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                                 EXHIBIT 10.13
                            AGREEMENT OF REINSURANCE
                                    NO. 8051
                                    BETWEEN
                        GENERAL REINSURANCE CORPORATION
                             A DELAWARE CORPORATION
                        HAVING ITS PRINCIPAL OFFICES AT
                                FINANCIAL CENTRE
                              695 EAST MAIN STREET
                          STAMFORD, CONNECTICUT 06904
                  (HEREINAFTER REFERRED TO AS THE "REINSURER")
                                      AND
                            ZENITH INSURANCE COMPANY
                             ZNAT INSURANCE COMPANY
                         ZENITH STAR INSURANCE COMPANY
                           WOODLAND HILLS, CALIFORNIA
                           CALFARM INSURANCE COMPANY
                             SACRAMENTO, CALIFORNIA
               (HEREIN COLLECTIVELY REFERRED TO AS THE "COMPANY")
 
    In consideration of the promises set forth in this Agreement, the parties
agree as follows:
 
ARTICLE I -- BUSINESS COVERED
 
    This Agreement is to indemnify the Company, subject to the terms and
conditions contained herein, in respect of the excess liability of the Company
resulting from accidents, happenings or occurrences arising during the currency
of this Agreement under policies, contracts or binders of insurance, or
reinsurance, oral or written, or other evidences of liability (hereinafter
called "policy" or "policies") heretofore issued or which may hereafter be
issued in respect of business classified by the Company as Workers' Compensation
(including Occupational Disease) and/or Employers' Liability.
 
    The indemnity afforded by this Agreement shall apply to each and every loss
or series of losses arising out of one accident, happening or occurrence,
whether involving any one or any combination of the classes of business listed
in the preceding paragraph, regardless of the number of policies under which
such loss is payable or the number of different interests insured.
 
ARTICLE II -- PARTIES TO THE AGREEMENT
 
    This Agreement is solely between the Company and the Reinsurer. When more
than one Company is named as a party to this Agreement, the first Company named
shall be the agent of the other companies as to all matters pertaining to this
Agreement. Performance of the obligations of each party under this Agreement
shall be rendered solely to the other party. However, if the Company becomes
insolvent, the liability of the Reinsurer shall be modified to the extent set
forth in the article entitled INSOLVENCY. In no instance shall any insured of
the Company or any claimant against an insured of the Company have any rights
under this Agreement.
 
ARTICLE III -- EXCLUSIONS
 
    This Agreement does not cover:
 
    (a) Excess insurance;
 
    (b) All reinsurance assumed except from its affiliates and except from
       companies which have fronted the Company's incidental out-of-state
       exposures;
 
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    (c) In respect of any policy issued or reinsured by the Company to cover the
       following occupations or employments, except when such occupations or
       employments are incidental to and form a minor part of the usual
       occupation or employment of the insured:
 
        (1) Working and navigation of any vessel, other than light craft on
            inland waterways and dredging;
 
        (2) Manufacture, storage, filing, breaking down, or transport of:
 
             (i) Fireworks, ammunition, fuse, cartridges, powder, nitroglycerine
                 or any explosive;
 
            (ii) Gasses and/or air under pressure in containers (but this
                 exclusion shall not apply to the storage or distribution of
                 liquid petroleum gas by wholesale or retail dealers);
 
        (3) Underground coal mines;
 
        (4) Manufacture of celluloid and pyroxylin;
 
        (5) Erection of structural iron and/or steel works, unless in
            conjunction with ordinary construction of buildings. Except that
            this Exclusion shall not apply to insureds engaged in steel work
            where such steel work erection is not beyond twelve stories in
            height;
 
        (6) Contractors doing building wrecking exclusively;
 
        (7) Tunnelling;
 
        (8) Tower, steeple and chimney shaft work;
 
        (9) Operation of dry docks, docks, quays and wharves;
 
       (10) Construction and maintenance of coffer dams;
 
       (11) Subaqueous construction and/or other subaqueous work;
 
       (12) Oil tanks and/or refining works;
 
       (13) Aviation risks involving flying risks;
 
       (14) Operations involving atomic energy and nuclear fission;
 
       (15) Operations of a carrier by rail;
 
       (16) Maritime and federal employments including all United States
            Longshoremen's and Harbor Workers' Act exposures;
 
    (d) Liability of the Company arising, by contract, operation of law, or
       otherwise, from its participation or membership, whether voluntary or
       involuntary, in any insolvency fund. "Insolvency Fund" includes any
       guaranty fund, insolvency fund, plan, pool, association, fund or other
       arrangement, howsoever denominated, established or governed; which
       provides for any assessment of or payment or assumption by the Company of
       part or all of any claim, debt, charge, fee or other obligation of an
       insurer, or its successors or assigns, which has been declared by any
       competent authority to be insolvent, or which is otherwise deemed unable
       to meet any claim, debt, charge, fee or other obligation in whole or in
       part.
 
    If the Company provides insurance for an insured with respect to any
operations listed in one or more of the exclusions in (c) above, and such
operations constitute only a minor and incidental part of the total operations
of the insured, such exclusions shall not apply.
 
    In connection with those occupations or employments enumerated under
exclusion (c) of this Article, if the Company, without the knowledge of and
contrary to the instructions of its head office, is bound or is unknowingly
exposed on a risk falling otherwise within one of the exclusions set
 
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forth, such risk is covered under this Agreement until the Company's head office
receives knowledge thereof and, pending cancellation of such risk by the
Company, for a further period of thirty days after receipt of such knowledge by
the head office of the Company.
 
    Where policies are issued by the Company through its membership of or
participation in an assigned risk plan or similar facility which involves
occupations or employments prohibited under exclusion (c) of this Article, such
policies are not excluded under this Agreement.
 
ARTICLE IV -- TERRITORY
 
    This Agreement shall cover wherever the Company's policies cover.
 
ARTICLE V -- TERM, CANCELLATION AND EXTENDED EXPIRATION
 
    This Agreement shall take effect at 12:01 A.M., January 1, 1995, and is of
unlimited duration but may be terminated as of 12:01 A.M., of the first day of
any calendar quarter by either party giving to the other not less than 90 days'
prior written notice. This Agreement shall apply to all losses occurring during
the currency of this Agreement irrespective of the inception dates of the
original policy or policies.
 
    By 12:01 A.M., is meant 12:01 A.M., Standard Time at the place where the
risk or risks upon which loss is sustained is or are located.
 
    If this Agreement shall terminate while the loss covered hereunder is in
progress, subject to the other conditions of this Agreement the Reinsurer is
responsible for its proportion of the entire loss or damage provided the loss
covered hereunder started before the time of termination.
 
ARTICLE VI -- AMOUNT OF COVER
 
    The Reinsurer will indemnify the Company in respect of the Company's "excess
losses", as hereinafter defined.
 
    "Excess losses" shall be defined as follows:
 
    (A)     IN RESPECT OF ALL BUSINESS COVERED HEREUNDER
 
            The Company's ultimate net loss the excess of $550,000 in respect of
    each accident, happening or occurrence up to a further $4,450,000 in respect
    of each such accident, happening or occurrence.
 
    (B)     IN RESPECT OF OCCUPATIONAL DISEASE AND/OR CONTINUOUS INJURY CLAIMS
 
            The Company's ultimate net loss the excess of $550,000 any one
    employee sustained by the Company resulting from occupational disease and/or
    continuous injury claims of one specific kind or class suffered by each
    employee, up to a further $4,450,000 ultimate net loss.
 
ARTICLE VII -- ULTIMATE NET LOSS AND CLAIM EXPENSES
 
    The term "ultimate net loss" wherever used in this Agreement shall mean the
actual loss or losses sustained by the Company, after making deductions for all
recoveries, all salvages and all claims on other reinsurances, except underlying
quota share reinsurance with UNUM, whether collected or not. Nothing in this
clause, however, shall be construed as meaning that losses are not recoverable
from the Reinsurer until the ultimate net loss to the Company has been
ascertained.
 
    The words "ultimate net loss" shall in addition include 80% of Extra
Contractual Obligations as defined herein, provided the Company notifies the
Reinsurer of any claim which may involve such Extra Contractual Obligations, and
the Reinsurer concurs in writing with the course of action taken by the Company.
 
    All salvages, recoveries or payments recovered or received subsequent to a
loss settlement under this Agreement shall be applied as if recovered or
received prior to the aforesaid settlement, and all necessary adjustments shall
be made by the parties hereto.
 
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    The term "ultimate net loss" shall include all claim expenses of the Company
arising from the settlement of claims. The term "claim expenses" shall mean
court costs, interest upon awards and judgments, allocated expenses for
investigation and adjustment, and allocated legal expenses paid by the Company.
The Reinsurer shall not, however, be required to contribute to the salary
charges of any officials or permanent employees of the Company except in the
case of field claim adjusters or staff attorneys and then only when the time
spent by any adjuster or staff attorney is definitely allocated to a specific
claim.
 
ARTICLE VIII -- EXTRA CONTRACTUAL OBLIGATIONS
 
    This Agreement shall protect the Company, within the limits hereof, where
the ultimate net loss includes any extra contractual obligations. "Extra
Contractual Obligations" are defined as those liabilities not covered under any
other provision of this Agreement and which arise from the handling of any claim
on business covered hereunder, such liabilities arising because of, but not
limited to, the following: failure by the Company to settle within the policy
limit, or by reason of alleged or actual negligence, fraud or bad faith in
rejecting an offer of settlement or in the preparation of the defense or in the
trial of any action against its insured or reinsured or in the preparation or
prosecution of an appeal consequent upon such action.
 
    The date on which an extra contractual obligation is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original accident,
casualty, disaster or loss occurrence.
 
    However, coverage hereunder as respects extra contractual obligations shall
not apply where the loss has been incurred due to the fraud of a member of the
Board of Directors or a corporate officer of the Company acting individually or
collectively or in collusion with any individual or corporation or any other
organization or party involved in the presentation, defense or settlement of any
claim covered hereunder.
 
ARTICLE IX -- LOSS IN EXCESS OF POLICY LIMITS
 
    The Reinsurer shall be liable for its proportion of any loss in excess of
the limit of the Company's original policy, such loss in excess of the limit
having been incurred because of failure by the Company to settle within the
policy limit or by reason of alleged or actual negligence, fraud or bad faith in
rejecting an offer of settlement or in the preparation of the defense or in the
trial of any action against its Insured or Reinsured or in the preparation or
prosecution of an appeal consequent upon such action.
 
    However, this Article shall not apply where the loss has been incurred due
to the fraud of a member of the Board of Directors or a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.
 
    For the purposes of this Article, the word "loss" shall mean any amounts for
which the Company would have been contractually liable to pay had it not been
for the limit of the original policy.
 
    The liability of the Reinsurer with respect to the sum of ultimate net loss
and loss in excess of policy limits shall not exceed the Reinsurer's limit of
liability as set forth in the article entitled AMOUNT OF COVER.
 
ARTICLE X -- NET RETAINED LINES
 
    This Agreement applies only to that portion of any insurance or reinsurance
which the Company retains net for its own account, subject to underlying quota
share reinsurance with UNUM, and in calculating the amount of any loss hereunder
and also in computing the amount or amounts in excess of which this Agreement
attaches, only loss or losses in respect of that portion of any insurances or
reinsurances which the Company retains net for its own account, subject to
 
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underlying quota share reinsurance with UNUM, shall be included; however, this
requirement shall be satisfied if such amount is retained by the Company or its
affiliated companies under common ownership.
 
    The amount of the Reinsurer's liability hereunder in respect of any loss or
losses shall not be increased by reason of the inability of the Company to
collect from any other Reinsurer, whether specific or general, any amounts which
have become due from them, whether such inability arises from the insolvency of
such other Reinsurer or otherwise.
 
ARTICLE XI -- AUTOMATIC REINSTATEMENT
 
    In the event of any claim arising or payments made under this Agreement, the
indemnity provided hereby shall be automatically reinstated to the original
amount without the payment of any additional premium.
 
ARTICLE XII -- PREMIUM
 
    The premium to be paid for this reinsurance shall be calculated by applying
a rate of 1.09% to the Company's gross net earned premium income on business the
subject matter of this Agreement during the currency of this Agreement. The term
"gross net earned premium income" shall mean gross earned premiums on business
covered under this Agreement, less cancellations and returns only and less the
earned portion of any premiums paid for reinsurance, recoveries under which
would inure to the Reinsurer's benefit.
 
ARTICLE XIII -- CURRENCY
 
    The Dollars mentioned herein shall mean United States Dollars.
 
ARTICLE XIV -- ILLEGALITY
 
    If any law or regulation of the Federal or State or Local Government of any
jurisdiction in which the Company is doing business shall render illegal the
arrangements made in this Agreement, the Agreement can be terminated
immediately, insofar as it applies to such jurisdiction, by the Company giving
notice to the Reinsurer to such effect.
 
ARTICLE XV -- ACCOUNTS
 
    Within 25 days after the close of each month, the Company shall render to
the Reinsurer a report of the reinsurance premium for the month with respect to
the Company's gross net earned premium income on business the subject matter of
this Agreement during the month; and the amount due the Reinsurer shall be
remitted within 60 days after the close of the month.
 
ARTICLE XVI -- ERRORS AND OMISSIONS
 
    Any inadvertent delays, omissions or errors made in connection with this
Agreement shall not release either party hereto from any liability which would
have arisen hereunder if such delay, omission or error had not been made,
provided such delays, omissions or errors are rectified immediately upon
discovery.
 
ARTICLE XVII -- NOTICE OF LOSS AND LOSS SETTLEMENTS
 
    The Company shall report promptly to the Reinsurer each claim or loss for
which the Company's estimated amount of net loss is 50% or more of the amount of
the Company Retention and shall also report all cases of serious injury which,
regardless of considerations of liability or coverage, might involve this
reinsurance, including but not limited to the following:
 
    (a) Cord injury -- paraplegia, quadriplegia;
 
    (b) Amputations -- requiring a prosthesis;
 
    (c) Brain damage affecting mentality or central nervous system -- such as
       permanent disorientation, behavior disorder, personality change,
       seizures, motor deficit, inability to speak (aphasia), hemiplegia or
       unconsciousness (comatose);
 
    (d) Blindness;
 
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    (e) Burns -- involving over 10% of body with third degree or 30% of body
       with second degree;
 
    (f)  Multiple fractures -- involving more than one member or non-union;
 
    (g) Fracture of both heel bones (fractured bilateral os calcis);
 
    (h) Nerve damage causing paralysis and loss of sensation in arm and hand
       (brachial plexus nerve damage);
 
    (i)  Massive internal injuries affecting body organs;
 
    (j)  Injury to nerves at base of spinal canal (Cauda Equina) or any other
       back injury resulting in incontinence of bowel and/or bladder;
 
    (k) Any other serious injury which, in the judgment of the Company, might
       involve the Reinsurer.
 
    All loss settlements made by the Company, provided they are within the terms
of this Agreement, shall be unconditionally binding upon the Reinsurer, and
amounts falling to the share of the Reinsurer shall be payable by it immediately
upon reasonable evidence of the amount paid or to be paid being given by the
Company.
 
ARTICLE XVIII -- LIABILITY OF THE REINSURER
 
    The liability of the Reinsurer shall follow that of the Company in every
case and shall be subject in all respects to all the general and special
stipulations, clauses, waivers and modifications of the Company's policy or
policies and any endorsements thereon.
 
    The Company shall be the sole judge as to what shall constitute a claim or
loss covered under the Company's original policy and as to the Company's
liability thereunder and as to the amount or amounts which it shall be proper
for the Company to pay thereunder; and the Reinsurer shall be bound by the
judgment of the Company as to the liability and obligation of the Company under
its original policies.
 
    No error or omission in reporting any risk or loss reinsured hereunder shall
invalidate the liability of the Reinsurer, but the reporting of reinsurance not
authorized by this Agreement or by special acceptance hereunder shall not bind
the Reinsurer, except for the return of premium paid therefor.
 
ARTICLE XIX -- ACCESS TO RECORDS
 
    The Reinsurer or its duly accredited representative shall have free access
to the appropriate books and records of the Company at all reasonable times for
the purpose of obtaining information concerning this Agreement or the subject
matter thereof.
 
ARTICLE XX -- TAX
 
    In consideration of the terms under which this Agreement is issued, the
Company undertakes not to claim any deduction in respect of the premium hereon
when making tax returns, other than Income or Profits Tax returns, to any State
or Territory or the District of Columbia.
 
ARTICLE XXI -- OFFSET
 
    The Company or the Reinsurer may offset any balance, whether on account of
premium, commission, claims or losses, adjustment expense, salvage, or
otherwise, due from one party to the other under this Agreement or under any
other agreement heretofore or hereafter entered into between the Company and the
Reinsurer, provided, however, that, in the event of an insolvency of a party
hereto, an offset shall only be allowed in accordance with the provisions of
section 7427 of the Insurance Law of the State of New York.
 
ARTICLE XXII -- ARBITRATION
 
    As a precedent to any right of action hereunder, if any dispute shall arise
between the Company and the Reinsurer with reference to the interpretation of
this Agreement or their rights
 
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with respect to any transaction involved, whether such dispute arises before or
after termination of this Agreement, such dispute, upon the written request of
either party, shall be submitted to three arbitrators, one to be chosen by each
party, and the third by the two so chosen. If either party refuses or neglects
to appoint an arbitrator within thirty days after the receipt of written notice
from the other party requesting it to do so, the requesting party may appoint
two arbitrators. If the two arbitrators fail to agree in the selection of a
third arbitrator within thirty days of their appointment, each of them shall
name two, of whom the other shall decline one and the decision shall be made by
drawing lots. All arbitrators shall be executive officers of insurance or
reinsurance companies or Underwriters at Lloyd's, London not under the control
of either party to this Agreement.
 
    The arbitrators shall interpret this Agreement as an honorable engagement
and not as merely a legal obligation; they are relieved of all judicial
formalities and may abstain from following the strict rules of law, and they
shall make their award with a view to effecting the general purpose of this
Agreement in a reasonable manner rather than in accordance with a literal
interpretation of the language. Each party shall submit its case to its
arbitrator within thirty days of the appointment of the third arbitrator.
 
    The decision in writing of any two arbitrators, when filed with the parties
hereto, shall be final and binding on both parties. Judgment may be entered upon
the final decision of the arbitrators in any court having jurisdiction. Each
party shall bear the expense of the third arbitrator and of the arbitration.
Said arbitration shall take place in the city in which the Company's head office
is located unless some other place is mutually agreed upon by the Company and
the Reinsurer.
 
ARTICLE XXIII -- INSOLVENCY
 
    In the event of the insolvency of the Company, this reinsurance shall be
payable directly to the Company, or to its liquidator, receiver, conservator or
statutory successor immediately upon demand, with reasonable provision for
verification, on the basis of the liability of the Company without diminution
because of the insolvency of the Company or because the liquidator, receiver,
conservator or statutory successor of the Company has failed to pay all or a
portion of any claim. It is agreed, however, that the liquidator, receiver,
conservator or statutory successor of the Company shall give written notice to
the Reinsurer of the pendency of a claim against the Company indicating the
policy or bond reinsured which claim would involve a possible liability on the
part of the Reinsurer within a reasonable time after such claim is filed in the
conservation or liquidation proceeding or in the receivership, and that during
the pendency of such claim the Reinsurer may investigate such claim and
interpose, at its own expense, in the proceeding where such claim is to be
adjudicated any defense or defenses that it may deem available to the Company or
its liquidator, receiver, conservator or statutory successor. The expense thus
incurred by the Reinsurer shall be chargeable, subject to the approval of the
court, against the Company as part of the expense of conservation or liquidation
to the extent of a pro rata share of the benefit which may accrue to the Company
solely as a result of the defense undertaken by the Reinsurer.
 
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    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate this 22nd day of May, 1995.
 
                                          GENERAL REINSURANCE CORPORATION
 
                                                        /s/ M. L.
 
                                          --------------------------------------
                                                          M. L.
                                                      Vice President
Attest:         /s/ KATHY MITAS
 
     ---------------------------------
                Kathy Mitas
 
this 25th day of May, 1995.
                                          ZENITH INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
and this 25th day of May, 1995.
                                          ZNAT INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
and this 25th day of May, 1995.
                                          ZENITH STAR INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
and this 25th day of May, 1995.
                                          CALFARM INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
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                               ENDORSEMENT NO. 1
                         ATTACHED TO AND MADE A PART OF
                            AGREEMENT OF REINSURANCE
                                    NO. 8051
                                    BETWEEN
                        GENERAL REINSURANCE CORPORATION
                                      AND
                            ZENITH INSURANCE COMPANY
                             ZNAT INSURANCE COMPANY
                         ZENITH STAR INSURANCE COMPANY
                           CALFARM INSURANCE COMPANY
 
    IT IS MUTUALLY AGREED that, as respects new and renewal policies of the
Company becoming effective at and after 12:01 A.M., January 1, 1996, and
policies of the Company in force at 12:01 A.M., January 1, 1996, the first
sentence of ARTICLE XII -- PREMIUM is amended to read as follows:
 
    "The premium to be paid for this reinsurance shall be calculated by applying
a rate of 1.30% to the Company's gross net earned premium income on business the
subject matter of this Agreement during the currency of this Agreement."
 
    IN WITNESS WHEREOF, the parties hereto have caused this Endorsement to be
executed in duplicate this 18th day of January, 1996.
 
                                          GENERAL REINSURANCE CORPORATION
 
                                                 /s/ ANTHONY J. ANASTANIO
 
                                          --------------------------------------
                                                   Anthony J. Anastanio
                                                      Vice President
Attest:         /s/ KATHY MITAS
 
     ---------------------------------
                Kathy Mitas
 
this 23rd day of January, 1996.
                                          ZENITH INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
and this 23rd day of January, 1996.
                                          ZNAT INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
and this 23rd day of January, 1996.
 
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                                          ZENITH STAR INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
and this 23rd day of January, 1996.
                                          CALFARM INSURANCE COMPANY
 
                                                   /s/ JOHN J. TICKNER
 
                                          --------------------------------------
                                                     John J. Tickner
Attest:        /s/ RUTH FULGIUN
 
     ---------------------------------
               Ruth Fulgiun
 
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