AND UNEARNED PREMIUMS; AND
(IV)
TO PAY ANY OTHER AMOUNTS THE REINSURED PARTICIPATING COMPANY
CLAIMS ARE DUE UNDER THIS AGREEMENT.
4.
THE REINSURED PARTICIPATING COMPANY SHALL IMMEDIATELY RETURN TO THE
PARTICIPATING COMPANY ANY AMOUNTS DRAWN DOWN ON THE LETTER OF CREDIT THAT ARE
SUBSEQUENTLY DETERMINED NOT TO BE DUE.
5.
THE ISSUING BANK SHALL HAVE NO RESPONSIBILITY WHATSOEVER IN CONNECTION
WITH THE PROPRIETY OF WITHDRAWALS MADE BY THE REINSURED PARTICIPATING COMPANY OF
THE DISPOSITION OF FUNDS
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WITHDRAWN, EXCEPT TO ENSURE THAT WITHDRAWALS ARE MADE ONLY UPON THE ORDER OF
PROPERLY AUTHORIZED REPRESENTATIVES OF THE REINSURED PARTICIPATING COMPANY.
E.
TO THE EXTENT THAT THE PARTICIPATING COMPANY ELECTS TO ESTABLISH A
TRUST ACCOUNT, THE FOLLOWING SHALL APPLY.
1.
IT IS AGREED THAT THE PARTICIPATING COMPANY SHALL ENTER INTO A TRUST
AGREEMENT (THE "TRUST AGREEMENT") IN A FORM ACCEPTABLE TO THE REINSURED
PARTICIPATING COMPANY AND ESTABLISH A TRUST ACCOUNT (THE "TRUST ACCOUNT") FOR
THE SOLE BENEFIT OF THE REINSURED PARTICIPATING COMPANY WITH A TRUSTEE (THE
"TRUSTEE"), WHICH SHALL BE AT THE TIME THE TRUST IS ESTABLISHED, AND SHALL
CONTINUE TO BE, EITHER A MEMBER OF THE FEDERAL RESERVE SYSTEM OR A NEW YORK
STATE CHARTERED BANK AND WHICH SHALL NOT BE A PARENT, SUBSIDIARY OR AFFILIATE OF
THE PARTICIPATING COMPANY OR THE REINSURED PARTICIPATING COMPANY.
2.
THE PARTICIPATING COMPANY AGREES TO DEPOSIT AND MAINTAIN IN SAID TRUST
ACCOUNT ASSETS TO BE HELD IN TRUST BY THE TRUSTEE FOR THE BENEFIT OF THE
REINSURED PARTICIPATING COMPANY AS SECURITY FOR THE PAYMENT OF THE PARTICIPATING
COMPANY'S OBLIGATIONS TO THE REINSURED PARTICIPATING COMPANY UNDER THE
AGREEMENT.
SUCH ASSETS SHALL BE MAINTAINED IN THE TRUST ACCOUNT BY THE
PARTICIPATING COMPANY AS LONG AS THE PARTICIPATING COMPANY CONTINUES TO REMAIN
LIABLE FOR SUCH OBLIGATIONS.
3.
THE PARTICIPATING COMPANY AGREES THAT THE ASSETS DEPOSITED INTO THE
TRUST ACCOUNT SHALL BE VALUED ACCORDING TO THEIR CURRENT FAIR MARKET VALUE AND
SHALL CONSIST ONLY OF CURRENCY OF THE UNITED STATES OF AMERICA, CERTIFICATES OF
DEPOSIT ISSUED BY A UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL
TENDER, AND INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS (1), (2), (3), (8)
AND (10) OF SECTION 1404(A) OF THE NEW YORK INSURANCE LAW, PROVIDED SUCH
INVESTMENTS ARE ISSUED BY AN INSTITUTION THAT IS NOT THE PARENT, SUBSIDIARY OR
AFFILIATE OF EITHER THE GRANTOR OR THE BENEFICIARY ("AUTHORIZED INVESTMENTS").
4.
THE PARTICIPATING COMPANY, PRIOR TO DEPOSITING ASSETS WITH THE
TRUSTEE, SHALL EXECUTE ALL ASSIGNMENTS AND ENDORSEMENTS IN BLANK, AND SHALL
TRANSFER LEGAL TITLE TO THE TRUSTEE OF ALL SHARES, OBLIGATIONS OR ANY OTHER
ASSETS REQUIRING ASSIGNMENTS, IN ORDER THAT THE REINSURED PARTICIPATING COMPANY,
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OR THE TRUSTEE UPON DIRECTION OF THE REINSURED PARTICIPATING COMPANY, MAY
WHENEVER NECESSARY NEGOTIATE ANY SUCH ASSETS WITHOUT CONSENT OR SIGNATURE FROM
THE PARTICIPATING COMPANY OR ANY OTHER ENTITY.
5.
ALL SETTLEMENTS OF ACCOUNT UNDER THE TRUST AGREEMENT BETWEEN THE
REINSURED PARTICIPATING COMPANY AND PARTICIPATING COMPANY SHALL BE MADE IN CASH
OR ITS EQUIVALENT.
6.
THE PARTICIPATING COMPANY AND THE REINSURED PARTICIPATING COMPANY
AGREE THAT THE ASSETS