Exhibit 10.24

 

ASSUMPTION AND NOVATION AGREEMENT

 

Among

 

LUMBERMENS MUTUAL CASUALTY COMPANY,
AMERICAN MOTORIST INSURANCE COMPANY, AMERICAN PROTECTION
INSURANCE COMPANY AND AMERICAN MANUFACTURERS MUTUAL
INSURANCE COMPANY

 

and

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA

 

and

 

LABOR READY, INC.

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

PREAMBLE

 

 

 

 

 

ARTICLE I

DEFINITIONS

 

 

 

 

ARTICLE II

BUSINESS ASSUMED AND NOVATED

 

 

 

 

ARTICLE III

TERM, TERRITORY AND CONDITIONS PRECEDENT

 

 

 

 

ARTICLE IV

CONSIDERATION

 

 

 

 

ARTICLE V

POLICY ADMINISTRATION

 

 

 

 

ARTICLE VI

INDEMNIFICATION

 

 

 

 

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

 

 

 

 

ARTICLE VIII

COVENANTS

 

 

 

 

ARTICLE IX

ARBITRATION

 

 

 

 

ARTICLE X

AMENDMENT OR TERMINATION

 

 

 

 

ARTICLE XI

GENERAL PROVISIONS

 

 

 

 

SCHEDULES

 

 

 

 

Schedule 1

List of Policies

 

 

 

 

EXHIBITS

 

 

 

 

Exhibit A

Novation Endorsement

 

 

i

--------------------------------------------------------------------------------

 

ASSUMPTION AND NOVATION AGREEMENT

 

This ASSUMPTION AND NOVATION AGREEMENT (this “Agreement”), effective and dated
as of the 29th day of December 2004, is made and entered into by and among
Lumbermens Mutual Casualty Company, American Motorist Insurance Company,
American Protection Insurance Company and American Manufacturers Mutual
Insurance Company, all corporations organized and existing under the laws of the
State of Illinois, (collectively, with their insurance company affiliates, the
“Company”), National Union Fire Insurance Company of Pittsburgh, Pennsylvania, a
corporation organized and existing under the laws of the State of Pennsylvania,
on behalf of itself and its affiliates (“National Union”), and Labor Ready,
Inc., a corporation organized and existing under the laws of the State of
Washington (“Labor Ready”), (Labor Ready, together with all policyholders,
certificate holders, insureds and beneficiaries under the Policies (as defined
below) of whatsoever kind or nature, including assignees of the rights of any of
the foregoing under the Policies, collectively, the “Insured”) in accordance
with the terms, conditions and definitions set forth below (the Company,
National Union and Labor Ready each is individually referred to herein as a
“Party,” or collectively, as the “Parties”).

 

R E C I T A L S:

 

WHEREAS, the Company issued various workers’ compensation and employers
liability insurance policies affording coverage to Labor Ready, such policies
are listed in Schedule 1 attached hereto (collectively, the “Policies,”
including all declarations, amendments,  and endorsements thereto, if any); and

 

WHEREAS, the Company desires to extinguish all of its duties, obligations,
liabilities, rights, privileges and benefits arising from or related to the
Policies and National Union desires to assume by way of novation all such
duties, obligations, liabilities, rights, privileges and benefits of the
Company; and

 

WHEREAS, and Labor Ready and the Company desire to extinguish all of their
respective duties, obligations, liabilities, rights, privileges and benefits
arising from or related to the Related Agreements (as defined herein) on the
terms and conditions provided herein;

 

WHEREAS, no officer, director, or employee of LABOR READY is or at any time has
been an officer, director, employee or attorney of, or person having influence
over the Company; and

 

WHEREAS, LABOR READY has not attempted to, does not, and does not have the right
or ability to control or manage the business or affairs of the Company; and

 

WHEREAS, the Parties have each received the advice of counsel in the
preparation, drafting and execution of this Agreement, which was negotiated
voluntarily and at arm’s length.

 

NOW, THEREFORE, in consideration of and in reliance upon the definitions,
premises, recitals, Schedules and Exhibits (all of which are incorporated in
full into this AGREEMENT), and the mutual promises, covenants and premises,
recitals and agreements, subject to the terms

 

--------------------------------------------------------------------------------

 

and conditions stated herein, and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in this Agreement, the following terms in quotation marks, when
capitalized, shall have the meanings set forth below (definitions are applicable
to both the singular and the plural forms of each term defined in this Article):

 

1.1                                 “NATIONAL UNION” SHALL HAVE THE MEANING SET
FORTH IN THE PREAMBLE TO THIS AGREEMENT.

 

1.2                                 “AGREEMENT” SHALL HAVE THE MEANING SET FORTH
IN THE PREAMBLE TO THIS AGREEMENT.

 

1.3                                 “ASSERTED LIABILITY” SHALL HAVE THE MEANING
SET FORTH IN SECTION 6.3 OF THIS AGREEMENT.

 

1.4                                 “CLAIMS NOTICE” SHALL HAVE THE MEANING SET
FORTH IN SECTION 6.4 OF THIS AGREEMENT.

 

1.5                                 “COMPANY” SHALL HAVE THE MEANING SET FORTH
IN THE PREAMBLE TO THIS AGREEMENT.

 

1.6                                 “EFFECTIVE DATE” SHALL HAVE THE MEANING SET
FORTH IN SECTION 3.1 OF THIS AGREEMENT.

 

1.7                                 “EX GRATIA PAYMENTS” SHALL MEAN PAYMENTS FOR
ANY LOSS NOT COVERED UNDER THE WRITTEN TERMS OF A POLICY, INCLUDING ANY LOSS
PAYMENTS NOT NECESSARILY REQUIRED UNDER A POLICY BUT MADE AS A COMMERCIAL
ACCOMMODATION.

 

1.8                                 “INSURANCE PROGRAM AGREEMENT” SHALL HAVE THE
MEANING SET FORTH IN SECTION 2.6 OF THIS AGREEMENT.

 

1.9                                 “INSURED” SHALL HAVE THE MEANING SET FORTH
IN THE PREAMBLE TO THIS AGREEMENT.

 

1.10                           “LABOR READY” SHALL HAVE THE MEANING SET FORTH IN
THE PREAMBLE TO THIS AGREEMENT.

 

1.11                           “LOSS(ES)” SHALL MEAN CLAIMS, RISKS, LOSSES,
OBLIGATIONS, LIABILITIES, DAMAGES, DEFICIENCIES, COSTS OR EXPENSES, AS SET FORTH
IN MORE DETAIL IN SECTION 6.3 OF THIS AGREEMENT.

 

1.12                           “PARTIES” SHALL HAVE THE MEANING SET FORTH IN THE
PREAMBLE TO THIS AGREEMENT.

 

1.13                           “WAHI” AGREEMENT” SHALL MEAN THAT CERTAIN
REINSURANCE AGREEMENT DATED  JANUARY 1, 2001, BETWEEN LUMBERMENS MUTUAL CASUALTY
COMPANY AND WORKERS’ ASSURANCE OF

 

2

--------------------------------------------------------------------------------

 

 

HAWAII, INC. (“WAHI”), INCLUDING ANY AND ALL SCHEDULES, ADDENDA, ENDORSEMENTS OR
AMENDMENTS THERETO.

 

1.14                           “POLIC(Y)(IES)” SHALL HAVE THE MEANING SET FORTH
IN THE PREAMBLE TO THIS AGREEMENT.

 

1.15                           “POLICY LIABILITIES” SHALL HAVE THE MEANING SET
FORTH IN SECTION 2.2 OF THIS AGREEMENT.

 

1.16                           “RECORDS” SHALL HAVE THE MEANING SET FORTH IN
SECTION 7.1 OF THIS AGREEMENT.

 

1.17                           “REINSURANCE AGREEMENTS” SHALL MEAN ANY AND ALL
CONTRACTS, BINDERS, COVER NOTES, FACULTATIVE CERTIFICATES OR TREATIES ENTERED
INTO BY THE COMPANY, INCLUDING AFFILIATES OF THE COMPANY, THAT PROVIDE
REINSURANCE COVERAGE FOR LOSSES UNDER THE POLICIES, INCLUDING THE WAHI
AGREEMENT.

 

1.18                           “Reinsurance Trust Agreement” shall mean that
certain trust agreement between the Company, WAHI and Bank of Hawaii, formerly
doing business as Pacific Century Trust effective January 1, 2001.

 

1.19                           “RELATED AGREEMENTS” SHALL HAVE THE MEANING SET
FORTH IN SECTION 2.6 OF THIS AGREEMENT.

 

1.20                           “THIRD PARTY ADMINISTRATOR AGREEMENT” SHALL MEAN
AND REFER TO THE CLAIMS SERVICES AGREEMENT DATED AS OF THE EFFECTIVE DATE BY AND
BETWEEN NATIONAL UNION AND ESIS (“TPA”).

 

1.21                           “Trust Agreement” shall mean that certain trust
agreement between the Company, WAHI and Wells Fargo Bank Minnesota, N.A.
effective December 18, 2002.

 

1.22                           “UNALLOCATED LOSS ADJUSTMENT EXPENSES” SHALL MEAN
ALL COSTS AND EXPENSES NOT ALLOCABLE TO A SPECIFIC CLAIM UNDER A POLICY THAT ARE
INCURRED IN THE INVESTIGATION, APPRAISAL, ADJUSTMENT, SETTLEMENT, LITIGATION,
DEFENSE OR APPEAL OF A SPECIFIC CLAIM, INCLUDING SALARIES AND EXPENSES OF
EMPLOYEES, AND OFFICE AND OTHER OVERHEAD EXPENSES, BUT EXCLUDING FEES OF THIRD
PARTY ADMINISTRATORS OF THE POLICIES.

 

ARTICLE II

 

BUSINESS ASSUMED AND NOVATED

 

2.1                                 EFFECTIVE ON THE EFFECTIVE DATE, THE COMPANY
HEREBY NOVATES, ASSIGNS AND TRANSFERS TO NATIONAL UNION, AND NATIONAL UNION
HEREBY ASSUMES FROM THE COMPANY AS EXCLUSIVE LIABILITIES AND OBLIGATIONS OF
NATIONAL UNION TO THE INSURED UNDER THE POLICIES, ONE HUNDRED PERCENT (100%) OF
THE POLICY LIABILITIES.  THE COMPANY ALSO ASSIGNS AND TRANSFERS TO NATIONAL
UNION, AND NATIONAL UNION HEREBY ASSUMES FROM THE COMPANY, ALL OF THE COMPANY’S
RIGHTS, PRIVILEGES, DEFENSES AND BENEFITS ARISING FROM OR RELATING TO THE
POLICIES.  THE PARTIES AGREE THAT THE DUTIES, OBLIGATIONS, LIABILITIES, RIGHTS,
PRIVILEGES AND BENEFITS ARISING FROM OR

 

3

--------------------------------------------------------------------------------

 

RELATED TO ANY AND ALL REINSURANCE AGREEMENTS AND RELATED AGREEMENTS, ARE NOT
TRANSFERRED TO OR ASSUMED BY NATIONAL UNION.

 

2.2                                 THE TERM “POLICY LIABILITIES” SHALL MEAN THE
GROSS LIABILITY OF THE COMPANY FOR LOSSES ARISING FROM OR RELATED TO THE
POLICIES (EXCLUDING LIABILITIES TO THE EXTENT PAID OR OTHERWISE DISCHARGED BY
THE COMPANY PRIOR TO THE EFFECTIVE DATE) BEFORE DEDUCTION FOR ALL APPLICABLE
CESSIONS, IF ANY, UNDER THE REINSURANCE AGREEMENTS.  POLICY LIABILITIES SHALL
ALSO INCLUDE THE FOLLOWING IF NOT PAID OR OTHERWISE DISCHARGED BY THE COMPANY
PRIOR TO THE EFFECTIVE DATE):

 

(A)                                  ALL LIABILITY FOR PREMIUM TAXES ON PREMIUMS
ARISING FROM OR RELATED TO THE POLICIES, RECEIVED BY THE COMPANY ON OR AFTER THE
EFFECTIVE DATE AND ACTUALLY REMITTED TO NATIONAL UNION;

 

(B)                                 ALL LIABILITY IN CONNECTION WITH THE
PARTICIPATION BY THE COMPANY, WHETHER INVOLUNTARY OR VOLUNTARY, IN ANY GUARANTY
FUND, ASSIGNED RISK PLAN OR OTHER GOVERNMENT MANDATED PROGRAMS OR ASSOCIATIONS
OF ANY KIND ESTABLISHED OR GOVERNED BY THE STATE OF THE COMPANY’S DOMICILE OR
ANY OTHER STATE OR JURISDICTION, WHICH PARTICIPATION IS BASED ON PREMIUMS
ARISING UNDER THE POLICIES, RECEIVED BY THE COMPANY ON OR AFTER THE EFFECTIVE
DATE AND ACTUALLY REMITTED TO NATIONAL UNION;

 

(C)                                  ALL LIABILITY FOR ANY ASSESSMENTS, RESIDUAL
MARKET LOADS OR SIMILAR CHARGES, WHETHER BASED ON LOSSES, PREMIUMS OR OTHERWISE,
ARISING FROM OR RELATED TO THE POLICIES WHICH BECOME PAYABLE ON OR AFTER THE
EFFECTIVE DATE;

 

(D)                                 ALL LIABILITY FOR RETURNS OR REFUNDS OF
PREMIUMS ARISING FROM OR RELATED TO THE POLICIES WHICH BECOME PAYABLE ON OR
AFTER THE EFFECTIVE DATE;

 

(E)                                  ALL LIABILITY FOR ANY FEES OF THIRD PARTY
ADMINISTRATORS OF THE POLICIES WHICH BECOME PAYABLE ON OR AFTER THE EFFECTIVE
DATE;

 

(F)                                    ALL LIABILITY (TO THE EXTENT PERMITTED BY
LAW) FOR CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SIMILAR DAMAGES WHICH ARISE FROM
OR RELATE TO ANY ALLEGED OR ACTUAL ACT, ERROR OR OMISSION BY THE COMPANY,
WHETHER INTENTIONAL OR OTHERWISE, OR FROM ANY RECKLESS CONDUCT OR BAD FAITH BY
THE COMPANY IN CONNECTION WITH THE HANDLING OF ANY CLAIM UNDER ANY OF THE
POLICIES OR IN CONNECTION WITH THE PREPARATION, ISSUANCE, DELIVERY OR
CANCELLATION OF ANY OF THE POLICIES; AND

 

(G)                                 ALL LIABILITY FOR EX GRATIA PAYMENTS.

 

2.3                                 NATIONAL UNION SHALL HAVE THE BENEFIT OF ANY
AND ALL DEFENSES, SETOFFS AND COUNTERCLAIMS TO WHICH THE COMPANY WOULD BE
ENTITLED WITH RESPECT TO SUCH POLICY LIABILITIES, IT BEING EXPRESSLY UNDERSTOOD
AND AGREED BY THE PARTIES THAT NO SUCH DEFENSES, SETOFFS OR COUNTERCLAIMS ARE
WAIVED BY THE EXECUTION OF THIS AGREEMENT OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THAT, AS OF THE EFFECTIVE DATE, NATIONAL
UNION SHALL BE FULLY SUBROGATED TO ALL SUCH DEFENSES, SETOFFS AND COUNTERCLAIMS.

 

4

--------------------------------------------------------------------------------

 

2.4                                 NATIONAL UNION IS HEREBY IRREVOCABLY
DESIGNATED THE SUCCESSOR TO THE COMPANY UNDER THE POLICIES AS IF SUCH POLICIES
WERE DIRECT OBLIGATIONS OF NATIONAL UNION.  NATIONAL UNION SUBSTITUTES ITSELF AS
OF THE EFFECTIVE DATE IN THE PLACE AND STEAD OF THE COMPANY AS IF NAMED IN THE
POLICIES IN PLACE OF THE COMPANY.  AS OF THE EFFECTIVE DATE, THE INSURED UNDER
THE POLICIES SHALL, AND DOES HEREBY, IMMEDIATELY RELEASE AND DISCHARGE THE
COMPANY FROM ANY AND ALL DUTIES, OBLIGATIONS AND LIABILITIES UNDER THE POLICIES
AND THE RELATED AGREEMENTS, AND THEREAFTER SHALL DISREGARD THE COMPANY AS A
PARTY THERETO. IMMEDIATELY AFTER THE EFFECTIVE DATE, THE COMPANY SHALL, AND DOES
HEREBY, IMMEDIATELY RELEASE AND DISCHARGE THE INSURED FROM ANY AND ALL DUTIES,
OBLIGATIONS AND LIABILITIES UNDER THE POLICIES AND THE RELATED AGREEMENTS,
EXCEPT FOR OBLIGATIONS TO COOPERATE WITH THE COMPANY.  EXCEPT TO THE EXTENT
PROHIBITED BY APPLICABLE LAW AND REGULATIONS, PAYMENTS MADE BY NATIONAL UNION
FOR THE BENEFIT OF THE INSURED SUBSEQUENT TO THE EFFECTIVE DATE IN DISCHARGE OF
OBLIGATIONS TO PROVIDE DIRECT COVERAGE TO THE INSURED UNDER ARTICLE II OF THIS
AGREEMENT SHALL DIMINISH, DOLLAR FOR DOLLAR, ANY OBLIGATION IN RESPECT THEREOF
WHICH NATIONAL UNION MAY HAVE TO THE COMPANY UNDER ARTICLE VI OF THIS
AGREEMENT.  AFTER THE EFFECTIVE DATE, THE INSURED SHALL FILE CLAIMS ARISING
UNDER THE POLICIES DIRECTLY WITH THE TPA ACTING ON BEHALF OF NATIONAL UNION
(EXCEPT FOR CLAIMS ON WHICH THE COMPANY HAS MADE PAYMENTS OR OTHERWISE SATISFIED
ITS LIABILITIES), AND NATIONAL UNION HEREBY CONSENTS TO BE SUBJECT TO DIRECT
ACTION TAKEN BY THE INSURED IN ACCORDANCE WITH THE INSURED’S RIGHTS UNDER THE
POLICIES; PROVIDED, HOWEVER, THAT THIS AGREEMENT SHALL NOT CONFER UPON THE
INSURED ANY ADDITIONAL RIGHTS OTHER THAN SUCH RIGHTS THAT THE INSURED WOULD HAVE
HAD AGAINST THE COMPANY IN THE ABSENCE OF THIS AGREEMENT. ON OR AFTER THE
EFFECTIVE DATE, NATIONAL UNION SHALL HAVE THOSE RIGHTS TO SUBROGATION AND
SALVAGE THAT MAY ACCRUE WITH REGARD TO CLAIMS ACTUALLY PAID BY NATIONAL UNION
UNDER THE POLICIES OR UNDER THE INDEMNITY SET FORTH IN THIS AGREEMENT.  THE
COMPANY SHALL BE ENTITLED TO THOSE RIGHTS OF SUBROGATION AND SALVAGE THAT MAY
ACCRUE WITH REGARD TO CLAIMS ACTUALLY PAID BY THE COMPANY UNDER THE POLICIES AND
NOT PAID BY NATIONAL UNION UNDER THE INDEMNITY SET FORTH IN THIS AGREEMENT.

 

2.5                                 SIMULTANEOUSLY WITH THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, NATIONAL UNION, THE COMPANY AND EACH INSURED SHALL
ENTER INTO A NOVATION ENDORSEMENT, IN THE FORM ATTACHED HERETO AS EXHIBIT A, FOR
EACH OF THE POLICIES.  SUCH NOVATION ENDORSEMENT SHALL PROVIDE FOR THE
SUBSTITUTION OF NATIONAL UNION FOR THE RELEVANT COMPANY AS STATED IN SECTION 2.4
OF THIS ARTICLE AND FOR THE EXPRESS AGREEMENT OF SUCH INSURED TO SUCH
SUBSTITUTION.

 

2.6                                 THE COMPANY, THE INSURED AND NATIONAL UNION
AGREE THAT, AS OF THE EFFECTIVE DATE, THE FOLLOWING AGREEMENTS (TOGETHER WITH
ANY AND ALL OTHER AGREEMENTS RELATING TO THE POLICIES, COLLECTIVELY, THE
“RELATED AGREEMENTS”) ARE HEREBY TERMINATED AND RELEASED FOR ALL PURPOSES:  (I)
THAT CERTAIN INSURANCE PROGRAM AGREEMENT ENTERED INTO BY THE COMPANY AND THE
INSURED AND EFFECTIVE AS OF JANUARY 1. 2001 (THE “INSURANCE PROGRAM AGREEMENT”),
(II) ANY THIRD PARTY ADMINISTRATOR OR CLAIM AGREEMENT RELATED TO THE POLICIES;
THE (III) WAHI AGREEMENT, (IV) THE REINSURANCE TRUST AGREEMENT AND (V) THE TRUST
AGREEMENT .  AS OF THE EFFECTIVE DATE, LABOR READY SHALL CEASE TO BE A
POLICYHOLDER OR MEMBER OF THE COMPANY, AND DOES HEREBY IMMEDIATELY RELEASE AND
DISCHARGE THE COMPANY FROM ANY AND ALL DUTIES, OBLIGATIONS AND LIABILITIES UNDER
THE RELATED AGREEMENTS, AND THE COMPANY DOES HEREBY IMMEDIATELY RELEASE AND
DISCHARGE LABOR READY FROM ANY AND ALL DUTIES, OBLIGATIONS AND LIABILITIES UNDER
THE RELATED AGREEMENTS.  AS OF THE EFFECTIVE DATE, ANY FUNDS HELD BY ANY THIRD
PARTY PURSUANT TO SUCH RELATED AGREEMENTS SHALL BE THE SOLE AND EXCLUSIVE
PROPERTY, RIGHT AND TITLE OF LABOR READY.

 

5

--------------------------------------------------------------------------------

 

ARTICLE III

 

TERM, TERRITORY AND CONDITIONS PRECEDENT

 

3.1                                 THIS AGREEMENT SHALL BE MADE EFFECTIVE AS OF
DECEMBER 29, 2004 (THE “EFFECTIVE DATE”).

 

3.2                                 THIS AGREEMENT SHALL APPLY TO ALL
TERRITORIES COVERED UNDER THE POLICIES.

 

3.3                                 THE FOLLOWING SHALL BE DEEMED CONDITIONS
PRECEDENT TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT:

 

(A)                                  THE COMPANY AND LABOR READY SHALL HAVE
EXECUTED THAT CERTAIN SETTLEMENT AGREEMENT AND RELEASE (THE “SETTLEMENT
AGREEMENT”) DATED AS OF THE EFFECTIVE DATE;

 

(b)                                 Labor Ready and National Union shall have
executed that certain Indemnification Agreement (the “Indemnification
Agreement”) dated as of the Effective Date;

 

(C)                                  ALL OTHER TERMS AND CONDITIONS SET FORTH IN
THIS AGREEMENT AND REQUIRED TO BE PERFORMED PRIOR TO THE EFFECTIVENESS OF THIS
AGREEMENT SHALL HAVE BEEN SATISFIED.

 

3.4                                 NATIONAL UNION’S ASSUMPTION OF THE POLICIES
FROM THE COMPANY, THE COMPANY’S ASSIGNMENT AND TRANSFER OF THE POLICIES TO
NATIONAL UNION, THE COMPANY’S RETURN OF COLLATERAL TO LABOR READY, AND THE
SATISFACTION OF THE OTHER TERMS AND CONDITIONS SET FORTH IN SECTION 3.3 HEREOF,
EACH PURSUANT TO THE TERMS OF THIS AGREEMENT, SHALL OCCUR CONTEMPORANEOUSLY.

 

ARTICLE IV

 

CONSIDERATION

 

4.1                                 EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.4,
AS CONSIDERATION FOR THE NOVATION AND ASSUMPTION BY NATIONAL UNION OF ALL THE
COMPANY’S LIABILITIES AND OBLIGATIONS UNDER THE POLICIES IN ACCORDANCE HEREWITH,
THE COMPANY SHALL, AS OF THE EFFECTIVE DATE: (I) ASSIGN TO NATIONAL UNION ALL
RIGHTS TO RECEIVE ANY FUTURE RECOVERIES UNDER THE POLICIES, INCLUDING WHERE
APPLICABLE, BUT NOT LIMITED TO, ANY DEDUCTIBLE REIMBURSEMENTS, SALVAGE AND
SUBROGATION RECOVERIES, AND ALL OTHER RIGHTS, PRIVILEGES, DEFENSES AND BENEFITS
OF THE COMPANY ARISING FROM OR RELATING TO THE POLICIES, AND (II) PERFORM ALL OF
ITS OTHER OBLIGATIONS UNDER THIS AGREEMENT.

 

4.2                                 AS CONSIDERATION FOR THE TRANSFER OF
LIABILITIES AND OBLIGATIONS UNDER THE POLICIES FROM THE COMPANY TO NATIONAL
UNION, LABOR READY SHALL, AS OF THE EFFECTIVE DATE, ENTER INTO THE SETTLEMENT
AGREEMENT WITH THE COMPANY, AND THE COMPANY SHALL RETURN OR RELEASE ANY AND ALL
COLLATERAL SECURING LABOR READY’S OBLIGATIONS UNDER THE POLICIES AND/OR RELATED
AGREEMENTS;

 

6

--------------------------------------------------------------------------------

 

4.2                                 NOTHING CONTAINED IN THIS ARTICLE IV RELATES
TO ANY PAYMENT TO BE MADE BY LABOR READY TO NATIONAL UNION UPON NATIONAL UNION’S
ENTRY INTO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, PREMIUM PAYMENTS.

 

ARTICLE V

 

POLICY ADMINISTRATION

 

5.1                                 THE COMPANY AGREES THAT, AFTER THE EXECUTION
AND DELIVERY OF THIS AGREEMENT, IT WILL USE ITS BEST EFFORTS TO FORWARD OR CAUSE
TO BE FORWARDED TO ZONAL UNDERWRITING MANAGER, AIG RISK MANAGEMENT, BUYOUT
DIVISION, 175 WATER STREET, 27TH FLOOR, NEW YORK, NEW YORK 10038, REASONABLY
PROMPTLY, ALL UNRESOLVED NOTICES AND OTHER WRITTEN COMMUNICATIONS ACTUALLY
RECEIVED BY THE COMPANY RELATING TO THE POLICIES (INCLUDING, WITHOUT LIMITATION,
ALL INQUIRIES, NOTICES OR COMPLAINTS FROM STATE INSURANCE REGULATORS, AGENTS,
BROKERS AND THE INSURED, ALL NOTICES OF CLAIMS, AND ALL SUITS AND ACTIONS FOR
WHICH IT RECEIVES SERVICE OF PROCESS).

 

5.2                                 NATIONAL UNION AGREES TO MAKE ALL REQUIRED
STATE BUREAU FILINGS OR REPORTS ON ANY PREMIUM OR LOSS TRANSACTION OCCURRING ON
OR AFTER THE EFFECTIVE DATE THAT HAVE NOT PREVIOUSLY BEEN MADE BY THE COMPANY ON
OR PRIOR TO THE EFFECTIVE DATE.

 

ARTICLE VI

 

INDEMNIFICATION

 

6.1                                 NATIONAL UNION AND LABOR READY EACH JOINTLY
AND SEVERALLY AGREE TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE COMPANY (AND ITS
DIRECTORS, OFFICERS, EMPLOYEES, SUCCESSORS AND PERMITTED ASSIGNS) FROM AND
AGAINST ALL LOSSES (AS HEREINAFTER DEFINED) ARISING FROM OR RELATED TO THE
POLICIES (OTHER THAN LOSSES TO THE EXTENT THEY WERE PAID OR OTHERWISE DISCHARGED
BY THE COMPANY PRIOR TO THE EFFECTIVE DATE).

 

6.2                                 LABOR READY AGREES TO INDEMNIFY, DEFEND AND
HOLD HARMLESS THE COMPANY (AND ITS DIRECTORS, OFFICERS, EMPLOYEES, SUCCESSORS
AND PERMITTED ASSIGNS) FROM AND AGAINST ALL LOSSES (AS HEREINAFTER DEFINED)
ARISING FROM OR RELATED TO THE RELATED AGREEMENTS (OTHER THAN LOSSES TO THE
EXTENT THEY WERE PAID OR OTHERWISE DISCHARGED BY THE COMPANY PRIOR TO THE
EFFECTIVE DATE).

 

6.3                                 AS USED HEREIN, “LOSS” AND/OR “LOSSES” SHALL
MEAN ALL CLAIMS, RISKS, LOSSES, OBLIGATIONS, LIABILITIES, DAMAGES, DEFICIENCIES,
COSTS OR EXPENSES (INCLUDING, WITHOUT LIMIT, ALLOCATED LOSS ADJUSTMENT EXPENSES
(INCLUDING DEFENSE AND COST CONTAINMENT AND ADJUSTING AND OTHER, AS THOSE TERMS
ARE DEFINED IN STATEMENT OF STATUTORY ACCOUNTING PRINCIPLES NO. 55, OF NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS, ACCOUNTING PRACTICES AND PROCEDURES
MANUAL (2004)), INTEREST ON AMOUNTS ACTUALLY PAID, PREJUDGMENT INTEREST,
POST-JUDGMENT INTEREST, DECLARATORY JUDGMENT EXPENSES, PENALTIES, AND REASONABLE
ATTORNEYS’ FEES AND DISBURSEMENTS), PROVIDED, HOWEVER, THAT “LOSS” AND/OR
“LOSSES” SHALL NOT INCLUDE UNALLOCATED LOSS ADJUSTMENT EXPENSES INCURRED BY THE
COMPANY AND SHALL NOT INCLUDE LOSSES RESULTING WHERE A COURT OF COMPETENT
JURISDICTION FINDS THAT THE COMPANY COMMITTED A CRIMINAL ACT OR THE COMPANY
ADMITS OR DOES NOT DISPUTE THAT IT COMMITTED A CRIMINAL ACT.

 

7

--------------------------------------------------------------------------------

 

6.4                                 REASONABLY PROMPTLY AFTER RECEIPT BY THE
COMPANY OF NOTICE OF ANY DEMAND, CLAIM OR CIRCUMSTANCES WHICH, WITH A LAPSE OF
TIME, WOULD GIVE RISE TO A CLAIM OR THE COMMENCEMENT (OR THREATENED
COMMENCEMENT) OF ANY ACTION, PROCEEDING OR INVESTIGATION (AN “ASSERTED
LIABILITY”) THAT MAY RESULT IN AN INDEMNIFICATION OBLIGATION ON THE PART OF
NATIONAL UNION AND/OR LABOR READY UNDER THE TERMS OF THIS ARTICLE VI, THE
COMPANY SHALL GIVE NOTICE THEREOF (THE “CLAIMS NOTICE”) TO NATIONAL UNION AND/OR
LABOR READY.  THE CLAIMS NOTICE SHALL INDICATE THE AMOUNT (ESTIMATED, IF
NECESSARY) OF THE LOSS THAT HAS BEEN OR MAY BE SUFFERED BY THE COMPANY.

 

6.5                                 NATIONAL UNION AND/OR LABOR READY, AS
APPLICABLE, SHALL DEFEND, AT THEIR OWN EXPENSE AND BY THEIR OWN COUNSEL, ANY
SUCH ASSERTED LIABILITY; PROVIDED, HOWEVER, THAT NATIONAL UNION AND/OR LABOR
READY MAY NOT COMPROMISE OR SETTLE ANY ASSERTED LIABILITY WITHOUT THE CONSENT OF
THE COMPANY UNLESS SUCH COMPROMISE OR SETTLEMENT (I) REQUIRES NO MORE THAN A
MONETARY PAYMENT FOR WHICH THE COMPANY IS HEREUNDER FULLY INDEMNIFIED OR
INVOLVES OTHER MATTERS NOT BINDING UPON THE COMPANY AND (II) FULLY RELEASES THE
COMPANY FROM ANY AND ALL LIABILITY.  IF IMMEDIATE ACTION IS NECESSARY TO DEFEND
THE COMPANY AGAINST AN ASSERTED LIABILITY, AND NATIONAL UNION AND/OR LABOR
READY, AS APPLICABLE, HAVE BEEN INFORMED OF THE NEED FOR IMMEDIATE ACTION BUT DO
NOT UNDERTAKE SUCH DEFENSE, THE COMPANY MAY DEFEND SUCH NEW ASSERTED LIABILITY
UNTIL SUCH TIME AS NATIONAL UNION AND/OR LABOR READY HAVE ACTED TO DEFEND THE
COMPANY OR UNTIL NATIONAL UNION AND/OR LABOR READY HAVE INFORMED THE COMPANY
THAT NATIONAL UNION AND/OR LABOR READY HAVE ASSUMED RESPONSIBILITY FOR SUCH
DEFENSE.  SUCH DEFENSE BY THE COMPANY SHALL BE AT THE EXPENSE OF NATIONAL UNION
AND/OR LABOR READY.  IN INFORMING ONE ANOTHER CONCERNING A NEW ASSERTED
LIABILITY THAT REQUIRES SUCH IMMEDIATE ACTION, NATIONAL UNION, LABOR READY AND
THE COMPANY MAY USE ANY MEANS OF COMMUNICATION THAT IS CLEARLY LIKELY TO PROVIDE
NOTICE.  IF THE COMPANY HAS NOT INFORMED NATIONAL UNION AND/OR LABOR READY, AS
APPLICABLE, OF THE NEED FOR IMMEDIATE ACTION, THE COST OF SUCH ACTION WILL BE
BORNE BY THE COMPANY UNTIL SUCH TIME AS NATIONAL UNION AND/OR LABOR READY ARE
NOTIFIED; LIKEWISE, IF NATIONAL UNION AND/OR LABOR READY HAVE ASSUMED THE
DEFENSE OF THE COMPANY AND NOTIFIED THE COMPANY OF SAME, ANY FURTHER ACTION BY
THE COMPANY THEREAFTER WILL BE AT THE COMPANY’S EXPENSE.

 

6.6                                 NOTWITHSTANDING THE PROVISIONS SET FORTH IN
SECTION 6.4, NATIONAL UNION AND/OR LABOR READY SHALL HAVE EXCLUSIVE CONTROL OVER
THE DEFENSE OF ANY ASSERTED LIABILITY FOR WHICH NATIONAL UNION AND/OR LABOR
READY HAVE ENTERED AN APPEARANCE OR OTHERWISE ASSUMED THE DEFENSE.  IN SUCH
CIRCUMSTANCES, THE COMPANY SHALL HAVE NO RIGHT TO PARTICIPATE IN THE DEFENSE
WITH REGARD TO AN ASSERTED LIABILITY.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

 

7.1                                 THE COMPANY REPRESENTS AND WARRANTS TO
NATIONAL UNION AND LABOR READY THAT:

 

(I)                                     THE COMPANY IS AN INSURANCE COMPANY DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS STATE OF
DOMICILE.

 

8

--------------------------------------------------------------------------------

 

(II)                                  THE COMPANY HAS ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT, AND TO PERFORM ITS OBLIGATIONS
HEREUNDER.  THE EXECUTION AND DELIVERY BY THE COMPANY OF THIS AGREEMENT, AND THE
PERFORMANCE BY THE COMPANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE APPROVAL.  THIS AGREEMENT, WHEN DULY
EXECUTED AND DELIVERED BY THE COMPANY, AND SUBJECT TO THE DUE EXECUTION AND
DELIVERY HEREOF BY NATIONAL UNION AND LABOR READY, WILL BE A VALID AND BINDING
OBLIGATION OF THE COMPANY, ENFORCEABLE AGAINST THE COMPANY, ITS PERMITTED
SUCCESSORS AND ASSIGNS, IN ACCORDANCE WITH ITS TERMS.

 

(III)                               THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY IN
ACCORDANCE WITH THE RESPECTIVE TERMS AND CONDITIONS HEREOF WILL NOT (A) VIOLATE
ANY PROVISIONS OF THE ARTICLES OF INCORPORATION OR BYLAWS OF THE COMPANY, OR (B)
VIOLATE ANY ORDER, JUDGMENT, INJUNCTION, AWARD OR DECREE OF ANY COURT,
ARBITRATOR OR GOVERNMENTAL OR REGULATORY BODY AGAINST, OR BINDING UPON, OR ANY
AGREEMENT WITH, OR CONDITION IMPOSED BY, ANY GOVERNMENTAL OR REGULATORY BODY,
FOREIGN OR DOMESTIC, BINDING UPON THE COMPANY AS OF THE DATE HEREOF.

 

(IV)                              THE COMPANY HAS NO OBLIGATION TO PAY ANY FEE,
COMMISSION, EXPENSE OR OTHER AMOUNT TO ANY INTERMEDIARY OR BROKER IN CONNECTION
WITH THIS AGREEMENT.

 

(V)                                 TO THE BEST OF THE COMPANY’S KNOWLEDGE AS OF
THE EFFECTIVE DATE, THE COMPANY HAS PROVIDED NATIONAL UNION, OR GIVEN NATIONAL
UNION FULL ACCESS TO, ALL BOOKS, RECORDS, REPORTS, UNDERWRITING FILES, CLAIMS
FILES, ELECTRONIC FILES, AND INFORMATION IN ANY FORM (THE “RECORDS”) RELATING TO
THE POLICIES.

 

(VI)                              TO THE BEST OF THE COMPANY’S KNOWLEDGE AS OF
THE EFFECTIVE DATE, THE COMPANY IS NOT AWARE OF ANY CLAIM MADE UNDER, OR
LITIGATION WITH RESPECT TO, ANY OF THE POLICIES WHICH CONTAINS A MATERIAL CLAIM
FOR BAD FAITH DAMAGES, PUNITIVE DAMAGES, EXTRA- CONTRACTUAL LIABILITIES,
LIABILITIES IN EXCESS OF POLICY LIMITS OR OTHER SIMILAR CLAIM, WHICH HAS NOT
BEEN FULLY AND FINALLY RESOLVED AND SETTLED AS OF THE EFFECTIVE DATE.

 

(VII)                           TO THE BEST OF THE COMPANY’S KNOWLEDGE AS OF THE
EFFECTIVE DATE, TPA IS THE ONLY THIRD PARTY ADMINISTRATOR THAT HAS BEEN RETAINED
TO ADJUST CLAIMS UNDER THE POLICIES, AND THE COMPANY IS NOT AWARE OF ANY OTHER
THIRD PARTY ADMINISTRATOR BEING RETAINED BY ANY OTHER PARTY TO ADJUST SUCH
CLAIMS.

 

(VIII)                        TO THE BEST OF THE COMPANY’S KNOWLEDGE AS OF THE
EFFECTIVE DATE, IT HAS PAID OR DISCHARGED ALL EXPENSES DESCRIBED IN SECTIONS
2.2(A-C).

 

(IX)                                THE ASSIGNMENT AND TRANSFER OF THE POLICIES
TO NATIONAL UNION AND/OR THE ASSIGNMENT, TRANSFER, RETURN OR CANCELLATION OF ANY
COLLATERAL OR OTHER FUNDS DUE AND OWING TO LABOR READY PURSUANT HERETO, WHETHER
BEFORE, ON OR AFTER

 

9

--------------------------------------------------------------------------------

 

THE EFFECTIVE DATE OR THE DATE ON WHICH THIS AGREEMENT IS EXECUTED BY THE
PARTIES HERETO, ARE NOT AND HAVE NOT BEEN MADE ON ACCOUNT OF AN ANTECEDENT DEBT
OWED BY THE COMPANY TO NATIONAL UNION, AND ARE INTENDED BY THE PARTIES HERETO TO
BE A CONTEMPORANEOUS EXCHANGE FOR NEW VALUE GIVEN TO THE COMPANY BY NATIONAL
UNION.

 

(X)                                   THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY WERE NEGOTIATED AT ARM’S LENGTH BY THE COMPANY.

 

(XI)                                OTHER THAN LABOR READY’S STATUS AS A
POLICYHOLDER OF THE COMPANY AS A MUTUAL INSURER, NEITHER NATIONAL UNION NOR
LABOR READY HAS ANY OWNERSHIP OR OTHER AFFILIATION WITH THE COMPANY.

 

(XII)                             THE COMPANY IS RECEIVING NEW AND REASONABLY
EQUIVALENT VALUE IN EXCHANGE FOR ANY RIGHTS OR ASSETS BEING TRANSFERRED TO LABOR
READY OR NATIONAL UNION PURSUANT TO THIS AGREEMENT.

 

(XIII)                          THE COMPANY HAS NOT TRANSFERRED OR ASSIGNED TO
ANY THIRD PARTY ANY OF ITS RIGHTS OR INTERESTS IN OR TO THE POLICIES, THE
RELATED AGREEMENTS, OR ANY COLLATERAL HELD IN RESPECT OF EITHER.

 

(XIV)                         EACH SUCH WARRANTY AND REPRESENTATION IS MATERIAL
TO THIS AGREEMENT AND RELIED UPON BY NATIONAL UNION AND THE INSURED,
RESPECTIVELY, IN ENTERING INTO THIS AGREEMENT.

 

7.2                                 NATIONAL UNION REPRESENTS AND WARRANTS TO
THE COMPANY AND LABOR READY THAT:

 

(I)                                     NATIONAL UNION IS AN INSURANCE COMPANY
DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF
PENNSYLVANIA.  IT IS DULY AUTHORIZED OR OTHERWISE QUALIFIED AND IN GOOD STANDING
TO CARRY ON THE BUSINESS OF INSURANCE IN THE STATE WHERE THE POLICIES WERE
ISSUED AND IN ANY OTHER STATE WHERE A RISK COVERED BY A POLICY IS LOCATED AND
MEETS THE REQUIREMENTS FOR CARRYING ON SUCH BUSINESS.

 

(II)                                  NATIONAL UNION HAS ALL REQUISITE POWER AND
AUTHORITY TO ENTER INTO THIS AGREEMENT, AND TO PERFORM ITS OBLIGATIONS
HEREUNDER.  THE EXECUTION AND DELIVERY BY NATIONAL UNION OF THIS AGREEMENT, AND
THE PERFORMANCE BY NATIONAL UNION OF ITS OBLIGATIONS UNDER THIS AGREEMENT, HAVE
BEEN DULY AUTHORIZED.  THIS AGREEMENT, WHEN DULY EXECUTED AND DELIVERED BY
NATIONAL UNION, AND SUBJECT TO THE DUE EXECUTION AND DELIVERY HEREOF BY THE
COMPANY AND LABOR READY, WILL BE A VALID AND BINDING OBLIGATION OF NATIONAL
UNION, ENFORCEABLE AGAINST NATIONAL UNION, ITS PERMITTED SUCCESSORS AND ASSIGNS,
IN ACCORDANCE WITH ITS TERMS.

 

(III)                               THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY IN
ACCORDANCE WITH THE RESPECTIVE TERMS AND CONDITIONS HEREOF WILL NOT (A) VIOLATE
ANY PROVISIONS OF THE ARTICLES OF INCORPORATION OR BYLAWS OF NATIONAL UNION, OR
(B) VIOLATE ANY ORDER,

 

10

--------------------------------------------------------------------------------

 

JUDGMENT, INJUNCTION, AWARD OR DECREE OF ANY COURT, ARBITRATOR OR GOVERNMENTAL
OR REGULATORY BODY AGAINST, OR BINDING UPON, OR ANY AGREEMENT WITH, OR CONDITION
IMPOSED BY, ANY GOVERNMENTAL OR REGULATORY BODY, FOREIGN OR DOMESTIC, BINDING
UPON NATIONAL UNION AS OF THE DATE HEREOF.

 

(IV)                              NATIONAL UNION HAS NO OBLIGATION TO PAY ANY
FEE, COMMISSION, EXPENSE OR OTHER AMOUNT TO ANY INTERMEDIARY OR BROKER IN
CONNECTION WITH THIS AGREEMENT.

 

(V)                                 EACH SUCH WARRANTY AND REPRESENTATION IS
MATERIAL TO THIS AGREEMENT AND RELIED UPON BY THE COMPANY AND THE INSURED,
RESPECTIVELY, IN ENTERING INTO THIS AGREEMENT.

 

7.3                                 LABOR READY (ON BEHALF OF ITSELF AND THE
OTHER INSUREDS) REPRESENTS AND WARRANTS TO THE COMPANY AND NATIONAL UNION THAT:

 

(I)                                     LABOR READY HAS ALL REQUISITE POWER AND
AUTHORITY TO ENTER INTO THIS AGREEMENT, AND TO PERFORM ITS OBLIGATIONS
HEREUNDER.  THE EXECUTION AND DELIVERY BY LABOR READY OF THIS AGREEMENT, AND
PERFORMANCE BY LABOR READY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, HAVE BEEN
DULY AUTHORIZED.  THIS AGREEMENT, WHEN DULY EXECUTED AND DELIVERED BY LABOR
READY, SUBJECT TO THE DUE EXECUTION AND DELIVERY HEREOF BY THE COMPANY AND
NATIONAL UNION, WILL BE A VALID AND BINDING OBLIGATION OF THE INSURED,
ENFORCEABLE AGAINST THE INSURED, ITS PERMITTED SUCCESSORS AND ASSIGNS, IN
ACCORDANCE WITH ITS TERMS.

 

(II)                                  THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY IN
ACCORDANCE WITH THE RESPECTIVE TERMS AND CONDITIONS HEREOF WILL NOT: (A) VIOLATE
ANY PROVISIONS OF THE ARTICLES OF INCORPORATION, BYLAWS OR OTHER ORGANIZATIONAL
DOCUMENTS OF LABOR READY, OR (B) VIOLATE ANY ORDER, JUDGMENT, INJUNCTION, AWARD
OR DECREE OF ANY COURT, ARBITRATOR, OR GOVERNMENTAL OR REGULATORY BODY AGAINST,
OR BINDING UPON, OR ANY AGREEMENT WITH, OR CONDITION IMPOSED BY, ANY
GOVERNMENTAL OR REGULATORY BODY, FOREIGN OR DOMESTIC, BINDING UPON THE INSURED
AS OF THE DATE HEREOF.

 

(III)                               LABOR READY HAS THE RIGHT, POWER AND
AUTHORITY TO APPROVE THE ASSIGNMENT, ASSUMPTION AND NOVATION OF THE POLICIES ON
BEHALF OF ALL PERSONS INSURED OR LOSS PAYEES THEREUNDER.

 

(IV)                              THE ONLY AGREEMENTS BETWEEN LABOR READY AND
THE COMPANY WHICH REFER OR RELATE TO THE POLICIES ARE THE RELATED AGREEMENTS.

 

(V)                                 TO THE BEST OF LABOR READY’S KNOWLEDGE AS OF
THE EFFECTIVE DATE, TPA IS THE ONLY THIRD PARTY ADMINISTRATOR THAT HAS BEEN
RETAINED TO ADJUST CLAIMS UNDER THE POLICIES, AND LABOR READY IS NOT AWARE OF
ANY OTHER THIRD PARTY ADMINISTRATOR BEING RETAINED BY ANY OTHER PARTY TO ADJUST
SUCH CLAIMS

 

11

--------------------------------------------------------------------------------

 

(VI)                              LABOR READY HAS NOT TRANSFERRED OR ASSIGNED
ANY OF ITS RIGHTS OR INTERESTS IN OR TO THE POLICIES OR THE RELATED AGREEMENTS,
AND NO PERSON HAS ANY RIGHT OR OTHER INTEREST THEREIN OR LIEN OR OTHER
ENCUMBRANCE THEREON.

 

(VII)                           EACH SUCH WARRANTY AND REPRESENTATION IS
MATERIAL TO THIS AGREEMENT AND RELIED UPON BY THE COMPANY AND NATIONAL UNION IN
ENTERING INTO THIS AGREEMENT.

 

7.4                                 THIS ARTICLE VII SHALL SURVIVE ANY
TERMINATION OF THIS AGREEMENT.

 

ARTICLE VIII

 

COVENANTS

 

8.1                                 AS SOON AS PRACTICABLE AFTER THE EXECUTION
AND DELIVERY OF THIS AGREEMENT, THE COMPANY SHALL FORWARD TO NATIONAL UNION, AT
NATIONAL UNION’S SOLE COST AND EXPENSE, A TRUE COPY OF ALL RECORDS RELATING TO
THE POLICIES.

 

8.2                                 WITHIN SIXTY (60) DAYS AFTER THE EFFECTIVE
DATE, THE COMPANY WILL PROVIDE TO NATIONAL UNION A FINAL ACCOUNTING, INCLUDING
ALL RELEVANT UNIT STATISTICAL INFORMATION, OF ALL TRANSACTIONS UNDER THE
POLICIES.  THE COMPANY WILL HAVE NO FURTHER OBLIGATIONS FOR ACCOUNTING FOR THE
POLICIES UNDER THIS AGREEMENT.

 

8.3                                 THE COMPANY WARRANTS AND COVENANTS THAT IT
HAS DISCUSSED THIS TRANSACTION WITH THE DIRECTOR OF THE ILLINOIS DEPARTMENT OF
FINANCIAL AND PROFESSIONAL REGULATION, DIVISION OF INSURANCE (THE “IDOI”), THAT
THE IDOI HAS NOT EXPRESSED ANY RESERVATIONS OR OBJECTIONS TO THE TRANSACTION,
AND THAT A LETTER APPROVING THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, THE EXECUTION AND PERFORMANCE OF OBLIGATIONS
ARISING UNDER THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE SETTLEMENT
AGREEMENT AND RELEASE ENTERED CONTEMPORANEOUSLY WITH THIS AGREEMENT) FROM THE
IDOI PURSUANT TO 215 ILCS 5/204(M)(C) SHALL BE DELIVERED TO LABOR READY WITHIN
TEN (10) BUSINESS DAYS AFTER THE EFFECTIVE DATE.

 

ARTICLE IX

 

ARBITRATION

 

9.1                                 IN THE EVENT OF ANY DISPUTE BETWEEN ANY TWO
OF THE PARTIES HERETO WITH REFERENCE TO THE INTERPRETATION, APPLICATION,
FORMATION, ENFORCEMENT OR VALIDITY OF THIS AGREEMENT OR THEIR RIGHTS WITH
RESPECT TO ANY TRANSACTION INVOLVED, WHETHER SUCH DISPUTE ARISES BEFORE OR AFTER
TERMINATION OF THIS AGREEMENT, SUCH DISPUTE, UPON WRITTEN REQUEST OF EITHER SUCH
PARTY, SHALL BE SUBMITTED TO THE EXCLUSIVE DECISION OF A BOARD OF ARBITRATION
COMPOSED OF TWO ARBITRATORS AND A NEUTRAL UMPIRE.  AN ORGANIZATIONAL MEETING
SHALL BE HELD WITHIN 30 DAYS OF THE APPOINTMENT OF THE UMPIRE.  THE
ORGANIZATIONAL MEETING SHALL BE HELD IN NEW YORK, NEW YORK, UNLESS OTHERWISE
MUTUALLY AGREED BY THE PARTIES AND THE MEMBERS OF THE BOARD OF ARBITRATION.  THE
PARTIES SHALL SUBMIT POSITION STATEMENTS TO THE BOARD OF ARBITRATION IN ADVANCE
OF THE

 

12

--------------------------------------------------------------------------------

 

ORGANIZATIONAL MEETING.  A PROMPT SCHEDULE FOR THE ARBITRATION, INCLUDING A DATE
FOR COMMENCEMENT OF THE FINAL HEARING, SHALL BE DETERMINED AT THE ORGANIZATIONAL
MEETING.

 

9.2                                 THE PARTIES AGREE THAT ARBITRATION PURSUANT
TO THE TERMS OF THIS ARTICLE IS A CONDITION PRECEDENT FOR THE RESOLUTION OF
DISPUTES BETWEEN THEM UNDER THIS AGREEMENT.  THE BOARD OF ARBITRATION WILL HAVE
COMPLETE JURISDICTION OVER THE ENTIRE MATTER IN DISPUTE, AND SHALL CONDUCT THE
ARBITRATION PROCEEDING TO RESOLVE DISPUTES ARISING FROM THIS AGREEMENT.

 

9.3                                 THE NOTICE REQUESTING ARBITRATION SHALL
STATE IN PARTICULAR ALL PRINCIPAL ISSUES TO BE RESOLVED AND NAME THE REQUESTING
PARTY’S ARBITRATOR.  EACH MEMBER OF THE BOARD OF ARBITRATION SHALL BE
DISINTERESTED AND NO MEMBER MAY BE A CURRENT OR FORMER OFFICER, DIRECTOR,
EMPLOYEE OR ATTORNEY OF ANY PARTY OR AN AFFILIATE OF ANY PARTY.  EACH PARTY
SHALL APPOINT ITS OWN ARBITRATOR.  IF THE PARTY RECEIVING THE NOTICE OF
ARBITRATION FAILS TO APPOINT ITS ARBITRATOR WITHIN 30 DAYS AFTER HAVING RECEIVED
THE WRITTEN NOTICE OF ARBITRATION, THE PARTY GIVING NOTICE SHALL APPOINT A
SECOND ARBITRATOR.  THE TWO ARBITRATORS SHALL CHOOSE A THIRD ARBITRATOR AS
UMPIRE WITHIN 30 DAYS AFTER APPOINTMENT OF THE SECOND ARBITRATOR.  IF THE TWO
ARBITRATORS FAIL TO AGREE UPON THE APPOINTMENT OF THE UMPIRE WITHIN SUCH 30 DAY
PERIOD, THE UMPIRE SHALL BE SELECTED PURSUANT TO THE AAA PROCEDURE IN EFFECT AT
SUCH TIME.

 

9.4                                 EACH PARTY MAY OBTAIN DISCOVERY FROM THE
OTHER THROUGH WRITTEN INTERROGATORIES AND THROUGH REQUESTS FOR DOCUMENTS, AND
MAY DEPOSE WITNESSES UPON NOTICE TO THE OTHER.  ANY OBJECTIONS TO PRODUCTION OF
DOCUMENTS OR TO THE SCOPE OF DISCOVERY SHALL BE SUBMITTED TO THE UMPIRE FOR
RESOLUTION.  THE UMPIRE MAY SCHEDULE A CONFERENCE AT WHICH THE PARTIES MAY
PRESENT ORAL ARGUMENTS AND SUBMIT WRITTEN BRIEFS WITH RESPECT TO THE PRODUCTION
OF DOCUMENTS OR THE SCOPE OF DISCOVERY.  THE UMPIRE SHALL RENDER A DECISION
WITHIN TWO BUSINESS DAYS OF THE CONFERENCE.  THE DECISION SHALL BE FINAL AND
BINDING ON ALL PARTIES.

 

9.5                                 THE BOARD SHALL MAKE ITS AWARD IN WRITING
AND SHALL STATE THE FACTUAL AND LEGAL BASIS FOR THE AWARD.  THE BOARD MAY AWARD
COMPENSATORY MONEY DAMAGES AND INTEREST THEREUPON BUT MAY NOT AWARD PUNITIVE,
EXEMPLARY, EXTRA-CONTRACTUAL, OR SIMILAR DAMAGES.  THE AWARD SHALL BE BASED UPON
A HEARING IN WHICH EVIDENCE MAY BE INTRODUCED WITHOUT FOLLOWING STRICT RULES OF
EVIDENCE BUT IN WHICH CROSS EXAMINATION AND REBUTTAL SHALL BE ALLOWED.  AT ITS
OWN ELECTION OR AT THE REQUEST OF THE BOARD, EITHER PARTY MAY SUBMIT A
POST-HEARING BRIEF FOR CONSIDERATION BY THE BOARD WITHIN TWENTY (20) DAYS AFTER
THE CLOSE OF THE HEARING.  THE BOARD SHALL MAKE ITS AWARD WITHIN THIRTY (30)
DAYS FOLLOWING THE CLOSE OF THE HEARING OR THE SUBMISSION OF POST-HEARING
BRIEFS, WHICHEVER IS LATER, UNLESS THE PARTIES CONSENT TO AN EXTENSION.  A
DECISION BY THE MAJORITY OF THE MEMBERS OF THE BOARD SHALL BECOME THE AWARD OF
THE BOARD AND SHALL BE FINAL AND BINDING ON ALL PARTIES.

 

9.6                                 EITHER PARTY MAY APPLY TO ANY COURT OF
COMPETENT JURISDICTION FOR AN ORDER CONFIRMING THE AWARD OR TO ENFORCE ANY
DECISION BY THE UMPIRE WITH RESPECT TO DISCOVERY.  A JUDGMENT OF SUCH COURT
SHALL THEREUPON BE ENTERED.

 

9.7                                 EACH PARTY SHALL BEAR THE EXPENSE OF ITS OWN
ARBITRATOR AND SHALL JOINTLY AND EQUALLY BEAR WITH THE OTHER PARTY THE EXPENSE
OF THE UMPIRE.  THE REMAINING COSTS OF THE

 

13

--------------------------------------------------------------------------------

 

ARBITRATION PROCEEDINGS OR ANY OTHER COSTS (NOT INCLUDING ATTORNEY FEES)
RELATING TO THE ARBITRATION MAY BE ALLOCATED BY THE BOARD.

 

9.8                                 THE ARBITRATION SHALL BE GOVERNED BY THE
UNITED STATES ARBITRATION ACT, TITLE 9 U.S.C. §1 ET SEQ.

 

9.9                                 IN THE EVENT OF A DISPUTE INVOLVING ALL
THREE PARTIES TO THIS AGREEMENT WITH REFERENCE TO THE INTERPRETATION,
APPLICATION, FORMATION, ENFORCEMENT OR VALIDITY OF THIS AGREEMENT OR THEIR
RIGHTS WITH RESPECT TO ANY TRANSACTION INVOLVED, THE PARTIES SHALL ADOPT SUCH
REVISIONS TO THIS ARTICLE IX AS ARE NECESSITATED BY THE RESOLUTION OF SUCH THREE
PARTY DISPUTE.

 

ARTICLE X

 

AMENDMENT OR TERMINATION

 

THIS AGREEMENT MAY BE AMENDED OR TERMINATED ONLY BY WRITTEN INSTRUMENT SIGNED BY
ALL THE PARTIES HERETO.

 

ARTICLE XI

 

GENERAL PROVISIONS

 

11.1                           HEADINGS AND SCHEDULES.  HEADINGS USED HEREIN ARE
NOT A PART OF THIS AGREEMENT AND SHALL NOT AFFECT THE TERMS HEREOF.  THE
ATTACHED SCHEDULES AND EXHIBITS ARE INCORPORATED IN AND MADE A PART OF THIS
AGREEMENT.

 

11.2                           NOTICES AND REPORTS.  EXCEPT AS OTHERWISE
SPECIFICALLY SET FORTH HEREIN, ALL NOTICES AND REPORTS TO BE GIVEN BY A PARTY
SHALL BE IN WRITING AND SHALL BE SUFFICIENTLY GIVEN IF SENT OR DELIVERED BY HAND
DELIVERY, NATIONALLY RECOGNIZED OVERNIGHT DELIVERY SERVICE WITH PROOF OF
DELIVERY OR BY PREPAID, REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED. 
NO NOTICE OR REPORT SHALL BE EFFECTIVE UNTIL RECEIVED BY THE PARTY TO WHOM IT IS
ADDRESSED.  THE ADDRESSES OF THE PARTIES FOR NOTICES AND REPORTS ARE AS FOLLOWS:

 

If to the Company:

 

Lumbermens Mutual Casualty Company
1 Kemper Drive
Long Grove, IL 60049-0001
Attention: General Counsel

 

 

 

If to National Union:

 

AIG Risk Management
Compliance Division
175 Water Street, 27th Floor
New York, NY 10038
Attention: George Turpin, Jr. Compliance
Director

 

14

--------------------------------------------------------------------------------

 

If to Insured:

 

Labor Ready, Inc.
1015 A Street
Tacoma, WA 98401
Attention: Mr. Derrek Gafford

 

 

 

with a copy to:

 

Stephen Schwab
Piper Rudnick LLP
203 N. La Salle, Suite 1900
Chicago, Illinois 60601

 

Changes in notice addresses or recipients may be made by the Company, National
Union or Insured by following the procedure specified in this Section 11.2
rather than the procedure for amendment of this Agreement.

 

11.3                           INCONTESTABILITY.  IN CONSIDERATION OF THE MUTUAL
COVENANTS AND AGREEMENTS CONTAINED HEREIN, EACH PARTY HERETO DOES HEREBY AGREE
THAT THIS AGREEMENT, AND EACH AND EVERY PROVISION HEREOF, IS AND SHALL BE
ENFORCEABLE BY AND BETWEEN THEM ACCORDING TO ITS TERMS, AND EACH PARTY DOES
HEREBY AGREE THAT IT SHALL NOT, DIRECTLY OR INDIRECTLY, CONTEST THE VALIDITY OR
ENFORCEABILITY HEREOF.

 

11.4                           ERRORS AND OMISSIONS.  ANY INADVERTENT DELAY,
OMISSION OR ERROR SHALL NOT BE HELD TO RELIEVE EITHER PARTY HERETO FROM ANY
OBLIGATION UNDER THIS AGREEMENT IF SUCH DELAY, OMISSION OR ERROR IS RECTIFIED
IMMEDIATELY UPON DISCOVERY.

 

11.5                           ENTIRE AGREEMENT.  THIS AGREEMENT, INCLUDING THE
RECITALS, TOGETHER WITH THE NOVATION ENDORSEMENTS CONSTITUTES THE ENTIRE
AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDES ALL PRIOR AGREEMENTS, UNDERSTANDINGS, PROPOSALS, AND NEGOTIATIONS,
BOTH WRITTEN AND ORAL, AMONG SUCH PARTIES WITH RESPECT TO SUCH SUBJECT MATTER.

 

11.6                           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN
COUNTERPARTS (OR BY COUNTERPART SIGNATURE PAGES), EACH OF WHICH SHALL BE DEEMED
AN ORIGINAL AND ALL OF WHICH CONSTITUTE ONE AND THE SAME INSTRUMENT.  THE
EXCHANGE OF COPIES OF THIS AGREEMENT AND OF SIGNATURE PAGES BY FACSIMILE
TRANSMISSION OR BY ELECTRONIC MAIL SHALL CONSTITUTE EFFECTIVE EXECUTION AND
DELIVERY OF THIS AGREEMENT AS TO THE PARTIES AND MAY BE USED IN LIEU OF THE
ORIGINAL AGREEMENT FOR ALL PURPOSES.  SIGNATURES OF THE PARTIES TRANSMITTED BY
FACSIMILE OR ELECTRONIC MAIL TRANSMISSION SHALL BE DEEMED TO BE THEIR ORIGINAL
SIGNATURES FOR ALL PURPOSES.

 

11.7                           NO THIRD PARTY BENEFICIARIES.  NOTHING IN THIS
AGREEMENT IS INTENDED OR SHALL BE CONSTRUED TO GIVE ANY PERSON, OTHER THAN THE
PARTIES HERETO, THEIR SUCCESSORS AND PERMITTED ASSIGNS, ANY LEGAL OR EQUITABLE
RIGHT, REMEDY OR CLAIM UNDER OR IN RESPECT OF THIS AGREEMENT OR ANY PROVISION
CONTAINED HEREIN.

 

11.8                           ASSIGNMENT.  THIS AGREEMENT SHALL BE BINDING UPON
AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS
AND PERMITTED ASSIGNS.  NEITHER THIS AGREEMENT NOR ANY RIGHT HEREUNDER MAY BE
ASSIGNED BY ANY PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTIES,
WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.

 

15

--------------------------------------------------------------------------------

 

11.9                           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

 

11.10                     EXERCISE OF RIGHTS.  THE FAILURE OR REFUSAL BY ANY
PARTY TO EXERCISE ANY RIGHTS GRANTED HEREUNDER SHALL NOT CONSTITUTE A WAIVER OF
SUCH RIGHTS OR PRECLUDE THE SUBSEQUENT EXERCISE THEREOF, AND NO VERBAL
COMMUNICATION SHALL BE ASSERTED AS A WAIVER OF ANY SUCH RIGHTS HEREUNDER UNLESS
SUCH COMMUNICATION SHALL BE CONFIRMED IN A WRITING PLAINLY EXPRESSING AN INTENT
TO WAIVE SUCH RIGHTS AND SIGNED BY THE PARTY AGAINST WHOM SUCH WAIVER IS
ASSERTED.

 

11.11                     DUTY OF COOPERATION.  EACH PARTY HERETO SHALL
COOPERATE FULLY WITH THE OTHER PARTIES USING REASONABLE COMMERCIAL EFFORTS IN
LIGHT OF EACH PARTY’S CIRCUMSTANCES IN ORDER TO ACCOMPLISH THE OBJECTIVES OF
THIS AGREEMENT.

 

[Signatures on Next Page]

 

16

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date.

 

 

 

LUMBERMENS MUTUAL CASUALTY
COMPANY AMERICAN MOTORIST
INSURANCE COMPANY, AMERICAN
PROTECTION INSURANCE COMPANY
AND AMERICAN MANUFACTURERS
MUTUAL INSURANCE COMPANY, on
behalf of each such entity and its insurance
company affiliates

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA,
on behalf of itself and its affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and
all insureds, named insureds and additional
insureds under the Policies

 

 

 

 

 

 

 

 

By:

  /s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

17

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

LIST OF POLICIES

 

Policy

 

Type

 

Effective Date

 

Issuing Company

5BA130167

 

WC AOS

 

01/01/01

 

Lumbermens Mutual Casualty Company

5BA130168

 

WC WI

 

01/01/01

 

Lumbermens Mutual Casualty Company

5BA130172

 

WC AZ

 

01/01/01

 

Lumbermens Mutual Casualty Company

5SC041161

 

WC XS

 

01/01/01

 

Lumbermens Mutual Casualty Company

 

 

 

 

 

 

 

5BH090111

 

WC AOS

 

01/01/02

 

American Manufacturers Insurance Company

5BH090114

 

WC WI

 

01/01/02

 

American Manufacturers Insurance Company

5BH090113

 

WC AZ

 

01/01/02

 

American Manufacturers Insurance Company

5SH142102

 

WC XS

 

01/01/02

 

American Manufacturers Insurance Company

 

 

 

 

 

 

 

5BH090111-01

 

WC AOS

 

01/01/03

 

American Manufacturers Insurance Company

5BH090114-01

 

WC WI

 

01/01/03

 

American Manufacturers Insurance Company

5BH090113-01

 

WC AZ

 

01/01/03

 

American Manufacturers Insurance Company

5BH091149

 

WC CA

 

01/01/03

 

American Manufacturers Insurance Company

5SH142102-01

 

WC XS

 

01/01/03

 

American Manufacturers Insurance Company

 

Schedule 1-1

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BH 090 114

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BH 090
114, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BH 090 114-01

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BH 090
114-01, including all amendments and endorsements thereto, if any, (the
“Policy”); and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA, on behalf
of itself and its affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BA 130 172

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BA 130
172, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

 

NOVATION ENDORSEMENT
To
Policy Number 5BA 130 167

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BA 130
167, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BA 130 168

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BA 130
168, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5SC 041 161

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5SC 041
161, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BH 090 113

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BH 090
113, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BH 090 111

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BH 090
111, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5SH 142 102

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5SH 142
102, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BH 090 113-01

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BH 090
113-01, including all amendments and endorsements thereto, if any, (the
“Policy”); and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BH 090 111-01

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BH 090
111-01, including all amendments and endorsements thereto, if any, (the
“Policy”); and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5SH 142 102-01

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5SH 142
102-01, including all amendments and endorsements thereto, if any, (the
“Policy”); and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

 

Title:

VP of Finance & Accounting

 

 

 

A-3

--------------------------------------------------------------------------------

 

NOVATION ENDORSEMENT
To
Policy Number 5BH 091 149

Issued To

LABOR READY, INC.

 

This Novation Endorsement (the “Endorsement”) is made and entered into by and
among LUMBERMENS MUTUAL CASUALTY COMPANY (the “Company”), National Union Fire
Insurance Company of Pittsburgh, PA (“National Union”), on behalf of itself and
its affiliates, and LABOR READY, INC. (“Labor Ready”) , on behalf of itself and
its affiliates, including all insureds, named insureds, additional insureds,
certificate holders and beneficiaries under the Policy as defined below (the
“Insured”) as of the 29th day of December, 2004.

 

WHEREAS, the Company issued to or assumed with respect to the Insured a
[Workers’ Compensation and Employers Liability] policy, Policy Number 5BH 091
149, including all amendments and endorsements thereto, if any, (the “Policy”);
and

 

WHEREAS, the Company, National Union and the Insured, at the request of the
Insured, have entered into that certain Assumption and Novation Agreement dated
as of December 29, 2004 (the “Assumption and Novation Agreement”) pursuant to
which the Policy will be novated and assumed by National Union; and

 

WHEREAS, the parties hereto all wish to substitute National Union for the
Company as the issuer and insurer of the Policy;

 

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Company, National Union and the Insured agree as follows:

 

1.                                       As of the Effective Date (as defined
below), subject to the terms of the Assumption and Novation Agreement, National
Union shall assume all of the liabilities and obligations of the Company under
the Policy and shall be substituted for the Company, in the Company’s name,
place and stead, as the insurer thereon so as to effect a novation of the Policy
and release the Company from any and all liabilities or obligations thereunder.

 

2.                                       With respect to the Insured, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement:

 

(a)                                  The Insured agrees to accept the transfer
of its Policy from the Company to National Union and fully and finally releases
the Company from any and all liabilities and obligations under the Policy;

 

(b)                                 All terms and conditions of the transferred
Policy remain unchanged, except that National Union is the Insured’s insurer
under the Policy;

 

(c)                                  All premium payments, policy charges,
notices, claims and suits or actions on the Policy shall in the future be made
directly to National Union as though it had

 

A-1

--------------------------------------------------------------------------------

 

issued the Policy originally, and all correspondence and inquiries should be
submitted to National Union at the following address and telephone number:

 

National Union Fire Insurance Company of Pittsburgh, PA

175 Water Street

New York, NY 10038

Attention: AIG Risk Management, Buyout Division

Telephone: 212 770-7000

 

3.                                       With respect to National Union, such
novation means that, as of the Effective Date, subject to the Assumption and
Novation Agreement, National Union shall assume all obligations and rights of
the Company arising from or related to the Policy and shall be entitled to
enforce all such rights in the name, place and stead of the Company.

 

4.                                       This Endorsement shall be effective as
of December 29, 2004 (the “Effective Date”).

 

5.                                       This Endorsement incorporates herein
the Assumption and Novation Agreement (including all schedules and exhibits
thereto).

 

6.                                       This Endorsement shall form a part of
the Policy.

 

7.                                       The signatories to this Endorsement
represent and warrant, each to the other, that the signatory:  (a) has read and
understands this Endorsement; (b) has full authority to bind the party to this
Endorsement presented by the signatory and that such party has full authority to
enter into this Endorsement and be bound by the terms and conditions of this
Endorsement; and (c) sets the signatory’s hand hereunto with the intention of
legally binding the party to this Endorsement represented by the signatory.

 

A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have entered into this Endorsement as of the day
and year contained in the first paragraph of this document.

 

 

 

LUMBERMENS MUTUAL CASUALTY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Gerald C. Pluard Jr.

 

 

 

 

Name:

Gerald C. Pluard Jr.

 

 

 

 

Title:

Associate General Counsel

 

 

 

 

 

 

 

 

 

NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, on behalf of itself and its
affiliates

 

 

 

 

 

 

 

 

By:

/s/ Russell Johnston

 

 

 

 

Name:

Russell Johnston

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

 

 

 

 

 

LABOR READY, INC., on behalf of itself and all insureds, named insureds and
additional insureds under the Policy

 

 

 

 

 

 

 

 

By:

/s/ Derrek Gafford

 

 

 

 

Name:

Derrek Gafford

 

 

 

 

Title:

VP of Finance & Accounting

 

 

A-3

--------------------------------------------------------------------------------