NO RIGHT TO PARTICIPATE IN THE DEFENSE
WITH REGARD TO AN ASSERTED LIABILITY.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1
THE COMPANY REPRESENTS AND WARRANTS TO
NATIONAL UNION AND LABOR READY THAT:
(I)
THE COMPANY IS AN INSURANCE COMPANY DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS STATE OF
DOMICILE.
8
(II)
THE COMPANY HAS ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT, AND TO PERFORM ITS OBLIGATIONS
HEREUNDER.
THE EXECUTION AND DELIVERY BY THE COMPANY OF THIS AGREEMENT, AND THE
PERFORMANCE BY THE COMPANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT, HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE APPROVAL.
THIS AGREEMENT, WHEN DULY
EXECUTED AND DELIVERED BY THE COMPANY, AND SUBJECT TO THE DUE EXECUTION AND
DELIVERY HEREOF BY NATIONAL UNION AND LABOR READY, WILL BE A VALID AND BINDING
OBLIGATION OF THE COMPANY, ENFORCEABLE AGAINST THE COMPANY, ITS PERMITTED
SUCCESSORS AND ASSIGNS, IN ACCORDANCE WITH ITS TERMS.
(III)
THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY IN
ACCORDANCE WITH THE RESPECTIVE TERMS AND CONDITIONS HEREOF WILL NOT (A) VIOLATE
ANY PROVISIONS OF THE ARTICLES OF INCORPORATION OR BYLAWS OF THE COMPANY, OR (B)
VIOLATE ANY ORDER, JUDGMENT, INJUNCTION, AWARD OR DECREE OF ANY COURT,
ARBITRATOR OR GOVERNMENTAL OR REGULATORY BODY AGAINST, OR BINDING UPON, OR ANY
AGREEMENT WITH, OR CONDITION IMPOSED BY, ANY GOVERNMENTAL OR REGULATORY BODY,
FOREIGN OR DOMESTIC, BINDING UPON THE COMPANY AS OF THE DATE HEREOF.
(IV)
THE COMPANY HAS NO OBLIGATION TO PAY ANY FEE,
COMMISSION, EXPENSE OR OTHER AMOUNT TO ANY INTERMEDIARY OR BROKER IN CONNECTION
WITH THIS AGREEMENT.
(V)
TO THE BEST OF THE COMPANY'S KNOWLEDGE AS OF
THE EFFECTIVE DATE, THE COMPANY HAS PROVIDED NATIONAL UNION, OR GIVEN NATIONAL
UNION FULL ACCESS TO, ALL BOOKS, RECORDS, REPORTS, UNDERWRITING FILES, CLAIMS
FILES, ELECTRONIC FILES, AND INFORMATION IN ANY FORM (THE "RECORDS") RELATING TO
THE POLICIES.
(VI)
TO THE BEST OF THE COMPANY'S KNOWLEDGE AS OF
THE EFFECTIVE DATE, THE COMPANY IS NOT AWARE OF ANY CLAIM MADE UNDER, OR
LITIGATION WITH RESPECT TO, ANY OF THE POLICIES WHICH CONTAINS A MATERIAL CLAIM
FOR BAD FAITH DAMAGES, PUNITIVE DAMAGES, EXTRA- CONTRACTUAL LIABILITIES,
LIABILITIES IN EXCESS OF POLICY LIMITS OR OTHER SIMILAR CLAIM, WHICH HAS NOT
BEEN FULLY AND FINALLY RESOLVED AND SETTLED AS OF THE EFFECTIVE DATE.
(VII)
TO THE BEST OF THE COMPANY'S KNOWLEDGE AS OF THE
EFFECTIVE DATE, TPA IS THE ONLY THIRD PARTY ADMINISTRATOR THAT HAS BEEN RETAINED
TO ADJUST CLAIMS UNDER THE POLICIES, AND THE COMPANY IS NOT AWARE OF ANY OTHER
THIRD PARTY ADMINISTRATOR BEING RETAINED BY ANY OTHER PARTY TO ADJUST SUCH
CLAIMS.
(VIII)
TO THE BEST OF THE COMPANY'S KNOWLEDGE AS OF THE
EFFECTIVE DATE, IT HAS PAID OR DISCHARGED ALL EXPENSES DESCRIBED IN SECTIONS
2.2(A-C).
(IX)
THE ASSIGNMENT AND TRANSFER OF THE POLICIES
TO NATIONAL UNION AND/OR THE ASSIGNMENT, TRANSFER, RETURN OR CANCELLATION OF ANY
COLLATERAL OR OTHER FUNDS DUE AND OWING TO LABOR READY PURSUANT HERETO, WHETHER
BEFORE,