Takaful Tire

Subscribers-AIF Agreement-TIRE

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I, state the following:

That I am a member of the household.

That my address is:

That my household intends to subscribe to Takaful Insurance Reciprocal Exchange also known as TIRE.

I understand that my subscription of TIRE, a reciprocal inter-insurance exchange, to be formed in the State of Minnesota is only for such subscription membership.

I understand that TIRE is not selling me any type of insurance policy including personal auto coverage at this time.

I understand my subscription is only for subscription purposes and TIRE and/or its affiliates or 3rd party contractors will not issue auto coverage policy based on my subscription.

I understand that TIRE is required by Minn. Stat. 71A.02, subd. 2(6) which provides, in part, (. . . that applications have been made for indemnity upon at least 100 separate risks aggregating not less than $1,500,000, as represented by executed contracts or bona fide applications, to become concurrently effective, . . .") AND that my subscription is only to meet this statutory requirement.

I understand that, by completing the following questions, I am a bona fide applicant subscribing to TIRE’s Reciprocal Exchange.

That by completing this form, I agree to become a bona fide applicant subscribing to a reciprocal inter-insurance exchange to be provided by TIRE.

That as a bona fide applicant, my total subscription for the reciprocal inter-insurance exchange is: $300

That the above statements and answers are true and correct to the best of my knowledge.

That I consent to the use of the information I provided here by TIRE and/or 3rd party(ies) for the sole purpose of the TIRE’s subscription requirements in the State of Minnesota.

That by submitting this form, I agree to all of the above terms and conditions.

Agree Disagree

SUBSCRIBERS AGREEMENT
AND
POWER OF ATTORNEY OF
TAKAFUL INSURANCE RECIROCAL EXCHANGE

This Agreement is made as of by and between those entities that have signed Subscription Agreements to Takaful Insurance Reciprocal Exchange ("TIRE"), a Minnesota domestic reciprocal insurer (the "Reciprocal") in the form of Attachment 1 hereto (hereinafter collectively the "Subscribers" and each individually may also sometimes be referred to as a "Subscriber") and TIRE Management LLC, as the attorney-in-fact (the "AIF" or "Attorney").

RECITALS

WHEREAS, the Subscribers wish to subscribe to this Agreement for the reciprocal exchange of insurance contracts, as a means to provide adequate and cost-effective insurance coverages pursuant to Takaful principles driven by faith, morals, and ethical insurance values in the provision of Islamic insurance products consistent with Sharia law which must be adhered to at all times and subject to applicable state and/or federal law; and

WHEREAS, the Subscribers wish to appoint an attorney-in-fact common to each of them to effectuate such exchange of insurance contracts by the Subscribers; and

WHEREAS, the Subscribers and AIF shall comprise the Reciprocal which shall operate pursuant to the Certificate of Authority.

NOW, THEREFORE, in consideration of the mutual agreements made herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Section 1. DEFINITIONS AND RULES OF CONSTRUCTION

1.1 Definitions

Active Subscriber means a Subscriber that has active subscription with TIRE which has not been terminated for any reason and/or or in accordance with the terms of this Agreement.
Affiliate: means a person in the same corporate system as a Subscriber by virtue of common ownership, control, operation or management, who is not a Subscriber and has been issued a Policy.
AIF Agreement: means the AIF Agreement between the Reciprocal and the AIF, which establishes AIF as the attorney-in-fact for the Reciprocal, and is incorporated herein by reference.
Attorney or AIF means an officer designated as the attorney, agent, representative, of TIRE Management LLC or TIRE Management LLC , a corporation having an office in Minnesota for the purpose of acting as the attorney-in-fact for the Reciprocal pursuant to the AIF Agreement and for the Subscribers pursuant to this Power of Attorney.
Bylaws means the bylaws of the Reciprocal adopted by the Subscribers Advisory Committee to govern the business and affairs of the Reciprocal, and all duly adopted amendments thereto.
Issuing Company means an insurance company that issues policies of insurance to a Subscriber or one or more of its Affiliates that are reinsured by or through the Reciprocal.
Person means an individual, partnership, corporation and other organizations and associations of individuals.
Policy means a policy of insurance issued by the Reciprocal or by an Issuing Company to a Subscriber or one or more of its Affiliates.
Reciprocal means the reciprocal insurer formed by this Agreement that is to be known as Takaful Insurance Reciprocal Exchange ("TIRE").
Subscriber means a person who has applied to and been accepted by the Reciprocal and has (i) executed this Subscribers Agreement and Power of Attorney by virtue of executing and delivering a Subscription Agreement substantially in the form of Attachment 1 for the purpose of adding it as a Subscriber; and (ii) paid the Attorney the full amount of premium for a term of at least six (6) months, and made a capital contribution to the Subscribers Contributed Capital Account.
Subscribers Advisory Committee means the committee established pursuant to this Agreement to oversee the activities of the Attorney, and generally direct the management and affairs of the Reciprocal. The Subscribers Advisory Committee shall have such powers and duties as shall be set forth in this Agreement.
Subscriber Contributed Capital Account means that account representing the capital contribution of the Subscriber. Said accounts shall be bookkeeping entries only and the Subscriber Contributed Capital Account funds shall be commingled with other funds held by the Reciprocal.
Subscription Agreement means an agreement having the effect of and making a person a party to this Agreement and means specifically Attachment 1 to this Agreement.
Year (which term may not be capitalized in this Agreement) means the calendar year unless otherwise designated in this Agreement by the Subscribers Advisory Committee.

1.2 Rules of Construction

Number: Except where the context requires otherwise, words importing the singular shall also include the plural and vice-versa.
Gender: References herein to any gender and the neuter shall also include any other gender and the neuter.
May or Shall: The word “may” will be construed as permissive and the word “shall” will be construed as imperative.
References to titles and sections of the District of Columbia Code (2001 Edition) refer to such titles and sections as amended, supplemented and replaced from time to time.

Section 2. PURPOSES

The Reciprocal is organized for the following purposes:

to provide Takaful is an Arabic word meaning “guaranteeing each other” and is driven by faith, morals, and ethical insurance values. Takaful provides access to others in the exchange and is a system that is based on mutual collaboration and sharing responsibility, with the aim of helping each other to bear the burden of risk. Takaful is approved under Islamic jurisprudence or Sharia guidelines. It represents the concept of insurance based on mutual co- operation and solidarity of people by participating in a takaful scheme.
the reciprocal exchange of contracts of insurance, reinsurance and indemnity among the Subscribers of the Reciprocal established pursuant to Minnesota Statutes Chapter 71A, as a means to provide adequate and cost-effective insurance coverages pursuant to Takaful principles driven by faith, morals, and ethical insurance values in the provision of Islamic insurance products consistent with Sharia law and subject to applicable state and federal law;
Conducting all activities necessary or incidental to the foregoing; and
Engaging in any other lawful business or activity.

Section 3. ATTORNEY-IN-FACT; POWER OF ATTORNEY

3.1 Appointment. The Subscribers, including any Subscribers who may be added to this Agreement by amendment, hereby appoint AIF as their attorney-in fact, or its then serving successor in office, to carry out the purposes and objectives set forth in this Agreement, to sign and effectuate the exchange of contracts of insurance, in the name of the Reciprocal, on its behalf and on behalf of each Subscriber hereto, and to perform such other duties and powers as are granted the Attorney herein. 3.2 Office. The AIF shall at all times maintain an office within the State of Minnesota, which office shall serve as the principal office of the Reciprocal. 3.3 Removal and Resignation. At any time, with or without cause, the Subscribers of the Reciprocal, upon the affirmative vote of a majority of votes entitled to be cast by the Subscribers, or the Subscribers Advisory Committee, upon a majority vote of all members thereof (including vacant positions), may suspend the Attorney or remove it from office and terminate its powers hereunder. The Attorney may resign as Attorney hereunder by giving written notice to. the Subscribers Advisory Committee at least sixty (60) days prior to the effective date of its resignation. 3.4 Substitute Attorney. In the event of the dissolution, insolvency, resignation, suspension, removal or withdrawal of said corporation as Attorney hereunder, the Subscribers Advisory Committee shall succeed to all of the powers and duties of the Attorney and, as soon thereafter as practicable, shall appoint a successor Attorney. 3.5 Powers and Duties. The Attorney shall manage the Reciprocal as provided in the AIF Agreement, subject to the supervision and direction. of, and such limitations as may be imposed by, the Subscribers Advisory Committee and to any powers specifically reserved in the Subscribers hereunder, and shall act for and bind the Subscribers of the Reciprocal in all transactions relating to, or arising out of, the operations of the Reciprocal.

Without limiting the generality of the foregoing, the Attorney shall have the following rights, powers and duties, which shall be exercised in accordance with, and subject to, all policies established from time to time by the Subscribers Advisory Committee and any rights specifically reserved in the Subscribers hereunder:

to sign contracts of insurance, reinsurance and indemnity that it is empowered to issue in the name of the Reciprocal insuring persons eligible as Subscribers (and their Affiliates), and to cancel or non-renew all or any part of such contracts in accordance with their terms, enforcing any underwriting criteria as may be established by the Subscribers Advisory Committee or an appropriate committee or subcommittee established by the Subscribers Advisory Committee;
to sign other relevant documents and contracts, specifically including Subscription Agreements accepting additional Subscribers in the Reciprocal, in the name of the Reciprocal or in its own name acting for all of the Subscribers of the Reciprocal;
to secure reinsurance for the risks insured by the Reciprocal;
to receive and give all notices, receive proofs of loss, recover amounts due under all insurance or reinsurance agreements and to enforce payment by suit, in its own name or otherwise, of any premium or other payment due the Reciprocal;
to receive and give receipts for money due and payable to the Reciprocal and to authorize or endorse all oral or written orders for payment on, and otherwise act with respect to, the Reciprocal’s accounts at banks or other depositories as shall be selected by the Subscribers or the Subscribers Advisory Committee;
to take necessary actions and execute and delivery necessary documents and papers on behalf of the Reciprocal for the purpose of borrowing money and obtaining credit on behalf of the Reciprocal, and to render at stated periods, as determined by the Subscribers Advisory Committee, written accounts of the Reciprocal’s finances and investments;
to invest and reinvest the monies and assets of the Reciprocal under Islamic sharia principles as may from time to time be required or desirable in accordance with policies and directives established by the Subscribers, the Subscribers Advisory Committee or a committee or subcommittee thereof;
to maintain necessary surplus or reserve funds but not less than legal requirements;
to accept service of process on behalf of the Reciprocal at the Attorney’s office in Minnesota, and in this capacity to serve as registered agent and maintain the registered office of the Reciprocal in Minnesota;
to comply with all applicable bond or other requirements imposed upon the Attorney by Minnesota law or as may be prescribed by the Subscribers or the Subscribers Advisory Committee;
to keep one or more separate accounts in the name of the Reciprocal for all financial and investment transactions of the Reciprocal, at depository institutions or investment institutions designated by the Subscribers Advisory Committee;
to deduct for itself from the funds of the Reciprocal an annual management fee not exceeding such amount as may be approved by the Subscribers Advisory Committee;
to deduct from advance premiums and deposits the full amount thereof if designated as fully non-refundable or, in all other cases, not more than such amount as is customary in the insurance industry for the type of coverage and circumstances;
to pay general and administrative expenses when and as due;
to delegate in writing any or all of the powers and duties hereby conferred upon it, at any time, from time to time, to one or more persons designated by it. The powers of any delegatee shall be subject to revocation by the Subscribers Advisory Committee or by the Attorney at any time upon written notice to the delegatee (and to the Attorney in the event of a revocation by the Subscribers Advisory Committee); and
in general, to do and to perform for the Subscribers and the Reciprocal all acts and duties, and to execute and deliver any and all papers and documents in furtherance of its powers and duties hereunder.

Section 4. SUBSCRIBER QUALIFICATIONS

Subscribers shall meet such qualifications, including underwriting criteria, as may be established by the Subscribers Advisory Committee from time to time. And that a Subscriber need not be a policyholder, but a policyholder shall be a Subscriber.
Subscriber shall become qualified and active Subscriber upon payment of a subscription fees in the amount of $300.00.

Section 5. SUBSCRIBER UNDERTAKINGS

5.1 Underwriting.Each Subscriber recognizes and agrees:

that neither its subscription herein by execution and delivery of the Subscription Agreement nor its status as a Subscriber entitles it to have its or its Affiliates’ risks underwritten by or through the Reciprocal or an Issuing Company nor as a policyholder; and
that the Reciprocal and an Issuing Company only underwrite risks where they have determined that an insured meets the Reciprocal’s and the Issuing Company’s underwriting criteria, and such other criteria as may be established and amended by the Reciprocal from time to time.

5.2 Compliance With Agreements; Conflicting Terms. Each Subscriber hereby agrees to comply with the provisions of this Agreement, the Bylaws of the Reciprocal, and all duly adopted policies and procedures of the Subscribers and the Subscribers Advisory Committee. In the event of a conflict between the provisions of this Agreement and any of the aforesaid other agreements or documents, the terms of this Agreement shall be controlling.

Section 6. SUBSCRIBERS MEETINGS

6.1 Meetings. The Subscribers shall meet annually to appoint the members of the Subscribers Advisory Committee and conduct other lawful business. The meeting shall be called and held (and notice thereof shall be given) in accordance with the Bylaws. The failure of the Subscribers to hold an annual meeting at a time stated or fixed in the Bylaws does not affect the validity of any vote or action taken by the Reciprocal or the Subscribers Advisory Committee and shall not result in the forfeiture or termination of the Reciprocal. 6.2 Voting. Each Subscriber shall entitled to one vote and may vote in person or by proxy on all matters coming before the Subscribers. The appointment of the members of the Subscribers Advisory Committee shall be determined in accordance with 7.2 of this Agreement.

Section 7. SUBSCRIBERS ADVISORY COMMITTEE

7.1 Creation and General Powers. There shall be a Subscribers Advisory Committee. Except as may be limited by this Agreement, the Subscribers Advisory Committee shall generally direct the management and business and affairs of the Reciprocal and shall, in addition to the duties and powers set forth herein, have such other powers and duties conferred upon it by the laws of the State of Minnesota, and as are necessary or desirable to establish policy and grant operational authority for the Reciprocal and all powers incidental thereto. 7.2 7.2 Number, Qualifications, and Manner of Appointment.Members of the Subscribers Advisory Committee shall be appointed in accordance with the provisions of this paragraph; and shall be removed in accordance with the Bylaws. The Subscribers Advisory Committee shall consist of at least three (3) members, at least two-thirds of which shall be Subscribers (or duly authorized representatives of a Subscriber who is not an individual) other than the Attorney or any person employed by, representing, or having a financial interest in the Attorney. Unless and until otherwise agreed by a vote of the Subscribers:

The Subscribers Advisory Committee shall consist of a number of members equal to at least one more than the number of Subscribers on the Committee.
Each Subscriber shall be entitled to nominate one member of the Subscribers Advisory Committee and the Attorney shall be entitled to nominate two members of the Subscribers Advisory Committee.
The Subscribers hereto agree to cast their votes to elect to the Subscribers Advisory Committee the persons nominated pursuant to the procedure described in § 7.2(b) above.

7.3 Quorum. At least one-third of the number of members of the Subscribers Advisory Committee shall be necessary to constitute a quorum for the transaction of business at any meeting of the Subscribers Advisory Committee. The meeting need not necessarily be in person.

Section 8. POWERS AND DUTIES OF THE SUBSCRIBERS ADVISORY COMMITTEE

8.1 Powers.The Subscribers Advisory Committee shall have the power and discretion to do any of the following; provided, however, that the existence of such power and discretion in the Subscribers Advisory Committee does not implicitly or explicitly limit the authority of the Attorney to act within the authority granted to it under this Agreement or the AIF Agreement:

provide general policy direction for the Reciprocal, including without limitation, the establishment of underwriting and investment policies of the Reciprocal, as well as policies regarding the administration of claims, and the establishment of general policies concerning the day-to-day management of the Reciprocal’ s affairs;
review the operations of the Reciprocal and oversee and evaluate the work and performance of the Attorney;
establish other committees or subcommittees of Subscribers or non-Subscribers, or both, for such purpose(s) as it may designate, which committees or subcommittees shall only have the power and authority as may be delegated by the Subscribers Advisory Committee, and specifically to establish an Executive Committee to which may be delegated the full power and authority of the Subscribers Advisory Committee to the extent allowed by law;
enter into agreements on behalf of the Reciprocal with the Attorney, including agreements concerning the amount of fees to be paid to the Attorney, for its services hereunder;
review the procedures of the Attorney for the safeguarding of money and other assets and advise the Attorney with respect to the investment of assets;
in the event of the failure of the Subscribers to do so, the Subscribers Advisory Committee may, in accordance with the Bylaws of the Reciprocal fill, for the unexpired term, any vacancy that may occur in the. Subscribers Advisory Committee, other than a vacancy resulting from the removal of a member by the Subscribers, which vacancy shall only be filled by the Subscribers;
adopt Bylaws, not inconsistent herewith, as it shall deem appropriate, establishing rules and procedures for calling and holding its meetings and for generally carrying out the business of the Reciprocal. The Bylaws shall provide that, in the event of any inconsistency between its provisions and the provisions of this Agreement, the terms of this Agreement shall control;
elect officers of the Reciprocal in accordance with procedures set forth in the Bylaws and delegate to such officers, duties, and signature authority on behalf of the Reciprocal, as appropriate. The duties of the various officers shall be outlined in, or in accordance with, the Bylaws;
contract, subcontract, or otherwise enter into contracts or agreements, for the purpose of securing and obtaining such services, consultation, and advice, as it may deem necessary or desirable in fulfilling its obligations under this Agreement;
establish and modify such rules and procedures as may be necessary or desirable for the conduct of the business of the Reciprocal, specifically including rules and procedures intended to govern situations and circumstances that are not expressly governed by the terms of this Agreement or that may not have been contemplated at the time of implementation of this Agreement; and
in general, perform for the Subscribers and the Reciprocal all acts and duties, and execute and deliver any and all papers and documents in furtherance of its powers and duties hereunder, and in furtherance of the business and operations of the Reciprocal.

8.2 Duties. The Subscribers Advisory Committee shall have the duty, subject to the specific terms of this Agreement, to:

supervise the finances of the Reciprocal;
supervise the Reciprocal’s operations to such extent as to assure conformity with this Agreement, the Reciprocal’s purpose under § 2(a), and Power of Attorney;
procure the audit of the accounts and records of the Reciprocal and of the Attorney, at the expense of the Reciprocal; and
so long as it shall be required pursuant to Minnesota law, hold at least one meeting annually within the State of Minnesota.

Section 9. SUBSCRIBER CONTRIBUTED CAPITAL ACCOUNTS

Upon withdrawal or other termination of Subscriber, any amounts owned by Subscriber allocated to Subscriber Contributed Capital Account shall be returned to the Subscriber less any amount owed by Subscriber to the Reciprocal approval of the Subscriber Advisory Committee.

Section 10. NON-ASSESSBLE CONTRACTS

The Reciprocal shall exchange insurance contracts on a non-assessable basis only. Subscriber shall have no financial obligation to the Reciprocal, other Subscribers, or its creditors, beyond the amounts charged to Subscriber for insurance premiums and/or Subscriber required capital contributions.

Section 11. TERMINATION

11.1 Termination of Active Subscribers. A Subscriber’s status as an Active Subscriber hereunder shall terminate. upon the occurrence of any one or more of the following:

the Subscriber shall fail to meet the Subscriber Qualifications set forth in Section 4 of this Agreement;
the Subscriber or one or more of its Affiliates shall be delinquent on premium obligations for a period of thirty (30) days or more;
the Subscriber shall fail to make subscription fees;
the Subscriber or one or more of its Affiliates shall breach any other obligation or promise under any Policy, or the terms of this Agreement, and fails to cure such breach within thirty (30) days of receiving written notice thereof;
the Subscriber (not including its Affiliates, if any) in the case of an individual Subscriber, dies;
the Subscriber (not including its Affiliates, if any), by merger, sale of assets or otherwise becomes owned or controlled (controlled meaning greater than 50% of the total voting power including the power to appoint members of the board of directors of such Subscriber) by another person who is not an Affiliate of the Subscriber prior to the date of the transaction in question, unless such other person would be eligible to become a Subscriber, in which case the Subscribers Advisory Committee may, but shall not be obligated to, make such arrangements as are determined by the Subscribers Advisory Committee to be fair and reasonable under the circumstances to admit the new Subscriber as a participant hereunder. Any new Subscriber shall be required to execute a Subscription Agreement and agree to be bound by the terms of this Agreement and shall assume in writing in a form acceptable to the Subscribers Advisory Committee all obligations of the predecessor Subscriber; or
the Subscribers Advisory Committee determines that the continuation of the Subscriber as such would otherwise be detrimental to the business and operations of the Reciprocal.

The Subscribers Advisory Committee may waive, temporarily or otherwise, the termination of Active Subscriber status hereunder, provided such Subscriber agrees to the waiver, and the Subscribers Advisory Committee, in its sole discretion, determines the circumstances warrant such waiver and such waiver shall not be opposed to the best interests of the Reciprocal or the other Subscribers. 11.2 Effect of Termination of Active Subscriber Status. In the event a Subscriber shall no longer be an Active Subscriber hereunder it shall:

immediately pay all unpaid subscription fees, premiums if subscriber was a policyholder, and other obligations due and payable hereunder on or prior to the date of termination. The Subscriber shall no longer participate in the business and operations of the Reciprocal and shall have no further voting or other rights or privileges of a Subscriber under thisAgreement. Termination of its status as Subscriber shall not relieve the Subscriber from any obligations that it may have hereunder, or under Policies.

Section 12. TERMINATION OF RECIPROCAL; LIQUIDATION

If the number of Subscribers shall be less than hundred (100), or if the exchange of contracts of insurance shall otherwise be discontinued, the Reciprocal shall be terminated. Upon termination, the Attorney shall proceed to wind up the affairs of the Reciprocal and shall pay or make provision for all obligations of the Reciprocal. Any assets remaining after such payment or provision shall be liquidated and distributed to the Subscribers in a manner approved by the Subscriber Advisory Committee and approved by the Minnesota Department of Commerce. In no event shall distributions to the Subscribers hereunder of Subscriber Savings Account balances be made later than six (6) months after the date of termination of the Reciprocal. Unpaid premiums and other unpaid obligation of a Subscriber to the Reciprocal shall be offset against any distributions to Subscribers hereunder.

Section 13. LIMITATION OF LIABILITY OF SUBSCRIBERS ADVISORY COMMITTEE MEMBERS AND OFFICERS AND INDEMNIFICATION THEREOF

13.1 Limitation of Liability. The members of the Subscribers Advisory Committee, its officers, employees, and all other agents of the Reciprocal, in incurring any debts, liabilities or obligations, or in taking or omitting any actions for or in connection with the Reciprocal are, and shall be deemed to be, acting as representatives of the Reciprocal and not in their own individual capacities.
No member of the Subscribers Advisory Committee, officer, or employee of the Reciprocal, shall be liable to the Reciprocal or to any other person for any act or omission of any other Subscribers Advisory Committee member, officer, or employee of the Reciprocal, whatsoever; in tort, contract or otherwise in connection with the management or operations of the Reciprocal, except as to liability arising from his or her own willful malfeasance, bad faith, or reckless disregard of duty. Except to the extent provided in the preceding sentence, no Subscribers Advisory Committee member, officer or employee of the Reciprocal, nor any Subscriber to the Reciprocal, shall be liable for any debt, claim, demand, judgment, decree, liability, loss or obligation of any kind of, against, or with respect to the Reciprocal, arising out of any action taken or omitted for, or on behalf of, the Reciprocal, and the Reciprocal shall be solely liable therefor and resort shall be made solely to the assets of the Reciprocal for the payment or performance thereof. In any event, the liability of Subscribers to the Reciprocal or to any other person by reason of any matter related to the Subscriber’s participation in the Reciprocal or to any aspect of the management or operations of the Reciprocal shall be several and not joint. 13.2 Written Instruments. As far as practicable, the members of the Subscribers Advisory Committee and the Attorney shall cause any written instrument creating an obligation of the Reciprocal to include a provision that neither the Subscribers, Subscribers Advisory Committee members, officers, employees nor agents of the Reciprocal shall be liable hereunder and that the other parties to the instrument shall look solely to the assets of the Reciprocal for the payment of any claim thereunder or for the performance thereof; provided, however, the omission of such an exculpatory provision from any instrument shall not render the Subscribers or any Subscribers Advisory Committee member, officer, employee or agent liable nor shall the members of the Subscribers Advisory Committee or any officers, employees or agents of the Reciprocal be liable to anyone for omission of an exculpatory provision. 13.3 Indemnification. The Reciprocal shall have the power and authority to indemnify members of its Subscribers Advisory Committee, its officers, employees, agents, and others in accordance with the provisions contained in the Bylaws.

Section 14. ALTERNATIVE DISPUTE RESOLUTION ACKNOWLEDGEMENT OF ARBITRATION

14.1 Arbitration. Any dispute, issue, conflict, or controversy arising from, under or in relation to this Agreement, including, without limitation, interpretations of law and the Agreement’s validity, which cannot otherwise be settled with unanimous consent of the parties, shall be subject to arbitration decided by a three (3) or five (5) member arbitration panel as noted below at a location in Minneapolis, Minnesota, agreed to by the parties. If there shall be two parties, each party will select a fair and impartial arbitrator and the arbitrators so chosen will choose neutral third arbitrator. Should there be three (3) parties, each party will select a fair and impartial arbitrator and the arbitrators so chosen shall choose two additional neutral arbitrators constituting a five (5) person panel. The arbitration hearing will commence upon thirty (30) days’ notice and conclude expeditiously. The arbitrators’ decision will be: final and binding upon the parties and may be enforced in any jurisdiction. Arbitration is the sole remedy for solving issues, conflicts, disputes, and controversies arising from, under or in relation to this Agreement. The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, but such arbitration need not be sanctioned by the American Arbitration Association unless one party to the arbitration shall demand the same. 14.2 Acknowledgement of Arbitration. Each party to this Agreement understands and agrees that § 14.1 of this Agreement contains an agreement to arbitrate (an “Arbitration Agreement”). Each party understands and agrees that after execution of this Agreement, none of them will be able to bring a lawsuit concerning any dispute that may arise which is covered by the Arbitration Agreement, unless it involves a question of constitutional or civil rights. Instead, each of the parties agrees to submit any such dispute to an impartial arbitrator(s).

Section 15. AMENDMENTS

The Subscribers hereto acknowledge that this Agreement may only be amended by a writing signed by the Reciprocal and the Attorney and approved by the Subscribers Advisory Committee. No amendment of the Subscribers Agreement and Power of Attorney shall be effective retroactively or as to any insurance contract issued prior thereto, unless agreed to by all of the Subscribers with the exception of amendments related to the compliance of the Reciprocal’s purpose under § 2(a).

Section 16. MISCELLANEOUS

16.1 Assignment. No Subscriber shall assign its rights or delegate its obligations, whether voluntarily, by operation of law (e.g., merger) or otherwise, under this Agreement or any part hereof without the written consent of the Reciprocal. 16.2 Entire Agreement. This Agreement constitutes the entire Agreement between the parties pertaining to the subject matter hereof and except as explicitly set forth herein, supersedes all prior and contemporaneous agreements and understandings of the parties in connection therewith. 16.3 Binding Effect. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, and assigns. 16.4 Governing Law; Jurisdiction. In view of the potentially diverse locations of the Subscribers of the Reciprocal and the Attorney, the parties agree that any disputes arising in connection with this Agreement shall be governed, construed, and enforced in accordance with the laws of the State of Minnesota applicable to contracts made and performed wholly within the State of Minnesota. In addition, each Subscriber submits to the exclusive jurisdiction of the state and federal courts within the District of Minnesota for the purpose of any suit, action, arbitration, or other proceeding arising out of, or with respect to, this Agreement. 16.5 Headings. The headings in this Agreement are for convenience only and shall not be deem d to constitute a part hereof, nor shall they affect the construction or interpretation of any provision of this Agreement. 16.6 Notices. All notices and other communications to be given under or by reason of this Agreement shall be sent by mail with postage prepaid and shall be deemed to have been duly given when so sent if addressed to the address of the party on the Subscription Agreement or to such other address as such party from time to time may designate for itself, by notice as provided herein. Any notices herein to the Attorney on its behalf, or to the Reciprocal shall be directed to the Attorney at the following address, or such other address as the Attorney may designate by notice as provided herein: 16.7 Counterparts. This Agreement may be signed in any number of counterparts, including Subscription Agreements made for the purpose of adding one or more Subscribers, which, together, shall constitute one and the same instrument, any one of which shall be deemed an original as to the parties subscribing the same. 16.8 Specific Performance. This Agreement shall be enforceable by specific performance or other equitable remedy cumulative with, and not exclusive of, any other remedy available to a party hereto. 16.9 Attorneys’ Fees. In the event of any action, arbitration, suit, or proceeding brought under or in connection with this Agreement, the prevailing party therein shall be entitled to recover, and the other party thereto agrees to pay the prevailing party’s costs and expenses in connection therewith, including reasonable attorneys’ fees. 16.10 Severance. If any provision of this Agreement is deemed to be invalid or unenforceable or prohibited by applicable law, such provision shall be deemed severable from the balance of this Agreement and the validity of the remaining provisions shall be enforced to the fullest extent allowed by law in the manner best calculated to fulfill the intentions of the parties as expressed herein. 16.11 Initial Subscribers. The following entities are the initial Subscribers to the Reciprocal, each of which is executing and delivering to the Attorney a Subscription Agreement to be effective as of the day and year first above written: IN WITNESS WHEREOF, the undersigned AIF has caused these presents to be executed by a representative that has the authority to execute and deliver this Agreement on its behalf, as an agreement binding between it and the Subscribers who execute Subscription Agreements that are accepted by the Reciprocal.

By:

Attorney-in-Fact

ATTACHMENT 1
SUBSCRIBERS AGREEMENT
TO
SUBSCRIBERS AGREEMENT AND POWER OF ATTORNEY
OF
TTAKAFUL INSURANCE RECIPROCAL EXCHANGE

This document constitutes the agreement of (the "Undersigned Subscriber") to the Subscribers Agreement and Power of Attorney of [Takaful Insurance Reciprocal Exchange] (the "Reciprocal") dated (the "Agreement"), and the Undersigned Subscriber’s signature herein constitutes and is deemed to be the Undersigned Subscriber’s signature on the Agreement, all as if the Undersigned Subscriber had executed the same as of the effective date hereof. Unless otherwise defined in this Subscription Agreement, the terms appearing in this Subscription Agreement shall have the meanings ascribed to them in the Agreement.
In consideration for its becoming a Subscriber to the Reciprocal and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Undersigned Subscriber hereby makes the following representations and agreements: 1. Acknowledgements and Representations of Undersigned Subscriber. In order to induce the Reciprocal to accept the Undersigned Subscriber      as a Subscriber to the Agreement, the Undersigned Subscriber hereby acknowledges and represents the following:

that prior to signing this Subscription Agreement, the Undersigned Subscriber was furnished with, has read and fully understands the Agreement and the Bylaws of the Reciprocal and any amendments to said documents to the date of this Subscription Agreement;

the Undersigned Subscriber represents that its governing body has authorized the execution and delivery of this Subscription Agreement and the consummation of all actions that may be required under the Agreement and Bylaws, that neither the execution and delivery of this Subscription Agreement nor any action on the part of the Subscriber contemplated under the Agreement or the Bylaws is prohibited or claimed to be prohibited (i) by any applicable governmental law, rule, regulation or the like; (ii) by any pending or threatened litigation or claim; or (iii) by any governing document or agreement of any kind applicable to the Undersigned Subscriber or to which the Undersigned Subscriber is a party.

The Undersigned Subscriber represents and acknowledges that all notices and other communications to be given to the Undersigned Subscriber under the Agreement or in connection with its participation in the Reciprocal shall be addressed to the following:
and that email communications may be to at

The Undersigned Subscriber acknowledges that prior to or simultaneously with the execution of this Subscription Agreement, the other Subscribers in the Reciprocal are those entities that are listed on Exhibit 1 hereto.

that it has reviewed Section 14 of the Agreement with respect to arbitrating disputes under the Agreement and is bound to arbitrate disputes in accordance with the terms of said Section 14, and

has made a capital contribution to the Capital Contribution Account in the amount of $ 300

2. Effective Date.This Subscription Agreement and the Undersigned Subscriber’s becoming a Subscriber in the Reciprocal are effective as of

IN WITNESS WHEREOF, the Undersigned Subscriber has executed this Subscription Agreement this to be effective as of the day and year above indicated.
By: , the "Undersigned Subscriber"
Agreed to .and Accepted By the Attorney-in-fact on behalf of TAKAFUL INSURANCE RECIPROCAL EXCHANGE the Reciprocal:
By:
Date:

Subscribers Agreement And Power Of Attorney Of
Takaful Insurance Recirocal Exchange

This Agreement is made as of the day of , by and between those entities that have signed Subscription Agreements to Takaful Reciprocal Insurance Exchange, a Minnesota domestic reciprocal insurer (the “Reciprocal”) in the form of Attachment 1 hereto (hereinafter collectively the “Subscribers” and each individually may also sometimes be referred to as a “Subscriber”) and , as the attorney-in-fact (the “AIF” or “Attorney”).

RECITALS
WHEREAS, the Subscribers wish to subscribe to this Agreement for the reciprocal exchange of insurance contracts, as a means to provide adequate and cost effective insurance coverages pursuant to Takaful principles driven by faith, morals, and ethical insurance values in the provision of Islamic insurance products consistent with Sharia law and subject to applicable state law; and

WHEREAS, the Subscribers wish to appoint an attorney-in-fact common to each of them to effectuate such exchange of insurance contracts by the Subscribers; and

WHEREAS, the Subscribers and AIF shall comprise the Reciprocal which shall operate pursuant to the Certificate of Authority.

NOW, THEREFORE, in consideration of the mutual agreements made herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Section 1. DEFINITIONS AND RULES OF CONSTRUCTION

1.1 Definitions

Active: Subscriber means a Subscriber that is (or which has one or more Affiliates that are) currently insured by a Policy whose status as such has not been terminated in accordance with the terms of this Agreement.

Affiliate: means a person in the same corporate system as a Subscriber by virtue of common ownership, control, operation or management, who is not a Subscriber and has been issued a Policy.

AIF Agreement: means the AIF Agreement between the Reciprocal and the AIF, which establishes AIF as the attorney-in-fact for the Reciprocal, and is incorporated herein by reference.

Attorney or AIF means , a corporation having an office in Minnesota for the purpose of acting as the attorney-in-fact for the Reciprocal pursuant to the AIF Agreement and for the Subscribers pursuant to this Power of Attorney.

Bylaws means the bylaws of the Reciprocal adopted by the Subscribers Advisory Committee to govern the business and affairs of the Reciprocal, and all duly adopted amendments thereto.

Issuing Company means an insurance company that issues policies of insurance to a Subscriber or one or more of its Affiliates that are reinsured by or through the Reciprocal.

Person means an individual, partnership, corporation and other organizations and associations of individuals.

Policy means a policy of insurance issued by the Reciprocal or by an Issuing Company to a Subscriber or one or more of its Affiliates.

Reciprocal means the reciprocal insurer formed by this Agreement that is to be known as Takaful Reciprocal Insurance Exchange.

Subscriber means a person who has applied to and been accepted by the Reciprocal and has (i) executed this Subscribers Agreement and Power of Attorney by virtue of executing and delivering a Subscription Agreement substantially in the form of Attachment 1 for the purpose of adding it as a Subscriber; and (ii) paid the Attorney the full amount of premium for a term of at least six (6) months, and made a capital contribution to the Subscribers Contributed Capital Account.

Subscribers Advisory Committee means the committee established pursuant to this Agreement to oversee the activities of the Attorney, and generally direct the management and affairs of the Reciprocal. The Subscribers Advisory Committee shall have such powers and duties as shall be set forth in this Agreement.

Subscriber Contributed Capital Account means that account representing the capital contribution of the Subscriber. Said accounts shall be bookkeeping entries only and the Subscriber Contributed Capital Account funds shall be commingled with other funds held by the Reciprocal.

Subscription Agreement means an agreement having the effect of and making a person a party to this Agreement and means specifically Attachment 1 to this Agreement.

Year (which term may not be capitalized in this Agreement) means the calendar year unless otherwise designated in this Agreement by the Subscribers Advisory Committee.

1.2 Rules of Construction

Number: Except where the context requires otherwise, words importing the singular shall also include the plural and vice-versa.

Gender: References herein to any gender and the neuter shall also include any other gender and the neuter.

May or Shall: The word “may” will be construed as permissive and the word “shall” will be construed as imperative.

References to titles and sections of the District of Columbia Code (2001 Edition) refer to such titles and sections as amended, supplemented and replaced from time to time.

Section 2. PURPOSES

The Reciprocal is organized for the following purposes:

The reciprocal exchange of contracts of insurance, reinsurance and indemnity among the Subscribers of the Reciprocal established pursuant to Minnesota Statutes Chapter 71A, as a means to provide adequate and cost effective insurance coverages pursuant to Takaful principles driven by faith, morals, and ethical insurance values in the provision of Islamic insurance products consistent with Sharia law and subject to applicable state law.

Conducting all activities necessary or incidental to the foregoing; and

Engaging in any other lawful business or activity.

Section 3. ATTORNEY-IN-FACT; POWER OF ATTORNEY
3.1 Appointment. The Subscribers, including any Subscribers who may be added to this Agreement by amendment, hereby appoint AIF as their attorney-in fact, or its then serving successor in office, to carry out the purposes and objectives set forth in this Agreement, to sign and effectuate the exchange of contracts of insurance, in the name of the Reciprocal, on its behalf and on behalf of each Subscriber hereto, and to perform such other duties and powers as are granted the Attorney herein. 3.2 Office. The Attorney shall at all times maintain an office within the State of Minnesota, which office shall serve as the principal office of the Reciprocal. 3.3 Removal and Resignation. At any time, with or without cause, the Subscribers of the Reciprocal, upon the affirmative vote of a majority of votes entitled to be cast by the Subscribers, or the Subscribers Advisory Committee, upon a majority vote of all members thereof (including vacant positions), may suspend the Attorney or remove it from office and terminate its powers hereunder. The Attorney may resign as Attorney hereunder by giving written notice to. the Subscribers Advisory Committee at least sixty (60) days prior to the effective date of its resignation. 3.4 Substitute Attorney. In the event of the dissolution, insolvency, resignation, suspension, removal or withdrawal of said corporation as Attorney hereunder, the Subscribers Advisory Committee shall succeed to all of the powers and duties of the Attorney and, as soon thereafter as practicable, shall appoint a successor Attorney. 3.5 Powers and Duties. The Attorney shall manage the Reciprocal as provided in the AIF Agreement, subject to the supervision and direction. of, and such limitations as may be imposed by, the Subscribers Advisory Committee and to any powers specifically reserved in the Subscribers hereunder, and shall act for and bind the Subscribers of the Reciprocal in all transactions relating to, or arising out of, the operations of the Reciprocal.

Without limiting the generality of the foregoing, the Attorney shall have the following rights, powers and duties, which shall be exercised in accordance with, and subject to, all policies established from time to time by the Subscribers Advisory Committee and any rights specifically reserved in the Subscribers hereunder:

to sign contracts of insurance, reinsurance and indemnity that it is empowered to issue in the name of the Reciprocal insuring persons eligible as Subscribers (and their Affiliates), and to cancel or non-renew all or any part of such contracts in accordance with their terms, enforcing any underwriting criteria as may be established by the Subscribers Advisory Committee or an appropriate committee or subcommittee established by the Subscribers Advisory Committee;

to sign other relevant documents and contracts, specifically including Subscription Agreements accepting additional Subscribers in the Reciprocal, in the name of the Reciprocal or in its own name acting for all of the Subscribers of the Reciprocal;

to secure reinsurance for the risks insured by the Reciprocal;

to receive and give all notices, receive proofs of loss, recover amounts due under all insurance or reinsurance agreements and to enforce payment by suit, in its own name or otherwise, of any premium or other payment due the Reciprocal;

to receive and give receipts for money due and payable to the Reciprocal and to authorize or endorse all oral or written orders for payment on, and otherwise act with respect to, the Reciprocal’s accounts at banks or other depositories as shall be selected by the Subscribers or the Subscribers Advisory Committee;

to take necessary actions and execute and delivery necessary documents and papers on behalf of the Reciprocal for the purpose of borrowing money and obtaining credit on behalf of the Reciprocal, and to render at stated periods, as determined by the Subscribers Advisory Committee, written accounts of the Reciprocal’s finances and investments;

to invest and reinvest the monies and assets of the Reciprocal as may from time to time be required or desirable in accordance with policies and directives established by the Subscribers, the Subscribers Advisory Committee or a committee or subcommittee thereof;

to maintain necessary surplus or reserve funds but not less than legal requirements;

to accept service of process on behalf of the Reciprocal at the Attorney’s office in Minnesota, and in this capacity to serve as registered agent and maintain the registered office of the Reciprocal in Minnesota;

to comply with all applicable bond or other requirements imposed upon the Attorney by Minnesota law or as may be prescribed by the Subscribers or the Subscribers Advisory Committee;

to keep one or more separate accounts in the name of the Reciprocal for all financial and investment transactions of the Reciprocal, at depository institutions or investment institutions designated by the Subscribers Advisory Committee;

to deduct for itself from the funds of the Reciprocal an annual management fee not exceeding such amount as may be approved by the Subscribers Advisory Committee;

to deduct from advance premiums and deposits the full amount thereof if designated as fully non-refundable or, in all other cases, not more than such amount as is customary in the insurance industry for the type of coverage and circumstances;

to pay general and administrative expenses when and as due;

to delegate in writing any or all of the powers and duties hereby conferred upon it, at any time, from time to time, to one or more persons designated by it. The powers of any delegatee shall be subject to revocation by the Subscribers Advisory Committee or by the Attorney at any time upon written notice to the delegatee (and to the Attorney in the event of a revocation by the Subscribers Advisory Committee); and

in general, to do and to perform for the Subscribers and the Reciprocal all acts and duties, and to execute and deliver any and all papers and documents in furtherance of its powers and duties hereunder.

Section 4. SUBSCRIBER QUALIFICATIONS
Subscribers shall meet such qualifications, including underwriting criteria, as may be established by the Subscribers Advisory Committee from time to time.

Section 5. SUBSCRIBER UNDERTAKINGS

5.1 Underwriting.Each Subscriber recognizes and agrees:

that neither its subscription herein by execution and delivery of the Subscription Agreement nor its status as a Subscriber entitles it to have its or its Affiliates’ risks underwritten by or through the Reciprocal or an Issuing Company; and

that the Reciprocal and an Issuing Company only underwrite risks where they have determined that the insured meets the Reciprocal’ s and the Issuing Company’s underwriting criteria, and such other criteria as may be established and amended by the Reciprocal from time to time.

5.2 Compliance With Agreements; Conflicting Terms. Each Subscriber hereby agrees to comply with the provisions of this Agreement, the Bylaws of the Reciprocal, and all duly adopted policies and procedures of the Subscribers and the Subscribers Advisory Committee. In the event of a conflict between the provisions of this Agreement and any of the aforesaid other agreements or documents, the terms of this Agreement shall be controlling.

Section 6. SUBSCRIBERS MEETINGS
6.1 Meetings. The Subscribers shall meet annually to appoint the members of the Subscribers Advisory Committee and conduct other lawful business. The meeting shall be called and held (and notice thereof shall be given) in accordance with the Bylaws. The failure of the Subscribers to hold an annual meeting at a time stated or fixed in the Bylaws does not affect the validity of any vote or action taken by the Reciprocal or the Subscribers Advisory Committee, and shall not result in the forfeiture or termination of the Reciprocal. 6.2 Voting. Each Subscriber shall entitled to one vote and may vote in person or by proxy on all matters coming before the Subscribers. The appointment of the members of the Subscribers Advisory Committee shall be determined in accordance with 7.2 of this Agreement.

Section 7. SUBSCRIBERS ADVISORY COMMITTEE
7.1 Creation and General Powers. There shall be a Subscribers Advisory Committee. Except as may be limited by this Agreement, the Subscribers Advisory Committee shall generally direct the management and business and affairs of the Reciprocal and shall, in addition to the duties and powers set forth herein, have such other powers and duties conferred upon it by the laws of the State of Minnesota, and as are necessary or desirable to establish policy and grant operational authority for the Reciprocal and all powers incidental thereto. 7.2 Number, Qualifications and Manner of Appointment.Members of the Subscribers Advisory Committee shall be appointed in accordance with the provisions of this paragraph; and shall be removed in accordance with the Bylaws. The Subscribers Advisory Committee shall consist of at least three (3) members, at least two-thirds of which shall be Subscribers (or duly authorized representatives of a Subscriber who is not an individual) other than the Attorney or any person employed by, representing or having a financial interest in the Attorney. Unless and until otherwise agreed by a vote of the Subscribers:

The Subscribers Advisory Committee shall consist of a number of members equal to at least one more than the number of Subscribers on the Committee.

Each Subscriber shall be entitled to nominate one member of the Subscribers Advisory Committee and the Attorney shall be entitled to nominate two members of the Subscribers Advisory Committee.

The Subscribers hereto agree to cast their votes to elect to the Subscribers Advisory Committee the persons nominated pursuant to the procedure described in § 7.2(b) above.

7.3 Quorum. At least one-third of the number of members of the Subscribers Advisory Committee shall be necessary to constitute a quorum for the transaction of business at any meeting of the Subscribers Advisory Committee.

Section 8. POWERS AND DUTIES OF THE SUBSCRIBERS ADVISORY COMMITTEE
8.1 Powers.The Subscribers Advisory Committee shall have the power and discretion to do any of the following; provided, however, that the existence of such power and discretion in the Subscribers Advisory Committee does not implicitly or explicitly limit the authority of the Attorney to act within the authority granted to it under this Agreement or the AIF Agreement:

provide general policy direction for the Reciprocal, including without limitation, the establishment of underwriting and investment policies of the Reciprocal, as well as policies regarding the administration of claims, and the establishment of general policies concerning the day-to-day management of the Reciprocal’ s affairs;

review the operations of the Reciprocal and oversee and evaluate the work and performance of the Attorney;

establish other committees or subcommittees of Subscribers or non-Subscribers, or both, for such purpose(s) as it may designate, which committees or subcommittees shall only have the power and authority as may be delegated by the Subscribers Advisory Committee, and specifically to establish an Executive Committee to which may be delegated the full power and authority of the Subscribers Advisory Committee to the extent allowed by law;

enter into agreements on behalf of the Reciprocal with the Attorney, including agreements concerning the amount of fees to be paid to the Attorney, for its services hereunder;

review the procedures of the Attorney for the safeguarding of money and other assets and advise the Attorney with respect to the investment of assets;

in the event of the failure of the Subscribers to do so, the Subscribers Advisory Committee may, in accordance with the Bylaws of the Reciprocal fill, for the unexpired term, any vacancy that may occur in the. Subscribers Advisory Committee, other than a vacancy resulting from the removal of a member by the Subscribers, which vacancy shall only be filled by the Subscribers;

adopt Bylaws, not inconsistent herewith, as it shall deem appropriate, establishing rules and procedures for calling and holding its meetings and for generally carrying out the business of the Reciprocal. The Bylaws shall provide that, in the event of any inconsistency between its provisions and the provisions of this Agreement, the terms of this Agreement shall control;

elect officers of the Reciprocal in accordance with procedures set forth in the Bylaws and delegate to such officers duties and signature authority on behalf of the Reciprocal, as appropriate. The duties of the various officers shall be outlined in, or in accordance with, the Bylaws;

contract, subcontract, or otherwise enter into contracts or agreements, for the purpose of securing and obtaining such services, consultation and advice, as it may deem necessary or desirable in fulfilling its obligations under this Agreement;

establish and modify such rules and procedures as may be necessary or desirable for the conduct of the business of the Reciprocal, specifically including rules and procedures intended to govern situations and circumstances that are not expressly governed by the terms of this Agreement or that may not have been contemplated at the time of implementation of this Agreement; and

in general, perform for the Subscribers and .the Reciprocal all acts and duties, and execute and deliver any and all papers and documents in furtherance of its powers and duties hereunder, and in furtherance of the business and operations of the Reciprocal.

8.2 Duties. The Subscribers Advisory Committee shall have the duty, subject to the specific terms of this Agreement, to:

supervise the finances of the Reciprocal;

supervise the Reciprocal’s operations to such extent as to assure conformity with this Agreement and Power of Attorney;

procure the audit of the accounts and records of the Reciprocal and of the Attorney, at the expense of the Reciprocal; and

so long as it shall be required pursuant to Minnesota law, hold at least one meeting annually within the State of Minnesota.

Section 9. SUBSCRIBER CONTRIBUTED CAPITAL ACCOUNTS
Upon withdrawal or other termination of Subscriber, amounts lower than $500 allocated to Subscriber Contributed Capital Account shall be retained by the Reciprocal and not returned to the subscriber. Amounts of $500 or over allocated to a Subscriber Contributed Capital Account shall be returned to the withdrawing or terminated Subscriber upon approval of the Subscriber Advisory Committee and the Minnesota Department of Commerce.

Section 10. NON-ASSESSBLE CONTRACTS
The Reciprocal shall exchange insurance contracts on a non-assessable basis only. Subscriber shall have no financial obligation to the Reciprocal, other Subscribers, or its creditors, beyond the amounts charged to Subscriber for insurance premiums and Subscriber required capital contributions.

Section 11. TERMINATION
11.1 Termination of Active Subscribers. A Subscriber’s status as an Active Subscriber hereunder shall terminate. upon the occurrence of any one or more of the following:

the Subscriber shall fail to meet the Subscriber Qualifications set forth in Section 4 of this Agreement;

neither the Subscriber nor any of its Affiliates shall be covered by a current Policy in which case the Subscriber shall no longer be an Active Subscriber as of the last date on which all such insurance coverages shall be terminated. A Subscriber may terminate or non-renew coverage procured from or through the Reciprocal by providing sixty (60) days’ prior written notice to the Subscribers Advisory Committee of its intent to terminate or non-renew its coverage, subject always to the Subscriber’s commitment to the Reciprocal pursuant to § 5.4 of this Agreement;

the Subscriber or one or more of its Affiliates shall be delinquent on premium obligations for a period of thirty (30) days or more;

the Subscriber shall fail to carry out the recommendations of the Subscribers Advisory Committee concerning any loss control or safety practices or programs or to follow generally accepted financial and loss control prevention standards within thirty (30) days after the date notice specifying such failure is provided to the Subscriber;

the Subscriber or one or more of its Affiliates shall breach any other obligation or promise under any Policy, or the terms of this Agreement, and fails to cure such breach within thirty (30) days of receiving written notice thereof;

the Subscriber (not including its Affiliates, if any) goes into voluntary or involuntary bankruptcy, receivership, makes an assignment for the benefit of creditors generally, voluntarily or involuntarily enters into dissolution proceedings, or in the case of an individual Subscriber, dies;

the Subscriber (not including its Affiliates, if any), by merger, sale of assets or otherwise becomes owned or controlled (controlled meaning greater than 50% of the total voting power including the power to appoint members of the board of directors of such Subscriber) by another person who is not an Affiliate of the Subscriber prior to the date of the transaction in question, unless such other person would be eligible to become a Subscriber, in which case the Subscribers Advisory Committee may, but shall not be obligated to, make such arrangements as are determined by the Subscribers Advisory Committee to be fair and reasonable under the circumstances to admit the new Subscriber as a participant hereunder. Any new Subscriber shall be required to execute a Subscription Agreement and agree to be bound by the terms of this Agreement and shall assume in writing in a form acceptable to the Subscribers Advisory Committee all obligations of the predecessor Subscriber; or

the Subscribers Advisory Committee determines that the continuation of the Subscriber as such would otherwise be detrimental to the business and operations of the Reciprocal.

The Subscribers Advisory Committee may waive, temporarily or otherwise, the termination of Active Subscriber status hereunder, provided such Subscriber agrees to the waiver, and the Subscribers Advisory Committee, in its sole discretion, determines the circumstances warrant such waiver and such waiver shall not be opposed to the best interests of the Reciprocal or the other Subscribers.

11.2 Effect of Termination of Active Subscriber Status. In the event a Subscriber shall no longer be an Active Subscriber hereunder it shall:

immediately pay all unpaid premiums, and other obligations due and payable hereunder on or prior to the date of termination. The Subscriber shall no longer participate in the business and operations of the Reciprocal and shall have no further voting or other rights or privileges of a Subscriber under this Agreement. Termination of its status as Subscriber shall not relieve the Subscriber from any obligations that it may have hereunder, or under Policies.

be deemed resigned from any position it may serve as officer or as a member of the Subscribers Advisory Committee of the Reciprocal, or in the event that one or more representatives of the Subscriber shall serve as officer or Subscribers Advisory Committee member, such representative(s) shall be deemed to have resigned from these positions; and

Section 12. TERMINATION OF RECIPROCAL; LIQUIDATION
If the number of Subscribers shall be less than three (3), or if the exchange of contracts of insurance shall otherwise be discontinued, the Reciprocal shall be terminated. Upon termination, the Attorney shall proceed to wind up the affairs of the Reciprocal and shall pay or make provision for all obligations of the Reciprocal. Any assets remaining after such payment or provision shall be liquidated and distributed to the Subscribers in a manner approved by the Subscriber Advisory Committee and approved by the Minnesota Department of Commerce.

In no event shall distributions to the Subscribers hereunder of Subscriber SavingsAccount balances be made later than six (6) months after the date of termination of the Reciprocal. Unpaid premiums and other unpaid obligation of a Subscriber to the Reciprocal shall be offset against any distributions to Subscribers hereunder.

Section 13. LIMITATION OF LIABILITY OF SUBSCRIBERS ADVISORY COMMITTEE MEMBERS AND OFFICERS AND INDEMNIFICATION THEREOF
13.1 Limitation of Liability. The members of the Subscribers Advisory Committee, its officers, employees and all other agents of the Reciprocal, in incurring any debts, liabilities or obligations, or in taking or omitting any actions for or in connection with the Reciprocal are, and shall be deemed to be, acting as representatives of the Reciprocal and not in their own individual capacities.

No member of the Subscribers Advisory Committee, officer or employee of the Reciprocal, shall be liable to the Reciprocal or to any other person for any act or omission of any other Subscribers Advisory Committee member, officer or employee of the Reciprocal, whatsoever; in tort, contract or otherwise in connection with the management or operations of the Reciprocal, except as to liability arising from his or her own willful malfeasance, bad faith or reckless disregard of duty. Except to the extent provided in the preceding sentence, no Subscribers Advisory Committee member, officer or employee of the Reciprocal, nor any Subscriber to the Reciprocal, shall be liable for any debt, claim, demand, judgment, decree, liability, loss or obligation of any kind of, against, or with respect to the Reciprocal, arising out of any action taken or omitted for, or on behalf of, the Reciprocal, and the Reciprocal shall be solely liable therefor and resort shall be made solely to the assets of the Reciprocal for the payment or performance thereof. In any event, the liability of Subscribers to the Reciprocal or to any other person by reason of any matter related to the Subscriber’s participation in the Reciprocal or to any aspect of the management or operations of the Reciprocal shall be several and not joint. 13.2 Written Instruments. As far as practicable, the members of the Subscribers Advisory Committee and the Attorney shall cause any written instrument creating an obligation of the Reciprocal to include a provision that neither the Subscribers, Subscribers Advisory Committee members, officers, employees nor agents of the Reciprocal shall be liable hereunder and that the other parties to the instrument shall look solely to the assets of the Reciprocal for the payment of any claim thereunder or for the performance thereof; provided, however, the omission of such an exculpatory provision from any instrument shall not render the Subscribers or any Subscribers Advisory Committee member, officer, employee or agent liable nor shall the members of the Subscribers Advisory Committee or any officers, employees or agents of the Reciprocal be liable to anyone for omission of an exculpatory provision. 13.3 Indemnification. The Reciprocal shall have the power and authority to indemnify members of its Subscribers Advisory Committee, its officers, employees, agents and others in accordance with the provisions contained in the Bylaws.

Section 14. ALTERNATIVE DISPUTE RESOLUTION ACKNOWLEDGEMENT OF ARBITRATION
14.1 Arbitration. Any dispute, issue, conflict or controversy arising from, under or in relation to this Agreement, including, without limitation, interpretations of law and the Agreement’s validity, which cannot otherwise be settled with unanimous consent of the parties, shall be subject to arbitration decided by a three (3) or five (5) member arbitration panel as noted below at a location in Minneapolis, Minnesota, agreed to by the parties. If there shall be two parties, each party will select a fair and impartial arbitrator and the arbitrators so chosen will choose neutral third arbitrator. Should there be three (3) parties, each party will select a fair and impartial arbitrator and the arbitrators so chosen shall choose two additional neutral arbitrators constituting a five (5) person panel. The arbitration hearing will commence upon thirty (30) days’ notice and conclude expeditiously. The arbitrators’ decision will be: final and binding upon the parties and may be enforced in any jurisdiction. Arbitration is the sole remedy for solving issues, conflicts, disputes and controversies arising from, under or in relation to this Agreement. The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association, but such arbitration need not be sanctioned by the American Arbitration Association unless one party to the arbitration shall demand the same. 14.2 Acknowledgement of Arbitration. Each party to this Agreement understands and agrees that § 14.1 of this Agreement contains an agreement to arbitrate (an “Arbitration Agreement”). Each party understands and agrees that after execution of this Agreement, none of them will be able to bring a lawsuit concerning any dispute that may arise which is covered by the Arbitration Agreement, unless it involves a question of constitutional or civil rights. Instead, each of the parties agrees to submit any such dispute to an impartial arbitrator(s).

Section 15. AMENDMENTS
The Subscribers hereto acknowledge that this Agreement may only be amended by a writing signed by the Reciprocal and the Attorney and approved by the Subscribers Advisory Committee. No amendment of the Subscribers Agreement and Power of Attorney shall be effective retroactively or as to any insurance contract issued prior thereto, unless agreed to by all of the Subscribers.

Section 16. MISCELLANEOUS
16.1 Assignment. No Subscriber shall assign its rights or delegate its obligations, whether voluntarily, by operation of law (e.g., merger) or otherwise, under this Agreement or any part hereof without the written consent of the Reciprocal. 16.2 Entire Agreement. This Agreement constitutes the entire Agreement between the parties pertaining to the subject matter hereof and except as explicitly set forth herein, supersedes all prior and contemporaneous agreements and understandings of the parties in connection therewith. 16.3 Binding Effect. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. 16.4 Governing Law; Jurisdiction. In view of the potentially diverse locations of the Subscribers of the Reciprocal and the Attorney, the parties agree that any disputes arising in connection with this Agreement shall be governed, construed, and enforced in accordance with the laws of the State of Minnesota applicable to contracts made and performed wholly within the State of Minnesota. In addition, each Subscriber submits to the exclusive jurisdiction of the state and federal courts within the District of Minnesota for the purpose of any suit, action, arbitration or other proceeding arising out of, or with respect to, this Agreement. 16.5 Headings. The headings in this Agreement are for convenience only and shall not be deem d to constitute a part hereof, nor shall they affect the construction or interpretation of any provision of this Agreement. 16.6 Notices. All notices and other communications to be given under or by reason of this Agreement shall be sent by mail with postage paid, and shall be deemed to have been duly given when so sent if addressed to the address of the party on the Subscription Agreement or to such other address as such party from time to time may designate for itself, by notice as provided herein. Any notices herein to the Attorney on its behalf, or to the Reciprocal shall be directed to the Attorney at the following address, or such other address as the Attorney may designate by notice as provided herein: 16.7 Counterparts. This Agreement may be signed in any number of counterparts, including Subscription Agreements made for the purpose of adding one or more Subscribers, which, together, shall constitute one and the same instrument, any one of which shall be deemed an original as to the parties subscribing the same. 16.8 Specific Performance. This Agreement shall be enforceable by specific performance or other equitable remedy cumulative with, and not exclusive of, any other remedy available to a party hereto. 16.9 Attorneys’ Fees. In the event of any action, arbitration, suit or proceeding brought under or in connection with this Agreement, the prevailing party therein shall be entitled to recover, and the other party thereto agrees to pay the prevailing party’s costs and expenses in connection therewith, including reasonable attorneys’ fees. 16.10 Severance. If any provision of this Agreement is deemed to be invalid or unenforceable or prohibited by applicable law, such provision shall be deemed severable from the balance of this Agreement and the validity of the remaining provisions shall be enforced to the fullest extent allowed by law in the manner best calculated to fulfill the intentions of the parties as expressed herein. 16.11 Initial Subscribers. The following entities are the initial Subscribers to the Reciprocal, each of which is executing and delivering to the Attorney a Subscription Agreement to be effective as of the day and year first above written: IN WITNESS WHEREOF, the undersigned Attorney has caused these presents to be executed by a representative that has the authority to execute and deliver this Agreement on its behalf, as an agreement binding between it and the Subscribers who execute Subscription Agreements that are accepted by the Reciprocal.

By:
Attorney-in-Fact

Date:

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