed to influence the government de jure or de facto of any nation or any
political division thereof, or in pursuit of political, religious, ideological, or
similar purposes to intimidate the public or a section of the public of any nation by any
person or group(s) of persons, whether acting alone or on behalf of or in connection with
any organization(s) or government(s) de jure or de facto, and which:

	 	a.	 	Involves violence against one or more persons; or
	 
	 	b.	 	Involves damage to property; or
	 
	 	c.	 	Endangers life other than that of the person committing the action; or
	 
	 	d.	 	Creates a risk to health or safety of the public or a section of the public; or
	 
	 	e.	 	Is designed to interfere with or to disrupt an electronic system.

	 	 	 	This Contract also excludes loss, damage, cost or expense directly or indirectly caused
by, contributed to by, resulting from, or arising out of or in connection with any action
in controlling, preventing, suppressing, retaliating against or responding to any act of
terrorism.
	 
	 	 	 	Notwithstanding the above and subject otherwise to the terms, conditions, and limitations
of this Contract, in respect only of personal lines this Contract will pay actual loss or
damage (but not related cost or expense) caused by any act of terrorism provided such act
is not directly or indirectly caused by, contributed to by, resulting from, or arising
out of or in connection with biological, chemical, or nuclear pollution or contamination.
	 
	 	11.	 	Loss or liability in any way or to any extent arising out of the actual or alleged
presence or actual, alleged or threatened presence of fungi including, but not limited to,
mold, mildew, mycotoxins, microbial volatile organic compounds or other “microbial
contaminations.” This includes:

	 	a.	 	Any supervision, instruction, recommendations, warnings or advice given
or which should have been given in connection with the above; and
	 
	 	b.	 	Any obligation to share damages with or repay someone else who must pay
damages because of such injury or damage.

For purposes of this exclusion, “microbial contamination” means any contamination, either
airborne or surface, which arises out of or is related to the presence of fungi, mold,
mildew, mycotoxins, microbial volatile organic compounds or spores, including, without
limitation, Penicillium, Aspergillus, Fusarium, Aspergillus Flavus and Stachybotrys
chartarum.

Page 3

 

Losses resulting from the above causes do not in and of themselves constitute an event
unless arising out of one or more of the following perils, in which case this exclusion
does not apply:

Fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm,
hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or
weight of snow.

	 	 	 	Notice of any claims for mold-related losses must be given by the Company to the
Reinsurer, in writing, within 24 months after the commencement date of the loss
occurrence to which such claims relate.
	 
	 	12.	 	Loss or liability excluded under the provisions of the “Electronic Data Endorsement
B” (N.M.A. 2915) attached to and forming part of this Contract.

Article V — Retention and Limit

	A.	 	As respects each excess layer of reinsurance coverage provided by this Contract, the
Company shall retain and be liable for the first amount of ultimate net loss, shown as
“Company’s Retention” for that excess layer in Schedule A attached hereto, arising out of each
loss occurrence. The Reinsurer shall then be liable, as respects each excess layer, for the
amount by which such ultimate net loss exceeds the Company’s applicable retention, but the
liability of the Reinsurer under each excess layer shall not exceed the amount, shown as
“Reinsurer’s Per Occurrence Limit” for that excess layer in Schedule A attached hereto, as
respects any one loss occurrence.
	 
	B.	 	No claim shall be made under any excess layer of reinsurance coverage provided by this
Contract as respects any one loss occurrence unless at least two risks insured or reinsured by
the Company are involved in such loss occurrence. For purposes of this Contract, the Company
shall be the sole judge of what constitutes one risk.
	 
	C.	 	Notwithstanding the provisions above, the ultimate net loss (including loss in excess of
policy limits, extra contractual obligations, and loss adjustment expense) as respects any one
loss occurrence with regard to the 50.0% quota share of the First American Property and
Casualty Insurance Company Florida Homeowners Program produced and underwritten by Mobile
Homeowners Insurance Agencies, Inc. shall not exceed the Company’s pro rata share of the
250-year Probable Maximum Loss as modeled in RMS as of the date on which the loss occurrence
commences.

Article VI — Reinstatement

	A.	 	In the event all or any portion of the reinsurance under any excess layer of reinsurance
coverage provided by this Contract is exhausted by loss, the amount so exhausted shall be
reinstated immediately from the time the loss occurrence commences hereon. For each amount so
reinstated the Company agrees to pay additional premium equal to the product of the following:

	 	1.	 	The percentage of the occurrence limit for the excess layer reinstated (based on
the loss paid by the Reinsurer under that excess layer); times

Page 4

 

	 	2.	 	The final adjusted reinsurance premium, as calculated in accordance with Article
XIII, for the excess layer reinstated for the term of this Contract (exclusive of
reinstatement premium).

	B.	 	Whenever the Company requests payment by the Reinsurer of any loss under any excess layer
hereunder, the Company shall submit a statement to the Reinsurer of reinstatement premium due
the Reinsurer for that excess layer. If the final adjusted reinsurance premium for any excess
layer for the term of this Contract has not been determined as of the date of any such
statement, the calculation of reinstatement premium due for that excess layer shall be based
on the annual deposit premium for that excess layer and shall be readjusted when the final
adjusted reinsurance premium for that excess layer for the term of this Contract has been
determined. Any reinstatement premium shown to be due the Reinsurer for any excess layer as
reflected by any such statement (less prior payments, if any, for that excess layer) shall be
payable by the Company concurrently with payment by the Reinsurer of the requested loss for
that excess layer. Any return reinstatement premium shown to be due the Company shall be
remitted by the Reinsurer as promptly as possible after receipt and verification of the
Company’s statement.

	C.	 	Notwithstanding anything stated herein, the liability of the Reinsurer under any excess layer
of reinsurance coverage provided by this Contract shall not exceed either of the following:

	 	1.	 	The amount, shown as “Reinsurer’s Per Occurrence Limit” for that excess layer in
Schedule A attached hereto, as respects loss or losses arising out of any one loss
occurrence; or
	 
	 	2.	 	The amount, shown as “Reinsurer’s Term Limit” for that excess layer in Schedule A
attached hereto, in all during the term of this Contract.

Article VII — Definitions

	A.	 	“Ultimate net loss” as used herein is defined as the sum or sums (including loss in excess
of policy limits, extra contractual obligations and loss adjustment expense, as hereinafter
defined) paid or payable by the Company in settlement of claims and in satisfaction of
judgments rendered on account of such claims, after deduction of all salvage, all recoveries
and all claims on inuring insurance or reinsurance, whether collectible or not. Nothing
herein shall be construed to mean that losses under this Contract are not recoverable until
the Company’s ultimate net loss has been ascertained.

	B.	 	“Loss in excess of policy limits” and “extra contractual obligations” as used herein shall be
defined as follows:

	 	1.	 	“Loss in excess of policy limits” shall mean 90.0% of any amount paid or payable by
the Company in excess of its policy limits, but otherwise within the terms of its policy,
such loss in excess of the Company’s policy limits having been incurred because of, but
not limited to, failure by the Company to settle within the policy limits or by reason of
the Company’s alleged or actual negligence, fraud or bad faith in rejecting an offer of
settlement or in the preparation of the defense or in the trial of any action against its
insured or reinsured or in the preparation or prosecution of an appeal consequent upon
such an action.

Page 5

 

	 	2.	 	“Extra contractual obligations” shall mean 90.0% of any punitive, exemplary,
compensatory or consequential damages paid or payable by the Company, not covered by any
other provision of this Contract and which arise from the handling of any claim on
business subject to this Contract, such liabilities arising because of, but not limited
to, failure by the Company to settle within the policy limits or by reason of the
Company’s alleged or actual negligence, fraud or bad faith in rejecting an offer of
settlement or in the preparation of the defense or in the trial of any action against its
insured or reinsured or in the preparation or prosecution of an appeal consequent upon
such an action. An extra contractual obligation shall be deemed, in all circumstances,
to have occurred on the same date as the loss covered or alleged to be covered under the
policy.

	 	 	Notwithstanding anything stated herein, the amount included in the ultimate net loss for any
one loss occurrence as respects loss in excess of policy limits and extra contractual
obligations shall not exceed 25.0% of the Company’s indemnity loss hereunder arising out of
that loss occurrence.
	 
	 	 	Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of
policy limits or any extra contractual obligation incurred by the Company as a result of any
fraudulent and/or criminal act by any officer or director of the Company acting individually or
collectively or in collusion with any individual or corporation or any other organization or
party involved in the presentation, defense or settlement of any claim covered hereunder.
	 
	 	 	If any provision of this paragraph B shall be rendered illegal or unenforceable by the laws,
regulations or public policy of any state, such provision shall be considered void in such
state, but this shall not affect the validity or enforceability of any other provision of this
Contract or the enforceability of such provision in any other jurisdiction.
	 
	C.	 	“Loss adjustment expense” as used herein shall mean expenses assignable to the investigation,
appraisal, adjustment, settlement, litigation, defense and/or appeal of specific claims,
regardless of how such expenses are classified for statutory reporting purposes. Loss
adjustment expense shall include, but not be limited to, declaratory judgments, interest on
judgments, expenses of outside adjusters, and a pro rata share of the salaries and expenses of
the Company’s field employees according to the time occupied adjusting such losses and
expenses of the Company’s officials incurred in connection with the losses, but shall not
include office expenses or salaries of the Company’s regular employees.

Article VIII — Other Reinsurance

	A.	 	The Company shall be permitted to carry excess reinsurance, recoveries under which shall
inure to the benefit of this Contract.

	B.	 	The Company shall be permitted to carry quota share reinsurance and underlying excess
catastrophe reinsurance, recoveries under which shall inure solely to the benefit of the
Company.

Page 6

 

Article IX — Florida Hurricane Catastrophe Fund

	A.	 	Any loss reimbursement paid or payable to the Company under the Florida Hurricane
Catastrophe Fund (“FHCF”) as a result of loss occurrences commencing during the term of this
Contract shall inure to the benefit of this Contract. Further, any FHCF loss reimbursement
shall be deemed to be paid to the Company in accordance with the reimbursement contract
between the Company and the State Board of Administration of the State of Florida at the full
payout level set forth therein and will be deemed not to be reduced by any reduction or
exhaustion of the FHCF’s claims paying capacity.

	B.	 	Prior to the determination of the Company’s FHCF retention and payout, if any, under the
reimbursement contract, the Reinsurer’s liability hereunder will be determined provisionally
based on the projected payout, determined in accordance with the provisions of the
reimbursement contract. Following determination of the payout under the reimbursement
contract, the ultimate net loss under this Contract will be recalculated. If, as a result of
such calculation, the loss to the Reinsurer under any excess layer of this Contract in any one
loss occurrence is less than the amount previously paid by the Reinsurer under that excess
layer, the Company shall promptly remit the difference to the Reinsurer. If the loss to the
Reinsurer under any excess layer in any one loss occurrence is greater than the amount
previously paid by the Reinsurer, the Reinsurer shall promptly remit the difference to the
Company.

	C.	 	If an FHCF reimbursement amount is based on the Company’s losses in more than one loss
occurrence and the FHCF does not designate the amount allocable to each loss occurrence, the
FHCF reimbursement amount shall be prorated in the proportion that the Company’s losses in
each loss occurrence bear to the Company’s total losses arising out of all loss occurrences to
which the FHCF reimbursement applies.

	D.	 	Any reimbursement premiums or emergency assessment paid by the Company under the FHCF shall
be deemed to be premiums paid for inuring reinsurance.

Article X — Loss Occurrence

	A.	 	The term “loss occurrence” shall mean the sum of all individual losses directly occasioned
by any one disaster, accident or loss or series of disasters, accidents or losses arising out
of one event which occurs within the area of one state of the United States or province of
Canada and states or provinces contiguous thereto and to one another. However, the duration
and extent of any one “loss occurrence” shall be limited to all individual losses sustained by
the Company occurring during any period of 168 consecutive hours arising out of and directly
occasioned by the same event, except that the term “loss occurrence” shall be further defined
as follows:

	 	1.	 	As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse
and water damage, all individual losses sustained by the Company occurring during any
period of 72 consecutive hours arising out of and directly occasioned by the same event.
However, the event need not be limited to one state or province or states or provinces
contiguous thereto.
	 
	 	2.	 	As regards riot, riot attending a strike, civil commotion, vandalism and malicious
mischief, all individual losses sustained by the Company occurring during any period

Page 7

 

	 	 	 	of 72 consecutive hours within the area of one municipality or county and the
municipalities or counties contiguous thereto arising out of and directly occasioned by
the same event. The maximum duration of 72 consecutive hours may be extended in respect
of individual losses which occur beyond such 72 consecutive hours during the continued
occupation of an insured’s premises by strikers, provided such occupation commenced
during the aforesaid period.
	 
	 	3.	 	As regards earthquake (the epicentre of which need not necessarily be within the
territorial confines referred to in the introductory portion of this paragraph) and fire
following directly occasioned by the earthquake, only those individual fire losses which
commence during the period of 168 consecutive hours may be included in the Company’s
“loss occurrence.”
	 
	 	4.	 	As regards “freeze,” only individual losses directly occasioned by collapse,
breakage of glass and water damage (caused by bursting frozen pipes and tanks) may be
included in the Company’s “loss occurrence.”
	 
	 	5.	 	As regards firestorms, brush fires, and other fires or series of fires,
irrespective of origin (except as provided in subparagraphs 2 and 3 above), which spread
through trees, grassland or other vegetation, all individual losses sustained by the
Company which occur during any period of 168 consecutive hours within a 100-mile radius
of any one fixed point selected by the Company may be included in the Company’s “loss
occurrence.” However, an individual loss subject to this subparagraph cannot be included
in more than one “loss occurrence.”

	B.	 	For all those “loss occurrences,” other than those referred to in subparagraph 2 of paragraph
A above, the Company may choose the date and time when any such period of consecutive hours
commences, provided that it is not earlier than the date and time of the occurrence of the
first recorded individual loss sustained by the Company arising out of that disaster, accident
or loss, and provided that only one such period of 168 consecutive hours shall apply with
respect to one event, except for any “loss occurrence” referred to in subparagraph 1 of
paragraph A above where only one such period of 72 consecutive hours shall apply with respect
to one event, regardless of the duration of the event.

	C.	 	As respects those “loss occurrences” referred to in subparagraph 2 of paragraph A above, if
the disaster, accident or loss occasioned by the event is of greater duration than 72
consecutive hours, then the Company may divide that disaster, accident or loss into two or
more “loss occurrences,” provided no two periods overlap and no individual loss is included in
more than one such period and provided that no period commences earlier than the date and time
of the occurrence of the first recorded individual loss sustained by the Company arising out
of that disaster, accident or loss.

	D.	 	No individual losses occasioned by an event that would be covered by 72 hours clauses may be
included in any “loss occurrence” claimed under the 168 hours provision.

Article XI — Loss Notices and Settlements

	A.	 	Whenever losses sustained by the Company appear likely to result in a claim hereunder, the
Company shall notify the Reinsurer, and the Reinsurer shall have the right to participate in
the adjustment of such losses at its own expense.

Page 8

 

	B.	 	All loss settlements made by the Company, provided they are within the terms of this
Contract, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all amounts for
which it may be liable upon receipt of reasonable evidence of the amount paid (or scheduled to
be paid) by the Company.

Article XII — Salvage and Subrogation

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

Article XIII — Reinsurance Premium

	A.	 	As premium for each excess layer of reinsurance coverage provided by this Contract, the
Company shall pay the Reinsurer the greater of the following:

	 	1.	 	The amount, shown as “Minimum Premium” for that excess layer in Schedule A attached
hereto; or
	 
	 	2.	 	The percentage, shown as “Premium Rate” for that excess layer in Schedule A
attached hereto, of the Company’s gross earned premium for Property business during the
term of this Contract.

	B.	 	The Company shall pay the Reinsurer a deposit premium for each excess layer of the amount,
shown as “Deposit Premium” for that excess layer in Schedule A attached hereto, in four equal
installments of the amount, shown as “Quarterly Deposit Premium” for that excess layer in
Schedule A attached hereto, on June 1, September 1 and December 1 of 2004 and March 1, 2005.

	C.	 	Within 45 days after the expiration of this Contract, the Company shall provide a report to
the Reinsurer setting forth the premium due hereunder for each excess layer, computed in
accordance with paragraph A, and any additional premium due the Reinsurer or return premium
due the Company for each such excess layer shall be remitted promptly.

	D.	 	“Gross earned premium” as used herein is defined as earned premium of the Company for the
classes of business reinsured hereunder, before the deduction of any premiums ceded by the
Company for reinsurance which inures to the benefit of this Contract. Gross earned premium
will not include the Company’s earned premium for Homeowners, Manufactured Homeowners and
Condominium policies that include a “No Wind/No Water” exclusion. It is understood that gross
earned premium shall include catastrophe fees, but shall exclude MGA fees, DRST fees and
policy surcharges to recoup residual market deficit assessments.

Page 9

 

Article XIV — Late Payments

	A.	 	The provisions of this Article shall not be implemented unless specifically invoked, in
writing, by one of the parties to this Contract.

	B.	 	In the event any premium, loss or other payment due either party is not received by the
intermediary named in Article XXXI (hereinafter referred to as the “Intermediary”) by the
payment due date, the party to whom payment is due, may, by notifying the Intermediary in
writing, require the debtor party to pay, and the debtor party agrees to pay, an interest
penalty on the amount past due calculated for each such payment on the last business day of
each month as follows:

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

	 	 	It is agreed that interest shall accumulate until payment of the original amount due plus
interest penalties have been received by the Intermediary.
	 
	C.	 	The establishment of the due date shall, for purposes of this Article, be determined as
follows:

	 	1.	 	As respects the payment of routine deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract. In the event a
due date is not specifically stated for a given payment, it shall be deemed due 30 days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.
	 
	 	2.	 	Any claim or loss payment due the Company hereunder shall be deemed due 10 business
days after the proof of loss or demand for payment is transmitted to the Reinsurer. If
such loss or claim payment is not received within the 10 days, interest will accrue on
the payment or amount overdue in accordance with paragraph B above, from the date the
proof of loss or demand for payment was transmitted to the Reinsurer.
	 
	 	3.	 	As respects any payment, adjustment or return due either party not otherwise
provided for in subparagraphs 1 and 2 of paragraph C above, the due date shall be as
provided for in the applicable section of this Contract. In the event a due date is not
specifically stated for a given payment, it shall be deemed due 10 business days
following transmittal of written notification that the provisions of this Article have
been invoked.

	 	 	For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.

Page 10

 

	D.	 	Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from
initiating any arbitration or other proceeding in accordance with the provisions of this
Contract. If the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount determined to
be due hereunder shall be calculated in accordance with the provisions set forth above unless
otherwise determined by such proceedings. If a debtor party advances payment of any amount it
is contesting, and proves to be correct in its contestation, either in whole or in part, the
other party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.
	 
	E.	 	Interest penalties arising out of the application of this Article that are $100 or less from
any party shall be waived unless there is a pattern of late payments consisting of three or
more items over the course of any 12-month period.

Article XV — Offset (BRMA 36D)

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

Article XVI — Access to Records (BRMA 1D)

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

Article XVII — Liability of the Reinsurer

	A.	 	The liability of the Reinsurer shall follow that of the Company in every case and be
subject in all respects to all the general and specific stipulations, clauses, waivers and
modifications of the Company’s policies and any endorsements thereon. However, in no event
shall this be construed in any way to provide coverage outside the terms and conditions set
forth in this Contract.

	B.	 	Nothing herein shall in any manner create any obligations or establish any rights against the
Reinsurer in favor of any third party or any persons not parties to this Contract.

Article XVIII — Net Retained Lines (BRMA 32E)

	A.	 	This Contract applies only to that portion of any policy which the Company retains net for
its own account (prior to deduction of any underlying reinsurance specifically permitted in
this Contract), and in calculating the amount of any loss hereunder and also in computing the

Page 11

 

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

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

Article XIX — Errors and Omissions (BRMA 14F)

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

Article XX — Currency (BRMA 12A)

	A.	 	Whenever the word “Dollars” or the “$” sign appears in this Contract, they shall be
construed to mean United States Dollars and all transactions under this Contract shall be in
United States Dollars.

	B.	 	Amounts paid or received by the Company in any other currency shall be converted to United
States Dollars at the rate of exchange at the date such transaction is entered on the books of
the Company.

Article XXI — Taxes (BRMA 50C)

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

Article XXII — Federal Excise Tax (BRMA 17A)

(Applicable to those reinsurers, excepting Underwriters at Lloyd’s London and other reinsurers
exempt from Federal Excise Tax, who are domiciled outside the United States of America.)

	A.	 	The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the
applicable percentage of the premium payable hereon as imposed under Section 4371 of the
Internal Revenue Code to the extent such premium is subject to the Federal Excise Tax.

	B.	 	In the event of any return of premium becoming due hereunder the Reinsurer will deduct the
applicable percentage from the return premium payable hereon and the Company or its agent
should take steps to recover the tax from the United States Government.

Page 12

 

Article XXIII — Reserve Requirements

	A.	 	If the Reinsurer is unauthorized in any state of the United States of America or the
District of Columbia, the Reinsurer agrees to fund, on or before December 31, 2004, its share
of the Company’s ceded United States unearned premium and outstanding loss and loss adjustment
expense reserves (including all case reserves plus any reasonable amount estimated to be
unreported, as determined by the Company, from known loss occurrences) by:

	 	1.	 	Clean, irrevocable and unconditional letters of credit issued and confirmed, if
confirmation is required by the insurance regulatory authorities involved, by a bank or
banks meeting the NAIC Securities Valuation Office credit standards for issuers of
letters of credit and acceptable to said insurance regulatory authorities; and/or
	 
	 	2.	 	Escrow accounts for the benefit of the Company; and/or
	 
	 	3.	 	Cash advances;

	 	 	if, without such funding, a penalty would accrue to the Company on any financial statement it
is required to file with the insurance regulatory authorities involved. The Reinsurer, at its
sole option, may fund in other than cash if its method and form of funding are acceptable to
the insurance regulatory authorities involved.
	 
	B.	 	If the Reinsurer is unauthorized in any province or jurisdiction of Canada, the Reinsurer
agrees to fund, on or before December 31, 2004, 115% of its share of the Company’s ceded
Canadian unearned premium and outstanding loss and loss adjustment expense reserves (including
all case reserves plus any reasonable amount estimated to be unreported, as determined by the
Company, from known loss occurrences) by:

	 	1.	 	A clean, irrevocable and unconditional letter of credit issued and confirmed, if
confirmation is required by the insurance regulatory authorities involved, by a Canadian
bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers
of letters of credit and acceptable to said insurance regulatory authorities, for no more
than 15/115ths of the total funding required; and/or
	 
	 	2.	 	Cash advances for the remaining balance of the funding required;

	 	 	if, without such funding, a penalty would accrue to the Company on any financial statement it
is required to file with the insurance regulatory authorities involved.
	 
	C.	 	With regard to funding in whole or in part by letters of credit, it is agreed that each
letter of credit will be in a form acceptable to insurance regulatory authorities involved,
will be issued for a term of at least one year and will include an “evergreen clause,” which
automatically extends the term for at least one additional year at each expiration date unless
written notice of non-renewal is given to the Company not less than 30 days prior to said
expiration date or longer where required by insurance regulatory authorities. The Company and
the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that
said letters of credit may be drawn upon by the Company or its successors in interest at any

Page 13

 

	 	 	time, without diminution because of the insolvency of the Company or the Reinsurer, but only
for one or more of the following purposes:

	 	1.	 	To reimburse itself for the Reinsurer’s share of unearned premiums returned to
insureds on account of policy cancellations, unless paid in cash by the Reinsurer;
	 
	 	2.	 	To reimburse itself for the Reinsurer’s share of losses and/or loss adjustment
expense paid under the terms of policies reinsured hereunder, unless paid in cash by the
Reinsurer;
	 
	 	3.	 	To reimburse itself for the Reinsurer’s share of any other amounts claimed to be
due hereunder, unless paid in cash by the Reinsurer;
	 
	 	4.	 	To fund a cash account in an amount equal to the Reinsurer’s share of any ceded
unearned premium and/or outstanding loss and loss adjustment expense reserves (including
all case reserves plus any reasonable amount estimated to be unreported, as determined by
the Company, from known loss occurrences) funded by means of a letter of credit which is
under non-renewal notice, if said letter of credit has not been renewed or replaced by
the Reinsurer 10 days prior to its expiration date;
	 
	 	5.	 	To refund to the Reinsurer any sum in excess of the actual amount required to fund
the Reinsurer’s share of the Company’s ceded unearned premium and/or outstanding loss and
loss adjustment expense reserves (including all case reserves plus any reasonable amount
estimated to be unreported, as determined by the Company, from known loss occurrences),
if so requested by the Reinsurer.

	a.	 	In the event the amount drawn by the Company on any letter of credit is in excess of the actual
amount required for C(1) or C(2) or C(4), in the case of C(3), the actual amount determined to
be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Article XXIV — Insolvency

	A.	 	In the event of the insolvency of one or more of the reinsured companies, this reinsurance
shall be payable directly to the company or to its liquidator, receiver, conservator or
statutory successor on the basis of the liability of the company without diminution because of
the insolvency of the company or because the liquidator, receiver, conservator or statutory
successor of the company has failed to pay all or a portion of any claim. It is agreed,
however, that the liquidator, receiver, conservator or statutory successor of the company
shall give written notice to the Reinsurer of the pendency of a claim against the company
indicating the policy or bond reinsured which claim would involve a possible liability on the
part of the Reinsurer within a reasonable time after such claim is filed in the conservation
or liquidation proceeding or in the receivership, and that during the pendency of such claim,
the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses that it may deem available to
the company or its liquidator, receiver, conservator or statutory successor. The expense thus
incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against
the company as part of the expense of conservation or liquidation to the extent of a pro rata
share of the benefit which may accrue to the company solely as a result of the defense
undertaken by the Reinsurer.

Page 14

 

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

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

Article XXV — Arbitration

	A.	 	As a condition precedent to any right of action hereunder, any dispute or difference
between the Company and any Reinsurer relating to the interpretation or performance of this
Contract, including its formation or validity, or any transaction under this Contract, whether
arising before or after termination, shall be submitted to arbitration.

	B.	 	If more than one reinsurer is involved in the same dispute, all such reinsurers shall
constitute and act as one party for purposes of this Article provided that communication shall
be made by the Company to each of the reinsurers constituting the one party, and provided,
however, that nothing therein shall impair the rights of such reinsurers to assert several,
rather than joint, defenses or claims, nor be construed as changing the liability of the
Reinsurer under the terms of this Contract from several to joint.

	C.	 	Upon written request of any party, each party shall choose an arbitrator and the two chosen
shall select a third arbitrator. If either party refuses or neglects to appoint an arbitrator
within 30 days after receipt of the written request for arbitration, the requesting party may
appoint a second arbitrator. If the two arbitrators fail to agree on the selection of a third
arbitrator within 30 days of their appointment, the Company shall petition the American
Arbitration Association to appoint the third arbitrator. If the American Arbitration
Association fails to appoint the third arbitrator within 30 days after it has been requested
to do so, either party may request a justice of a court of general jurisdiction of the state
in which the arbitration is to be held to appoint the third arbitrator. All arbitrators shall
be active or retired officers of insurance or reinsurance companies, or Lloyd’s London
Underwriters, and disinterested in the outcome of the arbitration. Each party shall submit
its case to the arbitrators within 30 days of the appointment of the third arbitrator.

	D.	 	The parties hereby waive all objections to the method of selection of the arbitrators, it
being the intention of both sides that all the arbitrators be chosen from those submitted by
the parties.

	E.	 	The arbitrators shall have the power to determine all procedural rules for the holding of the
arbitration including but not limited to inspection of documents, examination of witnesses and
any other matter relating to the conduct of the arbitration. The arbitrators shall interpret
this Contract as an honorable engagement and not as merely a legal obligation; they are

Page 15

 

	 	 	relieved of all judicial formalities and may abstain from following the strict rules of law.
The arbitrators may award interest and costs. Each party shall bear the expense of its own
arbitrator and shall share equally with the other party the expenses of the third arbitrator
and of the arbitration.

	F.	 	The decision in writing of the majority of the arbitrators shall be final and binding upon
both parties. Judgment may be entered upon the final decision of the arbitrators in any court
having jurisdiction. The arbitration shall take place in Bala Cynwyd, Pennsylvania, unless
otherwise mutually agreed between the Company and the Reinsurer.

	G.	 	This Article shall remain in full force and effect in the event any other provision of this
Contract shall be found invalid or non-binding.

	H.	 	All time limitations stated in this Article may be amended by mutual consent of the parties,
and will be amended automatically to the extent made necessary by any circumstances beyond the
control of the parties.

Article XXVI — Service of Suit

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not
authorized in any State, Territory or District of the United States where authorization is required
by insurance regulatory authorities. This Article is not intended to conflict with or override the
parties obligations to arbitrate their disputes in accordance with Article XXV.)

	A.	 	It is agreed that in the event the Reinsurer fails to pay any amount claimed to be due
hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a
court of competent jurisdiction within the United States. Nothing in this Article constitutes
or should be understood to constitute a waiver of the Reinsurer’s rights to commence an action
in any court of competent jurisdiction in the United States, to remove an action to a United
States District Court, or to seek a transfer of a case to another court as permitted by the
laws of the United States or of any state in the United States.

	B.	 	Further, pursuant to any statute of any state, territory or district of the United States
which makes provision therefor, the Reinsurer hereby designates the party named in its
Interests and Liabilities Agreement, or if no party is named therein, the Superintendent,
Commissioner or Director of Insurance or other officer specified for that purpose in the
statute, or his successor or successors in office, as its true and lawful attorney upon whom
may be served any lawful process in any action, suit or proceeding instituted by or on behalf
of the Company or any beneficiary hereunder arising out of this Contract.

Article XXVII — Agency Agreement

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

Page 16

 

Article XXVIII — Governing Law

This Contract shall be governed as to performance, administration and interpretation by the
laws of the State of Pennsylvania exclusive of the rules with respect to conflicts of law, except
as to rules with respect to credit for reinsurance in which case the applicable rules of all the
states shall apply.

Article XXIX — Confidentiality

The Reinsurer, except with the express prior written consent of the Company, shall not
directly or indirectly communicate, disclose or divulge to any third party any knowledge or
information that may be acquired either directly or indirectly as a result of the inspection of the
Company’s books, records and papers. The restrictions as outlined in this Article shall not apply
to communication or disclosures that the Reinsurer is required to make to its statutory auditors,
retrocessionaires, legal counsel, arbitrators involved in any arbitration procedures under this
Contract or disclosures required upon subpoena or other duly-issued order of a court or other
governmental agency or regulatory authority.

Article XXX — Severability

If any provision of this Contract should be invalid under applicable laws, the latter shall
control but only to the extent of the conflict without affecting the remaining provisions of this
Contract.

Article XXXI — Intermediary (BRMA 23A)

Benfield Inc. is hereby recognized as the Intermediary negotiating this Contract for all
business hereunder. All communications (including but not limited to notices, statements, premium,
return premium, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements)
relating thereto shall be transmitted to the Company or the Reinsurer through Benfield Inc., 3600
West 80th Street, Minneapolis, Minnesota 55431. Payments by the Company to the Intermediary shall
be deemed to constitute payment to the Reinsurer. Payments by the Reinsurer to the Intermediary
shall be deemed to constitute payment to the Company only to the extent that such payments are
actually received by the Company.

In Witness Whereof, the Company by its duly authorized representative has executed this Contract as
of the date undermentioned at:

Bala Cynwyd, Pennsylvania, this ___13th___day of _October___in the year _2004___.

Christopher J. Maguire, Executive VP & Chied Underwriting Officer__

Philadelphia Insurance Companies (for and on behalf of the “Company”)

Page 17

 

Schedule A

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	First	 	Second	 	Third	 	Fourth
	 	 	Excess	 	Excess	 	Excess	 	Excess
	Company’s Retention
	 	$	10,000,000	 	 	$	20,000,000	 	 	$	40,000,000	 	 	$	65,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Reinsurer’s Per
	 	$	10,000,000	 	 	$	20,000,000	 	 	$	25,000,000	 	 	$	50,000,000	 
	Occurrence Limit
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Reinsurer’s Term Limit
	 	$	20,000,000	 	 	$	40,000,000	 	 	$	50,000,000	 	 	$	100,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Minimum Premium
	 	$	1,680,000	 	 	$	2,000,000	 	 	$	1,350,000	 	 	$	1,600,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Premium Rate
	 	 	1.00	%	 	 	1.19	%	 	 	0.81	%	 	 	0.96	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Deposit Premium
	 	$	2,100,000	 	 	$	2,500,000	 	 	$	1,687,500	 	 	$	2,000,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Quarterly
	 	$	525,000	 	 	$	625,000	 	 	$	421,875	 	 	$	500,000	 
	Deposit Premium
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

The figures listed above for each excess layer shall apply to each Subscribing Reinsurer in the
percentage share for that excess layer as expressed in its Interests and Liabilities Agreement
attached hereto.

 

 

Nuclear Incident Exclusion Clause — Physical Damage — Reinsurance (U.S.A.)

	1.	 	This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or
indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed
for the purpose of covering Atomic or Nuclear Energy risks.

	2.	 	Without in any way restricting the operation of paragraph (1) of this Clause, this
Reinsurance does not cover any loss or liability accruing to the Reassured, directly or
indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage
(including business interruption or consequential loss arising out of such Physical Damage)
to:

	 	I.	 	Nuclear reactor power plants including all auxiliary property on the site, or
	 
	 	II.	 	Any other nuclear reactor installation, including laboratories
handling radioactive materials in connection with reactor
installations, and “critical facilities” as such, or
	 
	 	III.	 	Installations for fabricating complete fuel elements or for
processing substantial quantities of “special nuclear material,” and
for reprocessing, salvaging, chemically separating, storing or
disposing of “spent” nuclear fuel or waste materials, or
	 
	 	IV.	 	Installations other than those listed in paragraph (2) III above
using substantial quantities of radioactive isotopes or other
products of nuclear fission.

	3.	 	Without in any way restricting the operations of paragraphs (1) and (2) hereof, this
Reinsurance does not cover any loss or liability by radioactive contamination accruing to the
Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on
property which is on the same site as a nuclear reactor power plant or other nuclear
installation and which normally would be insured therewith except that this paragraph (3)
shall not operate

	 	(a)	 	where Reassured does not have knowledge of such nuclear reactor power plant or
nuclear installation, or
	 
	 	(b)	 	where said insurance contains a provision excluding coverage for damage to property
caused by or resulting from radioactive contamination, however caused. However on and
after 1st January 1960 this sub-paragraph (b) shall only apply provided the said
radioactive contamination exclusion provision has been approved by the Governmental
Authority having jurisdiction thereof.

	4.	 	Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this
Reinsurance does not cover any loss or liability by radioactive contamination accruing to the
Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive
contamination is a named hazard specifically insured against.

	5.	 	It is understood and agreed that this Clause shall not extend to risks using radioactive
isotopes in any form where the nuclear exposure is not considered by the Reassured to be the
primary hazard.

	6.	 	The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act
of 1954 or by any law amendatory thereof.

     7. Reassured to be sole judge of what constitutes:

	 	(a)	 	substantial quantities, and
	 
	 	(b)	 	the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and
agreed that

	 	(a)	 	all policies issued by the Reassured on or before 31st December 1957 shall be free
from the application of the other provisions of this Clause until expiry date or 31st
December 1960 whichever first occurs whereupon all the provisions of this Clause shall
apply.
	 
	 	(b)	 	with respect to any risk located in Canada policies issued by the Reassured on or
before 31st December 1958 shall be free from the application of the other provisions of
this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all
the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 35B

 

 

Nuclear Incident Exclusion Clause — Physical Damage — Reinsurance (Canada)

	1.	 	This Agreement does not cover any loss or liability accruing to the Reinsured, directly or
indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers
formed for the purpose of covering Atomic or Nuclear Energy risks.

	2.	 	Without in any way restricting the operation of paragraph 1 of this clause, this Agreement
does not cover any loss or liability accruing to the Reinsured, directly or indirectly, and
whether as Insurer or Reinsurer, from any insurance against Physical Damage (including
business interruption or consequential loss arising out of such Physical Damage) to:

	 	(a)	 	nuclear reactor power plants including all auxiliary property on the site, or
	 
	 	(b)	 	any other nuclear reactor installation, including laboratories handling radioactive
materials in connection with reactor installations, and critical facilities as such, or
	 
	 	(c)	 	installations for fabricating complete fuel elements or for processing substantial
quantities of prescribed substances, and for reprocessing, salvaging, chemically
separating, storing or disposing of spent nuclear fuel or waste materials, or
	 
	 	(d)	 	installations other than those listed in (c) above using substantial quantities of
radioactive isotopes or other products of nuclear fission.

	3.	 	Without in any way restricting the operation of paragraphs 1 and 2 of this clause, this
Agreement does not cover any loss or liability by radioactive contamination accruing to the
Reinsured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on
property which is on the same site as a nuclear reactor power plant or other nuclear
installation and which normally would be insured therewith, except that this paragraph 3 shall
not operate:

	 	(a)	 	where the Reinsured does not have knowledge of such nuclear reactor power plant or
nuclear installation, or
	 
	 	(b)	 	where the said insurance contains a provision excluding coverage for damage to
property caused by or resulting from radioactive contamination, however caused.

	4.	 	Without in any way restricting the operation of paragraphs 1, 2 and 3 of this clause, this
Agreement does not cover any loss or liability by radioactive contamination accruing to the
Reinsured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive
contamination is a named hazard specifically insured against.

	5.	 	This clause shall not extend to risks using radioactive isotopes in any form where the
nuclear exposure is not considered by the Reinsured to be the primary hazard.

	6.	 	The term “prescribed substances” shall have the meaning given to it by the Atomic Energy
Control Act R.S.C. 1985(c), A-16 or by any law amendatory thereof.

	7.	 	Reinsured to be sole judge of what constitutes:

	 	(a)	 	substantial quantities, and
	 
	 	(b)	 	the extent of installation, plant or site.

	8.	 	Without in any way restricting the operation of paragraphs 1, 2, 3 and 4 of this clause, this
Agreement does not cover any loss or liability accruing to the Reinsured, directly or
indirectly, and whether as Insurer or Reinsurer, caused:

	 	(1)	 	by any nuclear incident, as defined in the Nuclear Liability Act or any other
nuclear liability act, law or statute, or any law amendatory thereof or nuclear explosion,
except for ensuing loss or damage which results directly from fire, lightning or explosion
of natural, coal or manufactured gas;
	 
	 	(2)	 	by contamination by radioactive material.

	NOTE:	 	Without in any way restricting the operation of paragraphs 1, 2, 3 and 4 of this clause,
paragraph 8 of this clause shall only apply to all original contracts of the Reinsured,
whether new, renewal or replacement, which become effective on or after December 31, 1992.

N.M.A. 1980 (2/19/93)

 

 

Pools, Associations and Syndicates Exclusion Clause

Section A:

Excluding:

	 	(a)	 	All business derived directly or indirectly from any Pool, Association or Syndicate
which maintains its own reinsurance facilities.
	 
	 	(b)	 	Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for
the purpose of insuring property whether on a country-wide basis or in respect of
designated areas. This exclusion shall not apply to so-called Automobile Insurance Plans
or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

It is agreed that business written by the Company for the same perils, which is known at the time
to be insured by, or in excess of underlying amounts placed in the following Pools, Associations or
Syndicates, whether by way of insurance or reinsurance, is excluded hereunder:

Industrial Risk Insurers,

Associated Factory Mutuals,

Improved Risk Mutuals,

Any Pool, Association or Syndicate formed for the purpose of writing

          Oil, Gas or Petro-Chemical Plants and/or Oil or Gas Drilling Rigs,

United States Aircraft Insurance Group,

Canadian Aircraft Insurance Group,

Associated Aviation Underwriters,

American Aviation Underwriters.

Section B does not apply:

	 	(a)	 	Where The Total Insured Value over all interests of the risk in question is less than
$250,000,000.
	 
	 	(b)	 	To interests traditionally underwritten as Inland Marine or stock and/or contents
written on a blanket basis.
	 
	 	(c)	 	To Contingent Business Interruption, except when the Company is aware that the key
location is known at the time to be insured in any Pool, Association or Syndicate named
above, other than as provided for under Section B(a).
	 
	 	(d)	 	To risks as follows:
	 
	 	 	 	Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public Utilities
(other than railroad schedules) and builder’s risks on the classes of risks specified in
this subsection (d) only.

Where this clause attaches to Catastrophe Excesses, the following Section C is added:

Section C:

Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its
participation in residual market mechanisms including but not limited to:

	 	(1)	 	The following so-called “Coastal Pools”:
	 
	 	 	 	Alabama Insurance Underwriting Association

Louisiana Insurance Underwriting Association

Mississippi Windstorm Underwriting Association

North Carolina Insurance Underwriting Association

South Carolina Windstorm and Hail Underwriting Association

Texas Windstorm Insurance Association

AND

	 	(2)	 	All “Fair Plan” and “Rural Risk Plan” business

Page 1 of 2

 

 

AND

	 	(3)	 	Citizens Property Insurance Corporation (“CPIC”) and the California Earthquake
Authority (“CEA”)

for all perils otherwise protected hereunder shall not be excluded, except, however, that this
reinsurance does not include any increase in such liability resulting from:

	 	(i)	 	The inability of any other participant in such “Coastal Pool” and/or “Fair Plan”
and/or “Rural Risk Plan” and/or Residual Market Mechanisms to meet its liability.
	 
	 	(ii)	 	Any claim against such “Coastal Pool” and/or “Fair Plan” and/or “Rural Risk Plan”
and/or Residual Market Mechanisms, or any participant therein, including the Company,
whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund
(as defined in the Insolvency Fund Exclusion Clause incorporated in this Contract).

Section D:

	 	(1)	 	Notwithstanding Section C above, in respect of the CEA, where an assessment is made
against the Company by the CEA, the Company may include in its Ultimate Net Loss only that
assessment directly attributable to each separate loss occurrence covered hereunder. The
Company’s initial capital contribution to the CEA shall not be included in the Ultimate
Net Loss.
	 
	 	(2)	 	Notwithstanding Section C above, in respect of CPIC, where an assessment is made
against the Company by CPIC, the maximum loss that the Company may include in the Ultimate
Net Loss in respect of any loss occurrence hereunder shall not exceed the lesser of:

	 	(a)	 	The Company’s assessment from CPIC for the accounting year in which the
loss occurrence commenced, or
	 
	 	(b)	 	The product of the following:

	 	(i)	 	The Company’s percentage participation in CPIC for the accounting
year in which the loss occurrence commenced; and
	 
	 	(ii)	 	CPIC’s total losses in such loss occurrence.

Any assessments for accounting years subsequent to that in which the loss occurrence commenced may
not be included in the Ultimate Net Loss hereunder. Moreover, notwithstanding Section C above, in
respect of CPIC, the Ultimate Net Loss hereunder shall not include any monies expended to purchase
or retire bonds as a consequence of being a member of CPIC. For the purposes of this Contract, the
Company may not include in the Ultimate Net Loss any assessment or any percentage assessment levied
by CPIC to meet the obligations of an insolvent insurer member or other party, or to meet any
obligations arising from the deferment by CPIC of the collection of monies.

	 	 	 	 	 
	NOTES:	 	Wherever used herein the terms:
	 
	 	 	 	 
	 

	 	“Company”
	 	shall be understood to mean “Company,”
“Reinsured,” “Reassured” or whatever other
term is used in the attached reinsurance
document to designate the reinsured company
or companies.
	 
	 	 	 	 
	 

	 	“Agreement”
	 	shall be understood to mean “Agreement,”
“Contract,” “Policy” or whatever other term
is used to designate the attached reinsurance
document.
	 
	 	 	 	 
	 

	 	“Reinsurers”
	 	shall be understood to mean “Reinsurers,”
“Underwriters” or whatever other term is used
in the attached reinsurance document to
designate the reinsurer or reinsurers.

Page 2 of 2

 

Pollution and Seepage Exclusion Clause

This Contract excludes loss and/or damage and/or costs and/or expenses arising from seepage
and/or pollution and/or contamination, other than contamination from smoke. Nevertheless, this
exclusion does not preclude payment of the cost of removing debris of property damaged by a loss
otherwise covered hereunder, subject always to a limit of 25% of the Company’s property loss under
the applicable original policy.

BRMA 39A

 

 

Electronic Data Endorsement B

	1.	 	Electronic Data Exclusion
	 
	 	 	Notwithstanding any provision to the contrary within the Contract or any endorsement thereto,
it is understood and agreed as follows:-

	 	a)	 	This Contract does not insure loss, damage, destruction, distortion, erasure,
corruption or alteration of ELECTRONIC DATA from any cause whatsoever (including but not
limited to COMPUTER VIRUS) or loss of use, reduction in functionality, cost, expense of
whatsoever nature resulting therefrom, regardless of any other cause or event
contributing concurrently or in any other sequence to the loss.
	 
	 	 	 	ELECTRONIC DATA means facts, concepts and information converted to a form useable for
communications, interpretation or processing by electronic and electromechanical data
processing or electronically controlled equipment and includes programs, software and
other coded instructions for the processing and manipulation of data or the direction and
manipulation of such equipment.
	 
	 	 	 	COMPUTER VIRUS means a set of corrupting, harmful or otherwise unauthorized instructions
or code including a set of maliciously introduced unauthorized instructions or code,
programmatic or otherwise, that propagate themselves through a computer system or network
of whatsoever nature. COMPUTER VIRUS includes but is not limited to “Trojan Horses,”
“worms” and “time or logic bombs.”
	 
	 	b)	 	However, in the event that a peril listed below results from any of the matters
described in paragraph a) above, this Contract, subject to all its terms, conditions and
exclusions, will cover physical damage occurring during the Contract period to property
insured by this Contract directly caused by such listed peril.
	 
	 	 	 	Listed Perils
	 
	 	 	 	Fire

Explosion

	2.	 	Electronic Data Processing Media Valuation
	 
	 	 	Notwithstanding any provision to the contrary within the Contract or any endorsement thereto,
it is understood and agreed as follows:-
	 
	 	 	Should electronic data processing media insured by this Contract suffer physical loss or damage
insured by this Contract, then the basis of valuation shall be the cost of the blank media plus
the costs of copying the ELECTRONIC DATA from back-up or from originals of a previous
generation. These costs will not include research and engineering nor any costs of recreating,
gathering or assembling such ELECTRONIC DATA. If the media is not repaired, replaced or
restored the basis of valuation shall be the cost of the blank media. However this Contract
does not insure any amount pertaining to the value of such ELECTRONIC DATA to the Assured or
any other party, even if such ELECTRONIC DATA cannot be recreated, gathered or assembled.

N.M.A. 2915 (25.1.01)

Page 1 of 4

 

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

First Excess Catastrophe Reinsurance

	 	 	 	 	 
	Reinsurers	 	Participations
	ACE Tempest Reinsurance Ltd.
	 	 	5.0	%
	Axis Specialty Limited
	 	 	10.0	 
	Everest Reinsurance Company
	 	 	10.0	 
	Folksamerica Reinsurance Company
	 	 	4.0	 
	PXRE Reinsurance Company
	 	 	5.0	 
	Renaissance Reinsurance, Ltd.
	 	 	10.0	 
	Swiss Re Underwriters Agency, Inc.
	 	 	 	 
	(for Swiss Reinsurance America Corporation)
	 	 	10.0	 
	Swiss Reinsurance America Corporation
	 	 	10.0	 
	Transatlantic Reinsurance Company
	 	 	8.0	 
	XL Re Ltd
	 	 	5.0	 
	 
	 	 	 	 
	Through Benfield Limited (Placement Only)
	 	 	 	 
	Munchener Ruckversicherungs-Gesellschaft
	 	 	2.5	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters and Companies
	 	 	 	 
	Per Signing Schedule(s)
	 	 	20.5	 
	 
	 	 	 	 
	Total
	 	 	100.0	%

Page 2 of 4

 

Second Excess Catastrophe Reinsurance

	 	 	 	 	 
	Reinsurers	 	Participations
	ACE Tempest Reinsurance Ltd.
	 	 	5.0	%
	American Re-Insurance Company, A Delaware Corporation
	 	 	9.0	 
	Axis Specialty Limited
	 	 	3.0	 
	Everest Reinsurance Company
	 	 	5.0	 
	Folksamerica Reinsurance Company
	 	 	3.0	 
	General Reinsurance Corporation
	 	 	10.0	 
	Hannover Re (Bermuda), Ltd.
	 	 	2.0	 
	Partner Reinsurance Company
	 	 	6.5	 
	PXRE Reinsurance Company
	 	 	1.5	 
	Renaissance Reinsurance, Ltd.
	 	 	4.0	 
	Swiss Re Underwriters Agency, Inc.
	 	 	 	 
	(for Swiss Reinsurance America Corporation)
	 	 	10.0	 
	Swiss Reinsurance America Corporation
	 	 	4.0	 
	Transatlantic Reinsurance Company
	 	 	10.0	 
	XL Re Ltd
	 	 	3.0	 
	 
	 	 	 	 
	Through Benfield Limited (Placement Only)
	 	 	 	 
	Munchener Ruckversicherungs-Gesellschaft
	 	 	10.0	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters and Companies
	 	 	 	 
	Per Signing Schedule(s)
	 	 	14.0	 
	 
	 	 	 	 
	Total
	 	 	100.0	%

Page 3 of 4

 

Third Excess Catastrophe Reinsurance

	 	 	 	 	 
	Reinsurers	 	Participations
	American Re-Insurance Company, A Delaware Corporation
	 	 	10.0	%
	Everest Reinsurance Company
	 	 	10.0	 
	Folksamerica Reinsurance Company
	 	 	4.0	 
	General Reinsurance Corporation
	 	 	8.0	 
	Hannover Re (Bermuda), Ltd.
	 	 	3.0	 
	Partner Reinsurance Company
	 	 	12.5	 
	PXRE Reinsurance Company
	 	 	2.0	 
	Swiss Reinsurance America Corporation
	 	 	6.5	 
	Transatlantic Reinsurance Company
	 	 	15.0	 
	XL Re Ltd
	 	 	5.0	 
	 
	 	 	 	 
	Through Benfield Limited (Placement Only)
	 	 	 	 
	Munchener Ruckversicherungs-Gesellschaft
	 	 	10.0	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters and Companies
	 	 	 	 
	Per Signing Schedule(s)
	 	 	14.0	 
	 
	 	 	 	 
	Total
	 	 	100.0	%

Page 4 of 4

 

Fourth Excess Catastrophe Reinsurance

	 	 	 	 	 
	Reinsurers	 	Participations
	American Re-Insurance Company, A Delaware Corporation
	 	 	10.0	%
	Folksamerica Reinsurance Company
	 	 	3.0	 
	Hannover Re (Bermuda), Ltd.
	 	 	5.0	 
	PXRE Reinsurance Company
	 	 	2.5	 
	Swiss Re Underwriters Agency, Inc.
	 	 	 	 
	(for Swiss Reinsurance America Corporation)
	 	 	10.0	 
	Swiss Reinsurance America Corporation
	 	 	7.0	 
	Tokio Millennium Re Ltd.
	 	 	15.0	 
	Transatlantic Reinsurance Company
	 	 	20.0	 
	XL Re Ltd
	 	 	5.0	 
	 
	 	 	 	 
	Through Benfield Limited (Placement Only)
	 	 	 	 
	Munchener Ruckversicherungs-Gesellschaft
	 	 	7.5	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters and Companies
	 	 	 	 
	Per Signing Schedule(s)
	 	 	15.0	 
	 
	 	 	 	 
	Total
	 	 	100.0	%

Page 5 of 4

 

Interests and Liabilities Agreement

of

ACE Tempest Reinsurance Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	5.0%

	 	of the First Excess Catastrophe Reinsurance
	5.0%

	 	of the Second Excess Catastrophe Reinsurance
	0%

	 	of the Third Excess Catastrophe Reinsurance
	0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Hamilton, Bermuda, this ___3rd___day of ___January___in the year ___2005___.

          Erin Anderson, Senior Vice President

ACE Tempest Reinsurance Ltd.

 

 

Interests and Liabilities Agreement

of

American Re-Insurance Company

A Delaware Corporation

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

     The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	0%

	 	of the First Excess Catastrophe Reinsurance
	9.0%

	 	of the Second Excess Catastrophe Reinsurance
	10.0%

	 	of the Third Excess Catastrophe Reinsurance
	10.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Princeton, New Jersey, this ___28th___day of ___February___in the year ___2005___.

_Gregory Mader, Senior Vice President-Property_____

American Re-Insurance Company, A Delaware Corporation

 

 

Interests and Liabilities Agreement

of

Axis Specialty Limited

Pembroke, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	10.0%

	 	of the First Excess Catastrophe Reinsurance
	3.0%

	 	of the Second Excess Catastrophe Reinsurance
	0%

	 	of the Third Excess Catastrophe Reinsurance
	0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Pembroke, Bermuda, this _28th___day of ___October___in the year _2004___.

__Christian Dunleavy, Vice President__________

Axis Specialty Limited

 

 

Interests and Liabilities Agreement

of

Everest Reinsurance Company

A Delaware Corporation

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	10.0%

	 	of the First Excess Catastrophe Reinsurance
	5.0%

	 	of the Second Excess Catastrophe Reinsurance
	10.0%

	 	of the Third Excess Catastrophe Reinsurance
	0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Liberty Corner, New Jersey, this _28th___day of ___February___in the year ___2005___.

__Roger Cunningham, Vice President-Treaty Property____

Everest Reinsurance Company

 

 

Interests and Liabilities Agreement

of

Folksamerica Reinsurance Company

New York, New York

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	4.0%

	 	of the First Excess Catastrophe Reinsurance
	3.0%

	 	of the Second Excess Catastrophe Reinsurance
	4.0%

	 	of the Third Excess Catastrophe Reinsurance
	3.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

New York, New York, this ___10th___day of ___January___in the year ___2005___.

__Robert Kuchn, Vice President________

Folksamerica Reinsurance Company

 

 

Interests and Liabilities Agreement

of

General Reinsurance Corporation

Wilmington, Delaware

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	0%

	 	of the First Excess Catastrophe Reinsurance
	10.0%

	 	of the Second Excess Catastrophe Reinsurance
	8.0%

	 	of the Third Excess Catastrophe Reinsurance
	0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Stamford, Connecticut, this _8th___day of ___February___in the year _2005___.

Joan LaFrance, Vice President________

General Reinsurance Corporation

 

 

Interests and Liabilities Agreement

of

Hannover Re (Bermuda), Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	0%

	 	of the First Excess Catastrophe Reinsurance
	2.0%

	 	of the Second Excess Catastrophe Reinsurance
	3.0%

	 	of the Third Excess Catastrophe Reinsurance
	5.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In any action, suit or proceeding to enforce the Subscribing Reinsurer’s obligations under the
attached Contract, service of process may be made upon Mendes & Mount, 750 Seventh Avenue, New
York, New York 10019.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Hamilton, Bermuda, this ___7th___day of _December___in the year ___2004___.

Knut Heinz, Underwriter & Daniel Duesterhaus, Assistant Vice President

Hannover Re (Bermuda), Ltd.

 

 

Interests and Liabilities Agreement

of

Partner Reinsurance Company

Pembroke Parish, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	0%

	 	of the First Excess Catastrophe Reinsurance
	6.5%

	 	of the Second Excess Catastrophe Reinsurance
	12.5%

	 	of the Third Excess Catastrophe Reinsurance
	0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Pembroke Parish, Bermuda, this ___25th___day of ___November___in the year _2004___.

__Brian Secrett, Senior Vice President____________________

Partner Reinsurance Company

 

 

Interests and Liabilities Agreement

of

PXRE Reinsurance Company

Hartford, Connecticut

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	5.0%

	 	of the First Excess Catastrophe Reinsurance
	1.5%

	 	of the Second Excess Catastrophe Reinsurance
	2.0%

	 	of the Third Excess Catastrophe Reinsurance
	2.5%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Edison, New Jersey, this ___4th___day of _February___in the year _2005___.

Eugene J. Sverchek, Senior Vice President_______

PXRE Reinsurance Company

 

 

Interests and Liabilities Agreement

of

Renaissance Reinsurance, Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	10.0%

	 	of the First Excess Catastrophe Reinsurance
	4.0%

	 	of the Second Excess Catastrophe Reinsurance
	0%

	 	of the Third Excess Catastrophe Reinsurance
	0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Hamilton, Bermuda, this ___11th___day of ___November___in the year ___2004___.

_Jon Paradine, Senior Vice President________________________

Renaissance Reinsurance, Ltd.

 

 

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

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	10.0%

	 	of the First Excess Catastrophe Reinsurance
	10.0%

	 	of the Second Excess Catastrophe Reinsurance
	0%

	 	of the Third Excess Catastrophe Reinsurance
	10.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Calabasas, California, this _9th___day of ___November___in the year ___2004_.

___Dan McElvany, Vice President____________

Swiss Re Underwriters Agency, Inc.

(for Swiss Reinsurance America Corporation)

 

 

Interests and Liabilities Agreement

of

Swiss Reinsurance America Corporation

Armonk, New York

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

(hereinafter referred to collectively as the “Company”)

It Is Hereby Agreed that the Subscribing Reinsurer hereby accepts the following percentage shares
in the interests and liabilities of the “Reinsurer” as set forth in the attached Contract captioned
above:

	 	 	 
	10.0%

	 	of the First Excess Catastrophe Reinsurance
	4.0%

	 	of the Second Excess Catastrophe Reinsurance
	6.5%

	 	of the Third Excess Catastrophe Reinsurance
	7.0%

	 	of the Fourth Excess Catastrophe Reinsurance

It Is Further Agreed that this Agreement shall become effective on June 1, 2004, and shall continue
in force until May 31, 2005, both days inclusive.

It Is Also Agreed that the Subscribing Reinsurer’s share in the attached Contract shall be separate
and apart from the shares of the other reinsurers, and shall not be joint with the shares of the
other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate
in the interests and liabilities of the other reinsurers.

It Is Also Agreed that, as respects the Subscribing Reinsurer’s share in the attached Contract, the
following paragraph shall be added to and made part of Article VII — Definitions:

“Declaratory judgments’ as used herein shall mean all legal expenses incurred in the
representation of the Company in litigation brought to determine the Company’s defense
and/or indemnification obligations that are allocable to any specific claim or loss
applicable

 

 

to policies subject to this Contract. In addition, the Company shall promptly notify the
Reinsurer of any declaratory judgments subject to this Contract.”

In Witness Whereof, the parties hereto by their respective duly authorized representatives have
executed this Agreement as of the dates undermentioned at:

Bala
Cynwyd, Pennsylvania, this ___13th___day of ___October___in the year ___2004_.

_ChristopherJ.Maguire,ExecutiveVP&ChiefUnderwritingOfficer_

Philadelphia Insurance Companies (for and on behalf of the “Company”)

Armonk, New York, this ___4th___day of ___November___in the year ___2004___.

_Peter Thompson, Account Executive____________

Swiss Reinsurance America Corporation

 

 

Interests and Liabilities Agreement

of

Tokio Millennium Re Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	0%

	 	of the First Excess Catastrophe Reinsurance
	0%

	 	of the Second Excess Catastrophe Reinsurance
	0%

	 	of the Third Excess Catastrophe Reinsurance
	15.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Hamilton, Bermuda, this ___8th day of ___November___in the year 2004___.

_Takayuki Sumi, Senior Underwriting Officer____________

Tokio Millennium Re Ltd.

 

 

Interests and Liabilities Agreement

of

Transatlantic Reinsurance Company

New York, New York

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	8.0%

	 	of the First Excess Catastrophe Reinsurance
	10.0%

	 	of the Second Excess Catastrophe Reinsurance
	15.0%

	 	of the Third Excess Catastrophe Reinsurance
	20.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

New York, New York,      this ___3rd___day of _November___in the year _2004___.

__Kevin M. Chiella, Assistant Vice President_________________

Transatlantic Reinsurance Company

 

 

Interests and Liabilities Agreement

of

XL Re Ltd

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	5.0%

	 	of the First Excess Catastrophe Reinsurance
	3.0%

	 	of the Second Excess Catastrophe Reinsurance
	5.0%

	 	of the Third Excess Catastrophe Reinsurance
	5.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Hamilton, Bermuda, this _15th___day of ___December___in the year _2004___.

_Paul Simons, Vice President________

XL Re Ltd

 

 

Interests and Liabilities Agreement

of

Munchener Ruckversicherungs-Gesellschaft

Munich, Germany

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	2.5%

	 	of the First Excess Catastrophe Reinsurance
	10.0%

	 	of the Second Excess Catastrophe Reinsurance
	10.0%

	 	of the Third Excess Catastrophe Reinsurance
	7.5%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:

Munich, Germany, this ___18th___day of ___November___in the year _2004___.

__Laurent Mathiew, Underwriter___________________________

Munchener Ruckversicherungs-Gesellschaft

 

 

Interests and Liabilities Agreement

of

Certain Underwriting Members of Lloyd’s

shown in the Signing Schedule attached hereto

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	9.5%

	 	of the First Excess Catastrophe Reinsurance
	7.5%

	 	of the Second Excess Catastrophe Reinsurance
	5.0%

	 	of the Third Excess Catastrophe Reinsurance
	5.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In any action, suit or proceeding to enforce the Subscribing Reinsurer’s obligations under the
attached Contract, service of process may be made upon Mendes & Mount, 750 Seventh Avenue, New
York, New York 10019.

Signed for and on behalf of the Subscribing Reinsurer in the Signing Schedule attached hereto.

 

 

Interests and Liabilities Agreement

of

Certain Insurance Companies

shown in the Signing Schedule(s) attached hereto

(hereinafter referred to as the “Subscribing Reinsurer”)

with respect to the

Excess Catastrophe Reinsurance Contract

Effective: June 1, 2004

issued to and duly executed by

Philadelphia Insurance Company

Bala Cynwyd, Pennsylvania

Philadelphia Indemnity Insurance Company

Bala Cynwyd, Pennsylvania

and

any and all other companies which are now

or may hereafter become member companies of

Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:

	 	 	 
	11.0%

	 	of the First Excess Catastrophe Reinsurance
	6.5%

	 	of the Second Excess Catastrophe Reinsurance
	9.0%

	 	of the Third Excess Catastrophe Reinsurance
	10.0%

	 	of the Fourth Excess Catastrophe Reinsurance

This Agreement shall become effective on June 1, 2004, and shall continue in force until May 31,
2005, both days inclusive.

The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.

In any action, suit or proceeding to enforce the Subscribing Reinsurer’s obligations under the
attached Contract, service of process may be made upon Mendes & Mount, 750 Seventh Avenue, New
York, New York 10019.

Signed for and on behalf of the Subscribing Reinsurer in the Signing Schedule(s) attached hereto.
David, Managing Director (Underwriters of Lloyds)

 

 

	 	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001169	 	 
	 
	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001177	 	 
	 
	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001185	 	 
	 
	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001193	 	 
	 
	 	 	 	 	 	 
	PROPORTION
	 	CODE	 	MEMBER COMPANY AND REFERENCE

	%
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	7.0000000

	 	W4105
	 	WELLINGTON REINSURANCE LIMITED

	 

	 	 	 	NOW KNOWN AS ASPEN INSURANCE UK LIMITED 

	 

	 	 	 	PW711337D0X

	3.0000000

	 	F8106
	 	GE FRANKONA REINSURANCE LIMITED

	 

	 	 	 	BX20830A04

	10.0000000  % TOTAL
	 	 	 	 

                                                                                Managing Director

This wording is not valid unless it bears the signature of the Managing Director of Ins-sure Services Limited.

Page 1 of 1

 

 

	 	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001169	 	 
	 
	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001177	 	 
	 
	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001185	 	 
	 
	 	 	 	 	 	 
	PROPORTION

	 	CODE
	 	MEMBER COMPANY AND REFERENCE

	%
	 	 	 	 	 	 
	6.0000000

	 	W4105
	 	WELLINGTON REINSURANCE LIMITED

	 

	 	 	 	NOW KNOWN AS ASPEN INSURANCE UK LIMITED

	 

	 	 	 	PW711337D0X

	3.0000000

	 	F8106
	 	GE FRANKONA REINSURANCE LIMITED

	 

	 	 	 	BX20829A04

	9.0000000  % TOTAL
	 	 	 	 

                                                                                Managing Director

This wording is not valid unless it bears the signature of the Managing Director of Ins-sure Services Limited.

Page 1 of 1

 

 

	 	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001169	 	 
	 
	 	 	 	 	 	 
	BUREAU REFERENCE	 	0407200001177	 	 
	 
	 	 	 	 	 	 
	PROPORTION

	 	CODE
	 	MEMBER COMPANY AND REFERENCE

	%
	 	 	 	 	 	 
	3.5000000

	 	W4105
	 	WELLINGTON REINSURANCE LIMITED

	 

	 	 	 	NOW KNOWN AS ASPEN INSURANCE UK LIMITED

	 

	 	 	 	PW705539L0X

	3.0000000

	 	F8106
	 	GE FRANKONA REINSURANCE LIMITED

	 

	 	 	 	BX20795A04

	6.5000000  % TOTAL
	 	 	 	 

     [ILLEGIBLE] of its obligations.

[ILLEGIBLE] if the name of the Managing Director of Ins-sure Services Limited is subscribed on behalf
of each of the Reinsurers in accordance [ILLEGIBLE] s of the Services Agreement that each of the
Reinsurers has with London Processing Centre Limited (a wholly owned subsidiary of
[ILLEGIBLE] -imited)

                                                                                Managing Director

This wording is not valid unless it bears the signature of the Managing Director of Ins-sure Services Limited.

Page 1 of 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]