Document:

Aggregate Stop Loss
                              Reinsurance Contract
                           Effective: January 1, 1999

                                    issued to

                         Amwest Surety Insurance Company
                           Far West Insurance Company
                                       and
                            Condor Insurance Company
                             all of Omaha, Nebraska

                                E. W. Blanch Co.

                              Reinsurance Services

                              3500 West 80th Street

                          Minneapolis, Minnesota 55431

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                                 Table of Contents

    Article                                                              Page

           I      Business Reinsured                                      3
          II      Term                                                    3
         III      Territory                                               3
          IV      Retention and Limit                                     4
           V      Definitions                                             5
          VI      Other Reinsurance                                       6
         VII      Loss Notices and Settlements                            6
        VIII      Salvage and Subrogation                                 6
          IX      Reinsurance Premium                                     6
           X      Late Payments                                           7
          XI      Reports and Remittances                                 9
         XII      Commutation                                             9
        XIII      Offset (BRMA 36C)                                       9
         XIV      Access to Records (BRMA 1D)                             9
          XV      Net Retained Lines                                      9
         XVI      Errors and Omissions (BRMA 14F)                        10
        XVII      Currency (BRMA 12A)                                    10
       XVIII      Taxes (BRMA 50B)                                       10
         XIX      Federal Excise Tax (BRMA 17A)                          10
          XX      Unauthorized Reinsurers                                11
         XXI      Insolvency                                             12
        XXII      Arbitration                                            13
       XXIII      Service of Suit (BRMA 49C)                             14
        XXIV      Agency Agreement                                       14
         XXV      Intermediary (BRMA 23A)                                15
                  Schedule A

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                               Aggregate Stop Loss
                              Reinsurance Contract
                           Effective: January 1, 1999

                                    issued to

                         Amwest Surety Insurance Company
                           Far West Insurance Company
                                       and
                            Condor Insurance Company
                             all of Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

                                       by

                Underwriters Reinsurance Company (Barbados), Inc.
                              Barbados, West Indies
                  (hereinafter referred to as the "Reinsurer")

Article I - Business Reinsured

By this Contract the Reinsurer  agrees to reinsure and/or  indemnify the Company
for the net excess  liability which may accrue to the Company during the term of
this Contract under its bonds,  policies,  contracts and binders of insurance or
reinsurance  (hereinafter  called  "bonds," as  respects  surety  business,  and
"policies,"  as respects  property  and casualty  business)  whether in force or
expired on the  effective  date hereof,  issued or renewed on or after that date
(including  bonds or policies  with premium  anniversary  dates on or after that
date), for all surety business and property and casualty business written by the
Company (direct and assumed),  subject to the terms,  conditions and limitations
hereinafter set forth.

Article II - Term

This Contract shall become  effective on January 1, 1999, with respect to losses
occurring  on or after that date and shall  remain in force until  December  31,
1999, both days inclusive.

Article III - Territory

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

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Article IV - Retention and Limit

A.    Subject to the  provisions of paragraphs B and C below,  the Company shall
      retain and be liable for an amount of ultimate  net loss equal to a 26.50%
      loss  ratio (as  hereinafter  defined  in  Article V) for the term of this
      Contract.  The  Reinsurer  shall then be liable for any  ultimate net loss
      which exceeds the Company's  retention,  but does not exceed a 28.00% loss
      ratio for the term of this Contract.

B.    In  addition  to the above and subject to the  provisions  of  paragraph C
      below,  the Reinsurer shall also be liable for any ultimate net loss which
      exceeds a 31.00%  loss ratio for the term of this  Contract,  but does not
      exceed a 39.718%  loss ratio for the term of this  Contract.  Any ultimate
      net loss in excess of a loss ratio for the term of this Contract  which is
      greater  than  28.00%,  but less than  31.00%,  shall be  retained  by the
      Company  and  shall be  hereinafter  referred  to as the  "loss  retention
      corridor."  The total  liability of the Reinsurer  during the term of this
      Contract  shall not exceed an amount equal to 10.218% of the Company's net
      earned premium for the term of this Contract.

C.    Notwithstanding the foregoing, in the event that the net earned premium as
      respects  property and casualty  business  exceeds 26.22% of the total net
      earned  premium  hereunder,  no claim  shall be made under  this  Contract
      unless  and until the  Company  shall  have  first  incurred  an amount of
      ultimate net loss in excess of 26.50% of its net earned premium during the
      term of this  Contract,  plus  35.00% of the  difference  by which the net
      earned premium as respects  property and casualty  business exceeds 26.22%
      of the total net earned premium  hereunder.  The limit of liability of the
      Reinsurer and the Company's loss retention corridor shall be arrived at in
      the same manner.

      In the event that the net earned premium as respects property and casualty
      business is less than 20.22% of the total net earned premium hereunder, no
      claim shall be made under this Contract unless and until the Company shall
      have first  incurred an amount of ultimate net loss in excess of 26.50% of
      its net earned premium  during the term of this  Contract,  less 35.00% of
      the  difference by which the net earned  premium as respects  property and
      casualty  business  is less than  20.22% of the total net  earned  premium
      hereunder.  The limit of liability of the Reinsurer and the Company's loss
      retention corridor shall be arrived at in the same manner.

D.    The Company  shall have the option to purchase an  additional  reinsurance
      limit equal to 10.218% of the Company's net earned premium for the term of
      this  Contract.  This option  expires on December 31, 1999 and can only be
      exercised if the ultimate net loss ceded under this  Contract is less than
      5.109% of the net earned premium for the term of this Contract.

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Article V - Definitions

A.    "Net excess  liability" as used herein shall mean those amounts payable by
      the Company as defined in the  ultimate net loss  definition  set forth in
      paragraph B below.

B.    "Ultimate  net  loss"  as  used  herein  is  defined  as the  sum or  sums
      (including  extra  contractual  obligations  and loss in excess of bond or
      policy limits,  both as hereafter  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.

C.    "Loss  in  excess  of  bond  or  policy  limits"  and  "extra  contractual
      obligations" as used herein shall be defined as follows:

       1.   "Loss in excess of bond or policy limits" shall mean any amount paid
            or  payable by the  Company in excess of its bond or policy  limits,
            but  otherwise  within  the terms of its  policy,  as a result of an
            action  against  it by its  insured  or its  insured's  assignee  to
            recover  damages the insured is legally  obligated to pay to a third
            party claimant because of the Company's alleged or actual negligence
            or bad faith in rejecting a settlement  within policy limits,  or in
            discharging  its duty to defend or prepare  the defense in the trial
            of an action  against its  insured,  or in  discharging  its duty to
            prepare or prosecute an appeal consequent upon such an action.

       2.   "Extra contractual obligations" shall mean any punitive,  exemplary,
            compensatory or consequential  damages, other than loss in excess of
            bond or policy limits, paid or payable by the Company as a result of
            an action  against it by its insured,  its  insured's  assignee or a
            third party claimant,  which action alleges  negligence or bad faith
            on the  part of the  Company  in  handling  a claim  under a  policy
            subject to this Contract.

      Any  loss  in  excess  of bond  or  policy  limits  or  extra  contractual
      obligation  shall be deemed to have  occurred on the same date as the loss
      covered or alleged to be covered under the bond or policy.

      Notwithstanding  anything stated herein,  this Contract shall not apply to
      any loss in  excess of bond or  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.

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D.    "Net earned premium" as used herein is defined as gross earned premium of
      the Company for the classes of business reinsured hereunder, less the
      earned portion of premiums ceded by the Company for reinsurance which
      inures to the benefit of this Contract.

E.    "Loss  ratio"  as used  herein  shall  mean  the  ratio  of the  Company's
      aggregate  ultimate net loss paid during the term of this  Contract to the
      Company's net earned premium for the term of this Contract.

Article VI - Other Reinsurance

A.    Notwithstanding  the  provisions  of Article IV, the Company is permitted,
      but not  required,  to purchase  other  facultative  and/or  other  treaty
      reinsurance on business  subject to this  Contract.  Premiums ceded by the
      Company for reinsurance which inures to the benefit of this Contract shall
      be  deducted  in  determining  subject  premium  hereunder  as provided in
      Article IX.

B.    The Company's inuring reinsurance agreements,  as identified in Schedule A
      attached  hereto,  shall  remain in force  during the term  hereof,  or so
      deemed.

Article VII - Loss Notices and Settlements

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 VIII - 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 IX - Reinsurance Premium

A.    As premium for the reinsurance  provided hereunder,  the Company shall pay
      the Reinsurer 3.5% of its net earned premium as respects  surety  business
      and 1.0% of its net  earned  premium as  respects  property  and  casualty
      business for the term of this Contract.

B.    The  Company  shall  pay  the  Reinsurer  an  annual  deposit  premium  of
      $3,609,256 in four  installments of $902,314 on January 1, April 1, July 1
      and October 1, 1999.

C.    If the  Company  elects to  purchase an  additional  reinsurance  limit in
      accordance  with the  provisions of paragraph D of Article IV, the Company
      shall pay an  additional  reinsurance  premium to the  Reinsurer  for such
      additional  limit  equal to 2.35% of its net earned  premium  as  respects
      surety  business and 0.65% of its net earned premium as respects  property
      and casualty business for the term of this Contract. The Company shall pay
      the Reinsurer a deposit premium of $2,400,000 in equal pro rata amounts on
      the first day of each calendar  quarter  remaining during the term of this
      Contract.

D.    Within 60 days after the  expiration of this  Contract,  the Company shall
      provide a report to the Reinsurer setting forth the premium due hereunder,
      computed in accordance with paragraphs A and C and any additional  premium
      due the  Reinsurer  or return  premium due the  Company  shall be remitted
      promptly.

Article X - Late Payments

A.    It is understood  and agreed that 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 XXV (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.   1/365th of the six month (or nearest  thereto)  U.S.  Treasury  Bill
            rate, as quoted in the Wall Street Journal on the first business day
            of the month for which the calculation is being 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:

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       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 45
            days  after  the  date of  transmittal  by the  Intermediary  of the
            initial billing for each such payment.

       2.   As respects any payment,  adjustment  or return due either party not
            otherwise  provided for in subparagraph 1 above,  the due date shall
            be  deemed  as five  business  days  following  receipt  of  written
            notification that the provisions of this Article have been invoked.

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

D.   Nothing  herein  shall be  construed  as  limiting  or  prohibiting  1) the
     Reinsurer from contesting the validity of any claim, or from  participating
     in the  defense or control  of any claim or suit;  or 2) 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.    As provided under Article VII it is understood and agreed that the Company
      shall furnish the Reinsurer with usual and customary claim information and
      nothing herein shall be construed as limiting or prohibiting the Reinsurer
      from requesting additional information that it may deem necessary.

F.    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.

<PAGE>

Article XI - Reports and Remittances

Within 60 days after the end of each calendar  quarter  following the expiration
of this  Contract,  the Company  shall  report to the  Reinsurer  its  aggregate
ultimate  net loss paid for the contract  term as of the end of the quarter.  If
the  aggregate  ultimate net loss paid exceeds an amount equal to the  Company's
retention  hereunder for the contract term based on an estimate of the Company's
net earned premium for the contract term, the Reinsurer shall pay its portion of
such  estimated  excess  (net of any  prior  payments  for the  contract  term).
However,  any such payment by the  Reinsurer  shall be  provisional,  subject to
adjustment  when the Company's  actual  ultimate net loss and net earned premium
for the contract term have been determined.

Article XII - Commutation

The Company may commute this Contract with agreement by the Reinsurer.

Article XIII - Offset (BRMA 36C)

The  Company  and the  Reinsurer  shall have the right to offset any  balance or
amounts  due from one party to the other under the terms of this  Contract.  The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise.

Article XIV - 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 XV - Net Retained Lines

A.    This Contract applies only to that portion of any bond or policy which the
      Company retains net for its own account,  and in calculating the amount of
      any loss  hereunder  and also in computing the amount or amounts in excess
      of which this  Contract  attaches,  only loss or losses in respect of that
      portion of any bond or 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 XVI - 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 XVII - 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 into the books of the Company.

Article XVIII - Taxes (BRMA 50B)

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

Article XIX - 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  premium  becoming due  hereunder the Reinsurer
      will deduct the  applicable  percentage  from the return  premium  payable
      hereon and the  Company or its agent  should take steps to recover the tax
      from the United States Government.

Article XX - Unauthorized Reinsurers

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 its
      share of the Company's  ceded unearned  premium and  outstanding  loss and
      loss adjustment expense reserves (including incurred but not reported loss
      reserves) 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.   With  regard to funding  in whole or in part by  letters  of credit,  it is
     agreed that each letter of credit will be in a form acceptable to insurance
     regulatory authorities involved,  will be issued for a term of at least one
     year and will include an "evergreen  clause," which  automatically  extends
     the term for at least one additional  year at each  expiration  date unless
     written notice of non-renewal is given to the Company not less than 30 days
     prior to said expiration date. The Company and the Reinsurer further agree,
     notwithstanding  anything  to the  contrary  in this  Contract,  that  said
     letters  of credit may be drawn upon by the  Company or its  successors  in
     interest at any time,  without  diminution because of the insolvency of the
     Company  or the  Reinsurer,  but  only  for one or  more  of the  following
     purposes:

       1.   To reimburse itself for the Reinsurer's  share of unearned  premiums
            returned  to  insureds  on account of bond or 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  bonds  or  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  incurred but not reported
            loss reserves)  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 incurred but not reported loss reserves),  if so
            requested by the Reinsurer.

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

Article XXI - 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 immediately upon
     demand,  with reasonable  provision for  verification,  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.

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 bond or policy  obligations
     of the company as direct  obligations  of the Reinsurer to the payees under
     such bonds or  policies  and in  substitution  for the  obligations  of the
     company to such payees.

Article XXII - Arbitration

A.    As a condition  precedent  to any right of action  hereunder,  any dispute
      arising out of the interpretation, performance or breach of this Contract,
      including  the  formation  or validity  thereof,  shall be  submitted  for
      decision to a panel of three  arbitrators.  Notice requesting  arbitration
      will be in writing and sent certified or registered  mail,  return receipt
      requested.

B.    One  arbitrator  shall be  chosen by each  party  and the two  arbitrators
      shall,   before  instituting  the  hearing,   choose  an  impartial  third
      arbitrator  who shall  preside at the  hearing.  If either  party fails to
      appoint its  arbitrator  within 30 days after being  requested to do so by
      the  other  party,  the  latter,  after 10 days  notice  by  certified  or
      registered  mail  of  its  intention  to do so,  may  appoint  the  second
      arbitrator.

C.    If the two  arbitrators  are  unable to agree  upon the  third  arbitrator
      within 30 days of their  appointment,  the two  arbitrators  will  jointly
      petition  the  American  Arbitration  Association  to  appoint  the  third
      arbitrator from the AAA's Panel of Reinsurance Arbitrators.

D.    All arbitrators shall be disinterested active or former executive officers
      of insurance or reinsurance companies,  underwriters at Lloyd's of London,
      reinsurance  intermediaries  and attorneys actively or formerly engaged in
      practicing law in the areas of insurance or reinsurance.

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

F.    The panel  shall be relieved of all  judicial  formality  and shall not be
      bound by the strict rules of procedure and evidence. The arbitration shall
      take place in Woodland Hills,  California or, if unanimously agreed by the
      panel, any other mutually acceptable location.

G.    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.  However,  nothing shall impair the rights of such  reinsurers to
      assert  several  rather  than joint  defenses  or  claims,  nor shall this
      provision be construed as changing the liability of the  reinsurers  under
      the terms of this Contract from several to joint.

H.    The panel  shall make its  decision  considering  custom and  practice  as
      promptly as possible  following the termination of hearings.  The decision
      of any two  arbitrators,  when  rendered  in  writing  shall be final  and
      binding, and judgment upon the award may be entered in any court

<PAGE>

      having jurisdiction.  The panel is empowered to grant such interim relief
      as it may deem appropriate.

I.    Each party shall bear the expense of its own  arbitrator and shall jointly
      and equally  with the other  party bear the cost of the third  arbitrator.
      The remaining  costs of the  arbitration  shall be allocated by the panel.
      The panel may, at its discretion, award such further costs and expenses as
      it considers appropriate, including but not limited to attorney's fees and
      interest to the extent permitted by law. Insofar as the arbitration  panel
      chooses to look to substantive law, it shall consider the law of the State
      of California.

Article XXIII - Service of Suit (BRMA 49C)

(Applicable  if the  Reinsurer is not domiciled in the United States of America,
and/or is not  authorized  in any State,  Territory  or  District  of the United
States where authorization is required by insurance regulatory authorities)

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

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

Article XXIV - Agency Agreement

Amwest Surety Insurance 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>

Article XXV - Intermediary (BRMA 23A)

E. W.  Blanch Co. 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 E. W. Blanch Co.,
Reinsurance  Services,  3500 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 parties hereto by their duly authorized  representatives
have executed this Contract as of the dates undermentioned at:

Calabasas, California,        this _______ day of ______________________ 199___.

                             ---------------------------------------------------
                             Amwest Surety Insurance Company
                             Far West Insurance Company
                             Condor Insurance Company

Barbados, West Indies,       this _______ day of _______________________ 199___.

                             ---------------------------------------------------
                             Underwriters Reinsurance Company (Barbados), Inc.

<PAGE>

                                   Schedule A

                               Aggregate Stop Loss
                              Reinsurance Contract
                           Effective: January 1, 1999

                                    issued to

                         Amwest Surety Insurance Company
                           Far West Insurance Company
                                       and
                            Condor Insurance Company
                             all of Omaha, Nebraska

Inuring Reinsurance Contracts:

1.    Agreement of Reinsurance No. B415, Effective:  May 1, 1992

2.    Agreement of Reinsurance No. FFAL09994, Effective: May 1, 1994

3.    Casualty Excess of Loss Reinsurance Contract, Effective:  July 1, 1996

4.    50% Private Passenger Automobile Quota Share Reinsurance Contract,
      Effective:  July 1, 1997

5.    75% California Homeowners Multiple Line Quota Share Reinsurance Contract,
      Effective:  July 1, 1997

6.    75% Florida Multiple Line Quota Share Reinsurance Contract, Effective:
      July 1, 1998

7.    Contingent Excess of Loss Reinsurance Contract, Effective:  July 1, 1998

<PAGE>

                                 Addendum No. 1

                                     to the

                               Aggregate Stop Loss
                              Reinsurance Contract
                           Effective: January 1, 1999

                                    issued to

                         Amwest Surety Insurance Company
                           Far West Insurance Company
                                       and
                            Condor Insurance Company
                             all of Omaha, Nebraska

                                       by

                Underwriters Reinsurance Company (Barbados), Inc.
                              Barbados, West Indies

It Is Hereby  Agreed,  effective  July 1, 1999,  that  paragraphs  A, B and C of
Article IX - Reinsurance Premium shall be deleted and the following  substituted
therefor:

     "A.    As premium for the reinsurance provided hereunder, the Company shall
            pay the Reinsurer 3.5% of its net earned premium as respects  surety
            business  for  the  term of this  Contract,  1.0% of its net  earned
            premium as respects  property and  casualty  business for the period
            from  January  1,  1999  through  June 30,  1999 and 7.5% of its net
            earned  premium as respects  property and casualty  business for the
            period from July 1, 1999 through December 31, 1999.

      B.    The Company  shall pay the  Reinsurer an annual  deposit  premium of
            $4,580,746 in two  installments of $902,314 on January 1 and April 1
            of 1999 and two  installments  of $1,388,059 on July 1 and October 1
            of 1999.

      C.    If the Company elects to purchase an additional reinsurance limit in
            accordance  with the  provisions  of  paragraph D of Article IV, the
            Company shall pay an additional reinsurance premium to the Reinsurer
            for such  additional  limit equal to 2.35% of its net earned premium
            as respects  surety  business and 5.00% of its net earned premium as
            respects  property  and  casualty  business  for  the  term  of this
            Contract.  The Company shall pay the Reinsurer a deposit  premium of
            $3,000,000 at the time such option is exercised."

<PAGE>

It Is Further  Agreed,  effective  July 1,  1999,  that this  Contract  shall be
amended as follows:

1.    Article XXV - Intermediary (BRMA 23A) - shall be deleted and the following
      substituted therefor:

      "Article XXV - Intermediary (BRMA 23A)

      E.  W.  Blanch  Co.,  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 E. W. Blanch  Co.,  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."

2.    Schedule A attached to and forming part of the  Contract  shall be deleted
      and  Schedule A attached to and  forming  part of this  Addendum  shall be
      substituted therefor.

The provisions of this Contract shall remain otherwise unchanged.

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

Calabasas, California,       this _______ day of ______________ in the year ___.

                             ---------------------------------------------------
                             Amwest Surety Insurance Company
                             Far West Insurance Company
                             Condor Insurance Company

Barbados, West Indies,       this _______ day of ______________ in the year ___.

                             ---------------------------------------------------
                             Underwriters Reinsurance Company (Barbados), Inc.

<PAGE>

                             (Revised: July 1, 1999)

                                   Schedule A

                               Aggregate Stop Loss
                              Reinsurance Contract
                           Effective: January 1, 1999

                                    issued to

                         Amwest Surety Insurance Company
                           Far West Insurance Company
                                       and
                            Condor Insurance Company
                             all of Omaha, Nebraska

Inuring Reinsurance  Contracts  applicable to the period from January 1, 1999 to
June 30, 1999:

1.    Agreement of Reinsurance No. B415, Effective:  May 1, 1992

2.    Agreement of Reinsurance No. FFAL09994, Effective: May 1, 1994

3.    Casualty Excess of Loss Reinsurance Contract, Effective:  July 1, 1996

4.    50% Private Passenger Automobile Quota Share Reinsurance Contract,
      Effective:  July 1, 1997

5.    75% California Homeowners Multiple Line Quota Share Reinsurance Contract,
      Effective:  July 1, 1997

6.    75% Florida Multiple Line Quota Share Reinsurance Contract, Effective:
      July 1, 1998

7.    Contingent Excess of Loss Reinsurance Contract, Effective:  July 1, 1998

Inuring  Reinsurance  Contracts  aplicable  to the  period  from July 1, 1999 to
December 31, 1999:

1.    Agreement of Reinsurance No. B415, Effective:  May 1, 1992

2.    Agreement of Reinsurance No. FFAL09994, Effective: May 1, 1994

3.    Excess Catastrophe Reinsurance Contract, Effective:  July 1, 1999

4.    Excess Per Event Reinsurance Contract, Effective:  July 1, 1999Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska

<PAGE>

                                Table of Contents

    Article                                                          Page

           I      Classes of Business Reinsured                       3
          II      Commencement and Termination                        4
         III      Territory (BRMA 51A)                                4
          IV      Exclusions                                          4
           V      Retention and Limit                                 6
          VI      Reinstatement                                       6
         VII      Definitions                                         8
        VIII      Other Reinsurance                                  11
          IX      Florida Hurricane Catastrophe Fund                 11
           X      Claims                                             11
          XI      Salvage and Subrogation                            12
         XII      Reinsurance Premium                                12
        XIII      Contingent Commission                              13
         XIV      Offset (BRMA 36C)                                  14
          XV      Access to Records (BRMA 1D)                        14
         XVI      Liability of the Reinsurer                         14
        XVII      Net Retained Lines (BRMA 32E)                      14
       XVIII      Errors and Omissions (BRMA 14F)                    15
         XIX      Currency (BRMA 12A)                                15
          XX      Taxes (BRMA 50B)                                   15
         XXI      Federal Excise Tax (BRMA 17A)                      15
        XXII      Loss Reserves                                      16
       XXIII      Insolvency                                         17
        XXIV      Arbitration                                        18
         XXV      Service of Suit (BRMA 49C)                         19
        XXVI      Agency Agreement                                   20
       XXVII      Intermediary (BRMA 23A)                            20

<PAGE>

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (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

A.   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 on the
     effective  date  hereof or issued or renewed  on or after  that  date,  and
     classified by the Company as Fire, Allied Lines,  Homeowners Multiple Peril
     (Sections I and II), Mobile Homeowners  Multiple Peril (Sections I and II),
     Inland  Marine,  Earthquake,  Private  Passenger  Automobile  Liability and
     Physical Damage,  Motorcycle Liability and Commercial  Automobile Liability
     and Physical Damage and General Liability  business,  subject to the terms,
     conditions and  limitations  set forth herein and in Schedule A attached to
     and forming part of this Contract.

B.   It is understood that the classes of business reinsured under this Contract
     are deemed to include:

       1.Coverages required for non-resident drivers under the  motor  vehicle
         financial  responsibility  law  or the  motor  vehicle compulsory
         insurance  law or any  similar  law of any  state or  province,
         following the provisions of the Company's policies when they include
         or are deemed to include so-called "Out of State Insurance" provisions;

<PAGE>

       2.Coverages required under Section 30 of the Motor Carrier Act of 1980
         and/or any amendments thereto.

Article II - Commencement and Termination

A.    This  Contract  shall become  effective  on July 1, 1999,  with respect to
      losses  arising out of loss events  commencing on or after that date,  and
      shall continue in force thereafter until terminated.

B.   Either party may terminate this Contract at any June 30 by giving the other
     party not less than 90 days prior notice by certified mail.

C.    If any contract  year expires or if this  Contract is  terminated  while a
      loss event 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 event had occurred prior to
      the expiration of such contract year or the  termination of this Contract,
      provided that no part of such loss event is claimed against any subsequent
      contract year hereunder or any renewal or replacement of this Contract.

D.    In the event negotiations for a renewal of this Contract are not completed
      by  June  30 of any  contract  year,  such  contract  year  shall,  at the
      Company's option,  be extended by addendum to 15 months,  and either party
      may then  terminate  this Contract on any September 30 by giving the other
      party not less than 60 days prior notice by certified mail.

E.    "Contract  year" as used in this Contract  shall mean the period from July
      1,  1999,  to June 30,  2000,  both days  inclusive,  and each  respective
      12-month period thereafter that this Contract continues in force. However,
      if a contract  year is extended  to 15 months as  provided in  paragraph D
      above, the contract year following such extended  contract year shall be a
      nine-month period and each subsequent  12-month period shall be a separate
      contract year.

Article III - Territory (BRMA 51A)

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

Article IV - Exclusions

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

1.   Reinsurance  assumed  by  the  Company,  except  inter-company  reinsurance
     between any of the reinsured companies hereunder.

<PAGE>

2.   Financial guarantee and insolvency.

3.   Business  written by the Company on a co-indemnity  basis where the Company
     is not the controlling carrier.

4.   Nuclear  risks as  defined  in the  "Nuclear  Incident  Exclusion  Clause -
     Physical Damage - Reinsurance  (U.S.A.)," the "Nuclear  Incident  Exclusion
     Clause - Physical  Damage - Reinsurance  (Canada),"  the "Nuclear  Incident
     Exclusion  Clause -  Liability -  Reinsurance  (U.S.A.)"  and the  "Nuclear
     Incident  Exclusion Clause - Liability - Reinsurance  (Canada)" attached to
     and forming part of this Contract.

5.   Liability as a member,  subscriber  or reinsurer of any Pool,  Syndicate or
     Association;  and any combination of insurers or reinsurers  formed for the
     purpose of covering  specific  perils,  specific classes of business or for
     the  purpose of insuring  risks  located in  specific  geographical  areas.
     However,  this  exclusion  shall not apply to residual  market  mechanisms,
     including but not limited to FAIR Plans, Joint  Underwriting  Associations,
     Assigned Risk Plans,  or to Coastal  Pools,  Beach Plans or similar  plans,
     however styled. It is understood and agreed, however, that this reinsurance
     does not include any increase in liability  to the Company  resulting  from
     (a) the inability of any other  participant in a residual market mechanism,
     including but not limited to a FAIR Plan, Joint  Underwriting  Association,
     Assigned Risk Plan,  Coastal Pool,  Beach Plan or similar plan, to meet its
     liability,  or (b) any claim  against  such a  residual  market  mechanism,
     including but not limited to a FAIR Plan, Joint  Underwriting  Association,
     Assigned  Risk Plan,  Coastal  Pool,  Beach Plan or  similar  plan,  or any
     participant therein,  including the Company,  whether by way of subrogation
     or otherwise, brought by or on behalf of any insolvency fund.

     Notwithstanding  the  foregoing,  this exclusion  shall  not apply  to loss
     assessments made against the Company by the Hawaii Hurricane Relief Fund or
     loss adjustment expenses incurred by the Company on Hawaii Hurricane Relief
     Fund policies issued by the Company.

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.   Seepage and pollution in accordance with the full ISO Seepage and Pollution
     Exclusion,  except when such loss is due to  explosion,  hostile fire or as
     respects  automobile  liability due to collision or upset, unless otherwise
     restricted by state law. However, where a court renders an adverse judgment
     interpreting  the ISO  Exclusion  wording,  the  Reinsurer  will cover that
     portion of the judgment regarding losses due to pollution.

8.   Business produced under the New York Motorcycle Program.

B.    The Company  shall have the option to exclude a class of business  subject
      to this Contract by providing the Reinsurer with prior written notice.

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 event. 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 Event Limit" for that excess
      layer in Schedule A attached hereto, as respects any one loss event.

B.    The  Company  shall  purchase  or  be  deemed  to  have  purchased  excess
      facultative  reinsurance for Commercial Automobile Liability policies with
      limits exceeding $2,000,000.

C.    If the Company's  losses arising from the same cause are allocated to more
      than one loss event under the provisions of subparagraph C of Article VII,
      the  Company's  retention  applicable  to each  such loss  event  shall be
      reduced by dividing  the  Company's  retention  by the number of such loss
      events  (whether or not commencing  during the term of this Contract) with
      pro rata  consideration  given  depending on the primary  policy limits or
      reinsurance  retention of the  individual  policy  periods  affected.  The
      Reinsurer's limit of liability applicable to such loss event for each such
      policy period shall be arrived at in the same manner.

Article VI - Reinstatement

A.   In the event all or any portion of the  reinsurance  under the First Excess
     Per Event layer is  exhausted  by loss during any one  contract  year,  the
     amount so exhausted shall be reinstated  immediately from the time the loss
     event  commences  hereon.  As respects loss events  involving only property
     losses  and at least two  risks,  for the first  $1,000,000  so  reinstated
     during any one contract  year the Company shall pay  reinstatement  premium
     equal to $75,000 times the  percentage  of the loss event limit  reinstated
     (based on the loss paid by the  Reinsurer);  for the second  $1,000,000  so
     reinstated   during  the  same   contract   year  the  Company   shall  pay
     reinstatement  premium equal to $150,000  times the  percentage of the loss
     event  limit  reinstated  (based  on the loss  paid by the  Reinsurer).  As
     respects  all other  losses  under the First  Excess Per Event  layer,  the
     Company shall pay no additional premium.

B.   In the event all or any portion of the reinsurance  under the Second Excess
     Per Event layer is  exhausted  by loss during any one  contract  year,  the
     amount so exhausted shall be reinstated  immediately from the time the loss
     event commences  hereon.  For the first $1,000,000 so reinstated during any
     one contract year the Company shall pay reinstatement  premium equal to 50%
     of the earned reinsurance premium for the Second Excess Per Event layer for
     that  contract  year  (exclusive  of   reinstatement   premium)  times  the
     percentage  of the loss event limit  reinstated  (based on the loss paid by
     the  Reinsurer);  for the second  $1,000,000 so reinstated  during the same
     contract year the Company shall pay reinstatement  premium equal to 100% of
     the earned  reinsurance  premium for the Second  Excess Per Event layer for
     that  contract  year  (exclusive  of   reinstatement   premium)  times  the
     percentage  of the loss event limit  reinstated  (based on the loss paid by
     the Reinsurer).

C.   Whenever  the  Company  requests  payment  by the  Reinsurer  of  any  loss
     hereunder for which reinstatement premium is due the Reinsurer, the Company
     shall submit a statement to the Reinsurer of such premium. If reinstatement
     premium is based on the earned  reinsurance  premium for the Second  Excess
     Per Event  layer  for the  contract  year,  and that  premium  has not been
     finally determined as of the date of any such statement, the calculation of
     reinstatement  premium due shall be based on the annual deposit premium and
     shall be readjusted  when the earned  reinsurance  premium for the contract
     year has been finally 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.

D.   Notwithstanding  anything  stated  herein,  the  liability of the Reinsurer
     shall not exceed:

       1.   As respects the First Excess Per Event layer, $3,000,000 as respects
            loss or losses arising out of loss events  commencing during any one
            contract  year and involving  only property  losses and at least two
            risks; and

       2.   As  respects  the  Second  Excess  Per Event  layer,  $3,000,000  as
            respects loss or losses arising out of loss events commencing during
            any one contract year.

<PAGE>

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% of any amount paid
            or  payable  by the  Company  in excess of its  policy  limits,  but
            otherwise  within the terms of its policy,  as a result of an action
            against  it by its  insured  or its  insured's  assignee  to recover
            damages  the  insured is legally  obligated  to pay to a third party
            claimant  because of the Company's  alleged or actual  negligence or
            bad faith in  rejecting a settlement  within  policy  limits,  or in
            discharging  its duty to defend or prepare  the defense in the trial
            of an action  against its  insured,  or in  discharging  its duty to
            prepare or prosecute an appeal consequent upon such an action.

       2.   "Extra  contractual  obligations"  shall  mean 90% of any  punitive,
            exemplary, compensatory or consequential damages, other than loss in
            excess of policy limits,  paid or payable by the Company as a result
            of an action against it by its insured,  its insured's assignee or a
            third party claimant,  which action alleges  negligence or bad faith
            on the  part of the  Company  in  handling  a claim  under a  policy
            subject to this Contract.  An extra contractual  obligation shall be
            deemed  to have  occurred  on the same date as the loss  covered  or
            alleged to be covered under the policy.

      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.

C.    "Loss  event" as used  herein is defined  as an  accident,  occurrence,  a
      series of accidents or  occurrences,  claim made,  loss  discovered or any
      other  circumstance  that triggers  coverage under the Company's  original
      policies arising out of or caused by one event, except that:

1.   As respects property losses subject hereto,  all individual losses directly
     occasioned by any one disaster,  occurrence or loss or series of disasters,
     occurrences or losses arising out of one occurrence  which occurs  anywhere
     in the world, but limited in the United States of America and Canada to any
     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  event" 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 event" shall be further defined as follows:

             a.   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  loss  event.  However,  the loss  event  need not be
                  limited  to one  state or  province  or  states  or  provinces
                  contiguous thereto.

             b.   As regards riot,  riot  attending a strike,  civil  commotion,
                  vandalism  and  malicious  mischief,   all  individual  losses
                  sustained  by the  Company  occurring  during any period 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 loss 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
                  assured's  premises  by  strikers,  provided  such  occupation
                  commenced during the aforesaid period.

             c.   As  regards  earthquake  (the  epicenter  of  which  need  not
                  necessarily  be within the  territorial  confines  referred to
                  above)  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 event."

             d.   As  regards   "freeze,"  only   individual   losses   directly
                  occasioned  by  collapse,  breakage of glass and water  damage
                  (caused by bursting  frozen pipes and tanks and melting  snow)
                  may be included in the Company's "loss event."

            Except for those "loss events" referred to in subparagraphs  (a) and
            (b) 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,  occurrence or loss, and provided that only one such
            period of 168 consecutive hours shall apply with respect to one loss
            event.

            However,   as   respects   those  "loss   events"   referred  to  in
            subparagraphs (a) and (b) above, if the disaster, occurrence or loss
            occasioned  by  the  occurrence  is  of  greater  duration  than  72
            consecutive  hours,  then the  Company  may  divide  that  disaster,
            occurrence or loss into two or more "loss events,"  provided that 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,
            occurrence or loss.

            It is understood  that losses  arising from a combination  of two or
            more perils as a result of the same  occurrence  shall be considered
            as  having  arisen  from  one  "loss  event."   Notwithstanding  the
            foregoing,  the  hourly  limitations  as stated  above  shall not be
            exceeded  as  respects  the  applicable  perils and no single  "loss
            event" shall  encompass a time period  greater than 168  consecutive
            hours.

       2.   Losses  arising from the date change to the year 2000,  or any other
            date change,  including leap year calculations,  shall not in and of
            themselves  be  regarded  as a "loss  event"  for  purposes  of this
            Contract. Such losses shall include any loss, damage, cost, claim or
            expense,  whether preventative,  remedial or otherwise,  directly or
            indirectly arising out of or relating to:

             a.   The calculation,  comparison,  differentiation,  sequencing or
                  processing of data involving the date change to the year 2000,
                  or any other date change, including leap year calculations, by
                  any computer system, hardware,  program or software and/or any
                  microchip,  integrated  circuit or similar  device in computer
                  equipment or non-computer  equipment,  whether the property of
                  the insured or not; or

             b.   Any change,  alteration  or  modification  involving  the date
                  change to the year 2000 or any other  date  change,  including
                  leap year calculations, to any such computer system, hardware,
                  program or software or any  microchip,  integrated  circuit or
                  similar   device  in  computer   equipment   or   non-computer
                  equipment, whether the property of the insured or not.

            This  subparagraph 2 applies  regardless of any other cause or event
            that  contributes  concurrently  or in any  sequence  to  the  loss,
            damage, cost claim or expense.

            However,  this subparagraph 2 shall not apply in respect of physical
            damage occurring at the insured's premises arising out of the perils
            covered by this  Contract.  None of the  circumstances  described in
            subparagraphs   2(a)  and  2(b)  above  shall,  in  and  of  itself,
            constitute a loss event for purposes of this Contract.

D.    "Policy period" as used herein shall mean the period from the inception or
      renewal date of the primary policy through the expiration,  termination or
      first premium  anniversary date of the policy,  whichever first occurs. As
      respects  continuous or greater than one year term policies,  each premium
      anniversary date shall be considered the beginning of a new policy period.

E.    "Loss adjustment  expense" as used herein shall mean expenses allocable to
      the investigation, defense and/or settlement of specific claims, including
      litigation  expenses,  interest on  judgments,  and  declaratory  judgment
      expenses  incurred in  connection  with claims  under  policies  reinsured
      hereunder,  but not including office expenses or salaries of the Company's
      regular employees.

F.    "Net earned  premium" as used herein is defined as gross earned premium of
      the  Company for the classes of  business  reinsured  hereunder,  less the
      earned  portion of premiums  ceded by the Company  for  reinsurance  which
      inures to the benefit of this Contract.

Article VIII - Other Reinsurance

The Company  shall be permitted  to carry other  reinsurance,  recoveries  under
which shall inure to the benefit of the Company and be entirely  disregarded  in
applying all of the provisions of this Contract.

Article IX - Florida Hurricane Catastrophe Fund

A.   Any loss  reimbursement  the Company  receives under the Florida  Hurricane
     Catastrophe  Fund (FHCF) as a result of loss events  commencing  during the
     term of this Contract shall be deemed to be salvage received by the Company
     in determining ultimate net loss under this Contract. If the salvage amount
     is based on the  Company's  losses in more than one loss event and the FHCF
     does not  designate  the amount  allocable to each loss event,  the salvage
     amount shall be prorated in the  proportion  that the  Company's  losses in
     each loss event bear to the Company's  total losses arising out of all loss
     events to which the salvage applies.  If, as a result of such salvage,  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.

B.    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 - Claims

A.   Whenever a claim is reserved by the Company for an amount  greater than its
     retention  hereunder  and/or whenever a claim appears likely to result in a
     claim under this Contract, the Company shall notify the Reinsurer. Further,
     the  Company  shall  notify  the  Reinsurer  whenever  a claim  involves  a
     fatality,   amputations  or  permanent  loss  of  use  of  upper  or  lower
     extremities,  spinal  injuries  resulting in partial or total  paralysis of
     upper or lower  extremities,  brain  injuries  resulting in  impairment  of
     physical  functions,  severe burn cases,  or any other  injuries  likely to
     result in a permanent  disability  rating of 50.0% or more,  regardless  of
     liability,  if the policy  limits or statutory  benefits  applicable to the
     claim are greater than the  Company's  retention  hereunder.  The Reinsurer
     shall have the right to participate,  at its own expense, in the defense or
     control of any claim or suit or proceeding involving this reinsurance.

B.    All claim  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 by the Company.

Article XI - 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 XII - Reinsurance Premium

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

       1.   The amount shown as "Annual  Minimum  Premium" for that excess layer
            in Schedule A attached hereto as respects each contract year; or

       2.   The  percentage,  shown as "Premium  Rate" for that excess  layer in
            Schedule A attached hereto,  of the Company's net earned premium for
            each contract year.

B.    The Company  shall pay the  Reinsurer an annual  deposit  premium for each
      excess  layer of the amount,  shown as "Annual  Deposit  Premium" for that
      excess layer in Schedule A attached hereto as respects each contract year,
      in four equal  installments  of the amount,  shown as  "Quarterly  Deposit
      Premium" for that excess layer in Schedule A attached  hereto,  on July 1,
      October 1, January 1, and April 1 of each contract year.

C.    In the event that a  contract  year is  extended  in  accordance  with the
      provisions  of  paragraph D of Article  II, the  amounts  shown as "Annual
      Minimum  Premium"  and "Annual  Deposit  Premium" for each excess layer in
      Schedule A for such  extended  contract  year shall be increased by 25.0%.
      The amounts shown as "Annual Minimum Premium" and "Annual Deposit Premium"
      for each  excess  layer in  Schedule A for the  nine-month  contract  year
      following an extended  contract year shall be 75.0% of the amount shown as
      "Annual  Minimum  Premium"  for that  excess  layer in Schedule A attached
      hereto.

D.    Within 60 days after the end of each  contract  year,  the  Company  shall
      provide a report to the Reinsurer  setting forth the premium due hereunder
      for the contract  year,  computed in accordance  with paragraph A, and any
      additional  premium due the  Reinsurer  or return  premium due the Company
      shall be remitted promptly.

Article XIII - Contingent Commission
A.    As respects the First Excess Per Event Layer only, the Reinsurer shall pay
      the Company a contingent  commission equal to 25.0% of the net profit,  if
      any,  accruing to the  Reinsurer  during each  accounting  period  defined
      herein.  The first  accounting  period shall be from the effective date of
      this  Contract  through the end of the third  contract year (as defined in
      paragraph E of Article II) hereunder,  and each subsequent period of three
      consecutive contract years shall be a separate accounting period. However,
      if this Contract is terminated,  the final accounting period shall be from
      the beginning of the then current  accounting  period  through the date of
      termination.

B.    The Reinsurer's net profit for each accounting  period shall be calculated
      in  accordance  with the following  formula,  it being  understood  that a
      positive balance equals net profit and a negative balance equals net loss:

       1.   Reinsurance premiums paid or payable for the First Excess Per Event
            layer for the accounting period;
            less

       2.   Expenses incurred by the Reinsurer at 20.0% of reinsurance  premiums
            paid or  payable  for the  First  Excess  Per  Event  layer  for the
            accounting period; less

       3.  Losses  incurred  for  the  First  Excess  Per  Event  layer  for the
accounting period; less

       4. The  Reinsurer's  net loss,  if any,  from the  immediately  preceding
accounting period.

C.   The Company shall calculate and report the Reinsurer's net profit within 60
     days after 24 months  following  the end of each  contract year within each
     accounting period,  within 60 days after the end of each accounting period,
     and within 60 days after the end of each 12-month period  thereafter  until
     all losses subject hereto have been finally settled.  Each such calculation
     shall be based on cumulative  transactions  hereunder from the beginning of
     the  accounting  period  through  the date of  calculation,  including  the
     Reinsurer's  net loss, if any, from the  immediately  preceding  accounting
     period.  As  respects  the  initial  calculation  referred  to  above,  any
     contingent  commission  shown  to be due the  Company  shall be paid by the
     Reinsurer as promptly as possible  after  receipt and  verification  of the
     Company's report. As respects each subsequent  calculation,  any additional
     contingent  commission  shown  to be due the  Company  shall be paid by the
     Reinsurer as promptly as possible  after  receipt and  verification  of the
     Company's  report.  Any return  contingent  commission  shown to be due the
     Reinsurer shall be paid by the Company with its report.

D.    "Losses  incurred"  as used  herein  shall  mean  ceded  losses  and  loss
      adjustment expense paid as of the effective date of calculation,  plus the
      ceded reserves for losses and loss  adjustment  expense  outstanding as of
      the  same  date,  all  as  respects  losses  arising  out of  loss  events
      commencing during the accounting period under consideration.

Article XIV - Offset (BRMA 36C)

The  Company  and the  Reinsurer  shall have the right to offset any  balance or
amounts  due from one party to the other under the terms of this  Contract.  The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise.

Article XV - 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 XVI - 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 XVII - Net Retained Lines (BRMA 32E)

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

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

Article XVIII - 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 XIX - 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 XX - Taxes (BRMA 50B)

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

Article XXI - 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.

Article XXII - Loss Reserves

A.    If the  Reinsurer  is  unauthorized  in any state of the United  States of
      America or the  District of Columbia  or the  Reinsurer  has an A. M. Best
      rating  equal to or below B++, the  Reinsurer  agrees to fund its share of
      the Company's ceded outstanding loss and loss adjustment  expense reserves
      (including incurred but not reported loss reserves) 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.   With  regard to funding  in whole or in part by  letters  of credit,  it is
     agreed that each letter of credit will be in a form acceptable to insurance
     regulatory authorities involved,  will be issued for a term of at least one
     year and will include an "evergreen  clause," which  automatically  extends
     the term for at least one additional  year at each  expiration  date unless
     written notice of non-renewal is given to the Company not less than 30 days
     prior to said expiration date. The Company and the Reinsurer further agree,
     notwithstanding  anything  to the  contrary  in this  Contract,  that  said
     letters  of credit may be drawn upon by the  Company or its  successors  in
     interest at any time,  without  diminution because of the insolvency of the
     Company  or the  Reinsurer,  but  only  for one or  more  of the  following
     purposes:

       1.   To reimburse itself for the Reinsurer's  share of losses and/or loss
            adjustment  expense  paid  under  the  terms of  policies  reinsured
            hereunder, unless paid in cash by the Reinsurer;

       2.   To reimburse  itself for the Reinsurer's  share of any other amounts
            claimed to be due hereunder, unless paid in cash by the Reinsurer;

       3.   To fund a cash account in an amount equal to the  Reinsurer's  share
            of any ceded  outstanding loss and loss adjustment  expense reserves
            (including  incurred but not reported loss reserves) 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;

       4.   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
            outstanding  loss and loss adjustment  expense  reserves  (including
            incurred but not  reported  loss  reserves),  if so requested by the
            Reinsurer.

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

Article XXIII - 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 immediately upon
     demand,  with reasonable  provision for  verification,  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.

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 XXIV - Arbitration

A.   As a condition precedent to any right of action hereunder,  in the event of
     any dispute or difference of opinion hereafter arising with respect to this
     Contract,  it is hereby  mutually agreed that such dispute or difference of
     opinion shall be submitted to  arbitration.  One Arbiter shall be chosen by
     the Company,  the other by the Reinsurer,  and an Umpire shall be chosen by
     the two Arbiters before they enter upon  arbitration,  all of whom shall be
     active  or  retired  disinterested   executive  officers  of  insurance  or
     reinsurance  companies or Lloyd's  London  Underwriters.  In the event that
     either  party should fail to choose an Arbiter  within 30 days  following a
     written  request  by the other  party to do so,  the  requesting  party may
     choose two Arbiters who shall in turn choose an Umpire before entering upon
     arbitration.  If the two  Arbiters  fail to agree upon the  selection of an
     Umpire  within 30 days  following  their  appointment,  each Arbiter  shall
     nominate three candidates within 10 days thereafter,  two of whom the other
     shall decline, and the decision shall be made by drawing lots.

B.    Each party shall present its case to the Arbiters within 30 days following
      the date of  appointment  of the Umpire.  The Arbiters shall consider this
      Contract  as  an  honorable  engagement  rather  than  merely  as a  legal
      obligation  and they are  relieved  of all  judicial  formalities  and may
      abstain  from  following  the strict  rules of law.  The  decision  of the
      Arbiters shall be final and binding on both parties; but failing to agree,
      they shall call in the Umpire and the  decision of the  majority  shall be
      final and binding upon both parties.  Judgment upon the final  decision of
      the Arbiters may be entered in any court of competent jurisdiction.

C.    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  and  communications  shall be made by the  Company to each of the
      reinsurers constituting one party, provided,  however, that nothing herein
      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 reinsurers participating under the terms of this Contract from several
      to joint.

D.    Each party shall bear the expense of its own  Arbiter,  and shall  jointly
      and  equally  bear with the other the  expense  of the  Umpire  and of the
      arbitration.  In the event that the two  Arbiters are chosen by one party,
      as above  provided,  the  expense  of the  Arbiters,  the  Umpire  and the
      arbitration shall be equally divided between the two parties.

E.    Any  arbitration  proceedings  shall take place at El Segundo,  California
      unless otherwise mutually agreed upon by the parties to this Contract, but
      notwithstanding the location of the arbitration,  all proceedings pursuant
      hereto  shall be governed by the law of the state in which the Company has
      its principal office.

Article XXV - Service of Suit (BRMA 49C)

(Applicable  if the  Reinsurer is not domiciled in the United States of America,
and/or is not  authorized  in any State,  Territory  or  District  of the United
States where authorization is required by insurance regulatory authorities)

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

B.    Further,  pursuant to any statute of any state,  territory  or district of
      the United States which makes  provision  therefor,  the Reinsurer  hereby
      designates the party named in its Interests and Liabilities Agreement,  or
      if no party is named therein, the Superintendent, Commissioner or Director
      of Insurance or other officer specified for that purpose in the

<PAGE>

      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 XXVI - 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.

Article XXVII - Intermediary (BRMA 23A)

E. W. Blanch Co., 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 E. W. Blanch Co.,
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:

Calabasas, California,       this ________ day of ____________ in the year ____.

                             ---------------------------------------------------
                             Condor Insurance Company
                             Amwest Surety Insurance Company
                             Far West Insurance Company

<PAGE>

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska

                                          First                     Second
                                          Excess                    Excess

Company's Retention                     $1,000,000                $2,000,000

Reinsurer's Per Event Limit             $1,000,000                $1,000,000

Annual Minimum Premium                    $700,000                  $161,000

Premium Rate                                 2.75%                     0.60%

Annual Deposit Premium                  $1,000,000                  $230,000

Quarterly Deposit Premium                 $250,000                   $57,500

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.

<PAGE>

U.S.A.

        NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE

      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

<PAGE>

        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.

<PAGE>

 U.S.A.

                 NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY -
             REINSURANCE (Approved by Lloyd's Underwriters' Fire and
                             Non-Marine Association)

      (1) This reinsurance does not cover any loss or liability  accruing to the
Reassured  as a member of, or  subscriber  to, any  association  of  insurers or
reinsurers  formed for the  purpose of  covering  nuclear  energy  risks or as a
direct or indirect reinsurer of any such member, subscriber or association.

      (2) Without in any way  restricting the operation of paragraph (1) of this
Clause it is understood and agreed that for all purposes of this reinsurance all
the original  policies of the Reassured  (new,  renewal and  replacement) of the
classes  specified in Clause II of this paragraph (2) from the time specified in
Clause  III in this  paragraph  (2)  shall be deemed to  include  the  following
provision (specified as the Limited Exclusion Provision):

      Limited Exclusion Provision.*

         I.     It is agreed that the policy does not apply under any liability
                coverage, to   (injury, sickness, disease, death or destruction
                with respect to which an insured under the (bodily injury or
                property damage
                policy  is also an  insured  under a  nuclear  energy  liability
                policy issued by Nuclear Energy Liability Insurance Association,
                Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
                Association  of Canada,  or would be an  insured  under any such
                policy but for its  termination  upon exhaustion of its limit of
                liability.
          II.   Family Automobile Policies (liability only),  Special Automobile
                Policies  (private  passenger   automobiles,   liability  only),
                Farmers  Comprehensive  Personal Liability  Policies  (liability
                only),  Comprehensive  Personal  Liability  Policies  (liability
                only) or policies of a similar nature; and the liability portion
                of  combination  forms  related to the four  classes of policies
                stated above, such as the Comprehensive  Dwelling Policy and the
                applicable types of Homeowners Policies.
          III.  The inception  dates and thereafter of all original  policies as
                described  in II above,  whether  new,  renewal or  replacement,
                being policies which either (a) become effective on or after 1st
                May, 1960, or (b) become  effective before that date and contain
                the Limited Exclusion Provision set out
above;
                provided  this  paragraph  (2) shall not be applicable to Family
                Automobile Policies, Special Automobile Policies, or policies or
                combination  policies  of  a  similar  nature,   issued  by  the
                Reassured on New York risks, until 90 days following approval of
                the Limited  Exclusion  Provision by the Governmental  Authority
                having jurisdiction thereof.

      (3)  Except  for  those  classes  of  policies  specified  in Clause II of
paragraph (2) and without in any way  restricting the operation of paragraph (1)
of this  Clause,  it is  understood  and agreed  that for all  purposes  of this
reinsurance the original  liability  policies of the Reassured (new, renewal and
replacement) affording the following coverages:

             Owners,  Landlords and Tenants  Liability,  Contractual  Liability,
             Elevator  Liability,  Owners or  Contractors  (including  railroad)
             Protective  Liability,  Manufacturers  and  Contractors  Liability,
             Product   Liability,   Professional   and  Malpractice   Liability,
             Storekeepers  Liability,  Garage  Liability,  Automobile  Liability
             (including Massachusetts Motor Vehicle or Garage Liability)

shall be  deemed to  include,  with  respect  to such  coverages,  from the time
specified in Clause V of this paragraph (3), the following provision  (specified
as the Broad Exclusion Provision):

      Broad Exclusion Provision.*

It is agreed that the policy does not apply:
         I.     Under any Liability Coverage to (injury, sickness, disease,
                death or destruction (bodily injury or property damage
                (a)     with  respect  to which an  insured  under the policy is
                        also an insured under a nuclear energy  liability policy
                        issued   by   Nuclear   Energy    Liability    Insurance
                        Association, Mutual Atomic Energy Liability Underwriters
                        or Nuclear Insurance  Association of Canada, or would be
                        an insured under any such policy but for its termination
                        upon exhaustion of its limit of liability; or
                (b)     resulting  from  the  hazardous  properties  of  nuclear
                        material  and with  respect  to which (1) any  person or
                        organization   is   required   to   maintain   financial
                        protection pursuant to the Atomic Energy Act of 1954, or
                        any law  amendatory  thereof,  or (2) the insured is, or
                        had this  policy not been issued  would be,  entitled to
                        indemnity  from the  United  States of  America,  or any
                        agency thereof,  under any agreement entered into by the
                        United States of America,  or any agency  thereof,  with
                        any person or organization.

<PAGE>

II.  Under any Medical Payments  Coverage,  or under any Supplementary  Payments
     Provision  relating to  (immediate  medical or surgical  relief to expenses
     incurred with respect (first aid, to (bodily injury,  sickness,  disease or
     death  resulting  from the hazardous  properties of (bodily  injury nuclear
     material  and arising  out of the  operation  of a nuclear  facility by any
     person or organization.

III. Under any  Liability  Coverage  to  (injury,  sickness,  disease,  death or
     destruction  (bodily injury or property damage resulting from the hazardous
     properties of nuclear  material,  if
                (a)   the nuclear material (1) is at any nuclear facility owned
                      by, or  operated by or on behalf of, an insured or
                      (2) has been discharged or dispersed therefrom;
                (b)   the nuclear  material is  contained in spent fuel or waste
                      at any time possessed,  handled, used, processed,  stored,
                      transported  or disposed of by or on behalf of an insured;
                      or
                (c)   the(injury, sickness, disease, death or destruction arises
                      out of the furnishing by an insured (bodily injury or
                      property damage
                      of services,  materials,  parts or equipment in connection
                      with the planning, construction, maintenance, operation or
                      use of any  nuclear  facility,  but if  such  facility  is
                      located   within  the  United   States  of  America,   its
                      territories,  or possessions or Canada, this exclusion (c)
                      applies only to (injury to or  destruction  of property at
                      such nuclear facility (property damage to such nuclear
                      facility and any property thereat.
IV. As used in this endorsement:
                "hazardous  properties" include radioactive,  toxic or explosive
                properties;  "nuclear  material" means source material,  special
                nuclear  material  or  byproduct  material;  "source  material",
                "special nuclear  material",  and "byproduct  material" have the
                meanings  given them in the Atomic  Energy Act of 1954 or in any
                law amendatory  thereof;  "spent fuel" means any fuel element or
                fuel component,  solid or liquid, which has been used or exposed
                to  radiation  in a  nuclear  reactor;  "waste"  means any waste
                material (1)  containing  byproduct  material and (2)  resulting
                from the operation by any person or  organization of any nuclear
                facility  included  within the  definition  of nuclear  facility
                under paragraph (a) or (b) thereof; "nuclear facility" means (a)
                any nuclear  reactor,  (b) any  equipment or device  designed or
                used for (1) separating the isotopes of uranium or lutonium, (2)
                processing or utilizing spent fuel, or (3) handling processing
                or packaging  waste,
                (c)  any   equipment   or  device   used  for  the   processing,
                     fabricating or alloying of special  nuclear  material if at
                     any time the total  amount of such  material in the custody
                     of the  insured at the  premises  where such  equipment  or
                     device is  located  consists  of or  contains  more than 25
                     grams  of  plutonium  or  uranium  233 or  any  combination
                     thereof, or more than 250 grams of uranium 235,
                (d)  any  structure,   basin,  excavation,   premises  or  place
                     prepared or used for the storage or disposal of waste,
                and includes the site on which any of the  foregoing is located,
                all operations  conducted on such site and all premises used for
                such operations;  "nuclear reactor" means any apparatus designed
                or used to sustain  nuclear fission in a  self-supporting  chain
                reaction or to contain a critical mass of fissionable material;
             ( With respect to injury to or  destruction  of property,  the word
             "injury" or "destruction" ( "property damage" includes all forms of
             radioactive  contamination  of  property.  ( includes  all forms of
             radioactive contamination of property.
         V.     The  inception  dates and  thereafter  of all original  policies
                affording  coverages  specified in this paragraph  (3),  whether
                new,  renewal  or  replacement,   being  policies  which  become
                effective on or after 1st May, 1960, provided this paragraph (3)
                shall not be applicable to
                     (i) Garage and Automobile  Policies issued by the Reassured
                     on New York risks,  or (ii) statutory  liability  insurance
                     required under Chapter 90, General Laws of
                Massachusetts,  until 90 days  following  approval  of the Broad
                Exclusion   Provision  by  the  Governmental   Authority  having
                jurisdiction thereof.
      (4) Without in any way  restricting the operation of paragraph (1) of this
Clause,  it is understood  and agreed that  paragraphs (2) and (3) above are not
applicable  to original  liability  policies of the Reassured in Canada and that
with respect to such policies this Clause shall be deemed to include the Nuclear
Energy  Liability  Exclusion  Provisions  adopted by the Canadian  Underwriters'
Association of the Independent Insurance Conference of Canada.

*NOTE.  The words printed in italics in the Limited  Exclusion  Provision and in
the Broad Exclusion Provision shall apply only in relation to original liability
policies  which  include  a Limited  Exclusion  Provision  or a Broad  Exclusion
Provision containing those words.

21/9/67
N.M.A. 1590

<PAGE>

           NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE
                                     CANADA

1. This Agreement does not cover any loss or liability accruing to the Reinsured
as a member of, or  subscriber  to, any  association  of insurers or  reinsurers
formed  for the  purpose  of  covering  nuclear  energy  risks or as a direct or
indirect reinsurer of any such member, subscriber, or association.

2. Without in any way restricting the operation of paragraph 1 of this clause it
is agreed that for all purposes of this  Agreement  all the  original  liability
contracts  of  the  Reinsured,  whether  new,  renewal  or  replacement,  of the
following classes, namely,

               Personal Liability,
               Farmers Liability,
               Storekeepers Liability,

which become effective on or after 31st December 1984, shall be deemed to
include, from their inception dates and
thereafter, the following provision: --

       Limited Exclusion Provision

       This  Policy  does not apply to bodily  injury or  property  damage  with
       respect to which the Insured is also insured  under a contract of nuclear
       energy liability insurance (whether the Insured is named in such contract
       or not and  whether  or not it is  legally  enforceable  by the  Insured)
       issued by the Nuclear Insurance  Association of Canada or any other group
       or pool of insurers or would be an Insured  under any such policy but for
       its termination upon exhaustion of its limit of liability.

       With respect to property, loss of use of such property shall be deemed to
be property damage.

3. Without in any way restricting the operation of paragraph 1 of this clause it
is agreed that for all purposes of this  Agreement  all the  original  liability
contracts of the Reinsured,  whether new,  renewal or replacement,  of any class
whatsoever  (other than  Personal  Liability,  Farmers  Liability,  Storekeepers
Liability or Automobile Liability contracts), which become effective on or after
31st December 1984,  shall be deemed to include,  from their inception dates and
thereafter, the following provision: --

       Broad Exclusion Provision

       It is agreed that this Policy does not apply:

       (a)    to liability imposed by or arising under the Nuclear Liability
              Act; or

       (b)    to bodily  injury or  property  damage  with  respect  to which an
              Insured  under this  Policy is also  insured  under a contract  of
              nuclear energy liability  insurance  (whether the Insured is named
              in  such  contract  or  not  and  whether  or  not  it is  legally
              enforceable  by  the  Insured)  issued  by the  Nuclear  Insurance
              Association  of Canada or any  other  insurer  or group or pool of
              insurers or would be an Insured  under any such policy but for its
              termination upon exhaustion of its limit of liability; or

       (c)    to  bodily  injury  or  property  damage  resulting   directly  or
              indirectly from the nuclear energy hazard arising from:

               (1)   the ownership, maintenance, operation or use of a nuclear
                     facility by or on behalf of an
                     Insured;

               (2)   the furnishing by an Insured of services,  materials, parts
                     or equipment in connection with the planning, construction,
                     maintenance, operation or use of any nuclear facility; and

               (3)   The possession,  consumption,  use,  handling,  disposal or
                     transportation  of  fissionable   substances  or  of  other
                     radioactive  material (except  radioactive  isotopes,  away
                     from a nuclear facility, which have reached the final stage
                     of  fabrication  so as to be  useable  for any  scientific,
                     medical,  agricultural,  commercial or industrial  purpose)
                     used, distributed, handled or sold by an Insured.

As used in this Policy:

               (I)   The term "nuclear  energy  hazard"  means the  radioactive,
                     toxic,   explosive  or  other   hazardous   properties   of
                     radioactive material;

              (II)   The term  "radioactive  material"  means uranium,  thorium,
                     plutonium,  neptunium,  their  respective  derivatives  and
                     compounds,  radioactive  isotopes of other elements and any
                     other  substances that the Atomic Energy Control Board may,
                     by  regulation,  designate as being  prescribed  substances
                     capable of releasing  atomic energy,  or as being requisite
                     for the production, use or application of atomic energy;

             (III) The term "nuclear facility" means:

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

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

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

                     (d)    any structure, basin, excavation,  premises or place
                            prepared  or used for the  storage  or  disposal  of
                            waste radioactive material;

                     and  includes  the site on which  any of the  foregoing  is
                     located, together with all operations conducted thereon and
                     all premises used for such operations.

              (IV)   The  term  "fissionable  substance"  means  any  prescribed
                     substance  that  is,  or  from  which  can be  obtained,  a
                     substance  capable of  releasing  atomic  energy by nuclear
                     fission.

               (V) With respect to property,  loss of use of such property shall
be deemed to be property damage.

N.M.A. 1979

<PAGE>

                                 Addendum No. 1

                                     to the

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

It is Hereby Agreed, effective October 1, 1999, that subparagraph 8 of paragraph
A of Article IV -  Exclusions - shall be deleted and the  following  substituted
therefor:

  "8.   Business produced under the California and New York Motorcycle Program."

The provisions of this Contract shall remain otherwise unchanged.

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

Calabasas, California,       this _____ day of _______________ in the year ____.

                             ---------------------------------------------------
                             Condor Insurance Company
                             Amwest Surety Insurance Company
                             Far West Insurance Company

<PAGE>

                                 Addendum No. 1

                                     to the

                       Interests and Liabilities Agreement

                                       of

                           Gerling Global Reinsurance
                             Corporation of America
                               New York, New York
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.

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

New York, New York,          this ____ day of _______________ in the year _____.

                             ---------------------------------------------------
                             Gerling Global Reinsurance Corporation of America

<PAGE>

                                 Addendum No. 1

                                     to the

                       Interests and Liabilities Agreement

                                       of

                  Hannover Ruckversicherungs-Aktiengesellschaft
                                Hannover, Germany
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.

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

Hannover, Germany,           this ____ day of _______________ in the year _____.

                             ---------------------------------------------------
                             Hannover Ruckversicherungs-Aktiengesellschaft

<PAGE>

                                 Addendum No. 1

                                     to the

                       Interests and Liabilities Agreement

                                       of

                         Hartford Fire Insurance Company
                              Hartford, Connecticut
                                       by
                             HartRe Company, L.L.C.
                              Hartford, Connecticut
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.

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

San Francisco, California,   this ____ day of _______________ in the year _____.

                             ---------------------------------------------------
                             HartRe Company, L.L.C.
             (for and on behalf of Hartford Fire Insurance Company)

<PAGE>

                                 Addendum No. 1

                                     to the

                       Interests and Liabilities Agreement

                                       of

                           PMA Reinsurance Corporation
                           Philadelphia, Pennsylvania
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.

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

Philadelphia, Pennsylvania,  this ____ day of _______________ in the year _____.

                             ---------------------------------------------------
                             PMA Reinsurance Corporation

<PAGE>

                                 Addendum No. 1

                                     to the

                       Interests and Liabilities Agreement

                                       of

                    SOREMA North America Reinsurance Company
                               New York, New York
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.

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

New York, New York,          this ____ day of _______________ in the year _____.

                             ---------------------------------------------------
                             SOREMA North America Reinsurance Company

<PAGE>

                                 Addendum No. 1

                                     to the

                       Interests and Liabilities Agreement

                                       of

                        Underwriters Reinsurance Company
                             Concord, New Hampshire
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                                Excess Per Event
                              Reinsurance Contract
                             Effective: July 1, 1999

                                    issued to

                            Condor Insurance Company
                              Calabasas, California
                         Amwest Surety Insurance Company
                                 Omaha, Nebraska
                                       and
                           Far West Insurance Company
                                 Omaha, Nebraska
             (hereinafter referred to collectively as the "Company")

The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.

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

Calabasas, California,       this ____ day of _______________ in the year _____.

                             ---------------------------------------------------
                             Underwriters Reinsurance Company

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