Document:

Exhibit
      10.37

     

    

    

    Quota
      Share

    Reinsurance
      Agreement

    Effective
      April 15, 2006

    (Hereinafter
      The “Agreement”)

    

    By
      And
      Between

    

    Republic
      Underwriters Insurance Company

    Administrative
      Offices In Dallas, Texas

    (Hereinafter
      The "Company")

    

    And

    

    American
      Vehicle Insurance Company

    Administrative
      Offices In Lauderdale Lakes, Florida

    (Hereinafter
      The "Reinsurer")

    

    

    

    

    

    Article
      I - Classes of Business Reinsured

    

    A.    By
      this
      Agreement, the Company obligates itself to cede to the Reinsurer and the
      Reinsurer obligates itself to accept quota share reinsurance of the Company’s
      gross liability under “Group AV business” that includes policies, contracts,
      endorsements, binders, certificates, proposals for insurance or reinsurance,
      and
      any other documents that bind the Company, which are classified by the Company
      as commercial general liability and special events coverages (hereinafter called
      “policies”) that are issued or renewed on or after the effective date hereof and
      produced and/or underwritten by general agents and producers recommended by
      the
      Reinsurer. The Reinsurer agrees in all respects to follow the fortunes of the
      Company with respect to all liabilities and obligations of the Company arising
      out of or in connection with the Group AV business written. It is understood
      and
      agreed that the Group AV business subject hereto shall include, but not be
      limited to, business assumed by the Company from its affiliates Southern County
      Mutual Insurance Company, Republic Lloyds, Southern Insurance Company and
      Republic-Vanguard Insurance Company, all of Dallas, Texas, and/or any other
      company affiliated with the Company now or hereafter. It is also understood
      and
      agreed that the reference to “Company” as used hereinafter shall include the
      aforementioned affiliates that issue policies, which form the subject business
      of this Agreement.

    

    B.    The
      liability of the Reinsurer with respect to each cession hereunder shall commence
      obligatory and simultaneously with that of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            2

        

      

    

     

    Article
      II - Commencement and Termination

    

    A.   The
      Agreement shall become effective on April 15, 2006, with respect to policies
      commencing or renewing on or after this date, and shall continue in force
      thereafter until terminated.

    

    B.    Either
      party may terminate the Agreement on any calendar quarter or any December 31
      thereafter by giving the other party not less than ninety (90) days prior notice
      by certified mail, return receipt requested. This Agreement may be terminated
      immediately upon mutual consent of the parties hereto.

    

    C.    Unless
      the Company elects to reassume the ceded unearned premium in force on the
      effective date of termination and so notifies the Reinsurer prior to or as
      promptly as possible after the effective date of termination, reinsurance
      hereunder on policies in force on the effective date of termination shall remain
      in full force and effect until the natural expiration, cancellation or rewrite
      of such policies, whichever occurs first. Additionally, the Reinsurer’s
      obligations for reinsurance hereunder shall continue to apply after termination
      of this Agreement in all respects including but not limited to policies, which
      must be issued or renewed as a matter of state law or regulation, until the
      final expiration or cancellation of such policies. A final accounting and
      settlement shall be made between the Company and Reinsurer upon the completion
      of all unfinished business subject to this Agreement.

    

    D.    Notwithstanding
      paragraph B above, it is understood and agreed that either party may terminate
      the Agreement at any time by giving ninety (90) days prior notice to the other
      party by certified mail, return receipt requested, if either party:

    

    
      	 	
              1.

            	
              Is
                ordered by a State Insurance Department or other legal authority
                to cease
                writing or assuming business or meets the definition of being in
                a
                “hazardous financial condition” (as defined by
                regulation);

            

    

    
      	 	
              2.

            	
              Is
                acquired or controlled by, merged with any other company, corporation
                or
                individual(s) not controlling the party’s operations at the inception of
                this Agreement;

            

    

    
      	 	
              3.

            	
              Modifies
                its reinsurance program significantly since the inception of this
                Agreement;

            

    

    
      	 	
              4.

            	
              Acquires
                the assets and/or liabilities of any other
                company;

            

    

    
      	 	
              5.

            	
              Loses
                the whole or a significant part of its policyholder’s surplus;
                or

            

    

    
      	 	
              6.

            	
              Has
                a conservator, liquidator or receiver appointed, or is the subject
                of any
                conservation, liquidation, insolvency or any other proceeding, where
                the
                intent is to take possession of its assets or control of its
                operations.

            

    

     

    Article
      III - Territory

    

    The
      territorial limits of this Agreement shall be identical with those of the
      policies written by Group AV. 

    

    Article
      IV - Retention and Limit

    

    As
      respects business subject to the Agreement, the Company shall cede to the
      Reinsurer and the Reinsurer agrees to accept 100% of the Company’s gross
      liability for Group AV business.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            3

        

      

    

    Article
      V - Original Conditions

    

    A.    All
      reinsurance under the Agreement shall be subject to the same rates, terms,
      conditions and waivers, and to the same modifications and alterations as the
      respective policies (inclusive of any reformation or liberalization of policies)
      which are subject to this Agreement. The Reinsurer shall be credited with its
      exact proportion of the original premiums received by the Company, prior to
      disbursement of any dividends, but after deduction of policy fees or equivalent
      charges, ceding commission as provided for in Article X other service fees
      or
      brokerage fees, and ceded reinsurance premiums, if any, paid by the Company
      for
      inuring reinsurance.

    

    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 Agreement.

     

    Article
      VI - Exclusions

    

    None.

     

    Article
      VII - Processing and Handling of the Business Reinsured

    

    A.    It
      is
      understood and agreed to by the Company and Reinsurer that all issuance,
      maintenance and servicing of the policies, claims and any other documents
      arising out of Group AV business written and reinsured under this Agreement
      shall be performed by the Reinsurer or its designee approved in writing by
      the
      Company. This includes, but is not limited to, policy rate, rule and form
      filings, policy application processing, policy issuance, cash handling,
      billings, collections, cancellations, reinstatements, agency commission payments
      (including information return reporting on behalf of the Company) and
      collections, claims handling, adjusting payments (including information return
      reporting on behalf of the Company), litigation, subrogation, all financial
      and
      statistical reporting records and requirements, and any other operational
      functions normally performed in the course of writing insurance business.
      Furthermore, it is understood and agreed that the Reinsurer shall not delegate
      to any general agent or other third party any delegations made by the Company
      to
      the Reinsurer hereunder without the express written consent of the
      Company.

    

    B.    Reinsurer
      shall recommend and request the Company to appoint the general agents to produce
      and/or underwrite Group AV business written and reinsured under the Agreement.
      However, the Company shall retain the exclusive rights to appoint and terminate
      any general agent and shall notify Reinsurer of any general agent appointment
      or
      termination made under this Agreement. The Reinsurer may recommend and request
      the Company to appoint sub-agents recommended by a general agent to produce
      Group AV business written and reinsured under the Agreement. However, the
      Company shall retain the exclusive rights to appoint and terminate any
      sub-agents recommended under this Agreement.

    

    C.    Notwithstanding
      any other provision under the Agreement, in the event that the Company deems
      it
      necessary to assume, or delegate to another party, the responsibility for
      processing and handling the Group AV business reinsured hereunder, Reinsurer
      shall be liable for and pay all costs and expenses of whatever kind or nature
      incurred by the Company that are due to the assumption or delegation of such
      activities. The Company shall notify the Reinsurer of its intention to assume
      or
      delegate the processing and handling of Group AV business by giving the
      Reinsurer written notice 

    setting
      forth the reasons for the Company’s decision to assume or delegate the handling
      of Group AV business. The Company’s notice shall allow the Reinsurer 30 calendar
      days from mailing date of notice to cure all circumstances cited in the
      Company’s notice to the Reinsurer. If the Reinsurer has not cured the
      circumstances cited in the Company’s notice, the Company shall assume control of
      the administration of the processing and handling of Group AV business and
      the
      Reinsurer shall cooperate fully with the Company’s efforts to transfer the
      administration and management of the business.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            4

        

      

    

     

    Article
      VIII - Reports and Remittances

    

    A. In
      lieu
      of Company furnishing Reinsurer with bordereaux showing the particulars of
      all
      reinsurance ceded hereunder, Reinsurer shall furnish, or cause to be furnished,
      reports to the Company within thirty (30) days after the end of each calendar
      month. Such reports shall be prepared in accordance with statutory annual
      statement reporting requirements and shall include the following at a
      minimum:

    

    
      	1.      	
              net
                written premiums for the month (“net written premiums” means the sum of
                gross written premiums including premium changes on endorsements
                plus all
                policy fees less return premiums including return premiums on
                cancellations) (“policy fees” means the sum of gross policy fees less
                returned policy fees, if any, that are determined by the Company
                as being
                required by regulatory authorities to be reported as written premiums
                for
                annual statement purposes);

            

    

    
      	 2.     	
              commissions
                paid or allowed to general agents and/or sub-agents on (1)
                above

            

    

    
      	3.      	
              ceding
                commission on (1) above (including ceded policy
                fees);

            

    

    
      	4.      	
              paid
                losses and loss adjustment expenses for the
                month;

            

    

    
      	5.      	
              unearned
                premium as of the end of the month;
                and

            

    

    
      	6.      	
              outstanding
                loss and loss adjustment expense reserves (including incurred but
                not
                reported loss reserves) as of the end of the
                month.

            

    

    

    Since
      the
      Reinsurer shall be responsible for the collection of all net written premiums
      and the payment of all general agent and/or agent compensation as well as all
      losses and loss adjustment expenses, the Reinsurer shall, provided the amount
      calculated is positive, remit to the Company, whether or not premiums have
      been
      collected from general agents and/or sub-agents, within forty-five (45) days
      after the end of each calendar month the net written premiums less the
      commissions paid or allowed to the general agents and/or sub-agents (i.e.,
      item
      (1) less (2) above). Within ten (10) days following the Company’s receipt of
      such amounts, the Company shall remit to the Reinsurer ceded net written
      premiums less its ceding commissions provided for in Article X. In the event
      that net written premiums less commissions paid or allowed to general agents
      and/or sub-agents is negative in any one calendar month, the Reinsurer shall
      remit to the Company, whether or not premiums have been collected from general
      agents and/or sub-agents, within forty-five (45) days after the end of each
      calendar month the amount of ceding commissions provided for in paragraphs
      B.
      and C. of Article X. It is understood and agreed that any funds that become
      due
      to any third party from the Company for return premiums or paid losses and
      loss
      adjustment expenses shall not be due and payable to that third party until
      such
      funds have first been collected by the Company from the Reinsurer. The
      Reinsurer’s liability for all losses, costs, expenses or other amounts due
      hereunder shall not be affected by the default of any general agent or
      sub-agent.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            5

        

      

    

     

    B.    Should
      any general agent, sub-agent or premium finance company fail to remit premiums
      to the Company (or return premiums to policyholders), the Reinsurer shall not
      hold the Company liable for said premiums ceded but not collected from (or
      returned by) the general agent, sub-agent or premium finance
      company.

    

    C.    Annually,
      the Reinsurer shall furnish the Company with such information as the Company
      may
      require to complete its annual convention statement.

    

    D.    Upon
      request, the Reinsurer shall furnish to the Company other reports or statistical
      records as required by the Company to be incompliance with insurance department
      regulations and statistical reporting requirements.

     

    Article
      IX - Currency

    

    A.    Whenever
      the word "dollars" or the "$" sign appears in the Agreement, they shall be
      construed to mean United States dollars and all transactions under the Agreement
      shall be in United States dollars.

    

    B.    Amounts
      paid or received by the Company shall be in United States dollars.

     

    Article
      X - Ceding Commission

    

    A.   Reinsurer
      shall pay ceding commissions to Company equal to the commissions paid or to
      be
      paid or allowed to the general agents and/or sub-agents producing Group AV
      business under the applicable Agency Agreements.

    

    B.    Reinsurer
      shall pay a ceding commission to Company for the costs of all brokerage, taxes,
      board, exchange or bureau assessments, and all other bureau or regulatory body
      expenses arising out of Group AV business. The provisional rate for taxes shall
      be estimated by the Company periodically as a percentage of net written premiums
      and adjusted by the Company annually to an actual rate. The difference between
      actual and estimated taxes shall be paid by the owing party to the other as
      soon
      as practicable after the close of each calendar year. In the event that return
      premiums exceed gross premiums written during any one calendar year, and in
      the
      further event that the Company is not able to recover any premium taxes from
      a
      state on the resulting net return premiums, Reinsurer agrees to reimburse the
      Company for any premium tax deduction made by Reinsurer in the monthly
      accountings to the Company for the calendar year involved.

    

    C.    A
      minimum
      ceding commission fee of four and three-fourths percent (4.75%) based upon
      annual net written premiums shall be paid by Reinsurer to the Company each
      month. Should the Agreement be terminated, the minimum fee set out in this
      paragraph shall be fully earned by the Company as of the effective date of
      termination and no refund of the fee shall be made by the Company to Reinsurer.
      For purposes of calculating ceding commissions, net written premiums shall
      include policy fees as well as premiums charged on the policy risks written
      and
      reinsured hereunder.

    

    D.    Ceding
      commissions provided for in paragraphs B. and C. above and to the extent that
      the Company has paid or allowed commissions to the general agents and other
      sub-agents under paragraph A. above shall be paid to the Company by Reinsurer
      regardless of the Reinsurer’s receipt of premium on Group AV business written
      and reinsured hereunder or a default by any general agent or sub-agent under
      any
      agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            6

        

      

    

    Article
      XI - Assignments and Assessments

    

    A.    The
      Reinsurer hereby assumes liability for any and all assessments and assignments
      arising out of Group AV business written and reinsured hereunder, whether before
      or after the termination of this Agreement, levied or made against the Company.
      If any recovery of an assessment or assignment that was paid by the Reinsurer
      is
      collected or realized by or returned to the Company, the Reinsurer shall receive
      its proportionate interest in the recovery of such assessment or
      assignment.

    

    B.    This
      Agreement shall apply to risks assigned to the Company under any assigned risk
      plan, if in the discretion of the Company such risks are assigned to the Company
      because they arise out of the Group AV business written and reinsured
      hereunder.

    

    C.    In
      the
      event this Agreement is terminated, the provisions of this Article shall survive
      and continue to apply for as long as the Company is subject to assignments
      and/or assessments arising out of the Group AV business written and reinsured
      hereunder.

     

    Article
      XII - Taxes

    

    In
      consideration of the terms under which this Agreement 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
      XIII - Loss and Loss Adjustment Expenses

    

    A.    Losses
      shall be reported to the Company by the Reinsurer, or its designee approved
      by
      the Company, in summary form as required by the Company. When requested,
      detailed loss information shall be provided to the Company by the Reinsurer,
      or
      its designee. Additionally, the Reinsurer shall notify the Company promptly
      when, in the opinion of the Company, a specific claim, suit or other proceeding
      involves unusual circumstances or large loss possibilities and shall continue
      to
      report updates to the Company on a monthly basis, or as requested by the
      Company, until such claim, suit or other proceeding has been settled or
      resolved. 

    

    B.    As
      authorized by the Company under this Agreement, the Reinsurer, or its designee
      approved in writing by the Company, shall adjust, settle, or compromise all
      losses, claims, suits or other proceedings arising out of Group AV business
      reinsured hereunder, whether or not a specific policyholder is named or joined
      in such claim, suit or other proceeding, including any class action suit
      (whether or not a class has been certified). Provided, however, the Company
      reserves the right to maintain control over the adjustment of all losses,
      claims, suits or other proceedings arising out of Group AV business reinsured
      hereunder, including but not limited to the defense of any such claims, suits
      or
      other proceedings. Notwithstanding any other provision under the Agreement,
      in
      the event the Company deems it necessary to assume, or delegate to another
      party, the responsibility for the adjustment of losses, claims, suits or other
      proceedings on Group AV business reinsured hereunder, Reinsurer shall be liable
      for and pay all costs and expenses of whatever kind or nature incurred by the
      Company that are due to the assumption or delegation of such
      activities.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        American
          Vehicle Insurance Company
          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            7

        

      

    

     

    C.    All
      payments for losses, adjustments, settlements, or compromises, including ex
      gratia payments, for Group AV business reinsured hereunder shall be paid by
      the
      Reinsurer on behalf of and in the name of the Company and such payments shall
      be
      unconditionally binding on the Reinsurer and the Reinsurer shall receive benefit
      from all salvage, subrogation, and recoveries thereof realized by the Company
      on
      Group AV business.

    

    D.    The
      Reinsurer shall pay on behalf of and in the name of the Company and bear all
      loss adjustment expense incurred by the Company, or on behalf of the Company,
      in
      the investigation, adjustment, appraisal or defense of all losses, claims,
      suits
      or other proceedings arising out of the business reinsured hereunder (excluding,
      however, office expenses and salaries of officials of the Company) whether
      or
      not a specific policyholder is named or joined in such claim, suit or other
      proceeding, including any class action suit (whether or not a class has been
      certified). The Reinsurer shall receive benefit from any recoveries of such
      loss
      adjustment expenses realized by the Company on Group AV business.

     

    Article
      XIV - Loss in Excess of Policy Limits/Extra Contractual
      Obligations

    

    A.    The
      Reinsurer shall assume, defend, and protect the Company from 100% of any loss
      in
      excess of any policy limit together with any legal costs and expenses incurred
      in connection therewith, whether or not such loss, costs and expenses are within
      the terms of any policy, including but not limited to, punitive and exemplary
      damages (hereinafter referred to as “Loss in Excess of Policy Limits”) having
      been incurred because of, but not limited to, failure by the Company or its
      designee to settle within the policy limit or by reason of alleged or actual
      negligence, fraud, misrepresentation, bad faith or statutory or regulatory
      violation in rejecting an offer of settlement, in denying or delaying payment
      or
      coverage, in the preparation of the defense or in the trial of any suit or
      other
      proceeding, or in the preparation or prosecution of an appeal consequent upon
      such action.

    

    B.    The
      Reinsurer shall assume, defend, and protect the Company from 100% of all Extra
      Contractual Obligations. The term “Extra Contractual Obligations” is defined as
      those liabilities, including but not limited to, punitive, exemplary,
      compensatory or consequential damages, fines penalties, costs and expenses
      not
      covered under any other provision of this Agreement and which arise out of
      Group
      AV business, including, but not limited to, (1) failure by the Company or its
      designee to settle within the policy limit, or by reason of alleged or actual
      negligence, fraud, misrepresentation, bad faith, or statutory or regulatory
      violation in rejecting an offer of settlement, in denying or delaying payment
      or
      coverage, in the preparation of the defense or in the trial of any suit or
      other
      proceeding, or in the preparation or prosecution of an appeal consequent upon
      such action; (2) alleged or actual excessive, discriminatory or other improper
      rates or underwriting practices; and (3) alleged or actual negligence, fraud,
      misrepresentation, malpractice, bad faith, or statutory or regulatory violation
      committed by the Reinsurer or its general agents and their employees,
      representatives, designees, sub-agents or sub-producers, whether or not
      committed within the authority granted by the Company under this Agreement
      or
      the applicable Agency Agreements.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            8

        

      

    

    C.   With
      respect to events described in paragraphs A. and B. of this Article, it is
      understood and agreed that the Reinsurer shall not be responsible for such
      acts
      if the acts are solely the result of actions taken by officers, or employees
      of
      the Company.

    

    D.   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.

    

    E.    Notwithstanding
      any other provisions to the contrary, the term “losses” used throughout this
      Agreement and its addenda shall include 100% of all Losses in Excess of Policy
      Limits and 100% of all Extra Contractual Obligations.

    

    F.    It
      is
      understood and agreed that the Company is not required to carry excess insurance
      or reinsurance to protect the Company and/or the Reinsurer against the subject
      matter of this Article.

     

    Article
      XV - Offset

    

    The
      Company and Reinsurer shall have the right to offset any balance or amounts
      due
      from one party to the other under the terms of this Agreement. 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
      XVI - Access to Records

    

    Each
      party shall have access during normal business hours to all records of the
      other
      party which pertain to the reinsurance of Group AV business hereunder. Requests
      shall be made at least seventy-two (72) hours in advance of the access
      date.

     

    Article
      XVII - Errors and Omissions

    

    A.    Inadvertent
      delays, errors or omissions made in connection with this Agreement 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 will be rectified as soon as possible after
      discovered and brought to the attention of the Company's
      management.

    

    B.    It
      is
      further understood that any policy issued as Group AV business inadvertently
      by
      the Reinsurer or any general agent or sub-agent shall be subject to the
      provisions of this Agreement and shall be unconditionally binding to the
      Reinsurer.

     

    Article
      XVIII - 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 the Company's ceded reserves
      for unearned premium and outstanding loss and loss adjustment expenses (reported
      and incurred but not reported) relating to the Group AV business written and
      reinsured hereunder, so as to allow the Company to take full credit for reserves
      ceded in its statutory annual statement, as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            9

        

      

    

    1.    Clean,
      irrevocable and unconditional letter(s) 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 (hereinafter referred to as “letter of credit”); 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 any insurance regulatory authority
      including the states in which the business is written. Reinsurer, at its sole
      option, may fund in other than cash if its method and form of funding are
      acceptable to the Company and the insurance regulatory authorities
      involved.

    

    B.    If
      the
      A.M. Best rating of the Reinsurer is below or drops below a rating of “A” at any
      time while any obligation of the Reinsurer under this Agreement remains
      outstanding, the requirements for funding of the Company’s ceded reserves for
      unearned premium and outstanding loss and loss adjustment expenses, including
      reserves for incurred but not reported losses, as provided for under this
      Article or any other provision of the Agreement shall apply regardless of
      whether or not the Reinsurer is an unauthorized reinsurer.

    

    C.    With
      regard to funding in whole or in part by letters of credit under this Article
      or
      any other provision of the Agreement, it is agreed that each letter of credit
      will be in a form acceptable to insurance regulatory authorities involved,
      and
      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 thirty (30) days prior to said expiration date. The
      Company and Reinsurer further agree, notwithstanding anything to the contrary
      in
      the Agreement, 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 Reinsurer, but only for one or more of the
      following purposes:

    

    1.    To
      reimburse the Company for unearned premiums returned to insureds on account
      of
      policy cancellations, unless paid in cash by Reinsurer.

    

    2.    To
      reimburse the Company for losses and/or loss adjustment expense paid under
      the
      terms of Policies reinsured hereunder, unless paid in cash by
      Reinsurer.

    

    3.    To
      reimburse the Company for any other amounts claimed to be due hereunder, unless
      paid in cash by Reinsurer.

    

    4.    To
      fund a
      cash account in an amount equal to any ceded unearned premium and/or outstanding
      loss and loss adjustment expense reserves, including incurred but not reported
      loss reserves, if said letter of credit has not been renewed or replaced by
      Reinsurer ten (10) days prior to its expiration date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            10

        

      

    

    5.    To
      refund
      to Reinsurer any sum in excess of the actual amount required to fund the
      Company's ceded unearned premium and/or outstanding loss and loss adjustment
      expense reserves, if so requested by Reinsurer.

    

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

    

    D.    It
      is
      further understood and agreed that, as a condition of this Agreement more fully
      described in Article XXI, the Reinsurer shall provide adequate reinsurance
      security to the Company in the form of a letter of credit that meets the
      requirements of this Article and Article XXI as well as the statutory
      qualifications for reinsurance credit in the Texas Insurance Code for
      unauthorized reinsurers. Prior to execution of this Agreement, the Company
      shall
      receive written confirmation from the bank that it has issued the letter of
      credit to the Company as the beneficiary in the minimum and initial amount
      of
      $15 million. Such letter of credit shall be adjusted immediately by the
      Reinsurer in accordance with the Letter of Credit Addendum attached to this
      Agreement if the sum of the obligations assumed by the Reinsurer under this
      Agreement at any time, as determined by the Company, are greater than $15
      million. If the Reinsurer does not comply with the reinsurance security
      requirements of this Agreement and its addenda, the Company, at its sole
      discretion, shall have the right to terminate this Agreement immediately by
      giving notice in writing to the Reinsurer.

     

    Article
      XIX - Insolvency

    

    A.    In
      the
      event of the insolvency of the Company, the reinsurance subject to this
      Agreement shall be payable 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 Reinsurer of the pendency of a claim against the Company indicating
      the policy reinsured which claim would involve a possible liability on the
      part
      of 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, 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
      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 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 the Agreement 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 the
      Company, the reinsurance under the Agreement shall be payable directly by
      Reinsurer to the Company or to its liquidator, receiver or statutory successor,
      or except (1) where the Agreement specifically provides another payee of such
      reinsurance in the event of the insolvency of the Company or (2) where Reinsurer
      with the consent of the direct insured or insureds has assumed in writing such
      policy obligations of the Company as direct obligations of Reinsurer to the
      payees under such policies and in substitution for the obligations of the
      Company to such payees.

    
      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
            American
              Vehicle Insurance Company

            Quota
              Share Reinsurance Agreement

            Originally
              Effective: April 15, 2006

            Page
              11

          

        

      

    

     

    Article
      XX - Arbitration

    

    A.    As
      a
      condition precedent to any right of action hereunder, any dispute arising out
      of
      the interpretation, performance or breach of this Agreement, including the
      formation or validity thereof, shall be submitted for decision to a panel of
      three arbitrators. Notice requesting arbitration shall 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 thirty
      (30) days after being requested to do so by the other party, the latter, after
      ten (10) days notice by certified or registered mail of its intention to do
      so,
      may appoint the second arbitrator.

    

    C.    If
      the
      two arbitrators are unable to agree upon the third arbitrator within thirty
      (30)
      days of their appointment, the third arbitrator shall be selected from a list
      of
      six individuals (three named by each arbitrator) by a judge of the federal
      district court having jurisdiction over the geographical area in which the
      arbitration is to take place, or if the federal court declines to act, the
      state
      court having general jurisdiction in such area.

     

    D.    All
      arbitrators shall be disinterested active or former executive officers of
      insurance or reinsurance companies or Underwriters at Lloyd’s,
      London.

    

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

    

    F.    The
      panel
      shall be relieved of all judicial formality and shall not be bound by the strict
      rules of procedures and evidence. Unless the panel agrees otherwise, arbitration
      shall take place in Dallas, Texas, but the venue may be changed when deemed
      by
      the panel to be in the best interest of the arbitration proceeding. Insofar
      as
      the arbitration panel looks to substantive law, it shall consider the law of
      the
      State of Texas. The decision of any two arbitrators when rendered in writing
      shall be final and binding. The panel is empowered to grant interim relief
      as it
      may deem appropriate.

    

    G.    The
      panel
      shall interpret this Agreement as an honorable engagement rather than as merely
      a legal obligation and shall make its decision considering the custom and
      practice of the applicable insurance and reinsurance business as promptly as
      possible following the termination of the hearings. Judgment upon the award
      may
      be entered in any court having jurisdiction thereof.

    

    H.    Each
      party shall bear the expense of its own arbitrator and shall jointly and equally
      bear with the other party 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 attorneys’ fees, to the extent permitted by
      law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            12

        

      

    

    I.    The
      parties agree, and the appointed arbitrators shall agree as part of their
      acceptance of nomination, to keep confidential and not disclose to persons
      not
      connected with the arbitration the details of the arbitration and all
      information received by them in connection therewith, except as may be required
      by process of law.

     

    Article
      XXI - Reinsurance Security

    

    A.    As
      a
      basis for entering into and maintaining this Agreement, it is understood and
      agreed that the Reinsurer shall establish and maintain certain security
      requirements of the Company, as set forth in this Agreement. It is understood
      and agreed that the Reinsurer shall provide certain information about the
      Reinsurer and its parent and affiliates to the Company, as requested, to comply
      with the Company’s internal controls and procedures regarding reinsurance
      security. Such information shall include, but not be limited to statutory and
      audited financial statements; descriptions of the Reinsurer’s reinsurance
      program; and copies of any significant regulatory filing that requires
      regulatory approval.

    

    B.    It
      is
      agreed that Reinsurer shall obtain for the benefit of Company an initial letter
      of credit in the amount of $15,000,000 that shall be maintained according to
      the
      Letter of Credit Addendum attached to this Agreement, which shall be
      incorporated herein by reference.

    

    C.    It
      also
      agreed that in the event that the Reinsurer enters into any ceded reinsurance
      of
      Group AV business to another reinsurer (i.e., a retrocessionaire), Reinsurer
      shall obtain for the benefit of Company an unlimited guarantee of the
      Reinsurer’s obligations under this Agreement from its retrocessionaires, which
      shall be executed separately and incorporated herein by reference. The
      Reinsurer shall fully disclose its reinsurance program to the Company at
      inception of this Agreement and annually thereafter. If any changes occur or
      are
      expected to occur to the Reinsurer’s reinsurance program, the Reinsurer shall
      provide timely written notice to the Company of those changes. 

     

    Article
      XXII - Indemnity and Hold Harmless Agreement

    

    IN
      CONSIDERATION OF THESE PRESENTS AND THE RECIPROCAL BENEFITS DERIVED BY EACH
      OF
      THE PARTIES HERETO, REINSURER HEREBY AGREES TO DEFEND, HOLD HARMLESS AND
      INDEMNIFY THE COMPANY AGAINST ANY AND ALL CLAIMS, CAUSES OF ACTION, SUITS OR
      OTHER PROCEEDINGS, LOSS, COST, DAMAGE OR EXPENSE (INCLUDING BUT NOT LIMITED
      TO
      ALL LEGAL FEES AND EXPENSES) OF WHATEVER KIND OR CHARACTER THAT ARISE OUT OF
      GROUP AV BUSINESS REINSURED HEREUNDER WHETHER OR NOT SUCH CLAIM, CAUSE OF
      ACTION, SUIT OR OTHER PROCEEDING, LOSS, COST, DAMAGE OR EXPENSE IS WITHIN THE
      TERMS AND CONDITIONS OF POLICIES WRITTEN AND REINSURED HEREUNDER AND WHETHER
      OR
      NOT ARISING IN CONNECTION WITH THIS AGREEMENT. THIS ARTICLE SHALL APPLY
      REGARDLESS OF THE SOLE OR CONTRIBUTORY NEGLIGENCE OR OTHER FAULT OF THE COMPANY,
      WHETHER ACTUAL OR ALLEGED.

    

    IF
      FOR
      ANY REASON THE REINSURER IS UNABLE TO OR DOES NOT ADMINISTER THE POLICIES
      REINSURED HEREUNDER (WHETHER THE AGREEMENT IS IN EFFECT OR THE GROUP AV BUSINESS
      IS BEING RUN-OFF), THE COMPANY SHALL APPOINT A THIRD PARTY TO ADMINISTER THE
      GROUP AV BUSINESS REINSURED HEREUNDER AND THE REINSURER SHALL BE LIABLE FOR
      ANY
      EXPENSES INCURRED THEREWITH.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            13

        

      

    

    Article
      XXIII - Savings Clause

    

    If
      any
      law or regulation of the federal, state, or local government of the United
      States or the rulings of officials having supervision over insurance companies
      should render illegal the undertaking of this Agreement as to risks located
      in
      the jurisdiction of such authority, either the Company or the Reinsurer may
      upon
      written notice to the other party suspend, abrogate, or amend this Agreement
      insofar as it relates to risks located within such jurisdiction to such extent
      as may be necessary to comply with such law, regulation, or ruling. Such
      suspension, abrogation, or amendment of a portion of this Agreement shall in
      no
      way affect any other portion thereof.

     

    Article
      XXIV - Service of Suit 

    

    A. It
      is
      agreed that in the event Reinsurer fails to pay any amount claimed to be due
      hereunder, Reinsurer, at the request of the Company, will submit to the
      jurisdiction of any court of competent jurisdiction within the United States,
      will comply with all requirements necessary to give such court jurisdiction
      and
      agrees to abide by the final decision of such court or an appellate court to
      which such court’s decision is appealed. Nothing in this Article constitutes or
      should be understood to constitute a waiver of 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 statue of any state, territory or district of the United States
      which makes provision therefore, 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 the officer specified
      for that purpose in the statute, or his 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
      XXV - Miscellaneous

    

    A.    The
      Agreement shall bind and inure to the sole benefit of the Company and Reinsurer
      and their respective successors and assigns and shall not confer any benefit
      on
      any other person.

    

    B.    The
      rights and obligations of either party under the Agreement shall not be assigned
      to a third party without the prior written approval of the other party to the
      Agreement.

    

    C.    The
      provision of the Agreement shall not create any right or legal relationship
      between Reinsurer and any insured and/or policyholder of Company.

    

    D.    The
      Agreement may be executed in one or more counterparts, each of which is deemed
      to be an original, and all of which taken together shall constitute one and
      the
      same instrument.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            14

        

      

    

    E.    The
      Agreement sets forth the entire agreement and understanding of the parties
      with
      respect to the subject matter hereof and supersedes any prior understandings,
      whether written or oral, with respect thereto.

    

    F.    The
      Agreement may be amended from time to time by a written instrument executed
      with
      the same degree of formality as the Agreement. No waiver of any of the terms
      or
      conditions of the Agreement by any party shall be considered as creating a
      waiver of the same terms or conditions in any subsequent transaction or
      occurrence.

    

    G.    This
      Agreement shall be governed by the laws of the United States of America and
      the
      State of Texas, without respect to their choice of law provisions.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            15

        

      

    

    IN
      WITNESS WHEREOF, the parties hereto by their respective duly authorized
      representatives have executed the Agreement to be effective as of April 15,
      2006.

     

    
      	 	 	 
	 	REPUBLIC
              UNDERWRITERS INSURANCE COMPANY
	 
 	 
 	 
 
	 	By  	/s/
              Jack
              Fulton   
	 	
              

            
	 	Its	Vice
              President
	 	 	
              
 

    

     

    
      	 	 	 
	 	AMERICAN
              VEHICLE INSURANCE COMPANY
	 
 	 
 	 
 
	 	By  	/s/ Irwin
              Giesecke  
	 	
              

            
	 	Its	President
	 	 	
              

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Letter
      of Credit Addendum

    To
      The

    Quota
      Share Reinsurance Agreement

    Originally
      Effective April 15, 2006

    

    This
      Letter of Credit Addendum, effective April
      15,
      2006,
      is
      incorporated into and forms a part of the Quota Share Reinsurance Agreement
      between Republic Underwriters Insurance Company (the “Company”) and American
      Vehicle Insurance Company (“Reinsurer”), originally effective April
      15,
      2006,
      covering Group AV business.

    

    It
      is
      agreed that Reinsurer
      shall provide the Company a letter of credit and maintain it as provided
      herein.

     

    Section
      I - Purpose Of Addendum

    

    Pursuant
      to the terms hereof, Reinsurer agrees to secure a letter of credit (as defined
      in herein) which shall be for the sole use and benefit of the Company for the
      payment of amounts due the Company as of the effective date hereof, and amounts
      that may become due the Company thereafter under the Quota Share Reinsurance
      Agreement (as amended from time to time, originally effective April 15, 2006,
      and hereinafter referred to as the "Reinsurance Agreement") as allowed
      herein.

     

    Section
      II - Amount Of Letter Of Credit

    

    A.    Concurrent
      with the execution of this Addendum, Reinsurer shall deliver or cause to be
      delivered to the Company a letter of credit in an amount greater than or equal
      to the initial amount as stated in the Reinsurance Agreement. Subsequent to
      the
      execution of this Addendum, Reinsurer shall immediately adjust the amount of
      the
      letter of credit to an amount greater than or equal to the greater of the
      minimum amount of $15,000,000 or the sum of the Company's "ceded reserves"
      and
      "other reinsurance balances."

    

    B.    "Letter
      of credit" as used herein shall meet the minimum requirements as to form and
      expiration as provided for in the Texas Insurance Code to qualify for
      reinsurance credit for unauthorized reinsurers and other provisions of the
      Reinsurance Agreement. Such letter of credit must be clean, irrevocable, and
      unconditional. It must be issued or confirmed by a qualified United States
      financial institution acceptable to the Company. It must be issued for a term
      of
      at least one year and 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 received by the Company not less than thirty (30)
      days
      prior to said expiration date.

    

    C.    "Ceded
      reserves" as used herein shall be defined as the reserves for unearned premiums
      plus the reserves for losses and loss adjustment expenses (reported as well
      as
      not reported) as determined by the Company that are ceded by the Company to
      Reinsurer for Group AV business.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            2

        

      

    

     

    D.    "Other
      reinsurance balances" as used herein shall be defined as the net of the
      receivables for ceded paid losses and loss adjustment expenses and the payable
      for ceded premiums written less the respective ceding commissions for Group
      AV
      business.

     

    Section
      III - Reporting

    

    A.    Subsequent
      to the effective date of this Addendum, Reinsurer shall report to the Company
      its calculation of the letter of credit balance required in writing. Such report
      shall be as of each calendar month and shall be due within forty five (45)
      days
      after the end of the subject monthly period.

    

    B.    Any
      changes to the letter of credit shall be agreed to in writing by the Company
      and
      Reinsurer. Such changes shall be completed and Reinsurer shall cause a new
      letter of credit, or amendments thereto, to be received by the Company within
      sixty (60) days after the end of the subject monthly period.

     

    Section
      IV - Company's Claim On The Letter Of Credit

    

    A.    In
      the
      event Reinsurer defaults upon its obligation under the Reinsurance Agreement
      including, but not limited to, the following: to reimburse the Company for
      Reinsurer's share of premiums refunded to policyholders on account of the
      cancellations of individual coverage under reinsured policies, or to reimburse
      the Company for lossesand loss adjustment expenses paid by the Company under
      the
      terms and provisions of the reinsured policies, or to reimburse the Company
      for
      Reinsurer's share of excess premium refunds to the policyholders under reinsured
      policies pursuant to retrospective premium adjustment formula agreements between
      the Company and the policyholders (or the similar), if any, or to reimburse
      the
      Company for Reinsurer's share of retrospective commission adjustments,
      contingent commissions, profit-sharing, or experience refunds due to the Company
      or the Company's agents, managing general agents, or special agents, then upon
      written demand by an authorized officer of the Company at the Company's sole
      discretion, the bank issuing the letter of credit shall thereupon pay proceeds
      of the letter of credit in cash to the Company.

    

    B.    In
      the
      event the Company takes possession of proceeds from the letter of credit as
      provided for in paragraph A. above, the Company shall return to Reinsurer any
      amount by which the proceeds of such letter of credit exceeds the balance due
      the Company under the Reinsurance Agreement. Reinsurer shall continue to be
      liable for any amount by which balances due the Company exceed the said proceeds
      of the letter of credit plus any unfunded portions thereof.

     

    Section
      V - Letter Of Credit Fee Expense

    

    The
      expense incurred to obtain and maintain the letter of credit will be borne
      solely by Reinsurer.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
          American
            Vehicle Insurance Company

          Quota
            Share Reinsurance Agreement

          Originally
            Effective: April 15, 2006

          Page
            3

        

      

    

     

    Section
      VI - Termination

    

    This
      Addendum shall continue beyond the effective date of termination of the
      Reinsurance Agreement, while the Group AV business is in run-off, until all
      obligations under the Reinsurance Agreement have been satisfied by the
      Reinsurer. This Addendum may only be terminated by the Company upon its
      verification of the final settlement between the Company and Reinsurer of all
      reinsured claims and losses and all obligations of Reinsurer under the
      Reinsurance Agreement. Such termination must be made by the Company in
      writing.

    

    IN
      WITNESS WHEREOF, the parties hereto by their respective duly authorized
      representatives have executed this Letter of Credit Addendum to the Quota Share
      Reinsurance Agreement to be effective as of April
      15,
      2006.

     

    
      	 	 	 
	Attest	REPUBLIC
              UNDERWRITERS INSURANCE COMPANY
	 
 	 
 	 
 
	/s/
              Kathy Campbell	By  	/s/ 
Jack
              Fulton   
	 	
              

            
	 	Its	Vice
              President 
	 	
              
 

    

     

    
      	 	 	 
	Attest	AMERICAN
              VEHICLE INSURANCE COMPANY
	 
 	 
 	 
 
	/s/
              Marite Messina	By  	/s/ 
Irwin
              Giesecke
	 	
              

            
	 	Its	PresidentExhibit
      10.1

    

    DTLL

    

    April
      6,
      2006

    

    Thomas
      Schrade

    President

    Board
      of
      Directors

    GRAND
      SIERRA RESORT CORP.

    3468
      Rice
      Street

    Vadnais
      Heights MN 55126

    

    RE:
      Proposed Transaction

    

    Dear
      Mr
      Schrade and Members of the Board,

    

    This
      letter is in response to your letter dated April 4, 2006.

    

    Please
      be
      advised that DTLL, Inc did not receive a copy of the letter from Grand Sierra
      Resorts Corp. dated March 17, 2006 until April 5, 2006.

    

    This
      is
      to confirm that we will provide the information you have requested in your
      letter, in addition to financing commitments, sufficient to close the
      transaction, as previously provided to you at the meeting in Minneapolis on
      March 7, 2006. 

    

    This
      is
      to advise you that DTLL, Inc has extended the offer to the Grand Sierra Resorts
      Corporation shareholders until 5 pm EST May 9, 2006.

    

    

    Sincerely,

    

    

    Dual
      Cooper

    President

    
 

    Destination
      Travel Leisure International

    1650
      West 82nd
      Street, Suite 1200, Bloomington, MN 55431

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