Exhibit 10.1

STOCK PURCHASE AGREEMENT

BY AND BETWEEN

MONTPELIER RE U.S. HOLDINGS LTD.

AND

SELECTIVE INSURANCE GROUP, INC.

DATED AS OF SEPTEMBER 19, 2011

TABLE OF CONTENTS

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Annexes:

Annex I — Pro Forma Net Worth Statement

Annex II — Purchase Price Allocation

Exhibits:

Exhibit A — Form of Amendment Number 1 to the Quota Share Treaty

Exhibit B — Form of Assignment and Assumption Agreement

Exhibit C — Form of Bill of Sale

Exhibit D — Form of Claims Services Agreement

Exhibit E — Form of Lease Assignment and Assumption Agreement

Exhibit F — Form of Loss Development Reinsurance Contract

Exhibit G — Form of Parental Guarantee

Exhibit H — Form of Transition Services Agreement

Exhibit I — Form of Trust Agreement

Disclosure Schedules:

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”) is dated as of September 19, 2011, between MONTPELIER RE U.S. HOLDINGS LTD., a Delaware corporation (“Seller”) and SELECTIVE INSURANCE GROUP, INC., a corporation organized under the laws of the State of New Jersey (“Buyer”).   Buyer and Seller each a “Party” and collectively, the “Parties.”

WHEREAS, Seller owns all of the issued and outstanding shares of common stock, par value $1.00 per share (the “Shares”), of MONTPELIER U.S. INSURANCE COMPANY, a stock property and casualty insurance company domiciled in the State of Oklahoma (the “Company”); and

WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, all of the Shares.

NOW THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants, agreements and conditions contained herein, the adequacy of which is hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1             Definitions.  For the purposes of this Agreement (including any schedules hereto), the following capitalized terms shall have the meanings set forth below:

“Affiliate” means a Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the Person specified.  For purposes of this definition, the term “control” (including the terms “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to (a) vote 50% or more of the voting securities of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“Amendment to the Quota Share Treaty” means Amendment Number 1 to the Quota Share Treaty Reinsurance Contract to be entered into between the Company and Montpelier Re substantially in the form attached hereto as Exhibit A.

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“Ancillary Agreements” means the Amendment to the Quota Share Treaty, the Assignment and Assumption Agreement, the Bill of Sale, the Claims Services Agreement, the Lease Assignment and Assumption Agreement, the Loss Development Reinsurance Contract, the Parental Guarantee, the Transition Services Agreement and the Trust Agreement.

“Applicable Laws” means any applicable order, law, statute, regulation, code, rule, judgment, decree or bulletin, promulgated, issued, enforced or entered by any Governmental Entity.

“Assigned and Assumed Contracts” means the contracts described on Schedule 1 to the Assignment and Assumption Agreement.  For the avoidance of doubt, “Assigned and Assumed Contracts” shall include contracts underlying any of the Company IT Assets which are not otherwise transferable or assignable to SICA and/or its designated Affiliates without a third party’s prior consent.

“Assignment and Assumption Agreement” means the Assignment and Assumption Agreement to be entered into between Montpelier Technical Resources Ltd., a Delaware corporation and an Affiliate of Seller and SICA substantially in the form attached hereto as Exhibit B.

“Bill of Sale” means the Bill of Sale to be entered into between Seller and SICA substantially in the form attached hereto as Exhibit C.

“Books and Records” means the Company’s books and records, financial records, compliance records relating to the assets, properties, business and operations and all such items and corporate records relating to the Company’s legal existence, stock ownership or corporate management that are in the possession or under the control of the Company, Seller or its Affiliates or their respective representatives, whether stored in hardcopy form or on magnetic or optical media, including (i) documents relating to the Company’s Surplus Lines Qualifications and ongoing regulatory matters (including all documents and records relating to the Deposits), (ii) the Company’s minute books (including the original or certified copies of the Company’s articles of incorporation and bylaws), stock record book, and the corporate seal of the Company, (iii) personnel files, (iv) documents relating to the Assigned and Assumed Contracts, (v) the Company’s general ledger, trial balance and claims register and (vi) any other books and records reasonably requested by the Buyer which are related to any assets to which the Company will have title after the Closing or to other matters for which the Company will have any continuing responsibility after the Closing.  Further, Books and Records shall include the Company’s Tax Returns (and related Tax information) filed on a stand-alone basis and related Tax information of the Company prepared with respect to the Company in joining the combined and consolidated Tax Returns of Seller and its Affiliates, and shall exclude (i) all Tax Returns and related Tax information of Seller and its Affiliates (other than the Company) and (ii) prior to the Closing, any such lists, information and records that are prohibited from being disclosed or transferred by Applicable Law or regulatory requirements.

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“Business” means the business of selling, marketing and underwriting property and specialty insurance contracts on a surplus lines basis and all other related or ancillary businesses and activities, including financial accounting and processing and adjudication of claims, as conducted by the Company.

“Business Day” means any day other than a Saturday, a Sunday, a legal holiday in the State of New York or a day on which banking institutions in the State of New York are authorized or obligated by Applicable Law to close.

“Business Employee” means each current employee of the Business who is not a Company Employee as of the date of this Agreement and is also listed in Section 1.1(i) of the Disclosure Schedule.

“Claims Services Agreement” means the Claims Services Agreement to be entered into between the Company and Montpelier Underwriting Agencies Limited, a Lloyd’s managing agency based in London and an Affiliate of Seller substantially in the form attached hereto as Exhibit D.

“Code” means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.  References to sections of the Code shall be construed to refer to any successor sections.

“Company Intellectual Property” means all Intellectual Property owned by, or licensed by any third party to, Seller or any of its Affiliates (i) that is primarily used in or related to the Business, or (ii) that is listed in Section 1.1(ii) of the Disclosure Schedule; provided that (x) the items listed in Section 1.1(iii) of the Disclosure Schedule, (y) the Company Names and Marks and (z) the Rater Software (collectively, the “Excluded IP/IT”) are excluded from the definition of “Company Intellectual Property”.

“Company IT Assets” means all IT Assets owned by, or leased or licensed by any third party to, Seller or any of its Affiliates that are (i) primarily used in or related to the Business or (ii) listed in Section 1.1(ii) of the Disclosure Schedule; provided that the Excluded IP/IT are excluded from the definition of “Company IT Assets”.

“Disclosure Schedule” means the disclosure schedule of even date herewith delivered simultaneously with the execution of this Agreement.

“GAAP” means generally accepted accounting principles in the United States.

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“Governmental Entity” means any (a) agency, administrative department, division or subdivision, commission, regulatory authority, taxing or administrative authority, state insurance department, court or other judicial body, legislature, audit group or procuring office of any municipal, town, city, county, state or federal government (including employees and agents) in the United States or in any foreign jurisdiction, (b) person, entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature and (c) arbitrator or arbitration panel.

“Indebtedness” means (a) all indebtedness for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (b) any other indebtedness that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (c) all obligations under financing leases, (d) all liabilities secured by a Lien on any property and (e) all guarantees of third party obligations.

“Insurance Policy” means any contract, policy, binder, cover notes or certificate of insurance or reinsurance issued or reinsured by the Company.

“Intellectual Property” means all intellectual property rights and rights in confidential information of every kind and description throughout the world, including all U.S. and foreign: (a) patents, patent applications (including provisionals), invention disclosures, and all related continuations, divisionals, continuations-in-part, re-examinations, extensions, reissues and extensions thereof (“Patents”); (b) trademarks, service marks, names, corporate names, trade names, logos, slogans, Internet domain names, trade dress, design rights and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (“Trademarks”); (c) copyrights and copyrightable subject matter, moral rights and rights of attribution and integrity (“Copyrights”); (d) trade secrets and all other confidential information, ideas, know-how, inventions, proprietary processes, formulae, models, and methodologies (“Trade Secrets”); (e) rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing (“Software”); (f) rights of publicity, privacy, and rights to personal information; (g) all rights in the foregoing and in other similar intangible assets; (h) all applications and registrations for the foregoing; and (i) all rights and remedies against past, present, and future infringement, misappropriation, or other violation thereof.

“IT Assets” means the computers, servers, workstations, routers, hubs, switches, data communications lines, telephone and telecommunications equipment (including telephone numbers) and all other tangible information technology equipment and Software.

“Knowledge of Seller” means actual knowledge of the officer or employee of Seller or the Company listed in Section 1.1(iv) of the Disclosure Schedule.

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“Lease” means that certain lease described in Section 3.12 of the Disclosure Schedule.

“Lease Assignment and Assumption Agreement” means either (i) the Lease Assignment and Assumption Agreement to be entered into between the Seller and SICA, substantially in the form attached hereto as Exhibit E or, solely in the event the parties are unable in good faith to enter into the aforementioned agreement, (ii) a commercially reasonable sublease agreement between Seller and SICA, to be negotiated in good faith between the parties prior to the Closing.

“Leased Premises” means the office space located in the building known as The Scottsdale Forum, located at 6263 North Scottsdale Road, Scottsdale, Arizona, as more fully described in the Lease.

“License Agreements” means all contracts, agreements or commitments pursuant to which Seller or any of its Affiliates (including the Company) is granted or obtains or agrees to grant or obtain any right to use any Company IP/IT Assets;

“Liens” means all mortgages, pledges, security interests, liens, charges, options, conditional sales agreements, claims, restrictions, covenants, easements, rights of way, title defects or other encumbrances or restrictions of any nature whatsoever.

“Loss Development Reinsurance Contract” means the Loss Development Reinsurance Contract to be entered into between the Company and Montpelier Re substantially in the form attached hereto as Exhibit F.

“Material Adverse Effect” means any occurrence, state of facts, change, event, effect or circumstance that, individually or in the aggregate: (a) has, or would be expected to have, a material adverse effect on the assets, liabilities, business, results of operations or financial condition of the Company other than any occurrence, state of facts, change, event, effect or circumstance covered by an agreement contemplated herein or to the extent resulting from (i) changes in general economic conditions or financial markets in general; (ii) changes after the date hereof in statutes, rules or regulations applicable to the Company or any of its respective properties or assets (iii) changes before or after the date hereof with respect to statutes, rules or regulations specifically relating to Surplus Lines Qualification; (iv) the announcement of this Agreement and the transactions contemplated hereby; or (iv) changes after the date hereof in GAAP or Statutory Accounting Principles; provided, however, that the exceptions set forth in clauses (i) and (iv) shall not be given effect to the extent that such occurrence, state of facts, change, event, effect or circumstance has a disproportionate adverse effect on the Company as compared to the effect on other similar Persons operating in the industry generally, or (b) would, or would reasonably be expected to, prevent or materially impair the ability of Seller or the Company to consummate the transactions contemplated by this Agreement.

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“Montpelier Re” means Montpelier Reinsurance Ltd., a Class 4 insurer organized under the laws of Bermuda and an Affiliate of Seller.

“Net Worth” means the net worth of the Company calculated in accordance with GAAP, consistently applied.  The Net Worth of the Company, as of any date, is set forth in the line item “Shareholders’ Equity” under the column “Net Worth to Buyer” in the applicable Net Worth Statement as of such date.

“Net Worth Statement” means each the following statements setting forth the Net Worth of the Company: the Pro Forma Net Worth Statement, the Proposed Estimated Closing Net Worth Statement, the Estimated Closing Net Worth Statement, Closing Net Worth Statement and the Final Closing Net Worth Statement.

“Oklahoma Insurance Department” means the Governmental Entity with regulatory authority over insurance matters in the State of Oklahoma.

“Open Source Software License” means (i) any Software license meeting the Open Source Definition, as defined by the Open Source Initiative, or Free Software Definition, as defined by the Free Software Foundation, or any similar license, including the GNU GPL, the GNU LPGL and the Affero, CDDL and CPL/Eclipse licenses and (ii) any other Software license that requires, as a condition of use, modification, distribution or other action with respect to such Software, that such Software, or any other Software derived from, incorporated into, distributed with or otherwise related to such Software (a) be made available in source code form to any one or more third parties, (b) be permitted to be modified by any one or more third parties, (c) be permitted to be disassembled or otherwise reverse engineered or (d) be redistributable at no license fee.

“Parent” means Montpelier Re Holdings Ltd., a corporation organized under the laws of Bermuda and ultimate parent company of Seller and its Affiliates.

“Parental Guarantee” means the Guarantee provided by Parent for the benefit of Buyer substantially in the form attached hereto as Exhibit G.

“Permits” means all permits, licenses, authorizations, variances, exemptions, orders, registrations and approvals of all Governmental Entities that are required for the conduct of the Business, including the Insurance License and the Surplus Lines Qualifications.

“Permitted Liens” means (a) Liens for current Taxes not yet due and payable or due and being contested in good faith by appropriate proceedings, provided that adequate reserves are maintained on the applicable Statutory Statements, (b) mechanics’, carriers’, workers’, repairers’, materialmens’, warehousemens’ and other similar Liens arising or incurred

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in the ordinary course of business and (c) such other Liens as would not in the aggregate materially adversely affect the value of, or materially adversely interfere with the use of, any of the properties and assets of the Company.

“Person” means an individual, a partnership, a limited liability company, a joint venture, a corporation, a trust, an unincorporated organization, a government or any department or agency thereof or any other entity.

“Policyholder” means policyholders and named insureds of the Insurance Policies.

“Post-Closing Tax Period” means any taxable period beginning after the Closing Date.

“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date.

“Pro Forma Net Worth Statement” means the Net Worth Statement of the Company as of June 30, 2011 attached as Annex I hereto.

“Quota Share Treaty Reinsurance Contract” means the Quota Share Treaty Reinsurance Contract between the Company and Montpelier Re dated originally as of December 10, 2007 and amended and restated on May 28, 2010.

“Representative” means an employee, director, officer, counsel, auditor, agent or other representative of the Parties.

“Required IP/IT Third Party Consents” means all consents, approvals or waivers from any third party in connection with the (i) sale, conveyance, assignment, transfer, delivery or license (as applicable) of any Company IP/IT Assets to SICA and/or its Affiliates as contemplated hereunder or (ii) provision of services as contemplated under the Transition Services Agreement, including in each case as may be required under any License Agreements.

“Required Regulatory Approvals” shall mean the Company Required Regulatory Approvals and the Buyer Required Regulatory Approvals.

“SICA” means Selective Insurance Company of America, a property and casualty insurance company domiciled in New Jersey and a wholly-owned subsidiary of the Buyer.

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“Statutory Accounting Principles” means, with respect to any insurance company, those accounting practices prescribed or permitted by the commissioner of insurance (or equivalent title) of the state of domicile of such insurance company.

“Straddle Period” means any taxable year or period that begins on or before the Closing Date and ends after the Closing Date.

“Surplus Lines Qualified” or “Surplus Lines Qualification” means, with respect to any United States jurisdiction, that the Company satisfies the requirements of such jurisdiction for writing insurance coverage on a surplus or excess lines basis, as those terms are commonly understood in the United States insurance industry and either: (i) in those United States jurisdictions in which a Governmental Entity maintains a list of insurance companies which are approved, qualified or eligible to write insurance coverage on a surplus or excess lines basis, is included on such list, or (ii) in those United States jurisdictions in which the surplus lines association or excess lines association or stamping office maintains a list of insurance companies which are approved, qualified or eligible to write insurance coverage on a surplus or excess lines basis, is included on such list; and (iii) with respect to the United States jurisdictions in which neither clause (i) nor clause (ii) above applies, the Company satisfies the requirements of such jurisdiction for writing insurance coverage on a surplus or excess lines basis.

“Tax Authority” means, with respect to any Tax, any Governmental Entity that imposes such Tax, and any agency charged with the collection, assessment, determination or administration of such Tax for such Governmental Entity.

“Taxes” means any and all federal, state, foreign or local income, net income, gross income, gross receipts, ad valorem, premium, excise, real property, personal property, windfall profit, sales, use, escheat, capital gains or corporation tax on capital gains, transfer, documentary, license, withholding, employment, payroll, profit, estimated, severance stamp, stamp duty, premium, occupation, value added registration, environmental (including taxes under Section 59A of the Code), climate change, imports, customs, vehicle, airplane, boat, vessel or other title or registration, capital stock, employees’ income withholding, foreign or domestic withholding, workers’ compensation, social security (or similar), unemployment, disability, franchise, alternative minimum, add-on minimum, guarantee fund assessment, retaliatory or other tax, fee, custom, tariff, impost, assessment, obligation, levy, tariff, charge or duty of the same or of a similar nature to any of the foregoing, and any interest, penalty, surcharge, addition or additional amount thereon imposed, assessed or collected by or under the authority of any Tax Authority or taxing agency thereof.

“Tax Return” means any return, report, declaration, claim for refund, information return, certificate, bill, or other return or statement, including any schedule or attachment thereto, and any amendment thereof, filed or required to be filed with any Tax Authority in connection with the determination, assessment or collection of any Tax.

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“Treasury Regulations” means the Treasury Regulations (including temporary regulations) promulgated by the United States Treasury Department with respect to the Code or other United States federal Tax statutes.

“Transition Services Agreement” means the Transition Services Agreement to be entered into between SICA and an Affiliate reasonably acceptable to the Buyer substantially in the form attached hereto as Exhibit H.

“Trust Agreement” means the Trust Agreement, by and among Montpelier Re, the Company and a financial institution mutually agreeable to the Seller and the Buyer, as trustee, substantially in the form attached hereto as Exhibit I.

The following terms are defined in the Sections of this Agreement set forth after such term below:

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Section 1.2                 Interpretations.

(a)           Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

(b)           Any singular term in this Agreement shall be deemed to include the plural, and any plural term shall be deemed to include the singular.

(c)           All pronouns and variations of pronouns shall be deemed to refer to the feminine, masculine or neuter, singular or plural, as the identity of the Person referred to may require.

(d)           Whenever the last day for the exercise of any right or the discharge of any duty under this Agreement falls on other than a Business Day, the party having such right or duty shall have until the next Business Day to exercise such right or discharge such duty.  Unless otherwise indicated, the word “day” shall be interpreted as a calendar day.

(e)           References to dollars and $ mean United States dollars, unless otherwise indicated.

(f)            No provision of this Agreement will be interpreted in favor of, or against, any of the parties hereto by reason of the extent to which any such party or its counsel participated in the drafting of this Agreement or by reason of the extent to which any such provision is inconsistent with any prior draft of this Agreement or any provision of this Agreement.

ARTICLE II

THE CLOSING

Section 2.1                 Purchase and Sale of the Shares.  Upon the terms and subject to the conditions of this Agreement, at the Closing provided for in Section 2.3, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller, 4,000,000 Shares, free and clear of all Liens, representing 100% of the outstanding capital stock of the Company.

Section 2.2                 Other Closing Transactions.  On or before the Closing Date, the Seller shall take or cause to be taken the following actions (collectively, “Other Closing Transactions”):

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(a)           Company IP/IT Assets.  Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall, on behalf of itself and its Affiliates (other than the Company), sell (as applicable), convey, assign, transfer and deliver to SICA or, if so requested by Buyer in writing prior to the Closing, its Affiliate, and SICA (or such Affiliate, as applicable) shall purchase, acquire and accept from Seller or such Affiliate of Seller, all Company Intellectual Property and Company IT Assets (collectively, “Company IP/IT Assets”) owned by or, subject to obtaining any Required IP/IT Third Party Consents, leased or licensed by any third party to Seller or Affiliate of Seller, free and clear of all Liens pursuant to the Bill of Sale or Assignment and Assumption Agreement, as applicable.

(b)           Transfer of the Lease.  Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall (i) assign the Lease to SICA pursuant to the Lease Assignment and Assumption Agreement, and (ii) transfer all equipment, hardware, tools, furniture, fixture, materials, leasehold improvements and other tangible assets owned by the Company and located at the Leased Premises pursuant to the Bill of Sale.

(c)           Settlement of Funds Withheld Balances.  Upon the terms and subject to the conditions of this Agreement, at the Closing, the Company shall settle any funds withheld balance in connection with any reinsurance provided by Montpelier Re.

(d)           Amendment of the Quota Share Treaty.  Upon the terms and subject to the conditions of this Agreement, at the Closing, Montpelier Re shall amend the Quota Share Treaty Reinsurance Contract pursuant to the Amendment to the Quota Share Treaty.

(e)           Funding of the Trust Account.  Upon the terms and subject to the conditions of this Agreement, at the Closing, Montpelier Re shall deposit assets in an amount sufficient to satisfy its reinsurance obligations under the Amendment to the Quota Share Treaty into a trust account established pursuant to the Trust Agreement.

Section 2.3                 Closing.  The purchase and sale of the Shares and the Other Closing Transactions contemplated by this Agreement to be consummated at closing (the “Closing”) shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036-6522 on the last Business Day of the month in which the last unfulfilled and unwaived condition to be satisfied prior to the Closing set forth in Article VII hereof shall be fulfilled or waived in accordance with the terms of this Agreement (other than those conditions contemplated to be satisfied at the Closing, but subject to satisfaction of such conditions at the Closing), or such other place, date and time as shall be agreed upon in writing by the parties hereto.  The date on which the Closing occurs is referred to herein as the “Closing Date.”

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Section 2.4                 Closing Purchase Price.

(a)           At least ten (10) days prior to the Closing Date, Seller shall cause to be prepared and delivered to Buyer an estimated Net Worth Statement of the Company, as of the Closing Date, which shall be prepared in the same format as the Pro Forma Net Worth Statement (“Proposed Estimated Net Worth Statement”), which shall include a calculation of the amount of the Net Worth of the Company as of the Closing Date.  Buyer shall be given an opportunity to review and comment on the Proposed Estimated Closing Net Worth Statement and Seller shall provide Buyer with access to such information and personnel as Buyer may reasonably request in connection with such review and comment.  Buyer shall provide any comments on the Proposed Estimated Closing Net Worth Statement at least two (2) Business Days prior to the Closing Date and the Parties shall negotiate in good faith a resolution of any differences in the amounts stated in the Proposed Estimated Closing Net Worth Statement; it being acknowledged that Seller shall have the ultimate responsibility for determining what, if any, changes will be reflected on the Estimated Closing Net Worth Statement.  The Net Worth Statement of the Company, estimated as of the Closing Date, and as revised to reflect any revisions thereto agreed to by the Parties, shall be the “Estimated Closing Net Worth Statement.”

(b)           The aggregate purchase price to be paid by Buyer to Seller at the Closing in consideration of the transfer by Seller of the Shares and other transactions contemplated by this Agreement shall be the sum of (i), (ii), (iii) and (iv) below:

(i)            the Net Worth of the Company as set forth on the Estimated Closing Net Worth Statement (the “Estimated Closing Net Worth Amount”),

(ii)           $9,750,000 in cash (the “Fixed Amount”),

(iii)          $3,588,000 representing the purchase price of the Company IP/IT Assets (the “IT Purchase Price”), and

(iv)          $3,500,000 representing the value of the Company’s deferred tax asset (the “Deferred Tax Asset Value”, and together with the Estimated Closing Net Worth Amount the Fixed Amount and the IT Purchase Price, the “Closing Purchase Price”); provided, however, that the Estimated Closing Net Worth Amount shall be subject to adjustment after the Closing as set forth in Section 2.7.

(c)           The total consideration paid to Seller pursuant to this Section 2.4, as adjusted pursuant to Section 2.7, shall be known as the “Purchase Price.”

Section 2.5                 Deliveries by Seller.  At the Closing, Seller shall deliver, or cause to be delivered, to Buyer the following:

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(a)           the officer’s certificate referred to in Section 7.3(c);

(b)           stock certificates representing all of the Shares, accompanied by stock powers duly executed in blank or a duly executed instrument or instruments of transfer, together with the stock certificates representing all the issued and outstanding shares of capital stock of the Company;

(c)           an executed cross-receipt for the Closing Purchase Price paid at the Closing;

(d)           duly executed resignations from the Company’s directors and officers identified in Section 5.9 of the Disclosure Schedule, effective as of the Closing Date;

(e)           evidence of the receipt by Seller, in such form as is reasonably acceptable to the Buyer, of all Company Required Regulatory Approvals;

(f)            subject to Section 5.12, evidence of the receipt by Seller, in such form as is reasonably acceptable to the Buyer, of all Required Third Party Consents;

(g)           evidence of the termination by the Seller, in such form as is reasonably acceptable to Buyer, of any and all liabilities or obligations arising in connection with all agreements and commitments, whether written or oral, which are between the Company, on the one hand, and Seller and its Affiliates (excluding the Company), on the other hand, pursuant to Section 5.11;

(h)           evidence of the release by the Seller and/or its Affiliates, in such form as is reasonably acceptable to Buyer, of any credit support obligations and payment of Indebtedness of Seller or any of its Affiliates (excluding the Company), pursuant to Section 5.11;

(i)            evidence of the termination or removal of the Company as a party by the Seller, in such form as is reasonably acceptable to Buyer, of all Intercompany Agreements except for the Amendment to the Quota Share Treaty and the Surviving Agreements, pursuant to Section 5.10;

(j)            a certificate of Approval of Domestic Surplus Lines from the Oklahoma Insurance Department dated as of a date no later than 30 days prior to the Closing Date;

(k)           any and all Books and Records;

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(l)            an executed Parental Guarantee;

(m)          a duly executed counterpart of each of the Amendment to the Quota Share Treaty, the Assignment and Assumption Agreement, the Bill of Sale, the Claims Services Agreement, the Lease Assignment and Assumption Agreement, the Loss Development Reinsurance Contract, the Transition Services Agreement and the Trust Agreement;

(n)           all other documents, certificates, instruments or writings required to be delivered by Seller on or prior to the Closing pursuant to this Agreement or any Ancillary Agreement;

(o)           a certificate dated the Closing Date and signed on behalf of Seller by the Chief Financial Officer of Seller setting forth the Investments owned by the Company as of the Closing Date and certifying that such Investments are the same Investments that Seller and Buyer have agreed upon pursuant to Section 5.18; and

(p)           in form and substance reasonably satisfactory to Buyer, an Internal Revenue Service Form W-9 executed by Seller.

Section 2.6                 Deliveries by Buyer.  At the Closing, Buyer shall deliver or cause to be delivered to Seller (unless delivered previously) the following:

(a)           the Closing Purchase Price, in cash by wire transfer of immediately available funds, to a bank account designated by Seller at least two (2) Business Days prior to the Closing;

(b)           the officer’s certificate referred to in Section 7.2(c);

(c)           an executed cross-receipt for the Shares delivered at the Closing;

(d)           evidence of the receipt by Buyer, in such form as is reasonably acceptable to the Seller, of all Buyer Required Regulatory Approvals;

(e)           a duly executed counterpart of the Transition Services Agreement;

(f)            the Lease Assignment and Assumption Agreement, duly executed by SICA; and

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(g)           all other documents, certificates, instruments or writings required to be delivered by Buyer on or prior to the Closing pursuant to this Agreement or any Ancillary Agreement.

Section 2.7                 Post-Closing Adjustment of Purchase Price.

(a)           As soon as practicable, but in no event later than 90 days following the Closing Date, Buyer shall cause to be prepared and delivered to Seller a Net Worth Statement of the Company, as of the Closing Date, (the “Closing Net Worth Statement”), with a certificate setting forth: (i) a calculation of the amount of the Net Worth of the Company, as of the Closing Date (the “Closing Net Worth Amount”); and (ii) the amount of any proposed adjustment to the Closing Purchase Price required pursuant to Section 2.7(f), if any.  The parties hereto agree and acknowledge the only component of the Closing Purchase Price subject to adjustment pursuant to this Section 2.7 is the Estimated Closing Net Worth Amount, and none of the Fixed Amount, the IT Purchase Price and the Deferred Tax Asset Value is subject to any post-Closing adjustment (except to the extent there may be a reduction of the IT Purchase Price pursuant to Section 5.12 and a reimbursement of the costs of medical and dental plans pursuant to Section 6.2).

(b)           During the preparation of the Closing Net Worth Statement and the period of any review or dispute provided for in this Section 2.7, Seller shall cooperate with Buyer and its Representatives, including by providing reasonable access to (i) all relevant information in the possession of Seller and its Affiliates and (ii) personnel of Seller and its Affiliates, in each case reasonably necessary or useful in the preparation of the Closing Net Worth Statement.

(c)           Seller shall have thirty (30) days from the date on which the Closing Net Worth Statement is delivered by Buyer to review the Closing Net Worth Statement and the certificate delivered therewith (the “Review Period”).  If Seller objects to any item or amount shown or reflected in the Closing Net Worth Statement or the certificate delivered therewith, Seller shall deliver written notice of their objection to Buyer on or prior to the last day of the Review Period (a “Dispute Notice”), provided, however, Seller shall have the right to dispute the determination of any such item or amount only on the basis, and to the extent that Seller claims, that (i) such item or amount was not determined in accordance with GAAP, consistently applied or (ii) a manifest arithmetic error was committed in the calculation of any of the line items or numerical data underlying the line items on the Closing Net Worth Statement or the certificate delivered therewith.  If Buyer does not receive a Dispute Notice on or prior to the last day of the Review Period, the Closing Net Worth Statement and the certificate delivered therewith shall be deemed accepted by Seller and the calculation of the Closing Net Worth Amount set forth therein shall be final, binding and conclusive for purposes of determining the Purchase Price.

(d)           For thirty (30) days (or such longer period as the parties may agree in writing) following receipt by Buyer of a Dispute Notice (the “Resolution Period”), senior

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executives of the Parties, shall attempt to resolve their differences arising from such objections, and any resolution by them shall be final, binding and conclusive for purposes of determining the Purchase Price.

(e)           The parties shall use their reasonable best efforts to submit, within ten (10) days following the end of the Resolution Period, any objections regarding the Closing Net Worth Statement remaining in dispute at the end of the Resolution Period (“Unresolved Disputes”) to Ernst & Young LLP (the “Neutral Auditor”) or if such firm is unable or unwilling to act, such other nationally recognized independent public accounting firm as shall be agreed upon in writing by Seller and Buyer.  Each party agrees to execute, if requested by the Neutral Auditor, a reasonable engagement letter in customary form.  Buyer and Seller shall cooperate with the Neutral Auditor and promptly provide all documents and information requested by the Neutral Auditor.  The Neutral Auditor shall be requested to promptly, and in any event within thirty (30) days after the submission of any Unresolved Disputes thereto, render its decision in writing (the “Adjustment Report”) and finalize the Closing Net Worth Statement and determine the appropriate Closing Net Worth Amount.  The Adjustment Report shall be final and binding upon the parties hereto, shall be deemed a final arbitration award that is binding on each of the parties hereto, and no party shall seek further recourse to courts or other tribunals, other than to enforce the Adjustment Report.  Judgment may be entered to enforce the Adjustment Report in any court of competent jurisdiction.  Buyer and Seller shall each be responsible for paying 50% of all fees and expenses relating to the work of the Neutral Auditor.

(f)            The Closing Net Worth Statement and the applicable Closing Net Worth Amount regarding which (i) there has been no Dispute Notice delivered by Seller, (ii) there is no Unresolved Dispute outstanding between the Buyer and Seller, or (iii) the Neutral Advisor has rendered its decision shall be referred to herein as the “Final Closing Net Worth Statement” and the “Final Closing Net Worth Amount”, respectively.

(g)           Effective upon the end of the Review Period (if a timely Dispute Notice is not delivered), or upon the resolution of all matters set forth in the Dispute Notice either by mutual agreement of the parties or by the issuance of the Adjustment Report (if a timely Dispute Notice is delivered), the Closing Purchase Price shall be subject to adjustment as follows:

(i)            if the Final Closing Net Worth Amount is less than the Estimated Closing Net Worth Amount, the Closing Purchase Price shall be reduced by an amount equal to the Estimated Closing Net Worth Amount minus the Final Closing Net Worth Amount; and

(ii)           if the Final Closing Net Worth Amount is greater than the Estimated Closing Net Worth Amount, the Closing Purchase Price shall be increased by an amount equal to the Final Closing Net Worth Amount minus the Estimated Closing Net Worth Amount.

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(h)           The net amount of all applicable adjustments to the Closing Purchase Price pursuant to Section 2.7(f) plus accrued interest on such amount at the three month London Interbank Offering Rate (LIBOR) as published in The Wall Street Journal, Eastern Edition, in effect on the day such payment is due shall be paid by the applicable party by wire transfer of immediately available funds to an account or accounts designated in writing by the recipient: (i) on the third Business Day following the end of the Review Period (if a timely Dispute Notice is not delivered) or (ii) on the third Business Day after resolution of all matters set forth in the Dispute Notice by mutual agreement of the parties or on the third Business Day after the date on which the Adjustment Report has been received by the Parties as applicable (if a timely Dispute Notice is delivered).

Section 2.8                 Purchase Price Allocation.  Prior to the signing of this agreement, Buyer and Seller shall agree to allocate the Purchase Price among the Shares and the non-compete covenant provided in Section 5.6 as set forth on Annex II.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer as follows:

Section 3.1                 Due Organization; Good Standing; Qualification.

(a)           Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Company is duly organized, validly existing and in good standing under the laws of the State of Oklahoma and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.  The Company is duly qualified or licensed and in good standing to do business in each jurisdiction in which the character of the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary.  Each Affiliate of Seller, other than Company, executing any Ancillary Agreement is a corporation or other entity duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.

(b)           The execution, delivery and performance by Seller of this Agreement and by Seller, the Company and each other Affiliate of Seller executing any Ancillary Agreement of any of the  Ancillary Agreements and the consummation of the transactions contemplated hereby or thereby will not:  (i) violate any provision of the articles of incorporation, certificate of incorporation, charter, by-laws or other organizational document of the Seller, the Company or any such Affiliate of Seller, as applicable; (ii) violate, conflict with or result in the breach of any of the terms of, result in any modification of the effect of, otherwise give to any other contracting party the right to terminate, or constitute (or with written notice or lapse of time or both constitute) a default under any material Contract to which the Seller, the Company or any such Affiliate of Seller is a party or by or to which it or its assets or properties

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may be bound or subject; (iii) violate any order, judgment, injunction, award or decree of any Governmental Entity against, or binding upon, or any Contract with, or condition imposed by, any Governmental Entity binding upon, Seller, the Company or any such Affiliate of Seller or the properties or assets of the Company; (iv) violate any Applicable Law of any jurisdiction as such Law relates to Seller, the Company or any such Affiliate of Seller or to the properties or assets of the Company; or (v) result in the creation or imposition of any Lien on any of the properties or assets of the Company.

(c)           For the period beginning on November 1, 2007, and ending on the date hereof, Seller has delivered to Buyer true and complete and correct copies of the articles of incorporation and the by-laws of the Company and all amendments thereto.  Seller has also provided Buyer with the corporate minutes and all amendments thereto of the Company.  The stock record book of the Company contains complete and accurate records of the stock ownership of the Company and the transfer of shares of its capital stock.

Section 3.2                 Capitalization.

(a)           The issued and outstanding capital stock of the Company consists exclusively of the Shares.  Seller directly owns all the Shares, which are duly authorized, validly issued, fully paid and non-assessable, and free and clear of all Liens.  The sale and delivery of the Shares as contemplated by this Agreement are not subject to any preemptive rights, rights of first refusal or other rights or restrictions.  The transactions contemplated by this Agreement shall convey to Buyer good and valid title to the Shares, free and clear of all Liens.

(b)           There are no options, rights or other agreements to which Seller or any of its Affiliates is a party or by which any of them is bound obligating any of them to (i) issue, deliver or sell, or refrain from issuing, delivering or selling, any shares of capital stock or other equity or ownership interest of the Company, or to grant, extend or enter into any such option, right or agreement, (ii) to repurchase, redeem or otherwise acquire, or to refrain from repurchasing, redeeming or otherwise acquiring, any shares of capital stock or other equity or ownership interest of the Company, or to grant, extend or enter into any such option, right or agreement or (iii) to vote, or to refrain from voting, any shares of capital stock or other equity or ownership interest of the Company.

Section 3.3                 Subsidiaries.  The Company does not have any Subsidiaries.  As of the Closing Date, the Company will not, directly or indirectly, own of record or beneficially any capital stock of or other equity interest in any Person.

Section 3.4                 Authority; Binding Agreement.  Each of Seller, the Company and any other Affiliate of Seller executing any Ancillary Agreement has all requisite power and authority to execute, deliver and perform its respective obligations under this Agreement and each Ancillary Agreement to which it is a party, and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance of this Agreement and each Ancillary Agreement to which the Seller, the Company or any Affiliate of Seller is a party, and the consummation of the transactions contemplated hereby and thereby, have been

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duly and validly authorized by the board of directors of the Seller, the Company and any such other Affiliate of Seller, as applicable, and no other corporate proceedings (or, in the case of an entity that is not a corporation, other similar proceedings) on the part of the Seller, the Company or any such other Affiliate of Seller, as applicable, are necessary to authorize this Agreement or any Ancillary Agreement to which the Seller, the Company or any such Affiliate of Seller is a party or the consummation of the transactions contemplated hereby or thereby.  This Agreement and each Ancillary Agreement to which the Seller, the Company or any other Affiliate of Seller is a party have been duly and validly executed and delivered by Seller, the Company and any such other Affiliate of Seller, as applicable, and constitute valid and binding agreements of the Seller, the Company and each such other Affiliate of Seller, as applicable, enforceable against the Seller, the Company and such other Affiliate of Seller, as applicable, in accordance with their terms, except that such enforcement may be subject to any bankruptcy, insolvency, reorganization, moratorium or other laws, now or hereafter in effect, relating to or limiting creditors’ rights generally.

Section 3.5                                                  Consents and Approvals; No Violations.  The execution and delivery by Seller, the Company and any other Affiliate of Seller executing any Ancillary Agreement, as applicable, of this Agreement and any Ancillary Agreement to which Seller, the Company or any such Affiliate of Seller is a party, and the consummation of the transactions contemplated hereby and thereby, and compliance by Seller, the Company and each such Affiliate of Seller, as applicable, with any of the provisions hereof and thereof, will not:

(a)                                  conflict with or violate any provision of the articles of incorporation or bylaws (or equivalent organizational documents) of the Seller, the Company or any such Affiliate of Seller;

(b)                                 conflict with, contravene or violate in any respect any federal, state or local order, statute, law, rule, regulation, ordinance, writ, injunction, arbitration award, directive, judgment, decree, principle of common law, constitution, treaty or any interpretation thereof enacted, promulgated, issued, enforced or entered by any Governmental Entity to which the Seller, the Company or any such Affiliate of Seller or any of their respective assets or properties is subject;

(c)                                  except as set forth on Section 3.5(c) of the Disclosure Schedule (the “Company Required Regulatory Approvals”), require any declaration, filing or registration with, or notice to or authorization, consent or approval of, any Governmental Entity;

(d)                                 except as set forth on Section 3.5(d) of the Disclosure Schedule (the “Required Third Party Consents”), require any consent, notice or other action under or result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, amendment or acceleration) under, any material note, bond, mortgage, indenture, license, agreement, lease or other obligation or instrument to which the Seller (or, with respect to Company IP/IT Assets, its Affiliate (as

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applicable)), the Company or any such Affiliate of Seller is a party or by which any of them or their property is bound;

(e)                                  give rise to the cancellation or revocation of any Permits; or

(f)                                    result (immediately or with the passage of time or otherwise) in the creation or imposition of a Lien upon any of the properties, rights or assets of the Company.

Section 3.6                                                  Financial Statements.

(a)                                  The annual statements of the Company, as filed with the Oklahoma Insurance Department for the years ended December 31, 2008, 2009 and 2010 (the “Annual Statutory Statements”) and quarterly statements for the quarters ended March 31, 2011 and June 30, 2011 and each additional quarterly statement filed after the date hereof and prior to the Closing Date (“Interim Statutory Statements”), together with all notes, exhibits and schedules thereto (all Annual Statutory Statements and Interim Statutory Statements, together with all exhibits and schedules thereto, referred to in this Section 3.6 are hereinafter referred to as the “Statutory Statements”), have been (or in the case of Statutory Statements filed after the date hereof, will be) prepared in accordance with Statutory Accounting Principles, and such accounting practices have been applied on a basis consistent with applicable statutory financial reporting requirements throughout the periods involved, except as expressly set forth in the notes, exhibits or schedules thereto.  The Statutory Statements present (or in the case of Statutory Statements filed after the date hereof, will present) fairly the financial position and the results of operations of the Company as of the dates and for the periods therein in accordance with statutory financial reporting requirements, except in the case of the Interim Statutory Statements for normal year-end adjustments.  The most recent Annual Statutory Statements and Interim Statutory Statements for the Company have previously been made available to Buyer.  The Statutory Statements complied in all material respects with all Applicable Laws when filed, and no deficiency has been asserted in writing with respect to any Statutory Statements by any Governmental Entity, except as those set forth in Section 3.6 of the Disclosure Schedule.

(b)                                 Except as set forth in Section 3.6 of the Disclosure Schedule, there are no permitted or prescribed practices applicable specifically to the Company.

Section 3.7                                                  Reserves.  The reserves recorded in the Statutory Statements were, as of the date specified in the applicable Statutory Statements, (a) based on actuarial assumptions that were reasonable in relation to relevant policy and contract provisions, (b) in compliance with Statutory Accounting Principles and (c) computed on the basis of methodologies consistent with those used in prior periods, except as otherwise noted in the Statutory Statements; provided, however, the parties hereto agree that to the extent there is any increase in such reserves, if covered by either the Amendment to the Quota Share Treaty or the Loss Development Reinsurance Contract, such increase shall not be deemed to be a breach of this Section 3.7.

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Section 3.8                                                  No Undisclosed Liabilities.  Except as and to the extent of the amounts specifically reflected or reserved against in the Statutory Statements, the Company has no liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise and whether due or to become due (“Liabilities”), except for Liabilities which were incurred since December 31, 2010, in the ordinary course of business consistent with past practice.

Section 3.9                                                  Absence of Certain Changes and Events.  Except as set forth in Section 3.9 of the Disclosure Schedule and as otherwise specifically contemplated by this Agreement, since December 31, 2010, (a) the Company has conducted the Business in the ordinary course of business consistent with past practices and (b) there has not been any fact, change, effect, occurrence, development or event that has had, or is reasonably likely to have, a Material Adverse Effect.

Section 3.10                                            Compliance with Applicable Law.  Except as set forth on Section 3.10 of the Disclosure Schedule, Since January 1, 2008, the Company has been in compliance, in all material respects, with all Applicable Laws and the Company has not received any notice of, any conflict with, or default or violation of, any Applicable Laws.  Without limiting the generality of the foregoing:

(a)                                  The Company is, and since January 1, 2008 has been, in compliance in all material respects with (i) all Applicable Laws relating to privacy, data protection and the collection and use of personal or private information gathered, accessed, collected or used or held for use by the Company and (ii) its own policies and procedures applicable to its collection, use of and disclosure of personal or private information of customers or consumers or insureds or beneficiaries under Insurance Policies (and the Company has implemented and maintained in effect since January 1, 2008 reasonable policies and procedures relating to such matters).  Since January 1, 2008, neither the Company nor any of its Affiliates has received any claim or notice from any Person alleging a violation of such Person’s privacy, personal or confidentiality rights under any such Applicable Laws, policies or procedures.

(b)                                 Except as set forth on Section 3.10(b) of the Disclosure Schedule, there is no decree, directive, order, writ, judgment, stipulation, settlement, determination, decision, award, injunction, temporary restraining order, cease and desist order or other order by, or any capital plan, supervisory agreement or memorandum of understanding with any Governmental Entity (each, an “Order”), binding against the Company, or any of its properties, rights or assets or any of its officers or directors (in their capacities as such) under which the Company or any of its officers or directors has any continuing obligations.

(c)                                  To the Knowledge of the Seller, the Company is in compliance in all material respects with the requirements of the insurance laws and regulations of the State of Oklahoma and the insurance laws and regulations of other jurisdictions which are applicable to its operations, and has filed all notices, reports, statements, registrations, responses, documents and other information required to be filed thereunder; and the Company has received no notification from any insurance regulatory authority to the effect that any additional permit or license from such insurance regulatory authority is needed to be obtained by the Company.

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(d)                                 No investigation, review or market conduct or financial examination by any Governmental Entity with respect to the Company is pending or, to the Knowledge of Seller, threatened, nor has any Governmental Entity indicated an intention to conduct any such investigation or review.

(e)                                  The Company has paid or will pay all assessments or other amounts due to any guaranty fund associations, residual market mechanism pools, bureaus or similar organizations for all periods through the Closing Date.

Section 3.11                                            Company Permits.

(a)                                  The Company is approved as a Domestic Surplus Lines Insurer in the State of Oklahoma (the “Insurance License”), and such Insurance License is valid and is in full force and effect and free and clear of all Liens.  The Company is not a party to any agreement and is not subject to any order, formal or informal, limiting the Company’s ability to make full use of the Insurance License which has been issued to it or requiring the Company to comply with regulatory standards, procedures or requirements different from those generally applicable to companies with certificates of authority or licenses similar to the Insurance License.  The Company has not (i) relinquished the Insurance License or had it revoked or suspended, (ii) been involved in a proceeding, whether formal or informal, to revoke, suspend, limit or restrict the Insurance License or the Company’s corporate charter, (iii) been notified by any Governmental Entity that such Governmental Entity might have cause to revoke, suspend, limit or restrict such Insurance License or the Company’s corporate charter, or become aware that any such suspension, revocation, or limitation has been threatened by any Governmental Entity, or (iv) written any business in any jurisdiction on an admitted basis other than those in which it is qualified to write business on an admitted basis.  Subject to the receipt of the consents and approvals set forth in Section 3.5(c) of the Disclosure Schedule, the Insurance License is not subject to termination as a result of the execution of this Agreement or any of the Ancillary Agreements nor the consummation of the transactions contemplated hereby or thereby.

(b)                                 Section 3.11(b)(i) of the Disclosure Schedule contains a true and correct list of each state in which the Company is Surplus Lines Qualified.  Other than as set forth in Section 3.11(b)(ii) of the Disclosure Schedule, the Company has not received any threat of or actual notice of suspension, cancellation or termination of any such Surplus Lines Qualification; and Seller do not have Knowledge of any event, inquiry, investigation or proceeding that could reasonably be expected to result in such suspension, cancellation or termination.  The Company has not written or assumed any business in any other jurisdiction on a non-admitted basis other than the class or type of business which it is authorized to write in such jurisdiction.

(c)                                  As of the date hereof, the Company is not “commercially domiciled” under the insurance Laws of any state or jurisdiction of the United States.

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Section 3.12                                            Real Property.

(a)                                  Except as set forth in Section 3.12 of the Disclosure Schedule, since November 1, 2007, the Company does not have, and has not had, any ownership interest, security interest, leasehold interest, license or other interest of any kind in any real property whatsoever.

(b)                                 The Seller’s interest in the Leased Premises has not been encumbered in any way other than the Permitted Liens.

(c)                                  The Seller holds the Leased Premises under a valid, subsisting and enforceable lease with such exceptions that are not material and do not interfere with the use of the Leased Premises.  True, correct and complete copies of Lease and any related amendments, modifications or supplements and guarantees have been delivered or made available to Buyer.

(d)                                 There exists no material default or condition, or any state of facts or event that, with the passage of time, the provision of notice or both would constitute a material default, in the performance of the obligations by the Seller or any of its Affiliates under the Lease; or, to the Knowledge of Seller, by any other party to the Lease.

(e)                                  The Lease is in full force and effect and there are no disputes or known events which would give rise to a dispute under the Lease.

(f)                                    Except as may be limited by bankruptcy, insolvency, reorganization and similar Applicable Laws affecting creditors generally and by the availability of equitable remedies, the Lease is a legal, valid, binding and enforceable obligation of the Seller, and, to the Knowledge of Seller, each other party to the Lease.  None of the Seller, the Company or any of its Affiliates has received any written communication or notice (i) of a breach of the Lease from the landlord or lessor and (ii) of any threatened or pending condemnation, eminent domain or similar proceeding with respect to all or a portion of any the Leased Premises.

(g)                                 None of the Seller, the Company or any of its Affiliates has granted any Person any right to occupy or otherwise use the Leased Premises.

(h)                                 No consent by any Person, other than the landlord under the Lease, is required in connection with the assignment of the Lease as contemplated in the Lease Assignment and Assumption Agreement.

Section 3.13                                            Investments.

(a)                                  Section 3.13(a) of the Disclosure Schedule sets forth an accurate and complete list of all securities, mortgages and other investments (collectively, “Investments”) owned by the Company as of June 30, 2011.  The Company has good and marketable title to the

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Investments listed in Section 3.13(a) of the Disclosure Schedule except for (i) Permitted Liens, (ii) statutory deposits subject to certain transfer restrictions, and (iii) Investments which have been disposed of in the ordinary course of business or as contemplated by this Agreement or redeemed in accordance with their terms.

(b)                                 The Investments owned by the Company (i) are of the types and within the applicable concentration limitations permitted under Applicable Law for investments by property and casualty insurance companies domiciled in the State of Oklahoma and (ii) qualify as admitted assets for purposes of the preparation of the Statutory Statements.

(c)                                  Section 3.13(c) of the Disclosure Schedule identifies any Investments which are in default, as of the date hereof, in the payment of principal or interest.

Section 3.14                                            Pro Forma Net Worth Statement.  The Pro Forma Net Worth Statement was prepared from the Books and Records as of June 30, 2011 and in accordance with GAAP, consistently applied.  The Proposed Estimated Closing Net Worth Statement and the Estimated Closing Net Worth Statement will be prepared from the Books and Records as of the Closing Date and in accordance with GAAP, consistently applied.

Section 3.15                                            Intellectual Property.

(a)                                  Section 3.15(a) of the Disclosure Schedule sets forth a complete and accurate list of the Company’s, or Seller’s or any of its Affiliates’, (a) Patents and Patent applications, (b) registrations and applications for Trademarks, (c) Copyright applications and registrations and (d) material Software, in each case which is included in the Company IP/IT Assets.  The Company owns or has the valid right to use all Intellectual Property owned, used, licensed or held for use in, or necessary to conduct, the Business, free and clear of any Liens (other than Permitted Liens).  With respect to each item of Intellectual Property listed on Section 3.15(a) of the Disclosure Schedule that is owned by the Company, Seller or any of its Affiliates, the Company (or Seller or such Affiliate, as applicable) is, and as of the Closing the Company or SICA (as applicable) will be, the sole and exclusive beneficial and, with respect to applications and registrations, record owner of each such item of Intellectual Property, free and clear of all Liens (other than Permitted Liens), and all such Intellectual Property is subsisting, valid and enforceable.

(b)                                 The conduct of the Business does not infringe, misappropriate or otherwise violate, and has not infringed, misappropriated or otherwise violated, any Intellectual Property, and there has been no such claim asserted or threatened in writing (including in the form of offers or invitations to obtain a license) against the Company or, to the Knowledge of Seller, any other Person.

(c)                                  To the Knowledge of Seller, no Person is infringing, misappropriating, or otherwise violating any Intellectual Property owned, used, or held for use

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by the Company, and no such claim has been asserted or threatened against any Person by the Company.

(d)                                 The Company is not subject to any outstanding judgments, governmental orders, consents, indemnifications, forbearances to sue, settlement agreements or other arrangements in connection with the resolution of any claims, disputes or other assertions that restrict the use of any Intellectual Property.

(e)                                  The Company takes reasonable measures to protect the confidentiality of Trade Secrets.

(f)                                    No current or former employee, officer, consultant or independent contractor of the Company or Seller or its Affiliates owns or retains any right, title or interest in or to any Intellectual Property owned (or purported to be owned) by the Company or Seller or its Affiliates that is included (or purported to be included) in the Company Intellectual Property owned by the Company, Seller or any of its Affiliates.

(g)                                 Other than the Retained Owned Intellectual Property or the Excluded IP/IT, Seller Parties and its Affiliates (other than the Company) do not own, have any right, title or interest in or to, have possession of, or license to the Company any Intellectual Property or IT Assets owned or purported to be owned, or primarily used or held for use, by the Company.

(h)                                 The consummation of the transactions contemplated under this Agreement or any of the Ancillary Agreements will not result in the loss of, impairment of, require any additional payments for, or (other than the Required IP/IT Third Party Consents) require any other Person’s consent to, the Company’s right to own, use, or hold for use any of the Intellectual Property owned, used, or held for use in the conduct of the Business, and, upon such consummation, SICA (or its designated Affiliate) will own, or have valid rights pursuant to the License Agreements, Section 5.17 and the Ancillary Agreements, all Intellectual Property and IT Assets necessary and sufficient for the conduct of the Business as currently conducted and as contemplated to be conducted.

Section 3.16                                            IT Assets.

(a)                                  Section 3.16(a) of the Disclosure Schedule sets forth a true and complete listing of all material IT Assets (other than Software set forth on Section 3.15(a)of the Disclosure Schedule) being used by the Company in the Business that are (i) owned by, (ii) leased to or (iii) licensed to the Company or an Affiliate of Seller or the Company.  The Company or its Affiliate (as applicable) possesses or has unrestricted access to all Intellectual Property and documentation necessary to compile and otherwise create fully operable executable

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versions of all material Software owned by the Company or an Affiliate of the Company that is used in the Business.

(b)                                 Except as set forth in Section 3.16(b) of the Disclosure Schedule, no third party has any license, escrow right, option or other right, title or interest in or to (including any right to receive any royalty, honorarium or other payment) any, and the Company has not provided to any other Person (other than to third party contractors whose access and use thereof was limited to use in connection with providing services to the Company) any material Software or any material confidential Intellectual Property included in the Company Intellectual Property and owned by the Company or Seller or any of its Affiliates.  Except as set forth on Section 3.16(b) of the Disclosure Schedule, (i) no Software licensed pursuant to or otherwise subject to an Open Source Software License or similar licensing or distribution terms or conditions is used in the Business in a manner that would require any Software to be disclosed, licensed, publicly distributed or dedicated to the public, and (ii) no Software included in the Company Intellectual Property and owned by the Company or Seller or any of its Affiliates is subject to any Open Source Software License or similar licensing or distribution terms or conditions.

(c)                                  Except as set forth in Section 3.16(c) of the Disclosure Schedule:  (i) the IT Assets owned or used by the Company operate and perform in all material respects in accordance with their documentation and functional specifications and as required in connection with the Business; (ii) since January 1, 2008: (A) the Company has maintained reasonable back-up and disaster recovery capabilities for its material computer systems and data consistent with industry practices; (B) the Company has taken commercially reasonable measures to ensure the security and integrity of its material IT Assets and the confidentiality, security and integrity of customer, beneficiary and employee information and Trade Secrets; and (C) to the Knowledge of Seller, there has been no material unauthorized access of the IT Assets and no unauthorized disclosure or use of any customer, beneficiary or employee information or of any Trade Secret of the Company.

Section 3.17                                            Litigation.  Except as set forth on Section 3.17 of the Disclosure Schedule and except for claims litigation arising under the Insurance Policies in the ordinary course of business, (a) there is no private or governmental action, suit, proceeding, litigation, claim, arbitration or investigation (each, an “Action”), threatened or pending before any arbitrator, agency, court or tribunal, foreign or domestic or, to the Knowledge of Seller, threatened against the Company, or any of its properties, rights, assets, or any of its officers or directors (in their capacities as such) that: (i) represents claims for extra-contractual obligations under any Insurance Policy; (ii) requests damages reasonably expected to be in excess of $100,000; or (iii) has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and (b) there are no Actions initiated by the Company threatened or pending against any Person.

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Section 3.18                                            Taxes

(a)                                  All material Tax Returns required to be filed related to the Company have been or will be filed in a timely manner (taking into account all extensions of due dates) with the appropriate Tax Authority, and all such Tax Returns are true, correct and complete in all material respects.

(b)                                 All material Taxes payable related to the Company that are or were due and payable on or before the Closing Date (without regard to whether such Taxes have been assessed) have been or will be timely paid.

(c)                                  Except as set forth in Section 3.18(c) of the Disclosure Schedule, no deficiencies for any Taxes for which the Company may be liable have been asserted or assessed against the Company which remain unpaid.

(d)                                 Except as set forth in Section 3.18(d) of the Disclosure Schedule, the Company has not been notified by any Tax Authority of any audit or investigation with respect to any liability for Taxes for which the Company may be liable and with respect to which the applicable statute of limitations has not expired.

(e)                                  Except as set forth in Section 3.18(e) of the Disclosure Schedule, there are no agreements in effect to extend the statute of limitations for the assessment or collection of any Tax for which the Company may be liable.

(f)                                    The Company has not participated in any “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4 or any other corresponding or similar provision of state, local or foreign Laws.

(g)                                 The Company has adequate accruals and reserves on the financial statements of the Company for all Taxes payable by the Company for all taxable periods and portions thereof through the date of such financial statements.

(h)                                 The Company has no liability for Taxes of any Person under Treasury Regulations Section 1.1502-6 (or similar provision of state, local, or foreign Laws), or as a transferee or successor under any Tax allocation, sharing or assumption agreement or by operation of Law.

(i)                                     As of the Closing, the Company had gross deferred tax assets that will be transferred to the Buyer with a value to Buyer of at least $5.32 million with such amount calculated in accordance with GAAP.  The gross deferred tax assets represent the Seller’s deferred tax assets without regard to any valuation allowance which the Company may deem necessary.

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(j)                                     The Company is not required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date, (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date, (iii) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding similar provision of state, local, or foreign income Tax law), (iv) installment sale or open transaction disposition made on or prior to the Closing Date, or (v) prepaid amount received on or prior to the Closing Date.

(k)                                  The Company has not constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for, or intended to qualify for, tax-free treatment under Section 355 of the Code (i) within the two-year period ending on the date hereof or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions set forth in this Agreement.

(l)                                     The Company has no existing “policyholder surplus account” as defined in Section 815 of the Code.

(m)                               The Company has materially complied with all applicable reporting, withholding and disclosure requirements under the Code and other Applicable Laws with respect to the Insurance Policies.

(n)                                 None of the Insurance Policies were issued, marketed, or sold by the Company as life insurance policies intended to qualify as such under Section 7702 of the Code or as contracts that provide for annuity benefits intended to be taxed to the policyholder pursuant to Section 72 of the Code.

(o)                                 None of the Insurance Policies issued or sold by the Company provide “health insurance coverage” as defined by Section 9832 of the Code.

(p)                                 The Company is not a “life insurance company” taxed pursuant to Section 816 of the Code.

Section 3.19                                            Employee Benefit Plans; ERISA.

(a)                                  Section 3.19(a) of the Disclosure Schedule sets forth a complete and accurate list of all Plans.  Other than the employment agreements listed in Section 3.19(a) of

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the Disclosure Schedules, none of the Plans are solely sponsored or administered by the Company.  The term “Plan” means any employee benefit plan, including any “employee welfare benefit plan” within the meaning of Section 3(1) of ERISA (including post-retirement medical and life insurance), any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA (regardless of whether such plan is subject to ERISA), any multiemployer plan (as defined in Section 3(37) of ERISA) or multiple employer plan (as defined in Section 413 of the Code), and any profit-sharing, bonus, stock option, stock purchase, restricted share units/shares, stock ownership, pension, retirement, deferred compensation, excess benefit, post-retirement medical or life insurance, welfare, incentive, sick leave or other leave of absence, short- or long-term disability, retention, employment, severance, change of control, salary continuation, medical, hospitalization, life insurance, fringe benefit or other plan, program, policy, practice, agreement or other arrangement, whether or not subject to ERISA, (i) maintained, entered into or contributed to by Seller, whether or not incorporated, that together with Seller or the Company would be deemed a “single employer” within the meaning of Section 4001(b) of ERISA (an “ERISA Affiliate”), or to which Seller, the Company or an ERISA Affiliate is a party, whether written or oral, for the benefit of any present or former employee, director, or consultant of the Company or the Business (including their respective dependents or beneficiaries) or (ii) under which the Company could reasonably be expected to have any present or future liability.

(b)                                 Each Plan complies in all respects in form with all Applicable Laws and has been maintained, administered and operated in all respects in accordance with its terms and in accordance with Applicable Laws, other than any failure to be so maintained that, individually or in the aggregate, could not reasonably be expected to result in a material liability to Buyer or any of its subsidiaries.  Except as set forth in Section 3.19(b) of the Disclosure Schedule, there is no litigation pending, or to the Knowledge of Seller, threatened, with respect to any Plan (other than routine claims for benefits in the ordinary course of business) that, individually or in the aggregate, could result in a material liability to Buyer or its subsidiaries (including, after the Closing, the Company).

(c)                                  No Plan is a defined benefit pension plan or is subject to Section 302 or Title IV of ERISA or Section 412 of the Code.  No Plan is a multiemployer plan within the meaning of Section 3(37) of ERISA.  No liability under Title IV of ERISA has been incurred by any of the Seller, the Company or any ERISA Affiliate which has not been satisfied in full and no event has occurred and no condition exists that could reasonably be expected to result in any of the Seller, the Company or any ERISA Affiliate incurring a liability under Title IV of ERISA.

(d)                                 The Plans that are “employee pension benefit plans” (within the meaning of Section 3(2) of ERISA) and that are intended to meet the qualification requirements of Section 401(a) of the Code (each, a “Pension Plan”) have received a favorable determination letter, opinion or advisory letters from the IRS to the effect that such Pension Plans and the related trusts are qualified and exempt from U.S. federal income taxes under Sections 401(a) and 501(a) of the Code, respectively, and nothing has occurred that would reasonably be expected to adversely affect the qualification of such Pension Plans or related trusts.  No nonexempt

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“prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has occurred with respect to any Plan that could reasonably be expected to subject any of the Seller, the Company or any ERISA Affiliate to any liability.  All contributions required to be made to or with respect to any Plan have been timely made.

(e)                                  Section 3.19(e) of the Disclosure Schedule provides a list of all current employees of the Company (collectively, the “Company Employees”).

(f)                                    Except as otherwise contemplated under this Agreement, neither the execution nor delivery of this Agreement nor the consummation of the transactions contemplated hereby shall, whether alone or in combination with any other event, result in (i) the accelerated vesting or payment of, or any increase in, any compensation to any present or former employee, director or consultant of any of the Company or the Business or (ii) the entitlement of any present or former employee, director or consultant of the Company or the Business to severance or termination pay or benefits.

(g)                                 There is no contract, agreement, plan, or arrangement covering any employee or former employee of the Company or of the Business that, individually or in the aggregate, could give rise to the payment of any amount that would not be deductible under Section 280G of the Code.

(h)                                 Except as set forth in Section 3.19(h) of the Disclosure Schedule, each of Seller, the Company or any ERISA Affiliate (i) do not maintain or contribute to any Plan which provides, or has any liability to provide, life insurance, medical, severance or other employee welfare benefits to any employee, independent contractor or consultant of the Company or the Business upon his or her retirement or termination of employment, except as may be required by Section 4980B of the Code or similar Law or (ii) has never represented, promised or contracted (whether in oral or written form) to any employee, independent contractor or consultant of the Company or the Business (either individually or as a group) to do so, except to the extent required by Section 4980B of the Code or similar Law.  Each of Seller, the Company and any ERISA Affiliate have complied with the applicable requirements of Section 4980B of the Code or any similar laws.

Section 3.20                                            Labor Matters.

(a)                                  The Company is in compliance in all material respects, and has been in such compliance since November 1, 2007, with all Applicable Laws relating to employment, including but not limited to wage and hours, health and safety, child labor, immigration, discrimination, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers’ compensation, labor relations, employee leave and unemployment insurance.

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(b)                                 The Company is not bound by any collective bargaining agreement or other agreement with any labor organization, union, or association, and no employees are or have been represented by any labor organization or employee association with respect to their employment by the Company or the Business since November 1, 2007.  No labor union, labor organization or group of employees has made a pending demand for recognition or certification.  No representation or certification proceedings or petitions seeking a representation proceeding, (i) are presently pending before, (ii) to the Knowledge of the Seller, are threatened in writing to be brought or filed with, or (iii) have been brought or filed since November 1, 2007 with, the National Labor Relations Board or any other Governmental Entity.  To the Knowledge of Seller, no labor union has planned or is planning any organizing activities with respect to any employees of the Company or the Business.  There have been no actual or, to the Knowledge of Seller, threatened labor disputes, strikes, lockouts or work stoppages against or affecting the Company since November 1, 2007.

(c)                                  There is no unfair labor practice charge, material grievance, arbitration, charge, lawsuit or complaint against the Company pending before a Governmental Entity, or, to the Knowledge of Seller, threatened, and nor has any such matter been settled or resolved since November 1, 2007.  Since November 1, 2007, Seller have not received written notice of the intent of any Governmental Entity responsible for the enforcement of employment laws to conduct an investigation with respect to or relating to the Company, nor have the Seller received written notice that any such investigation is in progress.

(d)                                 Since November 1, 2007, the Company has at all times properly classified and treated, under Applicable Laws, each of its workers as an employee or independent contractor, and, in the case of employees, has properly classified and treated, under Applicable Laws, each of its employees as exempt or non-exempt from overtime wage requirements (including in respect of each Benefit Plan).

(e)                                  Since November 1, 2007, the Company has at all times been in compliance with all notice and other requirements under the Worker Adjustment and Retraining Notification Act, and all other similar applicable statutes, ordinances and regulations of any jurisdiction which impose advance notice or other requirements concerning any such employment losses (the “WARN Act”).

(f)                                    To the Knowledge of Seller, no employee of the Company is in any material respect in violation of any term of any employment agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, restrictive covenant or other obligation to a former employer of any such employee relating (i) to the right of any such employee to be employed by the Company or the Business or (ii) the knowledge of use of Trade Secrets or proprietary information.

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(g)                                 Except as set forth in Section 3.20(g) of the Disclosure Schedule, to the Knowledge of Seller, as of the date hereof, no current employee has any plans to terminate his or her relationship or employment with the Company or the Business.

(h)                                 All written personnel policies which may remain binding on the Company after the Closing are set forth in Section 3.20(h) of the Disclosure Schedule.  The Company maintains an employee handbook, a true and complete copy of which has heretofore been made available to the Buyer.

(i)                                     As of the date hereof, there are no active medical restriction forms placing any limitations on the physical activity of any of the Company Employees.

(j)                                     The Company has complied with all Applicable Laws in connection with the retention of the Business Employees.

Section 3.21                                            Material Contracts.

(a)                                  Section 3.21(a) of the Disclosure Schedule sets forth a complete and accurate list of the following contracts, agreements or commitments to which the Company is a party or by which the Company is bound or, solely as it relates to the Business or any Company IP/IT Assets, to or by which Seller or its Affiliate is a party or is bound, as applicable (each, a “Company Material Contract”):

(i)                                     All agreements which by their terms require or call for aggregate payments in excess of $100,000 per year, other than policies of insurance issued in the ordinary course of business;

(ii)                                  All agreements relating to the sale of a business or the sale of material assets outside the ordinary course of business;

(iii)                               All agreements relating to the acquisition of any business or material assets outside of the ordinary course of business;

(iv)                              All agreements relating to Indebtedness (whether incurred, assumed, guaranteed or secured by any asset) having an outstanding principal amount in excess of $50,000, including any trust preferred securities;

(v)                                 All agreements involving any director or officer of the Company;

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(vi)                              All agreements restricting the declaration or payment of any dividends or distributions on, or in respect of, any capital stock or equity interest of the Company;

(vii)                           All collective bargaining agreements or agreements with any labor organization, union or association;

(viii)                        All employment or consulting agreements which cannot be terminated without payment of severance or other monetary obligation,

(ix)                                All agreements that contain covenants that materially limit the ability of the Company (A) to compete in any line of business or with any Person or in any geographic area or to sell, supply, price, develop or distribute any service, product or asset, including any non-competition covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses or (B) to purchase or acquire an interest in any other entity;

(x)                                   All agreements with respect to any joint venture, partnership, limited liability or other similar agreement or arrangement relating to the formation, creation, operation, management or control of any partnership or joint venture;

(xi)                                All agreements obligating the Company to make any capital commitment or expenditure (including pursuant to any joint venture);

(xii)                             All agreements relating to or involving any exchange traded, over-the-counter or other swap, cap, floor, collar, futures contract, forward contract, option or other derivative financial instrument or contract, based on any commodity, security, instrument, asset, rate or index of any kind or nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;

(xiii)                          All agreements obligating the Company to provide indemnification, collateral, or a guarantee;

(xiv)                         All agreements pursuant to which the Company (or, with respect to Company IP/IT Assets, Seller or its Affiliate, as applicable) (a) is granted or obtains or agrees to grant or obtain any right to use any Company Intellectual Property (other than standard form contracts granting rights to use readily available shrink wrap or click wrap Software having a replacement cost and annual license fee of less than $10,000 in the aggregate for all such related

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contracts), (b) is restricted in its right to use or register any Intellectual Property, or (c) permits or agrees to permit any other Person, to use, enforce, or register any Company Intellectual Property, including any license agreements, coexistence agreements, and covenants not to sue;

(xv)                            All material agreements relating to Company IT Assets;

(xvi)                         All agreements providing for any confidentiality or standstill arrangements; or

(xvii)                     Any other agreements that are material to the Company not covered by the foregoing.

(b)                                 With respect to each Company Material Contract, except as set forth in Section 3.21(b) of the Disclosure Schedule: (i) the Company Material Contract is legal, valid, binding and enforceable against the Company, Seller and/or its Affiliates, as applicable, and, to the Knowledge of Seller, the other party thereto, and is in full force and effect; (ii) the Company Material Contract will continue to be legal, valid, binding and enforceable against the Company and, to the Knowledge of Seller, the other party thereto, and remain in full force and effect following the consummation of the transactions contemplated by this Agreement; (iii) the Company is not in breach or default in any material respect, and no event has occurred that with the passage of time or provision of notice or both would constitute such a breach or default by the Company, or permit termination or acceleration by the other party, under the Company Material Contract; and (iv) to the Knowledge of Seller, no other party to the Company Material Contract is in breach or default in any material respect, and no event has occurred that with the passage of time or provision of notice or both would constitute such a breach or default by such other party, or permit termination or acceleration by the Company, under such Company Material Contract.

Section 3.22                                            Intercompany Services and Transactions.  Seller have made available to Buyer copies of all written agreements or arrangements, and written summaries of all material oral arrangements (“Intercompany Agreements”), relating to all intercompany transactions currently in effect between Seller or its Affiliates (other than the Company) and the Company, or provided by the Company to Seller or its Affiliates (other than the Company).  Section 3.22(i) of the Disclosure Schedule accurately sets forth all such Intercompany Agreements.  All intercompany transactions provided thereunder have been carried out in all material respects in accordance with Applicable Laws and all consents and notice filings for such services or transactions have been obtained or made, as applicable.  Except for the Quota Share Treaty Reinsurance Contract which will be amended as provided herein, and for Intercompany Agreements that will survive and remain in effect after the Closing, as set forth in Section 3.22(ii) (the “Surviving Agreements”), the Company will not be a party to nor otherwise have any Liabilities pursuant to any Intercompany Agreements as of the Closing Date.

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Section 3.23                                            Accounts.  Section 3.23 of the Disclosure Schedule sets forth an accurate and complete list and brief description of each and every bank account, safe deposit box, brokerage account, trust account, depository account or other custodial account of the Company other than the Deposits.  Other than the assets deposited in the accounts listed in Section 3.23 of the Disclosure Schedule and the Deposits, the Company has no other material liquid assets or investments held or maintained with any other Person at any location.

Section 3.24                                            Deposits.  Section 3.24 of the Disclosure Schedule lists all funds maintained by the Company with Governmental Entities under any applicable insurance law (each a “Deposit”).  Section 3.24 of the Disclosure Schedule accurately sets forth the assets comprising each such Deposit, and the name of the bank and the number of the bank account in which such Deposit is maintained.  The Deposits are being held in compliance with Applicable Law, and neither Seller nor the Company is in receipt of any written notice of any claim alleging such failure to comply with Applicable Law.

Section 3.25                                            Agents and Producers.

(a)                                  To the Knowledge of Seller, as of the date of this Agreement, any person performing the duties of agent, broker or other producer with respect to the Company (collectively, “Producers”), that wrote, sold, or produced business, or performed such other act for or on behalf of the Company that required a license under Applicable Law, was so duly licensed and appointed as required by Applicable Law, in the particular jurisdiction in which such Producer wrote, sold, produced, solicited or serviced such business.

(b)                                 To the Knowledge of Seller, no Producer has been since January 1, 2010, or is currently, in violation (or with or without notice or lapse of time or both, would be in violation) of any term or provision of any Applicable Laws with respect to the writing, sale or production of insurance or other business of the Company.

(c)                                  The contracts and other agreements pursuant to which Producers act on behalf of the Company are valid, binding and in full force and effect in accordance with their terms, and none of the parties to such contracts and agreements are in default thereunder in any material respect.  Seller has made available to Buyer an accurate and complete copy of each standard form agency agreement used by the Company.

(d)                                 Section 3.25(d) of the Disclosure Schedule sets forth a list of all Producers for the year ended December 31, 2010.  To the Knowledge of Seller, as of the date hereof, no Producer intends to cancel, terminate or otherwise materially modify its relationship with the Company, whether as a result of the consummation of the transactions contemplated by this Agreement or otherwise.

(e)                                  There are no outstanding loans between Company, on the one hand, and any Producer, on the other.

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Section 3.26                                            Reinsurance Agreements.

(a)                                  Section 3.26(a)(i) of the Disclosure Schedule sets forth a list of all ceded reinsurance treaties and agreements, including retrocessional agreements, to which the Company is a party or under which the Company has any material existing rights, obligations or liabilities (the “Company Reinsurance Agreements”).  Copies of all Company Reinsurance Agreements that are in effect on the date of this Agreement have been made available to Buyer.  All Company Reinsurance Agreements are in full force and effect.  Neither the Company, nor, to the Knowledge of Seller, any other party to a Company Reinsurance Agreement is in default in any material respect to any provision.  Except as set forth in Section 3.26(a)(ii) of the Disclosure Schedule, the Company has not received any notice from any party to any Company Reinsurance Agreement of any dispute or default with respect to such Company Reinsurance Agreement.  There are no pending or, to the Knowledge of Seller, threatened Actions with respect to any Company Reinsurance Agreements.  There are no entities, other than the Company, that have rights to access coverage under any Company Reinsurance Agreements.

(b)                                 Except as set forth on Section 3.26(b) of the Disclosure Schedule, the Company is not a party to any reinsurance plans, pools or fronting arrangements under which any rights or obligations remain outstanding.

(c)                                  Except for the Transfer and Assignment Agreement dated as of October 31, 2007, by and between General Agents Insurance Company of America, Inc. and MGA Insurance Company, Inc., the Company is not now, nor has it ever been, a party to any transfer and assumption agreement or any other similar agreement, the effect of which is to transfer specified insurance and/or non-insurance liabilities of the Company and related assets to a transferee in exchange for the transferee’s agreement to assume all such liabilities on behalf of the Company.

Section 3.27                                            Ownership of Assets.  Except as specifically set forth in Section 3.27 of the Disclosure Schedule and as otherwise contemplated by the Transition Services Agreement, other than with respect to Intellectual Property or IT Assets, on the Closing Date and after consummation of the transactions contemplated by this Agreement, no entity other than the Company owns any assets used in, or provides services in connection with, the Business.

Section 3.28                                            Insurance.  The Company is covered by valid and currently effective insurance policies issued in favor of the Company that are customary and adequate for companies of similar size in the industry and locales in which the Company operates.  Section 3.29 of the Disclosure Schedule sets forth an accurate and complete list of all insurance policies issued in favor of the Company or in which the Company is a named insured or otherwise a beneficiary.  Section 3.29 of the Disclosure Schedule also identifies the term of each such policy.  With respect to each such insurance policy, (a) the policy is in full force and effect and all premiums due have been paid, (b) the Company is not in breach of or default under, and the Company has not taken any action or failed to take any action which, with notice or the lapse of time or both, would constitute such a breach or default, or permit termination or modification of, any such policy and (c) to the Knowledge of Seller, no insurer on any such policy has been

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declared insolvent or placed in receivership, conservatorship or liquidation, and no notice of cancellation or termination has been received with respect to any such policy.  On the Closing Date, the Buyer shall add the Company to their insurance programs and the Seller shall cause all policies covering the Company to be cancelled.

Section 3.29                                            Indebtedness of the Company.

(a)                                  Section 3.29(a) of the Disclosure Schedule sets forth an accurate and complete list as of the date hereof and after giving effect to the consummation of the transactions contemplated by this Agreement, of all outstanding Indebtedness of the Company, including the amount of principal and unpaid accrued fees and interest outstanding under each instrument evidencing such Indebtedness and a description of the collateral and any guaranty securing such Indebtedness.

(b)                                 Except as set forth on Section 3.29(b) of the Disclosure Schedule, there are no prepayment penalties or other fees associated with the repayment of the Indebtedness set forth on Section 3.29(a) of the Disclosure Schedule.

(c)                                  The Company is not in default, and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness, and to the Knowledge of Seller, no event or condition exists with respect to any such Indebtedness that would permit (or that with notice or lapse of time, or both, would permit) one or more Persons to cause any such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled date of payment.

Section 3.30                                            Books and Records.  All of the Books and Records of the Company are complete and accurate in all material respects and have been maintained in the ordinary course of business and in accordance with (a) Applicable Laws and (b) the record retention policies of the Company and its Affiliates.

Section 3.31                                            Environmental Compliance.  To the Knowledge of the Seller, the Company is not subject to, and neither the Seller nor the Company has any reason to believe that the Company may become subject to, any material liability (contingent or otherwise) or material corrective or remedial obligation arising under any federal, state, local or foreign law, rule or regulation (including the common law) relating to or regulating health, safety, pollution or the protection of the environment except as may be covered under insurance or reinsurance business underwritten by the Company.

Section 3.32                                            Brokers and Finders.  Except for Willis Capital Markets & Advisory, the fee of which shall be paid by Seller, neither the Seller nor any of its Affiliates has retained any agent, broker, investment banker, financial advisor or other firm or person that is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:

Section 4.1                                                  Due Organization; Good Standing.  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey.

Section 4.2                                                  Authority; Binding Agreement.  Buyer has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and each Ancillary Agreement to which Buyer is a party and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance of this Agreement and each Ancillary Agreement to which Buyer is a party and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by the board of directors of Buyer and no other corporate proceedings on the part of Buyer are necessary to authorize this Agreement or any Ancillary Agreement to which Buyer is a party or the consummation of the transactions contemplated hereby or thereby.  This Agreement and each Ancillary Agreement to which Buyer is a party have been duly and validly executed and delivered by Buyer and constitute valid and binding agreements of Buyer, enforceable against Buyer in accordance with their terms, except that such enforcement may be subject to any bankruptcy, insolvency, reorganization, moratorium or other laws, now or hereafter in effect, relating to or limiting creditors’ rights generally.

Section 4.3                                                  Consents and Approvals; No Violations.  The execution and delivery by Buyer of this Agreement and each Ancillary Agreement to which Buyer is a party, the consummation by Buyer of the transactions contemplated hereby and thereby, and compliance by Buyer with any of the provisions hereof and thereof, will not:

(a)                                  conflict with or violate any provision of the articles of incorporation or bylaws of Buyer;

(b)                                 conflict with, contravene or violate in any respect any foreign, federal, state or local order, statute, law, rule, regulation, ordinance, writ, injunction, arbitration award, directive, judgment, decree, principle of common law, constitution, treaty or any interpretation thereof enacted, promulgated, issued, enforced or entered by any Governmental Entity to which Buyer or any of its assets or properties is subject; or

(c)                                  except as set forth on Section 4.3(c) of the Disclosure Schedule (the “Buyer Required Regulatory Approvals” require any declaration, filing or registration with, or notice to or authorization, consent or approval of, any Governmental Entity.

Section 4.4                                                  Financing.  Buyer has on the date of execution of this Agreement, and will have at the Closing Date, access to funds sufficient to pay the Purchase Price and

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consummate the transactions contemplated hereby.

Section 4.5                                                  Brokers and Finders.  Buyer and its Affiliates have not retained any agent, broker, investment banker, financial advisor or other firm or person that is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement.

ARTICLE V

COVENANTS OF THE PARTIES

Section 5.1                                                  Conduct of the Business of the Company.

(a)                                  Seller agrees that, during the period from the date of this Agreement to the Closing, except as consented to by Buyer in writing, Seller shall cause the Company to conduct the business in the ordinary course, consistent with past practices, and shall use its reasonable efforts to ensure that the Company (i) preserves substantially intact its business organization, (ii) keeps available the services of its officers, employees, Producers and consultants and (iii) maintains good relationships with all Persons with whom it does business (including Producers).

(b)                                 Without limiting the generality of the foregoing, Seller agrees that, during the period from the date of this Agreement to the Closing, except as consented to by Buyer in writing, Seller shall not, and Seller shall cause the Company not to:

(i)                                     amend, waive or otherwise change, in any respect, its articles of incorporation or bylaws;

(ii)                                  authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, its capital stock or other securities or equity interests, including any securities convertible into or exchangeable for shares of stock of any class and any other equity-based awards;

(iii)                               split, combine, recapitalize or reclassify any shares of its capital stock or equity interests or issue any other securities in respect thereof, or declare, pay or set aside any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock or equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any shares of its capital stock or other securities or equity interests;

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(iv)                              incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise), make a loan or advance to or investment in any third party, or guarantee or endorse any Indebtedness or other liability or obligation of any Person;

(v)                                 (A) enter into or adopt any employee benefit plan or arrangement solely sponsored or maintained by the Company, (B) except as set forth in Section 5.1(b)(v)(B) of the Disclosure Schedule, increase in any manner the compensation, bonus or fringe or other benefits of, or pay any bonus of any kind or amount whatsoever to, any current or former director, employee or consultant of the Company or the Business, (C) pay any benefit or amount not required under any Plan or any other benefit plan or arrangement for the benefit any current or former director, employee or consultant of the Company or the Business, (D) grant or pay any severance or termination pay or increase in any manner the severance or termination pay of any current or former directors, employee or consultant of the Company or the Business, (E) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Plan to any current or former director, employee or consultant of the Company or the Business, (F) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Plan for the benefit any current or former director, employee or consultant of the Company or the Business or (G) except as set forth in Section 5.1(b)(v)(G) of the Disclosure Schedule, take any action to accelerate the vesting or payment of any compensation or benefit under any Plan for the benefit any current or former director, employee or consultant of the Company or the Business;

(vi)                              hire any new employee, or promote any current employee, to be an officer or member of senior management;

(vii)                           other than as contemplated by this Agreement, transfer any employee into the Company or out of the Company;

(viii)                        (A) make, revoke, or amend any Tax election or settle or compromise any Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any Tax claim or assessment or grant any power of attorney with respect to Taxes or enter into any closing agreement with respect to any Tax or surrender any right to claim a Tax refund, (B) change any method of accounting for Tax purposes or (C) file any amended U.S. federal, state or foreign income Tax Return or any other material amended Tax Return;

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(ix)                                grant or acquire (except as contemplated by this Agreement), or abandon, cancel or otherwise dispose of or permit to lapse, any right, title or interest in or to, any rights to any Intellectual Property, or disclose to any Person (other than representatives of Buyer), any trade secret, except in each case as necessary in the ordinary conduct of the Business consistent with past practice and pursuant to reasonable confidentiality protection;

(x)                                   except as contemplated by this Agreement, modify or amend in any material manner, terminate or waive or assign any material right under any Company Material Contract or enter into any new contract that would be a Company Material Contract;

(xi)                                fail to maintain the Books and Records in all material respects in the ordinary course of business consistent with past practice;

(xii)                             establish any subsidiary or enter into any new line of business;

(xiii)                          fail to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, operations and activities as are currently in effect;

(xiv)                         revalue any of its material assets or make any change in accounting methods, principles or practices, except as required by GAAP Accounting Principles;

(xv)                            except as contemplated in the Agreement, waive, release, assign, settle or compromise any suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, the Company) not in excess of $25,000 individually, or $100,000 in the aggregate, or otherwise pay, discharge or satisfy any claims, liabilities or obligations other than in the ordinary course of business consistent with past practice. For the avoidance of doubt, nothing in this Section 5.1(b)(xv) shall limit the ability of the Company to settle insurance or reinsurance claims in the ordinary course of business ;

(xvi)                         acquire, including by merger, consolidation, acquisition of stock or assets, or any other form of business combination, any

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corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets;

(xvii)                      sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;

(xviii)                   make any capital expenditures in excess of $100,000;

(xix)                           adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

(xx)                              enter into any agreement, understanding or arrangement with respect to the voting or registration of its capital stock;

(xxi)                           enter into any new reinsurance agreement or transaction as assuming or ceding insurer;

(xxii)                        alter or amend in any material respect any existing underwriting, claims handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies (including compliance policies) or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP or Applicable Law;

(xxiii)                     take any action that would reasonably be expected to delay or impair the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements; or

(xxiv)                    authorize or agree to do any of the foregoing actions.

Section 5.2                                                  Access to Information; Confidentiality.

(a)                                  Except as prohibited by Applicable Law, Seller shall cause the Company prior to the Closing to (i) provide Buyer and its Representatives, upon reasonable advance notice and during regular business hours, reasonable access to all Books and Records, Tax Returns, personnel, Representatives, facilities and properties of the Company, (ii) permit Buyer to make such copies and inspections thereof, upon advance notice and during regular business hours, as Buyer may reasonably request and (iii) cause the officers of the Company to furnish Buyer with such financial and operating data and other information regarding the

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business and properties of the Company that Buyer may from time to time reasonably request; provided, however, that any such access shall not unreasonably interfere with the normal operations of the business of the Company.  In addition, Seller shall provide Buyer with access to all records of Seller that relate to the Continuing Employees, but only to the extent that such records pertain to: (a) skill and development training, (b) seniority histories, (c) salary and benefit information and (d) Occupational, Safety and Health Administration reports and records.

(b)                                 Buyer hereby acknowledges that, pending the Closing, any information provided or made available to it by or on behalf of Seller or the Company pursuant to Section 5.2(a) shall be kept confidential in accordance with the Confidentiality Agreement between Buyer and Seller, dated July 13, 2011 (the “Confidentiality Agreement”).

(c)                                  From and after the Closing, Seller and its Affiliates shall not disclose, furnish or make available to any Person (other than their Representatives who need to know such information in connection with the performance of their services or duties to, or their ownership of or affiliation with, Seller and/or its Affiliates) or use any nonpublic information with respect to the Company; provided, however, that the provisions of this Section 5.2(c) shall not apply to any such information that (i) is disclosed or made available to the public other than by Seller or its Affiliates in breach of the provisions of this Section 5.2(c) or (ii) is required to be disclosed by Applicable Law or in connection with filings with any Governmental Entity.

Section 5.3                                                  Efforts and Actions to Cause Closing.

(a)                                  Prior to the Closing, upon the terms and subject to the conditions of this Agreement, Buyer and Seller shall use their respective commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done and cooperate with each other in order to do, all things necessary, proper or advisable to consummate the Closing as promptly as practicable, including preparing and filing all forms, registrations and notices required to consummate the Closing and taking such actions necessary to obtain any requisite approvals, authorizations, consents, orders, licenses, permits, qualifications, exemptions or waivers by any third party or Governmental Entity (including the Required Regulatory Approvals, the Required Third Party Consents and the Required IP/IT Third Party Consents).  Seller, Buyer, and any of their respective Affiliates shall not take any action after the date hereof that could reasonably be expected to materially delay the obtaining of, or result in not obtaining, any permission, approval or consent from any Governmental Entity, third party or other Person required to be obtained prior to Closing (including the Required Regulatory Approvals and the Required Third Party Consents).  Nothing in this Agreement shall obligate Buyer or any of its Affiliates (including, after the Closing, the Company) to take any action or commit to take any action, or consent or agree to any condition, restriction or undertaking requested or imposed by any Governmental Entity, whether in connection with obtaining any requisite approvals, authorizations, consents, orders, licenses, permits, qualifications, exemptions or waivers or otherwise, if (i) in the good faith determination of Buyer, such action, condition, restriction or undertaking, individually or in the aggregate, with all other such actions, conditions, restrictions or undertakings, would be reasonably expected to materially and adversely affect the benefits,

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taken as a whole, that Buyer reasonably expects to derive from the transactions contemplated by this Agreement, (ii) prohibit or limit in any manner the declaration or payment of dividends or distributions by the Company beyond a period of one year after the Closing, (iii) require that any capital contribution or series of capital contributions be made to the Company in excess of $15,000,000, (iv) require that any guarantees, keepwells, letters of credit, indemnity or contribution agreements, support agreements, statements of support, insurance surety bonds or similar agreements or other forms of capital or balance sheet support be provided to the Company or (v) require Buyer to (A) divest or hold separate any material part of its or the Company’s businesses or operations (or of a combination of Buyer’s and the Company’s businesses or operations) or (B) agree not to compete in any geographic area or line of business (each a “Burdensome Condition”).

(b)                                 Without limiting the generality of the undertakings set forth in Section 5.3(a), Buyer shall use its respective commercially reasonable efforts to file as soon as practicable, but in no event later than fifteen (15) Business Days following the date hereof, applications in connection with all Buyer Required Regulatory Approvals, including the “Form A” statement regarding the acquisition of control of the Company with the Oklahoma Insurance Department.

(c)                                  If the Seller, Buyer, or their respective Affiliates receive a request for information or documentary material from any Governmental Entity regarding this Agreement or any of its contemplated transactions, then such party receiving such request shall endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other party, an appropriate and compliant response.

Section 5.4                                                  Public Announcements.  Prior to the Closing, Seller and Buyer shall consult with each other before issuing any report (including any report filed on Form 8-K with the United States Securities and Exchange Commission), statement or press releases or otherwise making any public statements with respect to this Agreement and the transactions contemplated hereby and neither shall issue any such report, statement or press release or make any such public statement prior to such consultation and the approval of the other party (such approval not to be unreasonably withheld, conditioned or delayed), except as in the reasonable judgment of the party may be required by Applicable Law.

Section 5.5                                                  No Solicitation.  From the date hereof through the earlier of the Closing Date or the date of termination of this Agreement, Seller shall not, and shall cause its Representatives not to entertain, solicit or encourage, directly or indirectly, in any manner, or furnish or cause to be furnished any information to any Person (other than Buyer) in connection with, or negotiate or otherwise pursue, the sale of the Company (in whole or in part), by any means.  From and after the date of this Agreement, Seller shall, and shall cause their Representatives to, immediately cease and cause to be terminated any ongoing solicitations, discussions or negotiations with any parties (other than Buyer) with respect to a sale of the Company (in whole or in part).

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Section 5.6                                                  Non-Compete.

(a)                                  Seller agrees that for a period of three (3) years following the Closing Date, Seller shall not, and shall cause its Affiliates not to, directly or indirectly (i) operate, engage in, manage or own a significant interest in any business that directly competes with the Business as conducted on the date hereof or (ii) except if and to the extent required by law or legal process use or transfer or otherwise disclose to any third party any Books and Records or any confidential information about or relating to the Business.  This Agreement shall not prohibit Seller and its Affiliates from (i) continuing to run their respective businesses other than the Business, including the current direct and facultative operations of Montpelier Underwriting Inc. or any successor thereof, (ii) reinsuring any business that directly or indirectly competes with the Business or (iii) administering the run-off of the Business or any other business as exists on the Closing Date.

(b)                                 The parties to this Agreement acknowledge that the covenants set forth in this Section 5.6(b) are an essential element of this Agreement and that, but for these covenants, the parties would not have entered into this Agreement.

(c)                                  If any party hereto commits a breach, or is about to commit a breach, of any of the provisions of this Section 5.6(c), the other party hereto shall have the right to have the provisions of this Section 5.6(c), specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach would cause irreparable injury to the non-breaching party and that money damages would not provide an adequate remedy to such party.  In addition, in connection with this Section 5.6(c), each of the parties hereto may take all such other actions and remedies available to it under law or in equity and shall be entitled to such damages as it can show it has sustained by reason of such breach.

Section 5.7                                                  Books and Records.

(a)                                  At the Closing, Seller shall deliver to Buyer the minute books, stock transfer book and corporate seal of the Company, to the extent not held by such entities.

(b)                                 After the Closing, each of the parties hereto shall preserve, until at least the seventh anniversary of the Closing Date, all pre-Closing Date records possessed or to be possessed by such party relating to the Company. After the Closing Date and up until at least the seventh anniversary of the Closing Date, upon any reasonable request from a party hereto or its Representatives, the party holding such records shall (i) provide to the requesting party or its Representatives reasonable access to such records during normal business hours and (ii) permit the requesting party or its Representatives to make copies of such records, in each case at the expense of the requesting party or its Representatives; provided, however, that nothing herein shall require either party to disclose any information to the other if such disclosure would jeopardize any attorney-client or other legal privilege or contravene any Applicable Law.  Such records may be sought under this Section 5.7 solely to the extent reasonably required in connection with the audit, accounting, Tax, litigation, federal securities disclosure or other similar needs of the party seeking such records.  Any information obtained pursuant to this Section 5.7 shall be kept confidential and used only for the purposes requested.  Notwithstanding

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the foregoing, any and all such records may be destroyed by a party if such destroying party sends to the other party hereto written notice of its intent to destroy such records, specifying in reasonable detail the contents of the records to be destroyed; such records may then be destroyed after the sixtieth day following such notice unless the other party notifies the destroying party that such other party desires to obtain possession of such records, in which event the destroying party shall transfer the records to such requesting party and such requesting party shall pay all reasonable expenses of the destroying party in connection therewith.

Section 5.8                                                  Ancillary Agreements.  The Seller shall, and Seller shall cause the Company, Parent and Affiliates to, execute and deliver at the Closing each of the Ancillary Agreements to which it is a party and each other agreement, document or instrument which is necessary to effect the transactions provided for in this Agreement or the Ancillary Agreements.

Section 5.9                                                  Director and Officer Resignations. At or prior to the Closing, the directors and officers of the Company identified in Section 5.9 of the Disclosure Schedule shall deliver to Buyer their resignations, effective as of the Closing.

Section 5.10                                            Intercompany Agreements and Accounts.  Except for the Ancillary Agreements and the Surviving Agreements, all Intercompany Agreements, and any other agreements and commitments, whether written or oral, which are between the Company, on the one hand, and Seller and its Affiliates (excluding the Company), on the other hand, shall be terminated and cancelled and any amounts due with respect thereto settled in full at or prior to the Closing and the Company shall be fully released from any and all liabilities or obligations arising in connection with any such agreements and commitments.  Seller shall have provided adequate evidence to Buyer in the form to be reasonably acceptable to Buyer, that the Company has been fully released from any and all liabilities or obligations arising in connection with any such Intercompany Agreements and other agreements and commitments effective as of the Closing.

Section 5.11                                            Release of Credit Support Obligations and Payment of Indebtedness.  Except as otherwise specifically contemplated by this Agreement, Seller shall, prior to Closing, release, or cause to be released, the Company from any credit support obligations and payment of the Indebtedness of Seller or any of its Affiliates (other than the Company).  Seller shall have provided adequate evidence to Buyer in the form to be reasonably acceptable to Buyer, that the Company has been fully released from any and all liabilities or obligations arising in connection with any credit support obligations and payment of the Indebtedness of Seller or any of its Affiliates (other than the Company) effective as of the Closing.

Section 5.12                                            Assigned and Assumed Contracts.

(a)                                  Seller hereby agrees that, in the event Seller has determined that it will not be able to obtain the necessary third party consents to assign one or more of the Assigned and Assumed Contracts to SICA and/or its designated Affiliates by the Closing Date pursuant to the Assignment and Assumption Agreement (any such contracts, “Unassigned Contracts”), Seller shall either (i) procure, on behalf of and in the name of SICA and/or its

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designated Affiliates, a duplicate contract or a contract providing substantially equivalent benefits to the Unassigned Contract (including, for clarity, substantially equivalent IT Assets on substantially equivalent terms, to the extent applicable), and Seller shall, before procuring the same, provide the proposed terms of such contract to SICA and use commercially reasonable efforts to incorporate any changes thereto reasonably requested by SICA (any such contracts, “Replacement Contracts”) or (ii) reduce the IT Purchase Price at Closing by the face amount of the Unassigned Contract (pro-rated for any remaining term).  The parties hereto agree that the Seller shall first attempt to procure a Replacement Contract and second reduce the Purchase Price if a Replacement Contract cannot be procured by the Closing Date.  Further, Seller shall inform Buyer promptly if it is reasonably foreseeable that there will be an Unassigned Contract at Closing.  Any Replacement Contracts shall be procured no later than by the Closing Date and at no additional cost or expense to SICA and/or its designated Affiliates.  Replacement Contracts shall become effective on the Closing Date.  Seller shall reimburse SICA and/or any of its designated Affiliates for any reasonable costs or expenses incurred in connection with a Replacement Contract or an Unassigned Contract.

(b)                                 Notwithstanding the foregoing, Seller may, at its sole option and expense, purchase the asset that would otherwise have been transferred to SICA and/or its designated Affiliates pursuant to an Unassigned Contract, and itself convey, transfer and deliver such asset to SICA and/or its designated Affiliates without any additional consideration.  If such asset provides equivalent or comparable benefits (as determined in the reasonable judgment of Seller) to the benefits that would otherwise have been available to SICA and/or its designated Affiliates under an Unassigned Contract, Seller shall be relieved of any obligation to procure a Replacement Contract or reduce the Purchase Price pursuant to paragraph (a) of this Section 5.12 with respect to such Unassigned Contract.

Section 5.13                                            Further Assurances.

(a)                                  From and after the Closing, each of the Parties shall use their reasonable best efforts to furnish or cause to be furnished to the other party and its Representatives such information and reasonable assistance relating to the Company (to the extent within the control of such other party) as is reasonably necessary for required financial reporting and required accounting matters of the other party, including the furnishing of such documentation and information relating to the Company as may be reasonably requested in connection with the preparation of reports, accounts and other documents and materials to be filed with or submitted to the U.S. Securities and Exchange Commission or any stock exchange.

(b)                                 At any time and from time to time, each party to this Agreement agrees to use its reasonable best efforts, subject to the terms and conditions of this Agreement, to take such actions and to execute and deliver such documents as may be necessary to effectuate the purposes of this Agreement at the earliest practicable time.

Section 5.14                                            Preservation of Insurance License and Qualifications.  The Seller shall, and shall cause the Company to, use reasonable best efforts to preserve the Company’s Insurance License and the Surplus Lines Qualification of the date of this Agreement in full force

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and effect.

Section 5.15                                            Company Names and Marks.  Effective as of the Closing, Seller, on behalf of itself and its Affiliates, hereby grants to Buyer and its Affiliates, for a period of six (6) months after the later of (x) the Closing or (y) the receipt of any approvals of Governmental Entities required for such transition have been obtained, a non-exclusive, worldwide, and royalty-free license to use the Trademarks owned by Seller or its Affiliates and used by the Company in the Business (the “Company Names and Marks”), substantially consistent with such use by the Business during the six (6) months prior to the Closing, to facilitate the transition by Buyer and its Affiliates to new names and marks.  As soon as reasonably practicable after the later of the Closing or such approvals have been obtained, the Company shall amend the Charter of the Company to eliminate the name “Montpelier” and phase-out use of the Company Names and Marks.  All goodwill associated with the Company Names and Marks generated by Buyer or its Affiliates’ use of the Company Names and Marks pursuant to the foregoing license in this Section 5.15 shall inure to the benefit of Seller and its Affiliates.  Buyer and its Affiliates shall use the Company Names and Marks at a level of quality equivalent in all material respects to that in effect for the Company Names and Marks as of the Closing.  For purposes of clarity, nothing in this Section 5.15 shall preclude any uses of the Company Names and Marks by Buyer and its Affiliates that are required or otherwise not prohibited under Applicable Law (including, for example, use in historical, tax, and similar records or fair use).

Section 5.16                                            Redomestication; Change of Name.  Prior to the Closing, Seller shall, and shall cause the Company to, to the extent permitted by Applicable Law, use commercially reasonable efforts to cooperate with Buyer and make, in a timely manner and as requested by Buyer, at Buyer’s sole cost and expense, any filings with or notifications to, Governmental Entities relating to the redomestication of the Company to New Jersey and the name change for the Company.  All such filings or notifications shall be prepared by Buyer and reasonably approved in form and substance by Seller.  Any actions requested or described in such filings or notifications shall be conditioned and become effective upon the occurrence of the Closing.

Section 5.17                                License to Retained Intellectual Property and Transferred Intellectual Property.

(a)                                  Effective as of the Closing, Seller, on behalf of itself and its Affiliates, hereby grants SICA and its Affiliates a worldwide, perpetual, irrevocable, transferable, sublicenseable and royalty-free license to all Intellectual Property (other than Trademarks but including, for clarity, all Intellectual Property comprising the “Rater” Software of Seller and/or its Affiliates (the “Rater Software”)) owned by Seller or any of its Affiliates and used in the Business (the “Retained Owned Intellectual Property”), including, for clarity, to use, copy, publish, distribute, make and own derivative works of and otherwise exploit the same, in connection with the conduct of the Business as currently conducted and extensions or expansions of the Business or Buyer’s or its Affiliates’ other businesses, and, reasonably promptly following Buyer’s or its Affiliates’ request therefor, shall deliver to Buyer or such Affiliate (at Buyer’s expense for Seller’s reasonable out-of-pocket costs) source code, executable versions and related documentation and data related to such Intellectual Property licensed hereunder in the format so

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requested, and, following such delivery, Seller shall have no further obligations in connection therewith (except as may be expressly set forth hereunder).

(b)                                 Effective as of the Closing, subject to the terms and conditions of this Agreement (including Section 5.6), SICA (or its designee under Section 2.2) hereby grants Seller and/or its applicable Affiliates a non-exclusive, royalty-free license to such Software included in the Company Intellectual Property assigned to and owned by SICA (or such designee) hereunder, if any, that is being used as of the date hereof and the Closing Date in accordance with this Agreement by Seller or such Affiliate in their businesses (other than the Business), to continue using the same solely as and to the extent so used as of the date hereof, and SICA or its Affiliates shall have no obligations in connection therewith.

Section 5.18                                            Investment Assets.  No later than five (5) Business Days prior to the Closing, Seller shall compile and deliver to Buyer a list of the proposed Investments to be retained by the Company as of the Closing Date.  Buyer shall promptly review such list and, at its sole discretion, determine which of the proposed Investments shall continue to be retained by the Company as of the Closing Date, and which shall be used to settle any pre-Closing obligations of the Company, including the settlement of the funds withheld balance under the reinsurance with Montpelier Re, or to fund the Trust Account (as such term is defined under the Trust Agreement).

Section 5.19                                            Year-End Closing.  Each party hereto shall use its commercially reasonable efforts, in cooperation with the other party, to satisfy all conditions precedent to the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements on or prior to December 31, 2011.

ARTICLE VI

EMPLOYEE MATTERS

Section 6.1                                                  Transfer of Employment.  No later than three (3) Business Days prior to the Closing Date,  Seller shall transfer the employment of each Business Employee who is not currently an employee of the Company to the Company. Each such transfer of employment shall be in writing and specify that the Business Employee must transfer employment no later than three (3) Business Days prior to the Closing Date.  Those Business Employees who become employed by Company in connection with the transactions contemplated by this Agreement shall be referred to herein as “Accepted Employees.”

Section 6.2                                                  Employee Benefits.  Effective as of the Closing Date, Buyer shall provide, or cause to be provided, to each Company Employee and each Accepted Employee (collectively, the “Continuing Employees”) who continue to be employed following the Closing Date and only for such time while so employed by the Company, Buyer or any of the Affiliates of Buyer for a maximum period not to exceed one (1) year following the Closing Date (the “Continuation Period”), (i) annual base salaries that are substantially comparable to the annual base salaries as in effect for such employees immediately prior to the Closing Date and (ii) employee benefits that are substantially comparable to the employee benefits provided to

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similarly situated employees of Buyer and its Affiliates as in effect from time to time; provided, however, that from the Closing through December 31, 2011, each Continuing Employee shall continue to participate and be covered under Seller’s medical and dental plans as in effect immediately prior to the Closing Date.  Seller will provide Buyer with an invoice of Seller’s actual costs of such medical and dental plans and Buyer will reimburse Seller for such costs from the Closing through December 31, 2011.  Unless prohibited by Applicable Law or by the terms of an applicable plan, Buyer shall use its commercially reasonable efforts to cause its third party insurance providers or third party administrators to waive all limitations as to any pre-existing condition or waiting periods in its applicable welfare plans with respect to participation and coverage requirements applicable to the Continuing Employees under any welfare plans that such employees may be eligible to participate in after the Closing Date, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the Closing Date under any comparable employee benefit plan.

Section 6.3                                                  Service Credit.  As of the Closing Date, Buyer shall, or shall cause its Affiliates to, give Continuing Employees full credit for purposes of eligibility and vesting (but, not for benefit accrual purposes under any defined benefit pension plan) under any employee benefit and compensation plans or arrangements maintained by Buyer or any of its Affiliates for such Continuing Employees’ service with Seller and its Affiliates to the same extent that such service was credited for purposes of any comparable employee benefit plan immediately prior to the Closing Date, unless prohibited by Applicable Law or by the terms of an applicable plan, and in no event shall service prior to the Closing Date be required to be taken into account if such service credit would result in the duplication of benefits with respect to the same period.

Section 6.4                                                  Seller’s Obligations.  Seller shall, as soon as practicable following the Closing, but in no event later than ten days following the Closing, pay pro-rata bonuses and/or incentive benefits (based on actual performance, if applicable) to each such Continuing Employee with respect to any bonus or incentive compensation plan or arrangement in which such Continuing Employee is participating as of the Closing, based upon the portion of the applicable performance or vesting period that has deemed to have elapsed as of the Closing, to be paid in accordance with the terms of such bonus or incentive compensation plan or arrangement; provided, that, Seller shall pay the individuals listed on Section 6.8 of the Disclosure Schedule, to the extent such individual becomes a Continuing Employee, the amounts, if any, with respect to the outstanding restricted share units scheduled to vest in December of 2011 on the earlier of the Closing Date or December 15, 2011 in accordance with the terms of the Montpelier Re Holdings, Ltd. 2007 Long-Term Incentive Plan and in compliance with Section 409A of the Code, if applicable.  Seller shall also cause the retirement accounts of any Continuing Employee under any Plan to vest fully as of the Closing.  As of the Closing all accrued and/or unused vacation and other paid time-off with respect to the Continuing Employees as of the Closing Date shall be reflected in the financial statements of the Company.

Section 6.5                                                  Non-Solicitation of Employees.  Seller shall not, and shall cause its Affiliates not to, without the prior written consent of Buyer, for a period of three (3) years from the Closing Date, directly or indirectly employ, hire as a consultant or otherwise use the services of, (a) any person who, as of the Closing Date, was an employee of the Company unless such person is terminated by Buyer or the Company without cause after the Closing Date, or (b) 

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any Business Employee, provided, however, that nothing herein shall prohibit the Seller from making general solicitation advertisements that are not targeting any employees of the Company.

Section 6.6                                                  Participation in Plans.  Effective as of the Closing, the Continuing Employees shall cease participation in all Plans, other than those Plans listed in Section 6.6 of the Disclosure Schedule.

Section 6.7                                                  Employee Restrictive Covenants.  From and after the Closing Date, the Seller shall not, and shall cause its Affiliates not to, enforce any non-competition, non-solicitation or non-disclosure covenant or obligation against any Continuing Employee to the extent that any such covenant or obligation would prohibit any of the Continuing Employee from becoming employed with the Buyer or any of the Buyer’s Affiliates, or engaging in any employment activities for, or providing any services to, the Buyer or any of the Buyer’s Affiliates.

Section 6.8                                                  Long-Term Incentive Benefits.  As of the Closing, Buyer shall or shall cause its Affiliates to pay the individuals listed on Section 6.8 of the Disclosure Schedule subject to the individual’s continued employment with Buyer or any of its Affiliates, cash payments in the amounts and on the dates set forth on Section 6.8 of the Disclosure Schedule.  In the event Buyer and its Affiliates terminates the employment of such individual for any reason other than for cause (but, excluding the individual’s voluntary resignation) during the twenty-four (24) months following the Closing Date, then Buyer or any of its Affiliates shall pay such individual the amounts listed on Section 6.8 of the Disclosure Schedule to the extent such amounts had not been previously paid.  Beginning in 2013 (based on the individual’s performance in 2012), the individuals listed in Section 6.8 of the Disclosure Schedule, subject to the individual’s continued employment with Buyer or any of its Affiliates, shall be eligible to participate in Buyer’s long-term incentive plan as in effect from time to time.

Section 6.9                                                  Acknowledgment.  The Parties acknowledge and agree that all provisions contained in Article VI of this Agreement are included for the sole benefit of the Parties and that nothing in this Agreement, whether express or implied, shall (i) obligate Buyer or any of its Affiliates to continue to employ any Continuing Employee for any period of time following the Closing Date or otherwise to treat any such Continuing Employee on any basis other than as an employee-at-will, (ii) create any third party beneficiary or other rights in any other Person, including any current or former employees of Seller, Buyer or their respective Affiliates, any participant in any Plan or benefit plan of Buyer, or any dependent or beneficiary thereof, or (iii) require Seller, Buyer or any respective Affiliates to continue any such plan or prevent or require the amendment, modification or termination thereof, except as specifically set forth herein.

ARTICLE VII

CONDITIONS TO CLOSING

Section 7.1                                                  Conditions to Obligations of Each Party.  The respective obligations of the Parties to consummate the transactions contemplated by this Agreement are

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subject to fulfillment at or prior to Closing of the following conditions:

(a)                                  No Injunction.  No Order issued by any Governmental Entity or other legal restraint or prohibition preventing or enjoining the consummation of the transactions contemplated by this Agreement shall be in effect and no law shall have been enacted, entered or promulgated by any Governmental Entity that prohibits or makes illegal the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements;

(b)                                 No Government Proceeding.  There shall not be any suit, action, investigation, inquiry or other proceeding instituted, pending or threatened by any Governmental Entity which seeks to enjoin or otherwise prevent consummation of the transactions contemplated by this Agreement or the Ancillary Agreements; provided that this condition may be relied upon by a Party only if such party has fulfilled its obligations under Section 5.3; and

(c)                                  Required Regulatory Approvals.  The Required Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired, and in the case of this condition solely insofar as it relates to the obligations of Buyer, there shall not be imposed or exist in connection herewith any Burdensome Condition.

Section 7.2                                                  Conditions to Obligations of Seller.  The obligations of Seller to consummate the transactions contemplated by this Agreement are subject to the fulfillment at or prior to the Closing of each of the following conditions (any or all of which, to the extent permitted by law, may be waived, in whole or in part, by Seller):

(a)                                  Representations and Warranties.  The representations and warranties of Buyer set forth in Article IV shall be true and correct, in all material respects, as of the date of this Agreement and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);

(b)                                 Performance.  Buyer shall have performed and complied, in all material respects, with all agreements, obligations, covenants and conditions required by this Agreement to be so performed or complied with by Buyer at or prior to the Closing;

(c)                                  Officer’s Certificate.  Buyer shall have delivered to Seller a certificate, dated as of the Closing Date, executed by an officer of Buyer certifying to the fulfillment of the conditions set forth in Section 7.2(a) and Section 7.2(b); and

(d)                                 Ancillary Agreements.  Seller shall have received copies, duly executed by Buyer, of each Ancillary Agreement to which Buyer is a party and such other

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documents, instruments and certificates as are required to be delivered prior to or on the Closing Date by Buyer pursuant to this Agreement or any Ancillary Agreement to which Buyer is a party.

Section 7.3                                                  Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the fulfillment at or prior to the Closing of each of the following conditions (any or all of which, to the extent permitted by law, may be waived, in whole or in part, by Buyer):

(a)                                  Representations and Warranties. The representations and warranties of Seller set forth in Article III shall be true and correct, in all material respects, as of the date of this Agreement and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);

(b)                                 Performance.  Seller shall have performed and complied, in all material respects, with all agreements, obligations, covenants and conditions required by this Agreement to be so performed or complied with by Seller at or prior to the Closing;

(c)                                  Officer’s Certificate.  Seller shall have delivered to Buyer a certificate, dated as of the Closing Date, executed by an officer of the Seller certifying to the fulfillment of the conditions set forth in Section 7.3(a) and Section 7.3(b);

(d)                                 Ancillary Agreements.  Buyer shall have received copies, duly executed by Seller, any Affiliate of the Seller and/or the Company, as applicable, of each Ancillary Agreement to which Seller, any Affiliate of the Seller and/or the Company is a party, and such other documents, instruments and certificates as are required to be delivered prior to or on the Closing Date by Seller, any Affiliate of the Seller and/or the Company, as applicable, pursuant to this Agreement or any Ancillary Agreement to which Seller, any Affiliate of the Seller and/or the Company is a party;

(e)                                  No Company Material Adverse Effect.  Since the date of this Agreement, no occurrence, state of facts, change, event, effect or circumstance has occurred or is continuing that has, or would be expected to have a Material Adverse Effect on the assets, liabilities, business, results of operations or financial condition of the Company;

(f)                                    No Burdensome Condition.  There shall not be in effect any Burdensome Condition with respect to any Required Regulatory Approval;

(g)                                 FIRPTA Certificate.  Seller shall have duly executed and delivered to Buyer, in form and substance reasonably satisfactory to Buyer, a certificate of non-foreign status as to the sale of the Shares pursuant to Section 1445(b)(2) of the Code;

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(h)                                 Company IP/IT Assets.  Subject to Section 5.12, Seller and its applicable Affiliates shall have obtained all Required IP/IT Consents and transferred ownership, assigned the lease, or assigned the license, as applicable, of all applicable Company IP/IT Assets to SICA (or its designee) in accordance with Section 2.2(a);

(i)                                     Director and Officer Resignations.  At or prior to the Closing, the director and officer resignations contemplated by Section 5.9, effective as of the Closing, shall be duly tendered to Buyer;

(j)                                     Investments.  Buyer shall have received a certificate dated the Closing Date and signed on behalf of Seller by the Chief Financial Officer of Seller setting forth the Investments owned by the Company as of the Closing Date and certifying that such Investments are the same Investments that Seller and Buyer have agreed upon pursuant to Section 5.18; and

(k)                                  Lease Assignment; Landlord Consent.  Seller shall have assigned the Lease to SICA and shall obtain the consent of the landlord under the Lease to the assignment of the Lease.  In connection with such assignment, SICA or its Affiliates (including Buyer) shall not be required to pay any amounts or accept any changes to the Lease increasing the tenant’s or any of its Affiliates’ obligations under the Lease.

ARTICLE VIII

CERTAIN TAX MATTERS

Section 8.1                                                  Liability for Indemnification.

(a)                                  Tax Indemnity by Seller.  Seller is responsible for and agrees to indemnify, defend and hold harmless Buyer and the Company from and against: (i) any Taxes imposed on or with respect to the Company with respect to any Pre-Closing Tax Period; (ii) with respect to Straddle Periods, any Taxes imposed on or with respect to the Company which are allocable, pursuant to Section 8.2, to the portion of such period ending on the Closing Date; (iii) any Taxes imposed on the Company by reason of being a member of any affiliated, consolidated, unitary, or combined group for a Tax period ending on or before the Closing Date (including Taxes imposed by reason of Treasury Regulations Section 1.1502-6 or any comparable provision of state, local or foreign law) or as a transferee or successor under any Tax allocation, sharing or assumption agreement or by operation of Law with respect to such period; (iv) any Taxes or Damages imposed on or incurred by Buyer or the Company arising out of or resulting from any inaccuracy in or breach of any representation or warranty under Section 3.18 (including, without limitation, any Taxes or Damages resulting from a reduction by any Tax Authority of the amount of the deferred tax assets set forth in Section 3.18(i)) or breach or non-performance of any covenant or agreement in Section 5.1(b)(viii) or this Article VIII; (v) Seller’s portion of any Transfer Taxes as determined under Section 8.11; and (vi) all excise taxes imposed under

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Section 4371 of the Code with respect to any Insurance Policy the risk for which was ceded by the Company prior to Closing, including all Taxes described in Internal Revenue Service Revenue Ruling 2008-15 and any excise taxes imposed on any reinsurance premium paid or deemed paid by the Company pursuant to any Ancillary Agreement (including any excise taxes imposed with respect to the Loss Development Reinsurance Contract and the Amendment to the Quota Share Treaty).

(b)                                 Tax Indemnity by Buyer.  Buyer is responsible for and agrees to indemnify, defend and hold harmless Seller from and against: (i) any Tax imposed on or with respect to the Company with respect to any Post-Closing Tax Period; (ii) with respect to Straddle Periods, any Tax imposed on or with respect to the Company which are allocable, pursuant to Section 8.2, to the portion of such period beginning after the Closing Date; (iii) any Taxes or Damages sustained or incurred by Seller arising out of or resulting from any breach or non-performance by Buyer of any covenant or agreement in this Article VIII; and (iv) Buyer’s portion of any Transfer Taxes as determined under Section 8.11.

Section 8.2                                                  Allocation of Taxes.  Buyer and Seller agree that if the Company is permitted but not required under Applicable Laws to treat the Closing Date as the last day of a Tax period, Buyer and Seller shall so treat the Closing Date.  Where such treatment is not permitted, in the case of Taxes that are payable with respect to a Tax period that begins before the Closing Date and ends after the Closing Date, the portion of any such Tax that is allocable to the portion of the period ending on the Closing Date shall:

(a)                                  in the case of Taxes that are either (i) based upon or related to income or receipts (including receipts of premiums) or (ii) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible), be deemed equal to the amount that would be payable if the taxable year ended on the Closing Date (except that (x) solely for purposes of determining the marginal Tax rate applicable to income or receipts during such period in a jurisdiction in which such Tax rate depends upon the amount or level of income or receipts, annualized income or receipts may be taken into account if appropriate for an equitable sharing of such Taxes and (y) exemptions, allowances and deductions that are otherwise calculated on an annual basis shall be apportioned on a daily basis); and

(b)                                 in the case of Taxes not described in Section 8.2(a) that are imposed on a periodic basis and measured by the amount, value or level of any item, be deemed to be the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction, the numerator of which is the number of calendar days in the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire period.

Section 8.3                                                  Preparation and Filing of Tax Returns.  Seller shall cause to be prepared and timely filed, taking into account all valid extensions of time to file, all Tax Returns of the Company (or Tax Returns in which the Company is required to be included) that are required to be filed for any Pre-Closing Tax Period.  All such Tax Returns shall be prepared in accordance with past practice and Seller shall provide copies of such Tax Returns to Buyer for

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Buyer’s review and reasonable comment twenty (20) days prior to the filing.  Seller shall pay or cause to be paid all Taxes shown to be due on Tax Returns that it is responsible for preparing and filing under this Agreement.  Buyer shall cause to be prepared and timely filed, taking into account all valid extensions of time to file, all Tax Returns of the Company (or Tax Returns in which the Company is required to be included, other than Tax Returns that include Seller or its Affiliates) that are required to be filed for any Straddle Period.  Seller shall, at their expense, cooperate with Buyer in the preparation of Straddle Period Tax Returns including, without limitation, the furnishing of Tax information for the pre-Closing portion of the Straddle Period.  Buyer shall pay to the appropriate Tax Authority the full amount of Taxes shown on any Straddle Period Tax Return, and Seller shall promptly reimburse Buyer for Seller’s share of such Taxes (or Buyer shall promptly pay Seller for Seller’s share of any refund or overpayment of such Taxes) as determined under this Section 8.3.  Such determination shall take into account any estimated tax payments made by Seller, any of Seller’s Affiliates or the Company prior to the Closing Date.

Section 8.4                                                  Contest Provisions.  Buyer shall promptly notify Seller in writing upon receipt by Buyer, any of Buyer’s Affiliates or the Company, of notice of any pending or threatened U.S. federal, state, local or foreign Tax audits or assessments which may affect the Tax liabilities of the Company for which Seller would be required to indemnify Buyer pursuant to Section 8.1(a), provided that failure to comply with this provision shall not affect Buyer’s right to indemnification hereunder except to the extent such failure directly results in an increase in the amount for which Seller are liable under Section 8.1(a).  Seller shall promptly notify Buyer in writing upon receipt by Seller or any of Seller’s Affiliates of notice of any pending or threatened U.S. federal, state, local or foreign Tax audits or assessments which may affect the Tax liabilities of the Company for which Buyer would be required to indemnify Seller pursuant to Section 8.1(b), provided that failure to comply with this provision shall not affect Seller’s right to indemnification hereunder except to the extent such failure directly results in an increase in the amount for which Buyer is liable under Section 8.1(b).  The Parties shall fully cooperate in providing Tax information reasonably required in connection with any audits or for other reasonable purposes.

Section 8.5                                                  Control of Contests Involving Pre-Closing Tax Periods.  Seller shall have the sole right to represent the Company’s interests in any Tax audit or administrative or court proceeding relating to Pre-Closing Tax Periods, and to employ counsel of its choice and at its expense.  Notwithstanding the foregoing, Seller shall not be entitled to settle after the Closing Date, either administratively or after the commencement of litigation, any claim for Taxes which would adversely affect in any material respect the liability for Taxes of Buyer or the Company for any years or periods ending after the Closing Date without the prior written consent of Buyer.  Such consent shall not be unreasonably withheld, and shall not be necessary to the extent that Seller has indemnified Buyer against the effects of any such settlement.

Section 8.6                                                  Control of Contests Involving Post-Closing Tax Periods.  Buyer shall have the sole right to represent the Company’s interests in any Tax audit or administrative or court proceeding for Post-Closing Tax Periods, and to employ counsel of its choice and at its expense.  Notwithstanding the foregoing, Buyer shall not be entitled to settle after the Closing Date, either administratively or after the commencement of litigation, any claim for Taxes which would adversely affect in any material respect the liability for Taxes of Seller or the Company

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for any period for which Seller must indemnify Buyer pursuant to Section 8.1(a) without the prior written consent of Seller.  Such consent shall not be unreasonably withheld, and shall not be necessary to the extent that Buyer has indemnified Seller against the effects of any such settlement.

Section 8.7                                                  Control of Contests Involving Straddle Periods.  Buyer shall have the sole right to represent the Company’s interests in any Tax audit or administrative or court proceeding relating to any Straddle Period, and to employ counsel of its choice and at its expense; provided, however, that if such audit or administrative or court proceeding would be reasonably likely to result in a material increase in Tax liability of the Company which may be subject to indemnification by Seller pursuant to Section 8.1(a), Seller shall be entitled to participate in the conduct of such audit or administrative or court proceeding at its expense.  Notwithstanding the foregoing, neither Buyer nor the Company may agree to settle any claim for the portion of the Straddle Period which may be the subject of indemnification by Seller under Section 8.1(a) without the prior written consent of Seller which consent shall not be unreasonably withheld.

Section 8.8                                                  Refunds.

(a)                                  Any Tax refund (including any interest in respect thereof) received by Buyer or the Company, and any amounts credited against Tax to which Buyer or the Company becomes entitled (including by way of any amended Tax Returns or any carryback filing), that relate to any taxable period, or portion thereof, for which Seller is liable pursuant to Section 8.1(a), shall be for the account of Seller, and Buyer shall pay over to Seller any such refund or the amount of any such credit within 10 days after receipt of such credit or entitlement thereto.  Buyer shall pay Seller interest at the rate prescribed under Section 6621(a)(1) of the Code, compounded daily, on any amount not paid when due under this Section 8.8.

(b)                                 Any Tax refund (including any interest in respect thereof) received by Seller, and any amounts credited against Tax to which Seller becomes entitled (including by way of any amended Tax Returns or any carryback filing), that relate to any taxable period, or portion thereof, for which Buyer is liable pursuant to Section 8.1(b), shall be for the account of Buyer and Seller shall pay over to Buyer any such refund or the amount of any such credit within 10 days after receipt of such credit or entitlement thereto.  Seller shall pay Buyer interest at the rate prescribed under Section 6621(a)(1) of the Code, compounded daily, on any amount not paid when due under this Section 8.8.

(c)                                  Each of the Parties shall cooperate, and cause each of its Affiliates to cooperate, in obtaining any Tax refund that the other party reasonably believes should be available, including through filing appropriate forms with the applicable Tax Authority.

Section 8.9                                                  Tax Elections.  Seller shall make a protective election pursuant to Treasury Regulation Section 1.1502-36(d)(6)(i)(A) to reduce the basis of shares of the Company in order to preclude the reduction of any attributes of the Company or its Subsidiaries pursuant to Treasury Regulation Section 1.1502-36.  In addition, Seller shall not be permitted to make an

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election pursuant to Treasury Regulation Section 1.1502-36(d)(6)(i)(B) to reattribute attributes of the Company.  Neither Buyer nor Seller shall make or file any election under Section 336(e) of the Code (or any similar provision of state, local or foreign law) in connection with the transactions contemplated by this Agreement.

Section 8.10                                            Survival of Obligations.  The obligations of the parties set forth in this Article VIII shall be unconditional and absolute and shall remain in effect for the period of the relevant statute of limitations applicable to the Taxes at issue.

Section 8.11                                            Transfer Taxes.  The Parties shall each economically bear 50% of any Transfer Taxes.  Buyer and Seller shall, and Buyer shall cause the Company to, cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any sales, use, transfer, value, stock transfer or stamp Taxes, or any transfer, recording, registration or other fees, or any similar Taxes or fees (collectively, “Transfer Taxes”) that in each case become payable in connection with the transactions contemplated by this Agreement.  Seller shall prepare and file, or cause to be prepared and filed, all Tax Returns with respect to Transfer Taxes and other documentation required with respect to such Tax Returns.  Buyer shall have the right to review and comment on such Tax Returns.  The cost and expense of preparing such Tax Returns and documentation shall be shared equally by Buyer and Seller.

Section 8.12                                            Tax Sharing Agreements.  Any and all existing Tax sharing agreements or arrangements, written or unwritten, between Seller (or any of Seller’s Affiliates) and the Company shall be terminated as of the Closing Date.

Section 8.13                                            Resolution of All Tax-Related Disputes.  With respect to any dispute or a disagreement relating to Taxes among the parties (“Tax Dispute”), the parties shall cooperate in good faith to resolve such Tax Dispute between them; but if for any reason the parties are unable to resolve such Tax Dispute within thirty (30) Business Days of receipt by a party of written notice of a Tax Dispute, the parties shall submit the Tax Dispute for resolution to an independent law firm or accounting firm, which firm shall select within ten (10) days an independent and impartial partner from such law firm or accounting firm to act as the “Neutral Tax Arbitrator” in respect of this Section 8.13.  The Neutral Tax Arbitrator shall be requested to promptly, and in any event within thirty (30) days after the submission of the Tax Dispute thereto, render its decision in writing. The award of the Neutral Tax Arbitrator, which shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq., shall be final and binding upon the parties hereto, shall be deemed a final arbitration award that is binding on each of the parties hereto, and no party shall seek further recourse to courts or other tribunals.  Buyer and Seller shall each be responsible for paying 50% of all fees and expenses relating to the work of the Neutral Tax Arbitrator.

Section 8.14                                            Exclusivity.  Notwithstanding anything in this Agreement to the contrary, except for Sections 10.1, 10.2(c)(iii), 10.2(c)(iv) and 10.7, which shall apply to Tax matters, the rights and obligations of the parties with respect to the indemnification for any and all Tax matters shall be solely governed by this Article VIII and shall not be subject to the provisions of Article X.

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ARTICLE IX

TERMINATION

Section 9.1                                                  Termination.  This Agreement may be terminated and the transactions contemplated hereby may be abandoned:

(a)                                  by mutual written agreement of the Parties at any time;

(b)                                 by Seller or Buyer, at any time after March 31, 2012, (the “Termination Date”), if the transactions contemplated by this Agreement shall not have been consummated on or prior to such date; provided that Seller may extend this date to a date not later than sixty (60) days after the Termination Date in the event the transactions contemplated by this Agreement have not been consummated because the conditions set forth in Section 7.1(c) have not been satisfied; and further provided that neither of the Parties shall be entitled to terminate this Agreement pursuant to this Section 9.1(b) if such party’s breach of this Agreement has prevented the consummation of the transactions contemplated by this Agreement;

(c)                                  by Seller or Buyer, at any time after (i) a Governmental Entity having jurisdiction over Buyer or Seller has notified the parties that it will not provide regulatory approval for the consummation of the transactions contemplated by this Agreement (provided that such party has complied with its obligations under Section 5.3) or (ii) any non-appealable final judgment, order, injunction or decree of any court of competent jurisdiction enjoining consummation of the transactions contemplated by this Agreement shall have been entered or issued;

(d)                                 by Seller, if there has been a material breach of any representation, warranty, agreement or covenant of Buyer, which breach shall have not been cured within thirty (30) days after written notice thereof from Seller, provided that such breach shall have rendered the conditions set forth in Section 7.2 incapable of fulfillment on or before the Termination Date (as extended pursuant to Section 9.1(b), if applicable); or

(e)                                  by Buyer, if there has been a material breach of any representation, warranty, agreement or covenant of Seller, which breach shall have not been cured within thirty (30) days after written notice thereof from Buyer, provided that such breach shall have rendered the conditions set forth in Section 7.3 incapable of fulfillment on or before the Termination Date (as extended pursuant to Section 9.1(b), if applicable).

Section 9.2                                                  Procedure and Effect of Termination.  In the event of the termination of this Agreement and the abandonment of the transactions contemplated hereby pursuant to Section 9.1(b), Section 9.1(c), Section 9.1(d) or Section 9.1(e) written notice thereof shall forthwith be given by the party so terminating to the other party and this Agreement shall terminate and the transactions contemplated hereby shall be abandoned, without further action by

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Seller or Buyer.  If this Agreement is terminated pursuant to Section 9.1:

(a)                                  each party shall redeliver all documents, work papers and other materials of the other party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the party furnishing the same, and all confidential information received by either party hereto with respect to the other party shall be treated in accordance with Section 5.2 and the Confidentiality Agreement;

(b)                                 all filings, applications and other submissions made pursuant to this Agreement shall, to the extent practicable, be withdrawn from the agency or other person to which made; and

(c)                                  there shall be no liability or obligation hereunder on the part of Seller or Buyer or any of their respective directors, officers, employees or Affiliates, except that Seller and Buyer only, as the case may be, may have liability to the other if the basis of termination is an intentional misrepresentation or breach or willful misconduct by Seller or Buyer, as the case may be, of one or more of the provisions of this Agreement, and except that the obligations provided for in Section 9.2(b) and Section 11.1, the confidentiality provision contained in Section 5.2 and the Confidentiality Agreement shall survive any such termination.

ARTICLE X

SURVIVAL; INDEMNIFICATION

Section 10.1                                            Survival of Representations, Warranties and Covenants.

(a)                                  All representations and warranties made by the Parties and the Buyer in this Agreement shall survive the Closing solely for purposes of this Article X (provided that the representations and warranties made by the Seller Parties in Section 3.18 shall survive the Closing solely for purposes of Article VIII) and solely for the period set forth herein.  All such representations and warranties of Seller and the Buyer in this Agreement shall survive for a period of eighteen (18) months after the Closing Date, after which time they shall terminate and be of no further force or effect and upon which no claim for indemnification may be made with respect to breaches thereof; provided that (i) the representations and warranties contained in Section 3.1, Section 3.2, Section 3.3, Section 3.4, Section 3.5(a) and Section 3.32 shall survive the Closing indefinitely or until the latest date permitted by Applicable Laws, (ii) the representations and warranties contained in Section 3.8, Section 3.10 and Section 3.11 shall survive for a period of thirty-six (36) months after the Closing Date, and (iii) the representations and warranties contained in Section 3.18 and Section 3.19 shall survive until ninety (90) days following the expiration of the applicable statute of limitations period or any extensions or waivers thereof.  Notwithstanding the foregoing, any representation or warranty contained in this Agreement in respect of which indemnity may be sought under this Article X shall survive the date at which it would otherwise terminate pursuant to this Section 10.1 if written notice of a

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claim for indemnification in respect of such representation or warranty contained in this Agreement in accordance with Section 10.3 or Section 10.4 shall have been duly given prior to such date, in which event such representation or warranty shall survive solely with respect to such claim until the final resolution thereof.  The period during which any such representation and warranty survives is the “Survival Period” for such representation and warranty.  Each covenant that is to be performed pursuant to this Agreement shall survive the Closing in accordance with its terms.

Section 10.2                                            Indemnification.

(a)                                  Indemnification for the Benefit of Buyer.  Subject to the limitations set forth in this Section 10.2, the Seller hereby agrees that it shall indemnify the Buyer and its Affiliates, successors and permitted assigns (the “Buyer Indemnified Party”), against, and shall defend and hold each of them harmless from and reimburse any Buyer Indemnified Party for, any and all damages, claims, losses, charges, actions, suits, proceedings, deficiencies, Taxes, interest, penalties, Liabilities, judgments, settlements and reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and reasonable expenses) (collectively, “Damages”) imposed on, sustained, incurred or suffered by such Buyer Indemnified Party, arising out of, relating to or in connection with:

(i)                                     any inaccuracy or breach of any representation or warranty of Seller set forth in this Agreement, except with respect to any inaccuracy or breach of any representation or warranty in Section 3.18;

(ii)                                  any failure by Seller to perform any covenant or agreement of Seller set forth in this Agreement, except with respect to any failure by Seller to perform any covenant or agreement in Article VIII;

(iii)                               any claim by any present or former director, employee or consultant of Seller or any of its Affiliates that arises under federal, state or local statute (including Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1990, the Equal Pay Act, the Americans with Disabilities Act of 1990, ERISA and all other statutes regulating the terms and conditions of employment), regulation or ordinance, under the common law or in equity (including any claims for wrongful discharge or otherwise), or under any employee benefit plan or program of Seller or any of its Affiliates, or under any policy, agreement, understanding or promise, written or oral, formal or informal, between Seller or any of its Affiliates and such present or former director, employee or consultant, that, in all cases, arose solely out of any action or omission by Seller or any of its Affiliates that occurred (or, in the case of omissions, failed to occur) on or prior to the Closing;

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(iv)                              any and all insurance and reinsurance claims, liabilities and obligations of the Company pertaining to the operations of the Company prior to the Closing that are not reinsured by Montpelier Re pursuant to the Amendment to the Quota Share Treaty or the Loss Development Reinsurance Contract, including all commissions, fees, unearned premiums and commission and/or premium adjustments;

(v)                                 any of the suits or other proceedings described in Section 3.17 of the Disclosure Schedule; and

(vi)                              any reasonable costs incurred in connection with the enforcement of their rights under this Section 10.2(a).

(b)                                 Indemnification for the Benefit of Seller.  Subject to the limitations set forth in this Section 10.2, the Buyer shall indemnify the Seller and its Affiliates, a,(the “Seller Indemnified Parties” and, together with the Buyer Indemnified Parties, the “Indemnified Parties”), against, and shall defend and hold each of them harmless from and reimburse any Seller Indemnified Party for, any and all Damages imposed on, sustained, incurred or suffered by such Seller Indemnified Party, arising out of, relating to or in connection with:

(i)                                     any inaccuracy or breach of any representation or warranty or agreement of the Buyer set forth in this Agreement;

(ii)                                  any failure by the Buyer to perform any covenant or agreement of the Buyer set forth in this Agreement; and

(iii)                               the enforcement of its rights under this Section 10.2(b).

(c)                                  Indemnification Matters.  Notwithstanding anything to the contrary set forth in this Article X:

(i)                                     No Buyer Indemnified Party shall be entitled to recover for any claim for indemnity in respect of Damages arising under Section 10.2(a)(i) (in the case of a Buyer Indemnified Party) or Section 10.2(b)(i) (in the case of a Seller Indemnified Party), unless and until the total aggregate amount of Damages with respect to all such claims arising under Section 10.2(a)(i) (in the case of a Buyer Indemnified Party) or Section 10.2(b)(i) (in the case of a Seller Indemnified Party) exceeds an amount equal to three percent (3%) of the Purchase Price, and, in such case, only to the extent of such excess; except with respect to

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any breach or inaccuracy of the representations and warranties contained in Section 3.1, Section 3.2, Section 3.3, Section 3.4, Section 3.5(a) and Section 3.32.

(ii)                                  The Buyer Indemnified Parties and the Seller Indemnified Parties shall not be entitled to recover from the Seller or the Buyer, respectively, Damages arising under Section 10.2(a)(i) (in the case of a Buyer Indemnified Party) or Section 10.2(b)(i) (in the case of a Seller Indemnified Party) in an amount greater than twenty five percent (25%) of the Purchase Price; except with respect to any breach or inaccuracy of the representations and warranties contained in Section 3.1, Section 3.2, Section 3.3, Section 3.4, Section 3.5(a),  Section 3.11.

(iii)                               The amount of any Damages for which indemnification is provided under Article VIII and this Article X shall be (i) computed net of any third party insurance proceeds actually received by the Indemnified Party, (ii) reduced by any Tax benefit recognized for GAAP purposes (without regard to any valuation allowance which the Company may deem necessary) and (iii) increased to take account of any and all Tax costs incurred by the Indemnified Party; in the case of an insurance recovery, net of the present value the initial increase in insurance premiums or other charges paid or reasonably expected to be realized by the Indemnified Party, resulting from such Damage and all out-of-pocket costs and expenses reasonably incurred by the Indemnified Party in recovering such proceeds from any third party. Each Indemnified Party agrees to use its reasonable efforts to obtain recovery in respect of any Damages from any third party insurance which is available in respect of such Damages. If an Indemnified Party receives such cash insurance proceeds in connection with Damages for which it has been indemnified hereunder, the Indemnified Party shall notify the Indemnifying Party (as defined below) and refund to the Indemnifying Party the amount of such insurance cash proceeds (after taking into account any deductibles, copayments or other cost sharing arrangements).  At the specific direction of Seller, Buyer agrees to use its commercially reasonable efforts to mitigate any Damages that are indemnifiable under this Article X and Buyer shall be reimbursed for any out-of-pocket expenses in connection with such mitigation efforts.

(iv)                              Notwithstanding anything in this Agreement to the contrary, for the purposes of Article VIII and this Article X, in the case of any representation, warranty, covenant or agreement of the Seller Parties that is limited or qualified by “material,” “materiality,” or by any similar term, qualification or limitation, the occurrence of a breach or inaccuracy of such representation, warranty, covenant or agreement, as the case may be, and the amount of Damages subject to indemnification hereunder shall be determined as if “material,” “materiality,” or any similar term, qualification or limitation were not included therein.

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(v)                                 The right of any Indemnified Party to indemnification and all other remedies based on any representation, warranty, covenant or agreement of the Seller contained in this Agreement shall not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or performance or compliance with, any such representation, warranty, covenant or agreement.

(vi)                              In the event that any Indemnifying Party:  (i) consolidates with or amalgamates, combines or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation, amalgamation, combination or merger; or (ii) sells, transfers, pledges or otherwise disposes of all or substantially all of its properties, assets (including portfolio investments) or capital stock of its subsidiaries (whether in one transaction or a series of related transactions) to one or more Persons, then, and in each such case, proper provision shall be made prior to the consummation of any such transaction so that each such Person shall assume by a written instrument entered into for the benefit of, and enforceable by, the Indemnified Parties the obligations of such Indemnifying Party set forth in this Article X.  No Indemnifying Party shall enter into or participate in any transaction designed to evade, or with the purpose of evading, its indemnification obligations under this Article X.

Section 10.3                                            Procedures for Third Party Claims.

(a)                                  The Indemnified Party seeking indemnification under Section 10.2 agrees to give prompt notice (in accordance with Section 11.2) upon becoming aware of the facts indicating that a claim for indemnification may be warranted to the party against whom indemnity is sought (the “Indemnifying Party”) of the assertion of any third party claim, or the commencement of any suit, action or proceeding in respect of which indemnity may be sought under Section 10.2 (the “Third Party Claims”).  Such notice referred to in the preceding sentence shall state the relevant facts and include reasonable, available support for the basis of the indemnification being sought and the amount of Damages subject to indemnification to the extent such information is readily available.  The failure by any Indemnified Party so to notify the Indemnifying Party shall not relieve any Indemnifying Party from any Liability which it may have to such Indemnified Party with respect to any claim made pursuant to this Section 10.3, except to the extent that such failure has an actual prejudicial effect on the defenses or other rights available to the Indemnifying Party with respect to such claim and except that the Indemnifying Party shall not be liable for any Liability incurred during the period in which the Indemnified Party failed to give such notice.  In the event of the assertion of any claim or the commencement of any suit, action or proceeding in respect of which indemnity would be sought by the Indemnified Party but for the fact that the notice of such claim, suit, action or proceeding was sent to the Indemnifying Party, the Indemnifying Party shall give prompt notice to the Indemnified Party of such claim, suit, action or proceeding.  The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time it receives a

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notice from the Indemnifying Party advising that the Indemnifying Party will be assuming the defense of such, and the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party has not assumed the defense thereof (other than during any period in which the Indemnified Party shall have not yet given a claim notice as provided above), which reasonable fees and expenses of counsel the Indemnifying Party shall reimburse the Indemnified Party promptly upon written request therefor.

(b)                                 Upon receipt of notice from the Indemnified Party pursuant to Section 10.3(a), the Indemnifying Party will have the right to, subject to the provisions of this Section 10.3, assume the defense and control of such Third Party Claims.  If the Indemnifying Party elects to assume the defense and investigation of such Third Party Claim, it shall, no later than fifteen (15) days following its receipt of the claim notice, notify the Indemnified Party in writing of its assumption of the defense and investigation of such Third Party Claim.  In the event the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall have the right but not the obligation to participate in the defense of such Third Party Claim with its own counsel and at its own expense (provided that the Indemnifying Party shall pay the reasonable attorneys’ fees of the Indemnified Party if (i) such fees shall have been authorized in writing by such Indemnifying Party in connection with the defense of such Third Party Claim, (ii) the Indemnified Party shall have reasonably concluded, after consultation with the Indemnified Party’s counsel, that there may be material defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, (iii) the Indemnified Party shall have reasonably concluded, after consultation with the Indemnified Party’s counsel, that there is an actual or potential conflict of interest that could make it inappropriate under applicable standards of professional conduct to have common counsel, or (iv) such Third Party Claim shall seek injunctive or equitable relief that if granted would reasonably be expected to interfere in any material respect with the conduct of the business of the Indemnified Party) and the Indemnifying Party will cooperate with the Indemnified Party.  If the Indemnifying Party elects to assume the defense of a Third Party Claim, the Indemnifying Party shall select counsel reasonably acceptable to the Indemnified Party and shall at all times diligently and promptly pursue the resolution of such Third Party Claim.  If the Indemnifying Party chooses to defend or prosecute a Third Party Claim, the Indemnified Party shall cooperate in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Whether or not the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the prior written approval of the Indemnifying Party (which approval shall not be unreasonably withheld), and no Indemnifying Party shall be obligated to indemnify the Indemnified Party hereunder for any settlement of such Third Party Claim entered into without such approval.

(c)                                  The Indemnifying Party shall be authorized to consent to a settlement of, or the entry of any judgment arising from, any Third Party Claim as to which the

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Indemnifying Party has assumed the defense in accordance with the terms of this Section 10.3, without the consent of any Indemnified Party, but only to the extent that such settlement or entry of judgment (i) provides solely for the payment of money solely by the Indemnifying Party, (ii) provides a complete written release of and for the benefit of any Indemnified Party potentially affected by such Third Party Claim from all matters that were asserted in connection with such claims, (iii) does not involve any injunctive relief or other equitable remedy against the Indemnified Party with respect to such Third Party Claim and (iv) which does not include a statement of admission of fault, culpability or failure to act by or on behalf of the Indemnified Party.  Except as provided in the foregoing sentence, settlement or consent to entry of judgment shall require the prior written approval of the Indemnified Party.  The Indemnified Party and the Indemnifying Party shall use reasonable best efforts to avoid production of confidential information (consistent with applicable Law), and to cause all communications among employees, counsel and others representing any party to a Third Party Claim to be made so as to preserve any applicable attorney-client or work-product privileges.

Section 10.4                                            Procedures for Direct Claims.  In the event any Indemnified Party shall have a claim for indemnity against any Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver prompt written notice of such claim to the Indemnifying Party.  Such notice referred to in the preceding sentence shall state the relevant facts and include therewith relevant documents and a statement in reasonable detail as to the basis for the indemnification sought and the amount of Damages subject to indemnification to the extent such information is readily available.  The failure by any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party with respect to any claim made pursuant to Section 10.2, it being understood that notices for claims in respect of a breach of a representation or warranty must be delivered prior to the expiration of the survival period for such representation or warranty.

Section 10.5                                            Exclusive Remedy.  The parties hereto expressly acknowledge and agree that except as otherwise expressly provided in this Agreement (a) the provisions of this Section 10.5 shall be the sole and exclusive remedy for Damages caused as a result of any inaccuracy or breach of any representation or warranty, or any breach, nonfulfillment or default in the performance of any covenant or agreement, contained in this Agreement, other than claims based on fraud, and (b) no Indemnifying Party shall be liable under this Agreement for consequential Damages (including loss of revenue, income or profits) or indirect, punitive or treble Damages in connection with any action, suit or proceeding brought by the Buyer against the Seller or by the Seller against the Buyer, or for any Damages based on either the reduced current or future profitability or earnings of the renewal rights or Damages based on a multiple of such profitability, earnings or other factor, or reduction therein except for any such consequential Damages, or indirect, punitive or treble Damages, actually paid to any unaffiliated third party pursuant to Section 10.3 (it being understood that all Damages will for purposes of this Section 10.5 be determined and calculated on a direct, dollar-for-dollar basis), or for other Damages not provided for in this Section 10.5.  Any liability for indemnification under this Agreement will be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement.  For the avoidance of doubt, nothing in this Section 10.5 shall affect any right to indemnification under the terms of any other agreement between Buyer and its Affiliates, on the one hand, and

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the Seller and its Affiliates, on the other hand.

Section 10.6                                            Effectiveness.  This Article X shall become effective immediately following the Closing.

Section 10.7                                            Tax Treatment of Indemnity Payments.  The Buyer and the Seller agree to treat any indemnity payment made pursuant to Article VIII or this Article X as an adjustment to the purchase price for U.S. federal, state, local and foreign income Tax purposes.

ARTICLE XI

MISCELLANEOUS

Section 11.1                                            Fees and Expenses.  Whether or not the transactions contemplated by this Agreement are consummated pursuant hereto, except as otherwise specifically provided herein, each of the Parties shall pay all fees and expenses incurred by, or on behalf of, such party in connection with, or in anticipation of, this Agreement and the consummation of the transactions contemplated hereby.  Seller shall pay all fees and expenses incurred by, or on behalf of, the Company in connection with, or in anticipation of, this Agreement and the consummation of the transactions contemplated hereby.

Section 11.2                                            Notices.  All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, by facsimile, by courier or mailed (certified or registered mail, postage prepaid, return receipt requested):

(a)                                  If to Seller or the Company, to:

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or to such other person or address as any party shall specify by notice in writing to the other party.  All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date on which so hand-delivered or telecopied, on the next Business Day following the date on which so delivered by courier, or on the third Business Day following the date on which so mailed, except for a notice of change of address, which shall be effective only upon receipt thereof.

Section 11.3                                            Entire Agreement.  This Agreement and each Ancillary Agreement, including all Schedules and Exhibits attached hereto or thereto, constitutes the entire contract between the parties and there are no understandings other than as expressed in this Agreement or any Ancillary Agreement.  All Schedules and Exhibits attached hereto and thereto are expressly incorporated into and made a part of this Agreement and each Ancillary Agreement as fully as though completely set forth herein or therein in full.  Capitalized terms used in the Schedules and Exhibits shall have the meanings assigned to them in this Agreement.  The Section references referred to in the Schedules are to sections of this Agreement, unless otherwise expressly indicated.

Section 11.4                                            Binding Effect; Assignment.  This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, directly or indirectly, by either Seller or Buyer without the prior written consent of the other party; provided, however, that Buyer may without consent of Seller assign its respective rights and interests but not its obligations hereunder to a wholly owned subsidiary of such party.

Section 11.5                                            Severability.  Any term or provision of this Agreement which is

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invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Section 11.6                                            No Third Party Beneficiaries.  Except with respect to Indemnified Parties pursuant to Article X, this Agreement is solely for the benefit of Seller and their respective successors and permitted assigns, with respect to the obligations of Buyer under this Agreement, and for the benefit of Buyer and its successors and permitted assigns, with respect to the obligations of Seller under this Agreement, and this Agreement shall not be deemed to confer upon or give to any other third party any remedy, claim, liability, reimbursement, cause of action or other right.

Section 11.7                                            Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which collectively shall constitute one and the same instrument.

Section 11.8                                            Article and Section Headings.  The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.

Section 11.9                                            Governing Law.  This Agreement and all claims and causes of action arising hereunder or relating hereto will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any conflict of law principles that would result in the application of the laws of any other jurisdiction.

Section 11.10                                      Consent to Jurisdiction.  Each party hereto agrees that, subject to Section 2.7, any action or proceeding (whether based on contract, tort or otherwise) between any of the parties seeking to enforce any provision of, or arising out of or relating to, this Agreement or the transactions contemplated hereby must be brought and determined exclusively in the United States District Court for the Southern District of New York or any New York state court in the borough of Manhattan. Each party (a) irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of such courts (and of the appropriate appellate courts therefrom) in any such action or proceeding, (b) agrees that it will not bring any such action or proceeding other than in the aforesaid courts and will not attempt to deny or defeat such jurisdiction by motion or other request for leave from any such court, and (c) irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such action or proceeding in any such court or that any such action or proceeding brought in any such court has been brought in an inconvenient forum.  Each party hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Without limiting the foregoing, each of the parties hereto irrevocably consents to service of process being made pursuant to the notice procedures set forth in Section 12.2, and agrees that, to the fullest extent permitted by law, service in such manner shall be effective service of process for any such action or proceeding.

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Section 11.11                                      Waiver of Jury Trial.  Each of the parties hereto irrevocable and unconditionally waives, to the fullest extent permitted by Applicable Law, any right such party may have to a trial by jury in respect of any action or proceeding (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the transactions contemplated hereby.  Each party hereto certifies that (a) no Representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not in the event of any action or proceeding, seek to enforce the foregoing waiver, (b) such party understands and with the advice of counsel has considered the implications of this waiver and (c) such party makes this waiver voluntarily.  Each party hereto acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 12.11.

Section 11.12                                      Specific Performance.  Each of the parties hereto acknowledges and agrees that irreparable damage would occur and that the parties would not have any adequate remedy at law in the event that any of the covenants or agreements contained in this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is therefore agreed that any party hereto shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled hereunder or otherwise.

Section 11.13                                      Amendment, Modification and Waiver. This Agreement may be amended, modified or supplemented at any time by written agreement of the Parties.  Any failure of Seller or Buyer to comply with any term or provision of this Agreement may be waived by the other party at any time only by an instrument in writing signed by such other party, but such waiver or failure to insist upon strict compliance with such term or provision shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure to comply.

[Signature Page Follows]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first above written.

[Signature Page to Stock Purchase Agreement]

ANNEX I

MONTPELIER US INSURANCE COMPANY (“MUSIC”)

Estimated Closing Net Worth Statement

June 30, 2011