Document:

EX-4.3

 Exhibit 4.3 
 WARRANT AGREEMENT 
 TO 

PURCHASE STOCK 
  

							
	Corporation: 	 	 Republic Financial Indemnity Group, Inc.
 a Delaware corporation (the “Company”)

				
	Number of Warrants:	 	18,000,000	 		 	
				
	Class of Stock:	 	Common Stock	 		 	
				
	Shares of Warrant Agreement Stock:	 	18,000,000	 		 	
		
	Exercise Price:	 	$0.12 per Warrant (the “Exercise Price”)
		
	Issue Date:	 	March 14, 2012 (the “Issue Date”)
		
	Expiration Date:	 	December 31, 2038 (the “Expiration Date”)

 This Warrant Agreement to Purchase Stock (this “Warrant Agreement”) certifies that, in
consideration of various loans made by it to the Company, Old Republic International Corporation (“Holder”) is entitled, at the times and in the manner set forth in Sections 2.1 and 2.2, to purchase from the Company until 5:00 p.m.
Central time, on the Expiration Date, up to the number of fully paid and nonassessable Shares equal to the “Number of Shares of Warrant Stock” (as defined below), at an exercise price per share equal to the Exercise Price, all as adjusted
pursuant to Section 3 of this Warrant Agreement and all subject to the provisions and upon the terms and conditions set forth in this Warrant Agreement. 
 1. DEFINITIONS. The following definitions shall apply for purposes of this Warrant Agreement: 
 1.1 “Acquisition” means (i) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the
holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity), (ii) the closing of the
transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons of the Company’s securities if, after such closing, such person or group of affiliated
persons would hold 50% or more of the outstanding voting stock of the Company (or the surviving or acquiring entity) or (iii) a sale of all or substantially all of the assets of the Company. 

 1.3 “Number of Shares of Warrant
Agreement Stock” means 18,000,000 Shares, subject to adjustment as provided in Section 3 hereof. 
 1.4
“Shares” means shares of Warrant Agreement Stock issuable upon the exercise of the Warrant. 
 1.7
“Warrant Stock” means shares of the Company’s Common Stock. 
 2. EXERCISE. 

2.1 Time of Exercise. Subject to the terms and conditions of this Warrant Agreement, the Holder at its option may exercise
these Warrants in whole or in part at any time or from time to time after any of the following dates or events, but prior to 5:00 p.m., Central Time on the aforesaid Expiration Date: 

2.1.a. March 31, 2015; 

2.1.b. The entry of a final judgment for the payment of $5 million or more (excluding any amounts covered by
insurance) rendered against the Company or any subsidiary of the Company, which judgment is not discharged or stayed within 60 days after (i) the date on which the right to appeal or petition for review thereof has expired if no such appeal or
review has commenced or (ii) the date on which all rights to appeal or petition for review have been extinguished; 
 2.1.c. The entry of a decree or order by a court having jurisdiction in the premises adjudging the Company or any subsidiary of the Company bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment, rehabilitation or composition of or in respect of same under Federal bankruptcy law or any other applicable Federal or State law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator, rehabilitator or other similar official for the Company or a subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 60 consecutive days; 
 2.1.d. The institution by the Company or a subsidiary of
the Company of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy, rehabilitation or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under Federal bankruptcy law or any other applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, rehabilitator
or other similar 

  
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official of same or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or 

the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the
Company or a subsidiary in furtherance of any such action; 
 2.1.e. A “person” or
“group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, its subsidiaries, and its and their employee benefit plans, becoming the direct or indirect “beneficial owner,” as defined in Rule
13d-3 under the Exchange Act, of the Company’s common equity representing more than 15% of the voting power of the Company’s common equity; 
 2.1.f. Consummation of any share exchange, consolidation or merger of the Company or any other transaction or series of transactions pursuant to which the Common Stock will be converted into cash,
securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person other than
one of the Company’s subsidiaries, other than a transaction where: (i) the holders of all classes of the Company’s common equity immediately prior to such transaction that is a share exchange, consolidation or merger own, directly or
indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such event; or (ii) 100% of the consideration received or to be received by the holders
of the Common Stock, excluding cash payments for fractional shares, in connection with the transaction or transactions consists of publicly traded securities and as a result of such transaction or transactions the Warrants become convertible into
such publicly traded securities, excluding cash payments for fractional shares; or 
 2.1.g. The
Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company. 
 2.2 Method
of Exercise. These Warrants may be exercised by delivering a duly executed Notice of Exercise in substantially the form attached as Exhibit A to the principal office of the Company, together with Holder’s check for the aggregate
Exercise Price for the Shares being purchased. 
 2.3 Delivery of Certificate and New Warrant. Promptly after
Holder exercises these Warrants, the Company shall deliver to Holder certificates for the Shares acquired and, if these Warrants have not been fully exercised or converted and have not expired, these Warrants shall automatically be reduced by the
number of Shares issued and remain exercisable for such remaining Shares not so acquired, and all other terms of the Warrant Agreement shall otherwise remain in full force and effect as so adjusted. Upon final exercise of these Warrants for any such
remaining number of Shares, this Warrant Agreement shall be surrendered by the Holder to the Company for cancellation. 

  
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 2.4 Replacement of Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant Agreement and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of
mutilation, on surrender and cancellation of this Warrant Agreement, the Company at its expense shall execute and deliver, in lieu of this Warrant Agreement, a new warrant of like tenor. 

3. ADJUSTMENTS TO THE SHARES. 
 3.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on the outstanding shares of the Warrant Stock payable in shares of the Warrant Stock or other securities of the
Company or subdivides or combines the outstanding shares of the Warrant Stock subsequent to the Issue Date, then upon exercise or conversion of these Warrants, Holder shall receive, without cost to Holder, the total number and kind of securities to
which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend, subdivision or combination occurred. 
 3.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, substitution, or other event that results in a change of the number and/or class of the securities
issuable upon exercise or conversion of these Warrants (other than pursuant to an Acquisition or a stock dividend, split, etc. described in Section 3.1 above) that occurs subsequent to the Issue Date, Holder shall be entitled to receive, upon
exercise or conversion of these Warrants, the number and kind of securities and property that Holder would have received for the Shares if these Warrants had been exercised immediately before such reclassification, exchange, substitution or other
event. The Company or its successor shall promptly issue to Holder a new Warrant Agreement for such new securities or other property. The new Warrant Agreement shall provide for adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 3 including, without limitation, appropriate adjustments to the Exercise Price and to the number of securities or property issuable upon exercise or conversion of the new Warrant Agreement.

 3.3 Adjustments of Exercise Price. If the outstanding Shares are combined or consolidated, by reclassification
or otherwise, into a lesser number of shares, subsequent to the Issue Date, the Exercise Price shall be proportionately increased. If the outstanding Shares are divided, by reclassification or otherwise, into a greater number of shares, the Exercise
Price shall be proportionately decreased. 
 3.4 Adjustment is Cumulative. The provisions of this Section 3
shall similarly apply to successive, stock dividends, stock splits or combinations, reclassifications, exchanges, substitutions, or other events. 

  
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 3.5 No Impairment. The Company shall not through a reorganization, transfer of
assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, intentionally avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant Agreement
by the Company, but shall at times in good faith assist in carrying out of all the provisions of this Section 3 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Section against such
impairment. 
 3.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the
Warrants and the number of Shares to be issued shall be rounded up to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrants, the Company shall eliminate such fractional Share interest by
paying Holder an amount by check computed by multiplying the fractional interest by the fair market value of a full Share. 

3.7 Certificate as to Adjustments. Upon each adjustment of the Exercise Price, the Company at its expense shall promptly
compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate
setting forth the Exercise Price in effect upon the date thereof, and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof, and the series of adjustments leading to such
Exercise Price and the number of Shares and the amount, if any, of other securities, cash or property receivable upon exercise or conversion hereof. 
 4. REPRESENTATIONS AND COVENANTS OF THE COMPANY. 
 4.1 Issuance of
Shares. The Company hereby represents and warrants to the Holder that all Shares which may be issued upon the exercise of the purchase right represented by this Warrant Agreement shall, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein and under applicable federal and state securities laws. 

4.2 Reservation of Shares. For so long as this Warrant Agreement remains outstanding, the Company shall at all times keep
reserved from its authorized but unissued shares of capital stock the full number of Shares. 

  
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 4.3. Registration of Warrant Shares. The Company covenants and agrees:

 (a) to register the resale of the Warrant Shares with the Securities and Exchange Commission (“SEC”) and
under all applicable state blue sky laws within ninety (90) days of the effectiveness of the Company’s registration statement on Form 10 under the Securities Exchange Act of 1934; 

(b) to prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement effective through the termination of the Exercise Period or until such earlier time as no Warrants remain outstanding; 

(c) to pay all expenses incurred by the Company in complying with this Section 4.3, including, without limitation,
(i) all registration and filing fees, (ii) all printing expenses, (iii) all fees and disbursements of counsel and independent public accountants for the Company, (iv) all blue sky fees and expenses (including fees and expenses of
counsel in connection with any blue sky surveys), and (v) the entire expense of any special audits incident to or required by any such registration. 
 5. REPRESENTATIONS OF HOLDER; TRANSFER. 
 5.1 Representations.
Holder hereby represents and warrants to the Company as follows. Holder is a qualified institutional buyer having such knowledge and experience in business and investment matters that Holder is capable of protecting Holder’s own interests in
connection with the acquisition, exercise or disposition of these Warrants. Holder is aware that this Warrant Agreement and the Shares are being, or will be, issued to Holder in reliance upon Holder’s representation in this Section 5.
Holder has received such information about the Company as Holder deems reasonable, has had the opportunity to ask questions and receive answers from the Company with respect to its business, assets, prospects and financial condition and has verified
any answers Holder has received from the Company with independent third parties to the extent Holder deems necessary. The Holder of this Warrant Agreement, by acceptance hereof, acknowledges this Warrant Agreement and the Shares to be issued upon
exercise hereof or conversion thereof are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of these Warrants or any
Shares to be issued upon exercise hereof or conversion thereof except under circumstances that will not result in a violation of the 1933 Act or any state securities laws. 

  
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 5.2 Transfer Restrictions. This Warrant Agreement and the Warrants may not be
transferred or assigned in whole or in part without compliance with the restrictions contained herein and with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of
investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if (i) the transfer is to the
stockholders, members or partners of Holder by way of dividend or distribution to all of the same or (ii) there is no material question as to the satisfaction of the applicable provisions under Rule 144 to permit the transfer in compliance
therewith. Notwithstanding anything herein to the contrary, these Warrants are not transferable without the prior written consent of the Company. Any purchaser, transferee or assignee of the Warrant and Shares issuable upon exercise of these
Warrants shall comply with and agree in writing both to the Holder and the Company to be bound by all of the restrictions contained herein. 
 5.3 Transfer Procedure. Subject to the restrictions on transfer described in Section 5 of this Warrant Agreement, Holder may transfer all or part of these Warrants by giving the Company
a written notice of the portion of the Warrant being transferred, such notice setting forth the name, address and taxpayer identification number of the transferee, and surrendering this Warrant Agreement to the Company for reissuance to the
transferee(s). 
 6. GENERAL PROVISIONS. 
 6.1 Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Warrant Agreement will be in writing and will be effective and deemed to
provide such party sufficient notice under this Warrant Agreement on the earliest of the following: (i) at the time of personal delivery, if delivery is in person; (ii) at the time of transmission by facsimile, addressed to the other party
at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by both telephone and printed confirmation sheet verifying successful transmission of the facsimile;
(iii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier
requested; or (iv) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries. 
 All notices not delivered personally or by facsimile will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number set forth
below the signature lines to this Warrant Agreement, or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other parties hereto. Notices to the Company will be marked
“Attention: President”. 

  
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 6.2 Attorneys’ Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant Agreement, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees. 

6.3 Governing Law. This Warrant Agreement will be governed by and construed under the internal laws of the State of Illinois
as applied to agreements among Illinois residents entered into and to be performed entirely within Illinois, without reference to principles of conflict of laws or choice of laws. 

6.4 Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions
as may be reasonably necessary to carry out the purposes and intent of this Warrant Agreement. 
 6.5 Counterparts.
This Warrant Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement. 

6.6 Amendment and Waivers. This Warrant Agreement may be amended and provisions may be waived upon the written consent of
the Holder and the Company. 
 IN WITNESS WHEREOF, the Company has caused this Warrant Agreement to be executed by its
duly authorized representative and Holder has executed this Warrant Agreement as of the Issue Date indicated on the first page of this Warrant Agreement. 
 COMPANY: 
  

			
	REPUBLIC FINANCIAL INDEMNITY GROUP, INC.
		
	By:	 	  

	Name:	 	Karl W. Mueller
	Title:	 	Senior Vice President/CFO
	Address:	 	307 N. Michigan Ave., 23rd Floor, Chicago, IL 60601
	Facsimile:	 	(312) 726-0309

 WARRANT HOLDER: 
  

			
	OLD REPUBLIC INTERNATIONAL CORPORATION
		
	By:	 	  

	Name:	 	Aldo C. Zucaro
	Title:	 	Chairman & CEO
	Address:	 	307 N. Michigan Avenue, 23rd Floor, Chicago, IL 60601
	Facsimile:	 	(312) 726-0309

  
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 EXHIBIT A 
 NOTICE OF EXERCISE 
 (TO BE SIGNED ONLY UPON EXERCISE OF
WARRANTS) 
 1. The undersigned hereby elects to purchase
                     shares of the Common Stock (the “Shares”) of Republic Financial Indemnity Group, a Delaware corporation,
pursuant to the terms of the attached Warrant Agreement with an issue date of March 31, 2012 (the “Warrant”), and tenders herewith payment of the total purchase price of such Shares in full, pursuant to a check or wire
transfer, in the amount of $                    . 
 2. Please issue a certificate or certificates representing said Shares in the name of the undersigned. The undersigned represents that it is acquiring the shares solely for its own account and not
as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws and hereby repeats the representations and warranties of the undersigned that are set forth in
Section 5.1 of the attached Warrant Agreement. 
 OLD REPUBLIC INTERNATIONAL CORPORATION 

 

			
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

		
	Address:	 	307 N. Michigan Avenue, 23rd Floor, Chicago, IL 60601 
	Facsimile:	 	(312) 726-0309
	
	(Federal Tax Identification Number)
	
	  

	(Signature of Holder and if applicable, Title)

  
 9EX-10.3

 Exhibit 10.3 
 STOP LOSS REINSURANCE AGREEMENT 
 THIS AGREEMENT is made by
and between OLD REPUBLIC MERCANTILE INSURANCE COMPANY (hereinafter referred to as the “Ceding Company”) and OLD REPUBLIC GENERAL INSURANCE CORPORATION (hereinafter referred to as the “Reinsurer”). 

WITNESSETH: 
 WHEREAS, the Ceding Company assumes liabilities under a Quota Share Reinsurance Agreement (herein, the “Quota Share”) which became effective as of April 1, 2012 with respect to
credit indemnity insurance produced through Old Republic Insured Credit Services, Inc. (the “Assumed Liabilities”); and 
 WHEREAS, the Ceding Company wishes to cede to the Reinsurer as excess of loss reinsurance a portion of the Assumed Liabilities on the terms and conditions set forth below; and 

WHEREAS, the Reinsurer wishes to accept such by way of excess of loss reinsurance on the terms and conditions set forth below.

 NOW, THEREFORE, in consideration of the premiums and the mutual promises contained herein, it is agreed as follows:

 ARTICLE I 
 COVERAGE 
 The Ceding Company hereby cedes to the Reinsurer and the
Reinsurer hereby accepts stop loss reinsurance with respect to the Assumed Liabilities of the Ceding Company. The liability of the Reinsurer hereunder shall be the amount by which the Assumed Liabilities exceed eighty-five percent (85%) but not
more than one hundred fifty-five percent (155%) of earned premium. For purposes of this Agreement, earned premium shall be the retained premium of the Ceding Company. The liability of the Reinsurer under this Agreement is subject in all
respects to the same interpretations, terms, rates, conditions and waivers, and to the same modifications, alterations, and cancellations as is the Assumed Liability of the Ceding Company, in the percentages specified herein, the true intent of this
Agreement being that the liability of the Reinsurer follow the fortunes of the Ceding Company as to the liabilities of the Ceding Company under the Quota Share. 
 ARTICLE II 
 TERMS AND CANCELLATION 

Subject to required regulatory approvals, this Agreement is effective as of 12:01 a.m., Standard Time, April 1, 2012, at the
Reinsurer’s principal place of business (“Effective Date”). This Agreement shall automatically terminate with any termination of the Reinsurance Agreement and may be terminated by either party at any time upon 90 days’ prior
written notice given to the other party on terms and conditions mutually agreeable to both parties. 

 If any one or more of the following described circumstances occurs during the term of this
Agreement, the Ceding Company may, in its sole discretion, terminate this Agreement by merely giving notice to the Reinsurer of its intention to do so: 
 If the Reinsurer: 
  

	 	(1)	Fails to discharge any of its obligations under this Agreement; 

  

	 	(2)	Ceases to be licensed to reinsure the particular classes of business covered by this Agreement or has the performance of its obligations hereunder rendered illegal by
any subsequent law or regulation; 

  

	 	(3)	Becomes insolvent, suspends payment of debts, convenes a meeting of creditors, or has a receiver appointed pursuant to a petition presented for its compulsory
liquidation, or a resolution is passed for its voluntary liquidation; or 

  

	 	(4)	Passes under the control of or is amalgamated with any other concern or becomes controlled by its government or ceases to have a separate existence.

 ARTICLE III 
 REINSURANCE PREMIUM 
 As consideration for this stop loss reinsurance, the
Ceding Company shall pay the Reinsurer an amount equal to ten percent (10%) of the earned premiums received by the Ceding Company under the Quota Share Reinsurance Agreement (“Reinsurance Premium”). The Reinsurance Premium shall be
subject to a retrospective return premium adjustment as of February 15, 2019, based upon the Reinsurer’s cumulative loss experience through December 31, 2018 or such earlier year-end date as the Ceding Company and the Reinsurer may
agree to for the calculation of the adjustment (the “Retro Calculation Period”). If the cumulative Reinsurance Premiums paid by the Ceding Company to the Reinsurer through the Retro Calculation Period are greater than the cumulative losses
paid by the Reinsurer hereunder through such date, the Reinsurer shall return 50 percent (50%) of such excess to the Ceding Company. No return premium shall be due if the cumulative losses exceed the cumulative Reinsurance Premiums paid through
the Retro Calculation Period. All payments hereunder shall be settled within thirty (30) days of the end of each calendar quarter. 

  
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 ARTICLE IV 

LOSSES, REPORTS AND REMITTANCES 
 All loss settlements made under the Quota Share, whether under the strict policy conditions or by way of compromise, shall be binding upon the Reinsurer in accordance with its participation. Participation
by the Reinsurer shall include any punitive or exemplary damages and any extra contractual obligations reinsured under the Quota Share. 
 Within five (5) days after the end of each calendar quarter, the Ceding Company shall furnish the Reinsurer a statement showing the following information for the treaty year to the end of the
calendar quarter with respect to the business reinsured hereunder: Ceded Premium, Reinsurance Premium and Assumed Liabilities. Within a reasonable time, the Ceding Company shall furnish any additional information required by the Reinsurer for annual
convention statement purposes. With respect to all losses reinsured hereunder, within thirty (30) days of the end of each calendar quarter, the Reinsurer will be fully responsible to pay to, or on behalf of, the Ceding Company its share of all
such losses and claims expenses, including, but not limited to, all legal fees incurred in claim settlements. 
 ARTICLE V

 OFF-SET OF AMOUNTS DUE 
 The Ceding Company and the Reinsurer may off-set any balances, whether on account of premiums, commissions, losses, loss adjustment expenses, or other sums, due from one party to the other under this
Agreement or under any other reinsurance agreement heretofore or hereafter entered into between the Ceding Company and the Reinsurer, whether acting as assuming or ceding company. 

ARTICLE VI 
 ACCESS TO RECORDS 
 The Ceding Company will make available for inspection
by the Reinsurer at all reasonable times all records of the Ceding Company concerning claims, losses or legal proceedings which involve or are likely to involve the liabilities reinsured hereunder. The Reinsurer’s payment of all balances due
the Ceding Company, as calculated by the Ceding Company, whether in dispute or not, is a condition precedent to the Ceding Company’s right of access to such records. The Reinsurer agrees, for itself and all of its directors, officers,
employees, agents and representatives, promptly to provide the Ceding Company with a copy of all audit reports resulting from such inspection and otherwise to keep the inspection or audit findings and reports strictly confidential and not disclose
any portion of such findings or reports to any third parties without the written consent of the Ceding Company. 

  
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 ARTICLE VII 

ERRORS AND OMISSIONS 
 No inadvertent delay, error or omission will relieve either party hereto from any liability which would attach to it hereunder if such delay, error or omission had not been made, provided such delay,
error or omission is rectified as soon as possible after discovery. 
 ARTICLE VIII 

INSOLVENCY 

In the event of the insolvency of the Ceding Company, this reinsurance will be payable directly to the Ceding Company, or to its
liquidator, receiver, conservator or statutory successor on the basis of the liability of the Ceding Company without diminution because of the insolvency of the Ceding Company or because the liquidator, receiver, conservator or statutory successor
of the Ceding 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 Ceding Company is to give written notice to the Reinsurer of the pendency of a
claim against the Ceding 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 of
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 adjudicate any defense or defenses that it may deem available to
the Ceding Company or its liquidator, receiver, conservator or statutory successor. 
 The expense thus incurred by the
Reinsurer will be chargeable, subject to the approval of the court, against the Ceding Company as part of the expense of conservation or liquidation to the Ceding Company solely as a result of the defense undertaken by the Reinsurer. 

The reinsurance will be payable by the Reinsurer to the Ceding Company or its liquidator, receiver, conservator or statutory successor,
except as provided by Section 4118(a) of the New York Insurance Law except (a) where this Agreement specifically provides another payee of such reinsurance in the event of the insolvency of the Company, or (b) where the Reinsurer with
the consent of the direct insureds has assumed such policy obligations of the Ceding Company as direct obligations of the Reinsurer to the payees under such policies and in substitution for the obligations of the Ceding Company to such payees.

 ARTICLE IX 
 ARBITRATION 
 As a condition precedent to any right of action hereunder, any dispute
arising out of or relating to this Agreement will be submitted to the decision of a board of arbitration composed of two arbitrators and an umpire, meeting in the City of Chicago, Illinois, unless otherwise agreed. 

  
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 The members of the board of arbitration are to be active or retired disinterested officials
of insurance or reinsurance companies other than the parties or their affiliates. Each party will appoint its arbitrator, and the two arbitrators will choose an umpire before instituting the hearing. If the respondent fails to choose its arbitrators
within four weeks after being requested to do so by the claimant, the latter will also appoint the second arbitrator. If the two arbitrators fail to agree upon the appointment of an umpire within four weeks after their nominations, each of them will
name three, of whom the other will decline two and the decision shall be made by drawing lots. 
 The claimant will submit its
initial statement within twenty (20) days from appointment of the umpire. The respondent will submit its statement, and the claimant may submit a reply statement within ten (10) days after receipt of the respondent’s statement. The
respondent’s statement shall be subject to the requirements of Section 1213 (c) (1) of the New York Insurance Law. 
 The board will make its decision with regard to the custom and usage of the insurance and reinsurance business. The board will issue its decision in writing upon evidence introduced at a hearing or by
other means of submitting evidence in which strict rules of evidence need not be followed, but in which cross examination and rebuttal will be allowed if requested. The board will make its decision within forty-five (45) days following the
termination of the hearings unless the parties consent to an extension. The majority decision of the board will be final and binding upon all parties to the proceeding and will not be subject to judicial review as to any questions of law. Judgment
may be entered upon the award of the board in any court having jurisdiction thereof. 
 Each party will bear the expense of its
own arbitrator and will jointly and equally bear with the other party the expense of the umpire. The remaining costs of the arbitration proceedings will be allocated by the board. 

ARTICLE X 
 GENERAL 
  

	A.	This Agreement may only be altered in writing by an amendment signed by authorized officers of the parties. 

 

	B.	This Agreement will be governed in all respects by the laws of the State of Illinois. 

 

	C.	All notices or other communications required hereunder will be in writing, sent by first class or registered mail, postage prepaid, facsimile or overnight courier to:

  
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 Ceding Company: 

OLD REPUBLIC MERCANTILE INSURANCE COMPANY 

307 North Michigan Avenue 
 Chicago, Illinois 60601 
 Attention:    
President 
 and 
 Reinsurer: 
 OLD REPUBLIC GENERAL INSURANCE CORPORATION

 Administrative Office 

307 North Michigan Avenue 
 Chicago, Illinois 60601 
 Attention:    
President 
 or such other addresses as may be designated in the same manner from time to time. 

 

	D.	The failure on any occasion by either party to enforce the terms of this Agreement will not be deemed or construed as a waiver of that party’s right to enforce
those or any other terms of this Agreement on any other occasion. 

  

	E.	The terms and conditions of this Agreement are to be liberally construed so as to give the fullest possible effect to the intentions of the parties.

  

	F.	The terms and conditions of this Agreement will be binding upon and inure to the benefit of the successors and assigns of the parties hereto. This Agreement may not,
however, be assigned, in whole or any part, by either party without the prior written consent of the other party hereto, and any assignment hereof made without such consent will be null and void as respects the party whose consent is required.

  

	G.	This Agreement may be executed in multiple counterparts, each of which shall be deemed an original. 

ARTICLE XI 
 ENTIRE AGREEMENT 
 This instrument comprises the entire agreement between
the parties relating to the subject matter hereof and may, by mutual consent, be altered in any of its terms and conditions only by a signed addendum hereto. 

  
 6 

 IN WITNESS WHEREOF, the parties hereby have caused this instrument to be duly
executed this             day of            , 2012. 

 

			
	 Ceding Company

	
	 OLD REPUBLIC MERCANTILE INSURANCE COMPANY

		
	 By:
	 	 
		 	Spencer LeRoy III, Senior Vice President and Secretary

  

			
	OLD REPUBLIC GENERAL INSURANCE CORPORATION
		
	 By:
	 	 
		 	Karl W. Mueller, Senior Vice President and Chief Financial Officer

  
 7

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