Common use of PREMIUMS AND ADDITIONAL CONSIDERATION Clause in Contracts

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 4.1 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM.PREMIUMS (aA) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, Contracts with respect to the Section A (Retrospective) Coverage PeriodPeriod under this Agreement, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of [December 31, 2001 2001] as filed with the Minnesota Department of Commerce Financial Services Authority and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] B hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (bB) As soon as reasonably practicable, but in no event later than 75 [75] days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, Contracts with respect to the Section A (Retrospective) Coverage PeriodPeriod under this Agreement, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.on

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 4.1 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- - PREMIUM. (aA) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, Contracts with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 3131st December, 2001 as filed with the Minnesota Department of Commerce Financial Services Authority and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] B hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (bB) As soon as reasonably practicable, but in no event later than 75 [90] days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, Contracts with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 3131st December, 2001 as filed with the Minnesota Department of Commerce Financial Services Authority and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay repay to the account of Retrocedant the difference (as an adjustment to the amount payable pursuant to Section 4.1(A) above) plus interest on such amount of at the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 4.2 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (aA) On the Effective Date, in respect of the Section B (Prospective) CoverageCoverage Period, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 3131st December, 2001 as filed with the Minnesota Department of Commerce Financial Services Authority and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission.. [NOTE: WOULD IT BE BETTER TO PUT THE LAST 3 1/2 LINES IN A SEPARATE CLAUSE, SINCE IT DOES NOT RELATE TO THE CALCULATION AS AT 30TH JUNE, 2002?] (bB) As soon as reasonably practicable, but in no event later than 75 [90] days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 3131st December, 2001 as filed with the Minnesota Department of Commerce Financial Services Authority and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay repay to the account of Retrocedant the difference (as an adjustment to the amount payable pursuant to Section 4.2(A) above) plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (cC) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before ______, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by Retrocedant or transferred held on trust for and paid by Retrocessionaire to or to the order of Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(cSection 4.2(C), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, Contracts with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] A hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's statutory annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations cancellations, and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at of the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance ContractsContracts as determined, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage PeriodPeriod under this Agreement, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's statutory annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, Contracts with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) CoverageCoverage Period, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage PeriodPeriod coverage period under this Agreement, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission, provided, however, that all premiums written arising in respect of a Loss Occurrence (as such term is defined in the Reinsurance Contract), including reinstatement premiums, loss share premiums and penalty premiums, shall be for the account of Retrocedant. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage PeriodPeriod under this Agreement, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's statutory annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission Commission, all as of the Effective Date (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission; provided, however, that any premiums payable that result from a Loss Occurrence (as defined in the Reinsurance Contract), including but not limited to Scheduled Premiums, Reinstatement Premiums, Loss Share Premiums and Penalty Premiums (all as defined in the Reinsurance Contract) will be ceded to the Reinsurer. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] A hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all the Reinsurance ContractsContract, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations cancellations, and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, relating to the Reinsurance ContractsContract, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Retrospective Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] A hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, , including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all the Reinsurance ContractsContract, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Vermont Department of Commerce Insurance and as submitted to The St. Xxxx, relating to the Reinsurance ContractsContract, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] B hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce Insurance and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] A hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Retrospective Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce Insurance and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUMPremium") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves reserves, relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce Insurance and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all the Reinsurance ContractsContract, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce Insurance and as submitted to The St. Xxxx, relating to the Reinsurance ContractsContract, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at of the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] B hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance ContractsContract, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all the Reinsurance ContractsContract, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts Contract for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance ContractsContract, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] B hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of the Applicable Rate from and including the Effective Date to and including the date of such payment. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) Coverage, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PERIOD-- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] C hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 [75] days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at a rate of the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) In the event that a reinsurance contract is not included in one of the classes set forth in Exhibit A-1, but is deemed to be a Reinsurance Contract by the mutual agreement of the parties, the parties shall determine whether the Final Section A Premium reflected one hundred percent of the associated reserves with respect to such Reinsurance Contract as of the Effective Date. If the Final Section A Premium did not so reflect such associated reserves with respect to such Reinsurance Contract as of the Effective Date, Retrocedant shall promptly pay to the account of Retrocessionaire an amount equal to the amount that should have been included in the Final Section A Premium, as determined pursuant to paragraph (b) of this Section 4.01, less any amounts paid by Retrocedant on or after the Effective Date pursuant to such Reinsurance Contract relating to such reserves, plus interest on such amount at the Applicable Rate calculated from and including the Effective Date to and including the date of such payment to Retrocessionaire. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Effecitve Date, in respect of the Section B (Prospective) CoverageCoverage Period, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 2002, of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage PeriodContracts, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 [75] days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTINGAccounting") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage PeriodContracts, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall 4 promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount the estimate of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to RetrocedantRetrocessionaire.

PREMIUMS AND ADDITIONAL CONSIDERATION. SECTION 4.01 SECTION A (RETROSPECTIVE) COVERAGE PERIOD -- PREMIUM. (a) On the Effective Date, in respect of the Section A (Retrospective) Coverage Period, Retrocedant shall pay to the account of Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal to one hundred percent (100%) of the carrying value on the books of the Retrocedant as of June 30, 2002, of the aggregate of all loss and loss adjustment expense and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, and subject to the adjustments as set forth on Exhibit [B] C hereto (the "LOSS RESERVE ADJUSTMENTS"), as applicable. (b) As soon as reasonably practicable, but in no event later than 75 [75] days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting, including the calculation of all Loss Reserve Adjustments as provided for herein (the "PROPOSED LOSS RESERVE ACCOUNTING") of all loss and loss adjustment expense reserves and ceding commission reserves relating to the Reinsurance Contracts, with respect to the Section A (Retrospective) Coverage Period, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, adjusted to reflect the Loss Reserve Adjustments, as applicable (the "FINAL SECTION A PREMIUM"). In the event the Final Section A Premium is greater than the Initial Section A Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate (as defined below) from and including the Effective Date to and including the date of such payment. In the event the Initial Section A Premium is greater than the Final Section A Premium, Retrocessionaire shall promptly pay to the account of Retrocedant the difference plus interest on such amount of at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) In the event that a reinsurance contract is not included in one of the classes set forth in Exhibit A-1, but is deemed to be a Reinsurance Contract by the mutual agreement of the parties, the parties shall determine whether the Final Section A Premium reflected one hundred percent of the associated reserves with respect to such Reinsurance Contract as of the Effective Date. If the Final Section A Premium did not so reflect such associated reserves with respect to such Reinsurance Contract as of the Effective Date, Retrocedant shall promptly pay to the account of Retrocessionaire an amount equal to the amount that should have been included in the Final Section A Premium, as determined pursuant to paragraph (b) of this Section 4.01, less any amounts paid by Retrocedant on or after the Effective Date pursuant to such Reinsurance Contract relating to such reserves, plus interest on such amount at the Applicable Rate calculated from and including the Effective Date to and including the date of such payment to Retrocessionaire. SECTION 4.02 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS. (a) On the Effective Date, in respect of the Section B (Prospective) CoverageCoverage Period, Retrocedant shall transfer to Retrocessionaire an amount (the "INITIAL SECTION B PREMIUM") equal to the carrying value on the books of Retrocedant as of June 30, 2002 2002, of one hundred percent (100%) of the unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage PeriodContracts, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, less the applicable Ceding Commission, as defined below, and with respect to all Reinsurance Contracts, one hundred percent (100%) of all gross premiums written on or after the Effective Time, net of premium returns, allowances and cancellations and less any applicable Ceding Commission. (b) As soon as reasonably practicable, but in no event later than 75 [75] days following the Effective Date, Retrocedant shall prepare and deliver to Retrocessionaire an accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together with the Proposed Loss Reserve Accounting, the "PROPOSED ACCOUNTING") of all unearned premium reserves relating to the Reinsurance Contracts for the Section B (Prospective) Coverage PeriodContracts, as of the Effective Date, determined in accordance with statutory accounting principles on a basis consistent in all material respects with the methods, principles, practices and policies employed in the preparation and presentation of Retrocedant's annual statutory financial statement as of December 31, 2001 as filed with the Minnesota Department of Commerce and as submitted to The St. Xxxx, relating to the Reinsurance Contracts, net of the applicable Ceding Commission (the "FINAL SECTION B PREMIUM"). In the event the Final Section B Premium is greater than the Initial Section B Premium, Retrocedant shall promptly pay to the account of Retrocessionaire the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. In the event the Initial Section B Premium is greater than the Final Section B Premium, Retrocessionaire shall 4 promptly pay to the account of Retrocedant the difference plus interest on such amount at the Applicable Rate from and including the Effective Date to and including the date of such payment. (c) Notwithstanding the foregoing, the parties agree that all gross estimated premiums written prior to the Effective Date and earned but not yet billed ("EBUB", and also referred to as "estimated premiums receivable" or "EBNR") as of the Effective Time and relating to the Reinsurance Contracts, as determined on or before _____, 2002, in accordance with Retrocedant's customary practices and procedures and as submitted to The St. Xxxx, shall be allocated to Retrocedant. All payments received after the Effective Time by Retrocedant or Retrocessionaire in respect of EBUB as of the Effective Time shall be retained by or transferred to Retrocedant, and all rights to collect such amounts shall be retained by or transferred to Retrocedant. Any changes made on or after the Effective Time as to the amount of EBUB as of the Effective Time shall be for the account of Retrocessionaire and shall not affect the amount retained by Retrocedant. The parties agree that as of the first anniversary of the date hereof, Retrocessionaire shall pay to Retrocedant the difference, if any, between the amount of EBUB as of the Effective Time and the aggregate amount paid to and/or retained by Retrocedant prior to that date with respect to EBUB as of the Effective Time. All amounts, if any, in respect of EBUB which are in excess of EBUB as of the Effective Time, calculated pursuant to the first sentence of this section 4.02(c), shall be for the account of Retrocessionaire and no such amounts shall be retained by or payable to Retrocedant.