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                                                                    EXHIBIT 10.1

                                LETTER OF CREDIT

                            REIMBURSEMENT AGREEMENT

                                    BETWEEN

                                   RTW, INC.

                                      AND

                         U.S. BANK NATIONAL ASSOCIATION

                           DATED AS OF JULY 30, 2004
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                                LETTER OF CREDIT
                            REIMBURSEMENT AGREEMENT

      THIS LETTER OF CREDIT REIMBURSEMENT AGREEMENT, dated as of July 30, 2004,
between RTW, INC., a corporation organized under the laws of Minnesota (the
"Company") in favor of U.S. BANK NATIONAL ASSOCIATION, a national banking
association (the "Bank").

                                    RECITALS

      1.    The Company has requested that the Bank issue certain irrevocable
            standby letters of credit not exceeding $4,050,000 in the aggregate.

      2.    The Company has agreed to reimburse the Bank for the Bank's
            liability, if any, under said letters of credit.

      NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the aforesaid letters of credit, and intending to be legally
bound hereby, the Company and the Bank hereby agree as follows:

                                    ARTICLE I
                        Definitions and Accounting Terms

      Section 1. Defined Terms. As used in this Agreement, the following terms
shall have the following respective meanings (and such meanings shall be equally
applicable to both the singular and the plural forms of the terms defined, as
the context may require).

            "ACIC": American Compensation Insurance Company, a Minnesota
      corporation.

            "Affiliate": When used with reference to any Person, (a) each Person
      that, directly or indirectly, controls, is controlled by or is under
      common control with, the Person referred to, (b) each Person which
      beneficially owns or holds, directly or indirectly, five percent or more
      of any class of voting stock of the Person referred to (or if the Person
      referred to is not a corporation, five percent or more of the equity
      interest), (c) each Person, five percent or more of the voting stock (or
      if such Person is not a corporation, five percent or more of the equity
      interest) of which is beneficially owned or held, directly or indirectly,
      by the Person referred to, and (d) each of such Person's officers,
      directors, joint venturers and partners. The term control (including the
      terms "controlled by" and "under common control with") means the
      possession, directly, of the power to direct or cause the direction of the
      management and policies of the Person in question.

            "Bank": as defined in the opening paragraph hereof.

            "Beneficiary": as to any Letter of Credit, the beneficiary of such
      letter of credit.
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            "Business Day": any day which is not a Saturday or Sunday and is not
      a day on which banking institutions in Minnesota, or the city in which the
      principal office of the Bank is located, are authorized or required by law
      to close, or on which the New York Stock Exchange is closed.

            "Code": the Internal Revenue Code of 1986, as amended.

            "Company": as defined in the opening paragraph hereof.

            "Contingent Obligation": With respect to any Person at the time of
      any determination, without duplication, any obligation, contingent or
      otherwise, of such Person guaranteeing or having the economic effect of
      guaranteeing any Indebtedness of any other Person (the "primary obligor")
      in any manner, whether directly or otherwise: (a) to purchase or pay (or
      advance or supply funds for the purchase or payment of) such Indebtedness
      or to purchase (or to advance or supply funds for the purchase of) any
      direct or indirect security therefor, (b) to purchase property,
      securities, equity interests or services for the purpose of assuring the
      owner of such Indebtedness of the payment of such Indebtedness, (c) to
      maintain working capital, equity capital or other financial statement
      condition of the primary obligor so as to enable the primary obligor to
      pay such Indebtedness or otherwise to protect the owner thereof against
      loss in respect thereof, or (d) entered into for the purpose of assuring
      in any manner the owner of such Indebtedness of the payment of such
      Indebtedness or to protect the owner against loss in respect thereof;
      provided, that the term "Contingent Obligation" shall not include
      endorsements for collection or deposit, in each case in the ordinary
      course of business.

            "Date of Issuance": for a Letter of Credit, the date on which such
      Letter of Credit is issued by the Bank.

            "Default": any event which, with the giving of notice (whether such
      notice is required under Article IX, or under some other provision of this
      Agreement, or otherwise) or lapse of time, or both, would constitute an
      Event of Default.

            "ERISA": the Employee Retirement Income Security Act of 1974, as
      amended.

            "ERISA Affiliate": any trade or business (whether or not
      incorporated) that is a member of a group of which the Company is a member
      and which is treated as a single employer under Section 414 of the Code.

            "Event of Default": any Event of Default described in Article IX
      hereof.

            "Expiration Date": for a Letter of Credit, the date on which such
      Letter of Credit expires.

            "GAAP": generally accepted accounting principles set forth in the
      opinions and pronouncements of the Accounting Principles Board of the
      American Institute of Certified Public Accountants and statements and
      pronouncements of the Financial Accounting Standards Board or in such
      other statements by such other entity as may be

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      approved by a significant segment of the accounting profession, which are
      applicable to the circumstances as of the date of determination.

            "Immediately Available Funds": funds with good value on the day and
      in the city in which payment is received.

            "Indebtedness": with respect to any Person at the time of any
      determination, without duplication, (a) all obligations of such Person for
      borrowed money, (b) all obligations of such Person evidenced by bonds,
      debentures, notes or other similar instruments, (c) all obligations of
      such Person upon which interest charges are customarily paid or accrued,
      (d) all obligations of such Person under conditional sale or other title
      retention agreements relating to property purchased by such Person, (e)
      all obligations of such Person issued or assumed as the deferred purchase
      price of property or services, (f) all obligations of others secured by
      any Lien on property owned or acquired by such Person, whether or not the
      obligations secured thereby have been assumed, (g) all capitalized lease
      obligations of such Person, (h) all obligations of such Person in respect
      of interest rate protection agreements or other hedging arrangements, (i)
      all obligations of such Person, actual or contingent, as an account party
      in respect of letters of credit or bankers' acceptances, (j) all
      obligations of any partnership or joint venture as to which such Person is
      or may become personally liable, and (k) all Contingent Obligations of
      such Person.

            "Investment": The acquisition, purchase, making or holding of any
      stock or other security, any loan, advance, contribution to capital,
      extension of credit (except for trade and customer accounts receivable for
      inventory sold or services rendered in the ordinary course of business and
      payable in accordance with customary trade terms), any acquisitions of
      real or personal property (other than real and personal property acquired
      in the ordinary course of business) and any purchase or commitment or
      option to purchase stock or other debt or equity securities of or any
      interest in another Person or any integral part of any business or the
      assets comprising such business or part thereof. The amount of any
      Investment shall be the original cost of such Investment plus the cost of
      all additions thereto, without any adjustments for increases or decreases
      in value, or write-ups, write-downs or write-offs with respect to such
      Investment.

            "Letter of Credit": an irrevocable direct-pay letter of credit of
      the Bank in the form of Exhibit A attached hereto or such other form
      prescribed by the Bank, as such letter of credit may be amended,
      supplemented, extended or restated from time to time.

            "Lien": any security interest, mortgage, pledge, lien, charge,
      encumbrance, title retention agreement or analogous instrument or device
      (including but not limited to the interest of the lessors under
      capitalized leases), in, of or on any assets or properties of the Person
      referred to, now owned or hereafter acquired.

            "PBGC": the Pension Benefit Guaranty Corporation, established
      pursuant to Subtitle A of Title IV of ERISA, and any successor thereto or
      to the functions thereof.

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            "Person": any natural person, corporation, partnership, joint
      venture, firm, association, trust, unincorporated organization, government
      or governmental agency or political subdivision or any other entity,
      whether acting in an individual, fiduciary or other capacity.

            "Plan": each employee benefit plan (whether in existence on the date
      of this Agreement or thereafter instituted), as such term is defined in
      Section 3 of ERISA, maintained for the benefit of employees, officers or
      directors of the Company or of any ERISA Affiliate.

            "Pledge Agreement": the Pledge Agreement dated concurrently herewith
      given by the Company in favor of the Bank whereunder the Company has
      pledged to the Bank all of its common stock in ACIC as security for the
      Company's obligations under this Agreement and the Related Documents.

            "Prime Rate": the rate of interest from time to time publicly
      announced by the Bank as its "prime rate"; the Bank may lend to its
      customers at rates that are at, above or below the Prime Rate. For
      purposes of determining any interest rate hereunder which is based on the
      Prime Rate, such interest rate shall change as and when the Prime Rate
      shall change.

            "Prohibited Transaction": the respective meanings assigned to such
      term in Section 4975 of the Code and Section 406 of ERISA.

            "Related Documents": a Letter of Credit, this Agreement, the Pledge
      Agreement or any other agreement or instrument relating hereto or thereto.

            "Reportable Event": a reportable event as defined in Section 4043 of
      ERISA and the regulations issued under such Section, with respect to a
      Plan, excluding, however, such events as to which the PBGC by regulation
      has waived the requirement of Section 4043(a) of ERISA that it be notified
      within 30 days of the occurrence of such event, provided that a failure to
      meet the minimum funding standard of Section 412 of the Code and of
      Section 302 of ERISA shall be a reportable event regardless of the
      issuance of any such waivers in accordance with Section 412(d) of the
      Code.

            "Restricted Payments": With respect to the Company, collectively,
      all dividends or other distributions of any nature (cash, securities other
      than common stock of the Company, assets or otherwise), and all payments
      on any class of equity securities (including warrants, options or rights
      therefor) issued by the Company, whether such securities are authorized or
      outstanding on the date hereof or at any time thereafter and any
      redemption or purchase of, or distribution in respect of, any of the
      foregoing, whether directly or indirectly.

            "Stated Amount": the amount of any Letter of Credit as stated in
      such Letter of Credit.

            "Subsidiary": any corporation 50% or more of whose securities or
      other ownership interests having ordinary voting power for the election of
      a majority of the

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      board of directors or other Persons performing similar functions are owned
      by the Company either directly or through one or more Subsidiaries.

      Section 2. Accounting Terms and Calculations. Except as may be expressly
provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP. To the extent any change in GAAP affects any computation
or determination required to be made pursuant to this Agreement, such
computation or determination shall be made as if such change in GAAP had not
occurred unless the Company and the Bank agree in writing on an adjustment to
such computation or determination to account for such change in GAAP.

      Section 3. Other Definitional Terms. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections, Exhibits, schedules and like references are
to this Agreement unless otherwise expressly provided.

                                   ARTICLE II
                         Issuance of Letters of Credit.

      Section 1. Issuance of Letters of Credit. At any time and from time to
time from the date hereof to June 30, 2005, upon written request of the Company
to the Bank, the Bank may, in its sole discretion, issue Letters of Credit in
the aggregate amount of not more than $4,050,000, substantially in the form
attached hereto as Exhibit A or such other form as may be prescribed by the
Bank, subject to and upon the terms and conditions set forth in this Agreement;
provided, that no Letter of Credit shall have an initial expiration date more
than one year from its Date of Issuance, but such expiration date may be
extended without amendment for one year from the initial expiration date or any
future expiration date so long as such Letter of Credit provides that the Bank
may notify a Beneficiary by registered mail not less than thirty (30) days prior
to such expiration date that any such Letter of Credit will not be renewed for
any such additional period.

                                   ARTICLE III
                        Reimbursement and Other Payments

      Section 1. Payments to the Bank. The Company hereby agree to pay to the
Bank:

            (a)   on each of (a) the Date of Issuance, and (b) on each
      anniversary of the Date of Issuance thereafter occurring so long as a
      Letter of Credit is outstanding, a letter of credit fee in an amount equal
      to the product of the Stated Amount of such Letter of Credit as of each
      such date times 1.5%;

            (b)   on the Date of Issuance and on each anniversary of the Date of
      Issuance so long as a Letter of Credit is outstanding, the Bank's
      customary letter of credit administration fee for such Letter of Credit
      (currently $300 per year);

            (c)   upon each transfer of any Letter of Credit in accordance with
      its terms, the sum of $1,000 per transfer plus the Bank's actual costs and
      expenses associated with such transfer;

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            (d)   on the day that any amount is drawn under a Letter of Credit,
      and after such drawing has been honored by the Bank, a sum equal to the
      amount so drawn under such Letter of Credit;

            (e)   upon each draw under a Letter of Credit, the Bank's drawing
      fee (currently an amount equal to the greater of (A) $75 or (B) one-eighth
      of one percent of the amount of the draw);

            (f)   upon each draw paid by wire transfer, a wire transfer fee of $
      15;

            (g)   upon each billing made by the Bank hereunder, a billing fee of
      $25;

            (h)   upon the making of any amendment to a Letter of Credit, the
      Bank's customary amendment fee (currently $75 per amendment);

            (i)   on demand, any and all reasonable charges and expenses,
      including the reasonable fees and expenses of outside counsel (determined
      on the basis of such counsel's generally applicable rates, which may be
      higher than the rates such counsel charges the Bank in certain matters)
      and/or the allocated costs of in-house counsel incurred from time to time,
      incurred by the Bank in enforcing any rights under this Agreement;

            (j)   on demand, interest on all amounts remaining unpaid by the
      Company to the Bank at any time under this Agreement from the date such
      amounts become payable (in the case of an amount payable on demand, from
      the date the Bank is first entitled to demand payment, regardless of
      whether a demand for payment is actually made) until payment in full at a
      fluctuating interest rate per annum (computed on the basis of the actual
      number of days elapsed and a year of 360 days) equal to two percent (2%)
      per annum above the Prime Rate; provided that such fluctuating interest
      rate shall in no event be higher than the maximum rate permitted by law.

      Section 2. Change in Law, Etc. If any change in any law or regulation or
in the interpretation thereof by any court or administrative or governmental
authority charged with the administration thereof, or the enactment of any new
law or regulation, shall either (i) impose, modify or deem applicable any
reserve, special deposit, capital adequacy or similar requirement against loans
made by or letters of credit issued by, the Bank or (ii) impose on the Bank any
other condition regarding this Agreement or a Letter of Credit, and the result
of any event referred to in the preceding clause (i) or (ii) shall be to
increase the cost to the Bank of issuing or maintaining a Letter of Credit
(which increase in cost shall be the result of the Bank's reasonable allocation
of the aggregate of such cost increases resulting from such event), or to reduce
the amount of principal, interest or any fee or compensation receivable by the
Bank in respect of this Agreement or a Letter of Credit, or in the case of
capital adequacy requirements, the result is to increase the amount of capital
required to be maintained by the Bank with respect to a Letter of Credit above
the amount of capital that otherwise would be required to be maintained by it
with respect thereto (taking into account the Bank's internal policies with
respect to capital maintenance as of the date hereof and laws in effect on the
date of this Agreement requiring future increases in capital maintenance) then,
upon demand by the Bank, the Company shall pay

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to the Bank, on the date or dates or at the intervals specified by the Bank,
such additional amounts as the Bank shall determine to be necessary to
compensate the Bank for such increased cost or capital or reduced receipt,
together with interest on each such amount from the date demanded until payment
in full thereof at the fluctuating rate as provided in Section l(j) above;
provided, however, that such increased compensation shall not become effective,
and shall not begin to accrue, until 30 days after the date on which the Bank
gives the Company written notice thereof. A certificate setting forth in
reasonable detail such increased cost or capital or reduced receipt incurred by
the Bank as a result of any event mentioned in clause (i) or (ii) of this
Section 2 and the amount determined by the Bank to be necessary to compensate
the Bank therefor, submitted by the Bank to the Company, shall be conclusive,
absent manifest error, as to the amounts thereof.

      Section 3. Form of Payment. All payments by the Company to the Bank
hereunder shall be non-refundable and made in lawful currency of the United
States and in Immediately Available Funds at the Bank's principal office at the
address indicated in Article XI Section 2, no later than 2:00 p.m. local time at
such office on the day payment is due. Payments received by the Bank after 2:00
p.m., local time at such office, shall be deemed to be received on the following
Business Day.

                                   ARTICLE IV
             Conditions Precedent to Issuance of a Letter of Credit

      Section 1. Items to be Received. It shall be a condition precedent to the
issuance by the Bank of a Letter of Credit that the Bank shall have received, on
or before the Date of Issuance, the following items, each, unless otherwise
indicated, dated the Date of Issuance and in form and substance satisfactory to
the Bank and its counsel:

            (a)   this Agreement, duly executed by the Company;

            (b)   the Pledge Agreement, dated as of even date herewith, executed
      by the Company in favor of the Bank, together with the original stock
      certificates in ACIC pledged thereby duly endorsed to the Bank in blank.

            (c)   a copy of the Company's organizational documents and all
      amendments thereto (certified by the Company's Secretary or Assistant
      Secretary as being true, correct and complete), a copy of the Company's
      resolution and such other evidence as the Bank may reasonably require that
      the execution, delivery and performance of this Agreement and each other
      Related Document to which the Company is a party has been duly authorized
      by all necessary organizational action;

            (d)   payment, in Immediately Available Funds, of the initial letter
      of credit fee payable under Article III, Sections l(a) and l(b) of this
      Agreement;

            (e)   payment of the fees, service charges and disbursements of
      legal counsel to the Bank;

            (f)   such financial statements of the Company as may be requested
      by the Bank; and

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            (g)   an opinion of Lindquist & Vennum covering the matters
      described by the Bank and otherwise in form and substance acceptable to
      the Bank.

            (h)   such other documents, instruments, approvals and, if requested
      by the Bank, certified duplicates of executed copies thereof, as the Bank
      may reasonably request.

      Section 2. Representations. The following statements shall be true and
correct on the Date of Issuance:

            (a)   the representations and warranties contained in Article VI of
      this Agreement are correct on and as of the Date of Issuance as though
      made on and as of such date;

            (b)   no petition by or against the Company has at any time been
      filed under the United States Bankruptcy Code or under any similar act;
      and

            (c)   no Event of Default has occurred and is continuing, or would
      result from the issuance of a Letter of Credit and execution, delivery or
      performance of this Agreement or any other Related Document.

                                    ARTICLE V
                              Obligations Absolute

      Section 1. Obligations Absolute. The obligations of the Company under this
Agreement shall be absolute, unconditional and irrevocable, and shall not be
subject to any right of set-off or counterclaim and shall be paid or performed
strictly in accordance with the terms of this Agreement, under all circumstances
whatsoever, including, without limitation, the following circumstances:

            (a)   any lack of validity or enforceability of a Letter of Credit
      or any Related Document;

            (b)   any amendment or waiver of any provision of all or any of the
      Related Documents;

            (c)   the existence of any claim, setoff, defense or other rights
      which the Company may have at any time against a Beneficiary, the Bank
      (other than the defense of payment to the Bank in accordance with the
      terms of this Agreement) or any other person or entity, whether in
      connection with this Agreement, the Related Documents or any transaction
      contemplated thereby or any unrelated transaction;

            (d)   any statement or any other document presented under a Letter
      of Credit proving to be forged, fraudulent, invalid or insufficient in any
      respect or any statement therein being untrue or inaccurate in any respect
      whatsoever;

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            (e)   payment by the Bank under a Letter of Credit against
      presentation of a sight draft or certificate which does not comply with
      the terms of such Letter of Credit; and

            (f)   any other circumstance or happening whatsoever, whether or not
      similar to any of the foregoing.

Notwithstanding the foregoing, the Company shall have a claim against the Bank,
and the Bank shall be liable to the Company, to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered by the
Company which the Company proves were caused by the Company's willful misconduct
or gross negligence in determining whether documents presented under any Letter
of Credit comply with the terms thereof.

                                   ARTICLE VI
                         Representations and Warranties

      The Company represents and warrants as follows:

      Section 1. Organization, Standing, Etc. The Company is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Minnesota and has all requisite power and authority to carry on its business
as now conducted, to enter into this Agreement and the Related Documents to
which it is a party and to perform its obligations under this Agreement and such
Related Documents. The Company and each Subsidiary has the power and authority
and the legal right to own and operate its properties and to conduct the
business in which it is currently engaged.

      Section 2. Authorization and Validity. The execution, delivery and
performance by the Company of this Agreement and the Related Documents to which
it is a party have been duly authorized by all necessary organizational action
by the Company, and this Agreement and such Related Documents constitute the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors' rights generally and subject to
limitations on the availability of equitable remedies.

      Section 3. No Conflict; No Default. The execution, delivery and
performance by the Company of this Agreement and the Related Documents to which
it is a party will not (a) violate any provision of any law, statute, rule or
regulation or any order, writ, judgment, injunction, decree, determination or
award of any court, governmental agency or arbitrator presently in effect having
applicability to the Company or any Subsidiary, (b) violate or contravene any
provision of the organizational documents of the Company, or (c) result in a
breach of or constitute a default under any indenture, loan or credit agreement
or any other agreement, lease or instrument to which the Company or any
Subsidiary is a party or by which it or any of its properties may be bound or
result in the creation of any Lien thereunder. To the best knowledge of the
Company, neither the Company nor any Subsidiary is in default under or in
violation of any such law, statute, rule or regulation, order, writ, judgment,
injunction, decree, determination

                                       9
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or award or any such indenture, loan or credit agreement or other agreement,
lease or instrument in any case in which the consequences of such default or
violation could have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) of the Company or such
Subsidiary.

      Section 4. Government Consent. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority is required on the
part of the Company or any Subsidiary to authorize, or is required in connection
with the execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, this Agreement or any of the Related
Documents.

      Section 5. Financial Statements and Condition. The Company's audited and
unaudited financial statements heretofore furnished to the Bank have been
prepared in accordance with GAAP on a consistent basis (except for year-end
audit adjustments as to the interim statements) and fairly present the
consolidated or consolidating financial condition of the Company and the
Subsidiaries as of such dates and the results of their operations and changes in
financial position for the respective periods then ended. As of the dates of
such financial statements, neither the Company nor any Subsidiary had any
material obligation, contingent liability, liability for taxes, or long-term
lease obligation which is not reflected in such financial statements or in the
notes thereto. Since the date of delivery of any such audited or unaudited
financial statements, there has been no material adverse change in the business,
operations, property, assets or condition, financial or otherwise, of the
Company or any Subsidiary.

      Section 6. Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any Subsidiary or any of its properties before any court or arbitrator, or
any governmental department, board, agency or other instrumentality which, if
determined adversely to the Company or any Subsidiary, would have a material
adverse effect on the business, operations, property or condition (financial or
otherwise) of the Company or on the ability of the Company to perform its
obligations under this Agreement or any of the Related Documents to which it is
a party.

      Section 7. ERISA. Each Plan complies with all material applicable
requirements of ERISA and the Code and with all material applicable rulings and
regulations issued under the provisions of ERISA and the Code setting forth
those requirements. No Reportable Event, other than a Reportable Event for which
the reporting requirements have been waived by regulations of the PBGC, has
occurred and is continuing with respect to any Plan. All of the minimum funding
standards applicable to such Plans have been satisfied and there exists no event
or condition which would permit the institution of proceedings to terminate any
Plan under Section 4042 of ERISA. There is no action, suit, proceeding or
investigation pending or threatened (or any basis therefor known to the Company
or any ERISA Affiliate) by the PBGC or any other governmental or administrative
agency or body involving any violation or alleged violation of ERISA or the Code
with respect to any Plan. The current value of the Plans' benefits, if any,
guaranteed under Title IV of ERISA does not exceed the current value of the
Plans' assets allocable to such benefits.

      Section 8. Regulation U. The Company is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (as
defined in Regulation U of the

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Board of Governors of the Federal Reserve System). The value of all margin stock
owned by the Company does not constitute more than 25% of the value of the
assets of the Company.

      Section 9. Taxes. The Company and each Subsidiary has filed all federal,
state and local tax returns required to be filed (except for extensions
requested in accordance with law) and has paid or made provision for the payment
of all taxes due and payable pursuant to such returns and pursuant to any
assessments made against it or any of its property and all other taxes, fees and
other charges imposed on it or any of its property by any governmental authority
(other than taxes, fees or charges the amount or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in accordance with GAAP have been provided on the books of the
Company or such Subsidiary). No tax Liens have been filed and no material claims
are being asserted with respect to any such taxes, fees or charges. The charges,
accruals and reserves on the books of the Company or the relevant Subsidiary in
respect of taxes and other governmental charges are adequate.

      Section 10. Burdensome Restrictions. Neither the Company nor any
Subsidiary is a party to or otherwise bound by any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction which would foreseeably have a material adverse
effect on the business, properties, assets, operations or condition (financial
or otherwise) of the Company or such Subsidiary or on the ability of the Company
or such Subsidiary to carry out its obligations under this Agreement or any of
the Related Documents to which it is a party.

      Section 11. Force Majeure. Since the date of the most recent financial
statement referred to in Article VI, Section 5, the business, properties and
other assets of the Company or such Subsidiary have not been materially and
adversely affected in any way as the result of any fire or other casualty,
strike, lockout, or other labor trouble, embargo, sabotage, confiscation,
condemnation, riot, civil disturbance, activity of armed forces or act of God.

      Section 12. Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an investment company within the meaning
of the Investment Company Act of 1940, as amended.

      Section 13. Full Disclosure. Subject to the following sentence, neither
the financial statements referred to in Article VI, Section 5, nor any other
certificate, written statement, exhibit or report furnished by or on behalf of
the Company in connection with or pursuant to this Agreement or any Related
Document contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements contained therein not
misleading. Certificates or statements furnished by or on behalf of the Company
to the Bank consisting of projections or forecasts of future results or events
have been prepared in good faith and based on good faith estimates and
assumptions of the management of the Company, and the Company has no reason to
believe that such projections or forecasts are not reasonable.

      Section 14. Subsidiaries. The Company has no Subsidiaries, except as
described in Schedule 1 hereto.

                                       11
<PAGE>

      Section 15. Survival of Representations. All representations and
warranties contained in this Article VI shall survive the delivery of any Letter
of Credit and any investigation at any time made by or on behalf of the Bank
shall not diminish its rights to rely thereon.

                                   ARTICLE VII
                     Affirmative Covenants of the Companies

      So long as either (i) any Letter of Credit is outstanding, or (ii) any
amount is due or owing to the Bank hereunder, the Company agrees, unless the
Bank shall otherwise consent in writing, that:

      Section 1. Financial Statements and Reports. The Company will furnish to
the Bank:

            (a)   As soon as available and in any event within 120 days after
      the end of each fiscal year of the Company, the consolidated and
      consolidating financial statements of the Company and the Subsidiaries
      consisting of at least statements of income, cash flow and changes in
      shareholder's equity, and a balance sheet as at the end of such year,
      setting forth in each case in comparative form corresponding figures from
      the previous annual audit, certified without qualification by independent
      certified public accountants of recognized standing selected by the
      Company and acceptable to the Bank.

            (b)   As soon as available, and in any event within 60 days after
      the end of each fiscal quarter, consolidated and consolidating statements
      of income, cash flow, changes in shareholder's equity for the Company and
      its Subsidiaries for such quarter and for the period from the beginning of
      such fiscal year to the end of such quarter, and a balance sheet of the
      Company and its Subsidiaries as at the end of such quarter, setting forth
      in comparative form figures for the corresponding period for the preceding
      fiscal year, accompanied by a certificate signed by Person having
      principal financial accounting responsibility for the Company and its
      Subsidiaries stating that such financial statements present fairly the
      financial condition of the Company and its Subsidiaries and that the same
      have been prepared in accordance with GAAP.

            (c)   As soon as practicable and in any event within 60 days after
      the end of each fiscal quarter, a statement signed by Person having
      principal financial accounting responsibility for the Company stating that
      as at the end of such quarter there did not exist any Default or Event of
      Default or, if such Default or Event of Default existed, specifying the
      nature and period of existence thereof and what action the Company
      proposes to take with respect thereto.

            (d)   Immediately upon any Person having substantial management
      responsibilities for the Company (which includes the Company's Chief
      Executive Officer or Chief Financial Officer) becoming aware of any
      Default or Event of Default, a notice describing the nature thereof and
      what action the Company proposes to take with respect thereto.

            (e)   Immediately upon any Person having management responsibilities
      for, the Company (which includes the Company's Chief Executive Officer or
      Chief Financial Officer) becoming aware of the occurrence, with respect to
      any Plan, of any Reportable

                                       12
<PAGE>

      Event (other than a Reportable Event for which the reporting requirements
      have been waived by PBGC regulations) or any "prohibited transaction" (as
      defined in Section 4975 of the Code), a notice specifying the nature
      thereof and what action the Company proposes to take with respect thereto,
      and, when received, copies of any notice from PBGC of intention to
      terminate or have a trustee appointed for any Plan.

      Section 2. Existence. The Company will, and will cause each Subsidiary to,
maintain its (i) existence in its present legal form in good standing under the
laws of its jurisdiction of organization and (ii) its qualification to transact
business in each jurisdiction where failure so to qualify would permanently
preclude the Company or such Subsidiary from enforcing its rights with respect
to any material asset or would expose the Company or such Subsidiary to any
material liability.

      Section 3. Payment of Taxes and Claims. The Company will, and will cause
each Subsidiary to, file all tax returns and reports which are required by law
to be filed by it and will pay before they become delinquent all taxes,
assessments and governmental charges and levies imposed upon it or its property
and all claims or demands of any kind (including but not limited to those of
suppliers, mechanics, carriers, warehouses, landlords and other like Persons)
which, if unpaid, might result in the creation of a Lien upon its property;
provided that the foregoing items need not be paid if they are being contested
in good faith by appropriate proceedings, and as long as the Company's or such
Subsidiary's title to its property is not materially adversely affected, its use
of such property in the ordinary course of its business is not materially
interfered with and adequate reserves with respect thereto have been set aside
on the Company's or such Subsidiary's books in accordance with GAAP.

      Section 4. Books and Records. The Company will, and will cause each
Subsidiary to, keep adequate and proper records and books of account in which
full and correct entries will be made of its dealings, business and affairs.

      Section 5. Compliance. The Company will, and will cause each Subsidiary
to, comply in all material respects with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject;
provided, however, that failure so to comply shall not be a breach of this
covenant if such failure does not have, or is not reasonably expected to have, a
materially adverse effect on the properties, business, prospects or condition
(financial or otherwise) of the Company and such Subsidiary and the Company and
such Subsidiary is acting in good faith and with reasonable dispatch to cure
such noncompliance.

      Section 6. Compliance with Other Documents. The Company will comply in all
material respects with the Related Documents.

      Section 7. Notice of Litigation. The Company will give prompt written
notice to the Bank of the commencement of any action, suit or proceeding before
any court or arbitrator or any governmental department, board, agency or other
instrumentality affecting the Company or any property of the Company or any
Subsidiary or to which the Company or any Subsidiary is a party in which an
adverse determination or result could have a material adverse effect on the
business, operations, property or condition (financial or otherwise) of the
Company or any Subsidiary or on the ability of the Company or any Subsidiary to
perform its obligations under

                                       13
<PAGE>

this Agreement and the other Related Documents, stating the nature and status of
such action, suit or proceeding.

                                  ARTICLE VIII
                       Negative Covenants of the Company

      So long as either (i) any Letter of Credit is outstanding, or (ii) any
amount is due or owing to the Bank hereunder, the Company agrees, unless the
Bank shall otherwise consent in writing, that:

      Section 1. Merger. The Company will not, and will not permit any
Subsidiary to, merge or consolidate or enter into any analogous reorganization
or transaction with any Person unless the Company or such Subsidiary is the
surviving entity and no Default or Event of Default would result from such
merger or consolidation.

      Section 2. Amendments or Modifications of Related Documents. The Company
will not amend, modify or supplement, nor agree or consent to any amendment or
modification of, or supplement to, any of the Related Documents.

      Section 3. Disposition of Assets. The Company will not, and will not
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one transaction or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:

            (a)   dispositions of assets in the ordinary course of business,
      including, without limitation, dispositions of Investments held by ACIC in
      the ordinary course of its business (but only to the extent that such
      disposition does not violate any agreement between the Bank and ACIC);

            (b)   dispositions of used, worn-out or surplus equipment, all in
      the ordinary course of business;

            (c)   the sale of equipment to the extent that such equipment is
      exchanged for credit against the purchase price of similar replacement
      equipment, or the proceeds of such sale are applied with reasonable
      promptness to the purchase price of such replacement equipment; and

            (d)   other dispositions of property during the term of this
      Agreement whose net book value in the aggregate does not exceed $100,000.

      Section 4. Plans. The Company will not permit, and will not allow any
Subsidiary to permit, any event to occur or condition to exist which would
permit any Plan to terminate under any circumstances which would cause the Lien
provided for in Section 4068 of ERISA to attach to any assets of the Company or
any Subsidiary; and the Company will not permit, as of the most recent valuation
date for any Plan subject to Title IV of ERISA, the present value (determined on
the basis of reasonable assumptions employed by the independent actuary for such
Plan and

                                       14
<PAGE>

previously furnished in writing to the Bank) of such Plan's projected benefit
obligations to exceed the fair market value of such Plan's assets.

      Section 5. Change in Nature of Business. The Company will not, and will
not permit any Subsidiary to, make any material change in the nature of the
business of the Company or such Subsidiary, as carried on at the date hereof.
For purposes of this Section, the provision of claims management, disability
management, the provision and sale of software related to such activities and
similar insurance-related activities will not be deemed to be a material change
in the nature of the business of the Company or any Subsidiary of the Company,
as carried on at the date hereof.

      Section 6. Subsidiaries. After the date of this Agreement, the Company
will not, and will not permit any Subsidiary to, form or acquire any corporation
which would thereby become a Subsidiary, unless the Company gives notice of the
establishment of the new Subsidiary to the Bank.

      Section 7. Negative Pledges; Subsidiary Restrictions. The Company will
not, and will not permit any Subsidiary to, enter into any agreement, bond, note
or other instrument with or for the benefit of any Person other than the Bank
which would (i) prohibit the Company or such Subsidiary from granting, or
otherwise limit the ability of the Company or such Subsidiary to grant, to the
Bank any Lien on any assets or properties of the Company or such Subsidiary, or
(ii) require the Company or such Subsidiary to grant a Lien to any other Person
if the Company or such Subsidiary grants any Lien to the Bank. The Company will
not permit any Subsidiary to place or allow any restriction, directly or
indirectly, on the ability of such Subsidiary to (a) pay dividends or any
distributions on or with respect to such Subsidiary's capital stock or (b) make
loans or other cash payments to the Company.

      Section 8. Restricted Payments. The Company will not make any Restricted
Payments, except that the Company may redeem stock purchased by employees
pursuant to incentive plans, provided that the aggregate redemption price paid
for such stock shall not exceed $250,000 in any single fiscal year.

      Section 9. Transactions with Affiliates. The Company will not, and will
not permit any Subsidiary to, enter into any transaction with any Affiliate of
the Company, except upon fair and reasonable terms no less favorable to the
Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.

      Section 10. Accounting Changes. The Company will not, and will not permit
any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change its fiscal year or
the fiscal year of any Subsidiary.

      Section 11. Indebtedness. The Company will not, and will not permit any
Subsidiary to, incur, create, issue, assume or suffer to exist any Indebtedness,
except:

            (a)   obligations of the Company under this Agreement and the
      Related Documents;

                                       15
<PAGE>

            (b)   liabilities, other than for borrowed money, incurred in the
      ordinary course of business.

            (c)   Indebtedness existing on the date of this Agreement and
      disclosed on Schedule 2 hereto, but not including any extension or
      refinancing thereof.

            (d)   Indebtedness secured by Liens permitted under Article VIII,
      Section 12(h) hereof provided that the aggregate principal amount of such
      Indebtedness at any time outstanding shall not exceed $100,000.

            (e)   Other unsecured Indebtedness, in an amount which, when
      combined with the amount of the existing Indebtedness permitted under
      clause (c) of this Section, does not exceed $20,000,000.

            (f)   Liabilities from the continued adjudication of claims
      resulting from workplace injuries in the ordinary course of the Company's
      workplace compensation insurance policies.

      Section 12. Liens. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien, or enter into,
or make any commitment to enter into, any arrangement for the acquisition of any
property through conditional sale, lease-purchase or other title retention
agreements, with respect to any property now owned or hereafter acquired by the
Company or a Subsidiary, except:

            (a)   Liens in favor of the Bank.

            (b)   Liens existing on the date of this Agreement and disclosed on
      Schedule 3 hereto.

            (c)   Deposits or pledges to secure payment of workers'
      compensation, unemployment insurance, old age pensions or other social
      security obligations, in the ordinary course of business of the Company or
      a Subsidiary.

            (d)   Liens for taxes, fees, assessments and governmental charges
      not delinquent or to the extent that payment therefor shall not at the
      time be required to be made in accordance with the provisions of Article
      VII, Section 3 hereof.

            (e)   Liens of carriers, warehousemen, mechanics and materialmen,
      and other like Liens arising in the ordinary course of business, for sums
      not due or to the extent that payment therefor shall not at the time be
      required to be made in accordance with the provisions of Article VII,
      Section 3 hereof.

            (f)   Liens incurred or deposits or pledges made or given in
      connection with, or to secure payment of, indemnity, performance or other
      similar bonds.

            (g)   Encumbrances in the nature of zoning restrictions, easements
      and rights or restrictions of record on the use of real property and
      landlord's Liens under leases on the

                                       16
<PAGE>

      premises rented, which do not materially detract from the value of such
      property or impair the use thereof in the business of the Company or a
      Subsidiary.

            (h)   The interest of any lessor under any capitalized lease entered
      into after the date hereof or purchase money Liens on property acquired
      after the date hereof; provided, that, (i) the Indebtedness secured
      thereby is otherwise permitted by this Agreement and (ii) such Liens are
      limited to the property acquired and do not secure Indebtedness other than
      the related capitalized lease obligations or the purchase price of such
      property.

      Section 13. A.M. Best Rating of ACIC. The Company will not permit the
rating of ACIC by A.M. Best & Company at any time to be less than B+.

                                   ARTICLE IX
                                Events of Default

      Section 1. Events of Default. The occurrence of any of the following
events (including the expiration of any specified time) shall constitute an
"Event of Default":

            (a)   any amount required to be paid by the Company under this
      Agreement or any other Indebtedness of the Company to the Bank, whether
      now existing or hereafter arising is not paid when due (whether by
      acceleration or otherwise);

            (b)   the Company shall fail to comply with any agreement, covenant,
      condition, provision or term contained in Article VII, Sections 2, 3 or 5
      or in Article VIII; or

            (c)   the Company shall fail to comply with any other agreement,
      covenant, condition, provision or term contained in this Agreement (other
      than those hereinabove set forth in this Article IX) and such failure to
      comply is not remedied within 30 calendar days after written notice of
      such failure is given by the Bank to the Company (unless the Bank shall
      agree in writing to an extension of such time prior to its expiration), or
      for such longer period of time (not to exceed 90 days) as may be
      reasonably necessary to remedy such default (other than defaults which can
      be cured by a money payment), provided that such default is capable of
      being remedied and the Company is proceeding with reasonable diligence to
      remedy the same; or

            (d)   any representation or warranty made by or on behalf of the
      Company, any Subsidiary in this Agreement or any other Related Document or
      by or on behalf of the Company or any Subsidiary in any certificate,
      statement, report or document herewith or hereafter furnished to the Bank
      pursuant to this Agreement or any Related Document shall prove to have
      been false or misleading in any material respect on the date as of which
      the facts set forth are stated or certified; or

            (e)   the Company shall become insolvent or shall generally not pay
      its debts as they mature or shall apply for, shall consent to, or shall
      acquiesce in the appointment of a custodian, trustee or receiver of the
      Company or for a substantial part of the property thereof or, in the
      absence of such application, consent or acquiescence, a custodian,

                                       17
<PAGE>

      trustee or receiver shall be appointed for the Company or for a
      substantial part of the property thereof and shall not be discharged
      within 30 days; or

            (f)   any bankruptcy, reorganization, debt arrangement or other
      proceedings under any bankruptcy or insolvency law shall be instituted by
      or against the Company, and, if instituted against the Company, shall have
      been consented to or acquiesced in by the Company, or shall remain
      undismissed for 30 days, or an order for relief shall have been entered
      against the Company; or

            (g)   any dissolution or liquidation proceeding shall be instituted
      by or against the Company and, if instituted against the Company, shall be
      consented to or acquiesced in by the Company or shall remain for 30 days
      undismissed; or

            (h)   a judgment or judgments for the payment of money in excess of
      the sum of $100,000 in the aggregate shall be rendered against the Company
      and the Company shall not discharge the same or provide for its discharge
      in accordance with its terms, or procure a stay of execution thereof,
      prior to any execution on such judgment by such judgment creditor, within
      30 days from the date of entry thereof, and within said period of 30 days,
      or such longer period during which execution of such judgment shall be
      stayed, appeal therefrom and cause the execution thereof to be stayed
      during such appeal; or

            (i)   the maturity of any material Indebtedness of the Company
      (other than Indebtedness under this Agreement) shall be accelerated, or
      the Company shall fail to pay any such material Indebtedness when due
      (after the lapse of any applicable grace period) or, in the case of such
      Indebtedness payable on demand, when demanded (after the lapse of any
      applicable grace period), or any event shall occur or condition shall
      exist and shall continue for more than the period of grace, if any,
      applicable thereto and shall have the effect of causing, or permitting the
      holder of any such Indebtedness or any trustee or other Person acting on
      behalf of such holder to cause, such material Indebtedness to become due
      prior to its stated maturity or to realize upon any collateral given as
      security therefor. For purposes of this clause (i), Indebtedness of the
      Company shall be deemed "material" if it exceeds $100,000 as to any item
      of Indebtedness or in the aggregate for all items of Indebtedness with
      respect to which any of the events described in this Article has occurred;
      or

            (j)   the occurrence of any event of whatsoever nature (including
      any adverse determination in any litigation, arbitration, or governmental
      investigation or proceeding) which could reasonably be expected to
      materially and adversely affect (a) the financial condition or operations
      of the Company and the Subsidiaries taken as a whole, (b) impair the
      ability of the Company to perform its obligations under this Agreement or
      any Related Document, (c) the rights and remedies of the Bank against the
      Company, or (d) the timely payment of amounts payable by the Company
      hereunder.

                                       18
<PAGE>

                                    ARTICLE X
                                    Remedies

      Section 1. Remedies. Upon the occurrence and during the continuance of an
Event of Default, the Bank may, in addition to any other remedies available to
it at law or in equity, exercise any one or more of the following remedies:

            (a)   The Bank may, by written notice to the Company, declare all
      obligations of the Company under this Agreement to be immediately due and
      payable, whereupon such obligations shall become immediately due and
      payable.

            (b)   The Bank may make demand upon the Company and forthwith upon
      such demand the Company shall pay to the Bank in Immediately Available
      Funds for deposit in a special cash collateral account maintained with the
      Bank (the "Cash Collateral Account") an amount equal to the maximum amount
      then available to be drawn under the Letters of Credit (assuming
      compliance with all conditions for drawing thereunder). The Bank shall
      have sole discretion in administering such funds, including the right to
      return such funds to the Company if the Bank so elects. Until each Letter
      of Credit has expired and all obligations of the Company under this
      Agreement shall have been paid in full:

                  (i)   If requested by the Company and subject to the right of
            the Bank to withdraw funds from the Cash Collateral Account as
            provided below, the Bank will in its name or the name of the Company
            from time to time, invest funds on deposit in the Cash Collateral
            Account, reinvest proceeds and invest interest or other income
            received from any such investments, in such Eligible Securities (as
            hereinafter defined) as the Company may select and give notice
            thereof to the Bank. Such proceeds, interest or income which are not
            so invested or reinvested in Eligible Securities shall, except as
            otherwise provided in this Section 1(b), be deposited and held by
            the Bank in the Cash Collateral Account. "Eligible Securities" means
            (A) United States Treasury bills with a remaining maturity of 90
            days or less, (B) negotiable certificates of deposit of the Bank or
            of any other bank having combined capital and surplus of at least
            $100,000,000 with a remaining maturity of 90 days or less, and (C)
            such other instruments as the Company may request and the Bank may
            approve in writing. Eligible Securities from time to time purchased
            and held pursuant to this Section 1(b) shall be referred to as
            "Collateral Securities" and shall, for purposes of this Agreement,
            constitute part of the funds held in the Cash Collateral Account in
            amounts equal to their respective outstanding principal amounts.

                  (ii)  If at any time the Bank determines that any funds held
            in the Cash Collateral Account are subject to any right or claim of
            any person or entity other than the Bank or that the total amount of
            such funds is less than the maximum amount at such time available to
            be drawn under the Letters of Credit, the Company will, forthwith
            upon demand by the Bank, pay to the Bank, as additional funds to be
            deposited and held in the Cash Collateral Account, an amount equal
            to the excess of (A) such maximum amount at such time available to
            be drawn under the Letters of Credit over (B) the total amount of
            funds, if any,

                                       19
<PAGE>

            then held in the Cash Collateral Account which the Bank determines
            to be free and clear of any such right and claim.

                  (iii) The Company hereby pledges, and grants to the Bank a
            security interest in, all funds held in the Cash Collateral Account
            (including Collateral Securities) from time to time and all proceeds
            thereof, as security for the payment of all amounts due and to
            become due from the Company to the Bank under this Agreement.

                  (iv)  The Bank may, at any time or from time to time after
            funds are either deposited in the Cash Collateral Account or
            invested in Collateral Securities, after selling (upon five days'
            notice to the Company), if necessary, any Collateral Securities,
            apply funds then held in the Cash Collateral Account to the payment
            of any amounts, in such order as the Bank may elect, as shall have
            become or shall become due and payable by the Company to the Bank
            under this Agreement. The Company agrees that, to the extent notice
            of sale of any Collateral Securities shall be required by law, five
            days' notice to the Company of the time and place of any public sale
            or the time after which any private sale is to be made shall
            constitute reasonable notification. The Bank may adjourn any public
            or private sale from time to time by announcement at the time and
            place fixed therefor, and such sale may, without further notice, be
            made at the time and place to which it was so adjourned.

                  (v)   Neither the Company nor any person or entity claiming on
            behalf of or through the Company shall have any right to withdraw
            any of the funds held in the Cash Collateral Account, except as
            otherwise provided in clause (vi) below, except that after the
            termination of the Letters of Credit in accordance with its terms
            and the payment of all amounts payable by the Company to the Bank
            under this Agreement, any funds remaining in the Cash Collateral
            Account shall be returned by the Bank to the Company or paid to
            whomever may be legally entitled thereto.

                  (vi)  So long as no Default or Event of Default shall have
            occurred and be continuing, the Bank will release to the Company (A)
            the interest or other income received on Collateral Securities and
            (B) at the written request of the Company, funds held in the Cash
            Collateral Account in an amount up to but not exceeding the excess,
            if any (immediately prior to the release of any such funds), of the
            total amount of funds held in the Cash Collateral Account over the
            maximum amount available to be drawn under the Letters of Credit.

                  (vii) The Company agrees that it will not (A) sell or
            otherwise dispose of any interest in the Cash Collateral Account or
            any funds held therein, or (B) create or permit to exist any Lien
            upon or with respect to the Cash Collateral Account or any funds
            held therein, except as provided in or contemplated by this
            Agreement.

                                       20
<PAGE>

                  (viii) The Bank shall exercise reasonable care in the custody
            and preservation of any funds held in the Cash Collateral Account
            and shall be deemed to have exercised such care if such funds are
            accorded treatment substantially equivalent to that which the Bank
            accords its own property, it being understood that the Bank shall
            not have any responsibility for taking any necessary steps to
            preserve rights against any parties with respect to any such funds.

            (c)   The Bank may offset any deposits of the Company held by the
      Bank (including those held by the Bank in the Cash Collateral Account and
      any unmatured time deposits) against sums due or to become due hereunder,
      whether or not then due.

            (d)   The Bank may exercise any remedy available to it under any
      other Related Document.

            (e)   The Bank may take whatever action at law or in equity that may
      appear necessary or appropriate to collect any amount due or thereafter to
      become due, or to enforce performance and observance of any obligation,
      agreement or covenant of the Company hereunder or under any other Related
      Document.

            (f)   Notwithstanding any of the foregoing, the Bank will not apply
      (whether pursuant to Article X, Section 1(b)(iv), Article X, Section l(c)
      or otherwise) any funds on deposit in the Cash Collateral Account (or any
      other deposits of the Company held by the Bank) to the payment or
      reimbursement of any drawing under any Letter of Credit unless and until
      such drawing has been honored by the Bank from its own funds.

                                   ARTICLE XI
                                  Miscellaneous

      Section 1. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor any consent to any departure by the Company therefrom shall
in any event be effective unless the same shall be in writing and signed by the
Bank, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

      Section 2. Notices. Except as otherwise specifically provided for herein,
all notices and other communications provided for herein shall be in writing and
telecopied, mailed or delivered to the intended recipient at the following
addresses:

      If to the Company:        8500 Normandale Lake Blvd., Suite 1450
                                Bloomington, MN 55437
                                Attn: Jeffrey B. Murphy

      If to the Bank:           U.S. Bank National Association
                                U.S. Bancorp Center
                                800 Nicollet Mall
                                Minneapolis, MN 55402
                                Attention: Christine Geer

                                       21
<PAGE>

or as to each party at such other address as shall be designated by such party
in a written notice to the other parties. All notices and other communications
hereunder shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice, three
Business Days after the date deposited in the mails, airmail postage prepaid, in
each case given or addressed as aforesaid.

      Section 3. No Waiver; Remedies. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

      Section 4. Indemnification. The Company hereby indemnifies and holds
harmless the Bank from and against any and all claims, damages, losses,
liabilities, reasonable costs or expenses whatsoever (including attorneys' fees)
which the Bank may incur (or which may be claimed against the Bank by any person
or entity whatsoever) by reason of or in connection with the execution and
delivery or transfer of, or payment or failure to pay under, any Letter of
Credit; provided that the Company shall not be required to indemnify the Bank
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (i) the willful misconduct or gross negligence
of the Bank or (ii) the Bank's willful failure to pay under any Letter of Credit
after the presentation to it by the Trustee of a sight draft and certificate
strictly complying with the terms and conditions of such Letter of Credit.
Nothing in this Section 4 is intended to limit the reimbursement obligation of
the Company contained in Article III, Section 1 hereof.

      Section 5. Continuing Obligation. This Agreement is a continuing
obligation, shall survive the termination of any Letter of Credit and shall (a)
be binding upon the Company, its successors and assigns, and (b) inure to the
benefit of and be enforceable by the Bank and its successors, transferees and
assigns; provided that the Company may not assign all or any part of this
Agreement without the prior written consent of the Bank.

      Section 6. Liability of the Bank. As between the Bank and the Company, the
Company assumes all risks of the acts or omissions of any Beneficiary with
respect to its use of any Letter of Credit. Neither the Bank nor any of its
officers or directors shall be liable or responsible for: (a) the use which may
be made of any Letter of Credit or for any acts or omissions of the Beneficiary
in connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement(s) thereon, even if such documents should in
fact prove to be in any or all respects invalid, insufficient, fraudulent or
forged; or (c) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit, except only that the Company shall have a
claim against the Bank, and the Bank shall be liable to the Company, to the
extent, but only to the extent, of any direct, as opposed to consequential,
damages suffered by the Company which the Company proves, by clear and
convincing evidence, were caused by (i) the Bank's willful misconduct or gross
negligence in determining whether documents presented under any Letter of Credit
comply with the terms of any Letter of Credit or (ii) the Bank's willful failure
to pay under any Letter of Credit after the presentation to it by the
Beneficiary of a sight draft and certificate strictly complying with the terms
and conditions of such Letter of Credit. In

                                       22
<PAGE>

furtherance and not in limitation of the foregoing, the Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation.

      Section 7. Costs, Expenses and Taxes. The Company agrees to pay on demand
all costs and expenses in connection with the preparation, execution, delivery
and enforcement of this Agreement and any other documents which may be delivered
in connection with this Agreement, including, without limitation, the fees,
service charges and out-of-pocket expenses of outside counsel to the Bank
(determined on the basis or at such counsel's generally applicable rates, which
may be higher than the rates such counsel charges to the Bank in certain
matters) and the allocated costs of the in-house counsel incurred from time to
time.

      Section 8. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.

      Section 9. Governing Law and Construction. THE VALIDITY, CONSTRUCTION AND
ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. Whenever possible,
each provision of this Agreement and any other statement, instrument or
transaction contemplated hereby or relating hereto shall be interpreted in such
manner as to be effective and valid under such applicable law, but, if any
provision of this Agreement or any other statement, instrument or transaction
contemplated hereby or relating hereto shall be held to be prohibited or invalid
under such applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement or any other
statement, instrument or transaction contemplated hereby or relating hereto.

      Section 10. Consent to Jurisdiction. AT THE OPTION OF THE BANK, THIS
AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING
IN HENNEPIN COUNTY; AND THE COMPANY CONSENTS TO THE JURISDICTION AND VENUE OF
ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT
CONVENIENT.

      Section 11. Waiver of Jury Trial. THE COMPANY AND THE BANK IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

      Section 12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.

                                       23
<PAGE>

      Section 13. Headings. The Table of Contents and Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

      Section 14. Accounting. All financial statements furnished to the Bank
under this Agreement and all computations and determinations required to be made
pursuant to this Agreement shall be made in accordance with GAAP, applied on a
basis consistent with the audited financial statements referred to in Article
VI, Section 5.

      Section 15. Term of Agreement. This Agreement shall remain in full force
and effect from the date hereof until such time as no Letters of Credit remain
outstanding and all amounts owing hereunder to the Bank have been fully paid.

      Section 16. Entire Agreement. This Agreement and the other Related
Documents to which the Company is a party embody the entire agreement and
understanding between the Company and the Bank with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings
relating to such subject matter.

      Section 17. Company Acknowledgements. The Company acknowledges that (a) it
has been advised by its own legal counsel in the negotiation, execution and
delivery of this Agreement and the Related Documents and has not received or
relied on any advice from the Bank or the Bank's legal counsel, Dorsey & Whitney
LLP, (b) the Bank has no fiduciary relationship to the Company, the relationship
being solely that of debtor and creditor, and (c) no joint venture exists
between the Company and the Bank.

      Section 18. Waivers and Recovery of Payments.

            (a)   Waivers of Defenses. The obligations of the Company hereunder
      shall not be released, in whole or in part, by any action or thing which
      might, but for this provision of this Agreement, be deemed a legal or
      equitable discharge of a surety or guarantor, other than irrevocable
      payment and performance in full of the obligations hereunder (except for
      contingent indemnity and other contingent obligations not yet due and
      payable) at a time after any obligation of the Bank hereunder to issue
      Letters of Credit shall have expired or been terminated and all
      outstanding Letters of Credit shall have expired or the liability of the
      Bank thereon shall have otherwise been discharged. The purpose and intent
      of this Agreement is that the obligations hereunder constitute the direct
      and primary obligations of the Company and that the covenants, agreements
      and all obligations of the Company hereunder be absolute, unconditional
      and irrevocable.

            (b)   Recovery of Payment. If any payment received by the Bank and
      applied to the obligations hereunder is subsequently set aside, recovered,
      rescinded or required to be returned for any reason (including, without
      limitation, the bankruptcy, insolvency or reorganization of the Company or
      any other obligor), the obligations hereunder to which such payment was
      applied shall, to the extent permitted by applicable law, be deemed to
      have continued in existence, notwithstanding such application, and the
      Company shall be liable for such obligations as fully as if such
      application had never been made. References in this Agreement to amounts
      "irrevocably paid" or to "irrevocable payment"

                                       24
<PAGE>

refer to payments that cannot be set aside, recovered, rescinded or required to
be returned for any reason.

                            [Signature Page follows.]

                                       25
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.

                                      RTW, INC.

                                      By /s/ Alfred L. LaTendresse
                                        -------------------------------

                                      Its Executive Vice President and
                                          Chief Financial Officer
                                         ------------------------------


                                      U.S. BANK NATIONAL ASSOCIATION

                                      By /s/ Christine J. Geer
                                         ------------------------------

                                      Its Corporate Banking Officer
                                          -----------------------------

          [Signature Page to Letter of Credit Reimbursement Agreement]

                                     S - 1
<PAGE>

                                    EXHIBIT A
                                       to
                    LETTER OF CREDIT REIMBURSEMENT AGREEMENT

                            Form of Letter of Credit
<PAGE>

                                                   ________, 2004

Beneficiary:

[NAME AND ADDRESS]

Applicant: [CALTIUS]

We have established this clean, irrevocable and unconditional Letter of Credit
in favor of Beneficiary for drawing up to $__________,000.00 (__________and
no/100 dollars) effective immediately. This letter of credit is issued,
presentable and payable at our office at U.S. Bank National Association, [800
NICOLLET MALL, MINNEAPOLIS, MINNESOTA 55402 ATTN: STANDBY LETTERS OF CREDIT] and
expires one year from the date hereof (the "Expiration Date"). Except when the
amount of this Letter of Credit is increased, this Credit cannot be modified or
revoked without your consent.

The term "Beneficiary" includes any successor by operation of law of the named
Beneficiary including without limitation, any liquidator, rehabilitator,
receiver or conservator. Drawings by any liquidator, rehabilitator, receiver or
conservator shall be for the benefit of all of the Beneficiary's policyholders.

We hereby undertake to promptly honor your sight draft(s) drawn on us,
indicating our Credit number_______________________, any part of this Credit
upon presentation of your draft drawn on us at our office specified in paragraph
one, on or before the expiration date hereof, or any automatically extended
expiration date; provided, however, the maximum aggregate amount that may be
drawn under this Credit shall not exceed US$____________,000.00.

Except as expressly stated herein, this undertaking is not subject to any
agreement, requirement or qualification. The obligation of U.S. Bank National
Association under this Credit is the individual obligation of U.S. Bank National
Association, and is in no way contingent upon reimbursement with respect
thereto, or upon our ability to perfect any lien, security interest or any other
reimbursement.

This Letter of Credit is deemed to be automatically extended without amendment
for one year from the expiration date or any future expiration date, unless
thirty (30) days prior to such expiration date, we notify you by registered mail
that the Letter of Credit will not be renewed for any such additional period.

This Letter of Credit is subject to and governed by the Laws of the State of
[New York] and the 1993 Revision of the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce (Publication 500)
and, in the event of any conflict, the Laws of the State of [New York] will
control. If this Credit expires during an interruption of business as described
in Article 17 of said Publication 500, the Bank hereby specifically agrees to
effect payment if this credit is drawn against within thirty (30) days after the
resumption of our business.

U.S. Bank National Association

_____________________________
    Authorized Signature
<PAGE>

                                                                      SCHEDULE 1

                                  Subsidiaries

Rtw, Inc has one subsidiary, American Compensation Insurance Company ("ACIC"), a
Minnesota corporation.
<PAGE>

                                                                      SCHEDULE 2

                                  Indebtedness

The Company's ACIC subsidiary is obligated with respect to a $1.5 million letter
of credit issued by U.S. Bank National Association in favor of General
Reinsurance.
<PAGE>

                                                                      SCHEDULE 3

                                      Liens

The Company's ACIC subsidiary has pledged securities to U.S. Bank National
Association in connection with a $1.5 million letter of credit issued by U.S.
Bank National Association to General Reinsurance.