Risk Sharing Term Sheet between Aequicap Property & Casualty Insurance Company and CastlePoint Management Inc.

Company:

Aequicap Property & Casualty Insurance Company (APC)

Program Manager:

Aequicap Program Administrators, Inc (APA)
3000 West Cypress Creek Road
Fort Lauderdale, Fl ###-###-####

Joseph A. Matteis, ARM - President

Term:

Effective July 1, 2007

Subject Business:

Workers Compensation (statutory limits)
Commercial Automobile Liability (trucking)

Authority:

Limited to the following states: FL

Management Company:

CastlePoint Management (CPM)
120 Broadway, 30th floor
New York, New York 10271

Estimated:

$50,000,000 maximum DWP for workers compensation

Annual Premium:

$50,000,000 maximum DWP for commercial automobile

Direct Written Premium (“DWP”):

Company’s Direct Written Premium related to Subject Business.

Applicable Reinsurance Treaties:

Must be approved by CastlePoint Management

BB & T:

For the purposes of this agreement, BB&T was calculated based upon an estimate of 6.5°% of DWP for workers compensation and 2% of DWP for commercial automobile liability, which shall be paid by Company.

Reinsurance Agreement

Type:

Quota Share Reinsurance

Reinsured:

Aequicap Property & Casualty Insurance Company

Reinsurer:

CastlePoint Insurance Company (CPIC)

Subject Premium:

DWP less the cost of any excess reinsurance

Limit:

$1,000,000

Cession:

100%

Workers Compensation Commission:

Calculation based upon DWP Income

Minimum

19.5% plus BB&T @ 63% Loss Ratio

Provisional

22.5% plus BB&T @ 60% Loss Ratio

Maximum

25.5% plus BB&T @ 57% Loss Ratio

Additionally, there will be a profit commission at a rate of .5 to 1 for loss ratios between 55% and 50%.

Commissions are subject to annual adjustments using CPM IBNR factors.

Unallocated Loss Adjustment Expense included in commission.

Commercial Automobile Commission:

Calculation based upon DWP Income

Minimum

21.5% plus BB&T @ 64% Loss Ratio

Provisional

24% plus BB&T @ 61.5% Loss Ratio

Maximum

29.5% plus BB&T @ 56% Loss Ratio

Commissions are subject to annual adjustments using CPM IBNR factors.

Unallocated Loss Adjustment Expense included in commission.

Collateral:

Company may require APC to provide LOC or New York Regulation 114 compliant Trust Account for difference between provisional and minimum commission at each calendar quarter end.

Loss Ratio:

Defined as Loss and Allocated Loss Adjustment Expense (unallocated loss adjustment expense included in commission)

Expense Constant:

Half of expense constant to be included as part of DWP

Loss Control Fee:

To be retained by APA (maximum fee of $150 per unit)

Warranty:

That there is reinsurance in place on APC’s behalf for a minimum of $19 million excess of $1 million for workers compensation

Retrocession:

CPIC and APC shall retrocede and AIC will accept a 20% pro rata share of this agreement

Third Party Administrator:

Aequicap Claims Services, Inc

By

/s/ James E. Roberts

Name:

James E. Roberts

Title:

President

Date:

6/22/2007

Accepted and agreed as of the date written below

Aequicap Property & Casualty Insurance Company

By

/s/ James E. Roberts

Name:

James E. Roberts

Title:

President

Date:

6/22/2007

CastlePoint Management Inc.

By

/s/ Gregory T. Doyle

Name:

Gregory T. Doyle

Title:

President

Date:

June 22, 2007