Revenue Sharing Agreement

EXHIBIT 10.Z


This REVENUE SHARING AGREEMENT (this "AGREEMENT") is made
and entered into as of the date of the Acquisition (as defined
below) between and among Tack Acquisition Company, a Delaware
corporation (the "ACQUISITION COMPANY"), Folksamerica Reinsurance
Company, a New York reinsurance company ("FOLKSAMERICA"), and
JOHN D. GILLESPIE, an individual resident of the State of
Connecticut (the "INVESTMENT MANAGER").


WHEREAS the Acquisition Company and the Investment Manager desire to enter into an agreement under which (i) the Acquisition Company and the Investment Manager shall share the revenue of Prospector Partners, L.L.C. ("PROSPECTOR PARTNERS"), and Prospector Associates, L.L.C. ("PROSPECTOR ASSOCIATES"), and (ii) the Acquisition Company shall pay the expenses of Prospector Partners during the Agreement Term (as defined below); and


WHEREAS Folksamerica and the Investment Manager desire to enter into an agreement under which Folksamerica shall receive a founder's revenue share (the "FOUNDER'S REVENUE SHARE") in respect of revenue of certain businesses of the Investment Manager as provided herein.


NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legally bound hereby, the parties hereto hereby agree as follows:


SECTION 1. TERM. The Acquisition Company's responsibility for the expenses of Prospector Partners and the sharing of the revenue of Prospector Partners and Prospector Associates by the Acquisition Company under the terms of Sections 2, 3, 4 and 5 hereof shall commence on January 1, 2001 (the "COMMENCEMENT DATE"), and shall remain in effect until any written notice of termination of the separate agreement between the Acquisition Company and John D. Gillespie (the "SEPARATE AGREEMENT"), dated as of the date of the Acquisition Company's acquisition (the "ACQUISITION") of CGU Corporation, a Delaware corporation, shall be given as required under Section 2 thereof; provided, however, that the provisions of Sections 2, 3, 4 and 5 of this Agreement shall not take effect unless and until the Separate Agreement shall take effect. With respect to the provisions of Sections 2, 3, 4 and 5 of this Agreement, the period of time between the Commencement Date and the termination of such provisions pursuant to the terms of this Agreement is herein referred to as the "AGREEMENT TERM".


SECTION 2. SHARING OF REVENUE. (a) The Investment Manager shall (i) pay or cause to be paid to the Acquisition Company out of any amounts allocable to him from the gross revenue of Prospector Partners and Prospector Associates in respect of each calendar year, no later than 30 days after the issuance of audited financial statements for Prospector Partners Fund, L.P., Prospector Partners Small Cap Fund, L.P., and Prospector Offshore Fund (Bermuda), Ltd., and any other fund that the Investment Manager shall be actively involved in the investment management during the Agreement Term (hereinafter any such funds shall collectively be referred to as the "FUNDS" and individually referred to as a "FUND"), in respect of such year, or, at


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his discretion, (ii) cause to be allocated, as of the last day of such year, to any capital account of the Acquisition Company in any of the Funds out of amounts otherwise allocable to any of the Investment Manager's capital accounts in any of the Funds in respect of such year, or (iii) shall pay, cause to be paid and/or cause to be so allocated, in aggregate, 50% of the Net Revenue (as defined below) in respect of such year to the extent such amount shall not have been previously paid or so allocated. Notwithstanding any provision herein to the contrary, the Investment Manager may pay or cause to be paid to the Acquisition Company, at any time in any calendar year during the Agreement Term, the Acquisition Company's share, or any portion of its share, of the Net Revenue for such year on an estimated basis. If the total amount paid to the Acquisition Company under this paragraph (a) in respect of any year shall exceed the Acquisition Company's share of Net Revenue for such year as finally determined, the Acquisition Company shall return such excess to the Investment Manager within 30 days of such final determination. "NET REVENUE" shall be calculated annually on a calendar year basis and shall mean the sum of (i) the aggregate gross revenue earned by Prospector Associates and Prospector Partners during any such year in respect of the Funds, less 24% of any such gross revenue in excess of $500,000 (which 24% represents the aggregate shares of such gross revenue of the founding investors of the Funds), and (ii) gross revenue earned by Prospector Partners during such year in respect of accounts managed by Prospector Partners during the Agreement Term that are not accounts of any Fund (hereinafter any such accounts shall be referred to collectively as the "SEPARATE ACCOUNTS" and individually as a "SEPARATE ACCOUNT"). Notwithstanding anything in the foregoing provisions of this paragraph to the contrary, the aforementioned definition of Net Revenue shall not include, (a) with respect to each share of convertible preferred stock in White Mountains Insurance Group, Ltd., a Bermuda company ("WHITE MOUNTAINS"), offered in connection with the Acquisition and subscribed to by any Fund or Separate Account prior to the Acquisition, the excess of $319 over the per share value at the time of subscription, as determined pursuant to the agreement under which such shares shall have been subscribed to, (b)(i) any amounts or interests earned or accrued prior to the Commencement Date, including amounts or interests earned but not yet paid in respect of Prospector Offshore Fund (Bermuda), Ltd., and any investment earnings in respect thereof, and (ii) the Investment Manager's pro rata share of investment earnings in respect of amounts earned or accrued, but not yet paid, subsequent to the Commencement Date in respect of Prospector Offshore Fund (Bermuda), Ltd., and (c) any amounts or interests earned in respect of any capital account in any of the Funds, or any Separate Account, owned by the Investment Manager, any member of Prospector Associates or Prospector Partners and any of the Investment Manager's, or any such member's, immediate family members or related entities.


(b) Additionally, during the Agreement Term, the Investment Manager shall pay or cause to be paid to the Acquisition Company 25% of his allocable share of the amount that the aggregate cumulative distributions paid to the Connecticut Fund Business Entities (as hereinafter defined) shall exceed $3 million during the Agreement Term. Such 25% shall be calculated and paid annually on a calendar year basis no later than 30 days after the issuance of audited financial statements for such entities in respect of each calendar year during the Agreement Term. The "CONNECTICUT FUND BUSINESS" shall mean the business activities of the Connecticut Fund Business Entities (as hereinafter defi ...