OF ALL SHARES, OBLIGATIONS
OR ANY OTHER ASSETS REQUIRING ASSIGNMENTS, IN ORDER THAT THE COMPANY, OR THE
TRUSTEE UPON DIRECTION OF THE COMPANY, MAY WHENEVER NECESSARY NEGOTIATE ANY SUCH
ASSETS WITHOUT CONSENT OR SIGNATURE FROM THE REINSURER OR ANY OTHER ENTITY.
5.
ALL SETTLEMENTS OF ACCOUNT UNDER THE
TRUST AGREEMENT BETWEEN THE COMPANY AND REINSURER SHALL BE MADE IN CASH OR ITS
EQUIVALENT.
6.
THE REINSURER AND THE COMPANY AGREE
THAT THE ASSETS IN THE TRUST ACCOUNT MAY BE WITHDRAWN BY THE COMPANY AT ANY
TIME, NOTWITHSTANDING ANY OTHER PROVISIONS IN THE AGREEMENT, PROVIDED SUCH
ASSETS ARE APPLIED AND UTILIZED BY THE COMPANY OR ANY SUCCESSOR OF THE COMPANY
BY OPERATION OF LAW, INCLUDING, WITHOUT LIMITATION, ANY LIQUIDATOR,
REHABILITATOR, RECEIVER OR CONSERVATOR OF THE COMPANY, WITHOUT DIMINUTION
BECAUSE OF THE INSOLVENCY OF THE COMPANY OR THE REINSURER, ONLY FOR THE
FOLLOWING PURPOSES:
(I)
TO REIMBURSE THE COMPANY FOR THE
REINSURER'S SHARE OF ANY LOSSES AND LOSS ADJUSTMENT EXPENSES PAID BY THE COMPANY
BUT NOT RECEIVED FROM THE REINSURER OR FOR UNEARNED PREMIUMS DUE TO THE COMPANY
BUT NOT OTHERWISE PAID BY THE REINSURER UNDER THE AGREEMENT; OR
(II)
TO MAKE PAYMENT TO THE REINSURER OF ANY
AMOUNTS HELD IN THE TRUST ACCOUNT THAT EXCEED 102% OF THE REINSURER'S
OBLIGATIONS (LESS THE BALANCE OF CREDIT AVAILABLE UNDER ANY LETTER(S) OF CREDIT)
HEREUNDER; OR
(III)
WHERE THE COMPANY HAS RECEIVED NOTIFICATION
OF TERMINATION OF THE TRUST ACCOUNT, AND WHERE THE REINSURER'S ENTIRE
OBLIGATIONS UNDER THE AGREEMENT REMAIN UNLIQUIDATED
13
AND UNDISCHARGED TEN (10) DAYS PRIOR TO SUCH TERMINATION, TO WITHDRAW AMOUNTS
EQUAL TO SUCH OBLIGATIONS (LESS THE BALANCE OF CREDIT AVAILABLE UNDER ANY
LETTER(S) OF CREDIT) AND DEPOSIT SUCH AMOUNTS IN A SEPARATE ACCOUNT, IN THE NAME
OF THE COMPANY, IN ANY UNITED STATES BANK OR TRUST COMPANY, APART FROM ITS
GENERAL ASSETS, IN TRUST FOR SUCH USES AND PURPOSES SPECIFIED IN SUB-PARAGRAPHS
(I) AND (II) ABOVE AS MAY REMAIN EXECUTORY AFTER SUCH WITHDRAWAL AND FOR ANY
PERIOD AFTER SUCH TERMINATION.
7.
THE REINSURER SHALL HAVE THE RIGHT TO
SEEK THE COMPANY'S APPROVAL TO WITHDRAW ALL OR ANY PART OF THE ASSETS FROM THE
TRUST ACCOUNT AND TRANSFER SUCH ASSETS TO THE REINSURER, PROVIDED THAT THE
WITHDRAWAL CONFORMS TO THE FOLLOWING REQUIREMENTS:
(I)
THE REINSURER SHALL, AT THE TIME OF
WITHDRAWAL, REPLACE THE WITHDRAWN ASSETS WITH OTHER AUTHORIZED INVESTMENTS
HAVING A MARKET VALUE EQUAL TO THE MARKET VALUE OF THE ASSETS WITHDRAWN,
(II)
AFTER SUCH WITHDRAWAL AND TRANSFER, THE
MARKET VALUE OF THE TRUST ACCOUNT IS NO LESS THAN 102% OF THE REINSURER'S
OBLIGATIONS (LESS THE BALANCE OF CREDIT AVAILABLE UNDER ANY LETTER(S) OF
CREDIT).
In the event that the Reinsurer seeks the Company's approval hereunder, the
Company shall not unreasonably or arbitrarily withhold its approval.
8.
IN THE EVENT THAT THE COMPANY WITHDRAWS
ASSETS FROM THE TRUST ACCOUNT FOR THE PURPOSES SET FORTH IN PARAGRAPH
(6)(I) ABOVE IN EXCESS OF ACTUAL AMOUNTS REQUIRED TO MEET THE REINSURER'S
OBLIGATIONS TO THE COMPANY (LESS THE BALANCE OF CREDIT AVAILABLE UNDER ANY
LETTER(S)