THAT ALL PREMIUMS FOR POLICIES WITH
EFFECTIVE OR RENEWAL DATES DURING AN ADJUSTMENT PERIOD SHALL BE CREDITED TO THAT
ADJUSTMENT PERIOD.
"TERRORISM" SHALL MEAN AN ACT, INCLUDING BUT NOT LIMITED TO THE USE OF FORCE OR
VIOLENCE AND/OR THE THREAT THEREOF, ANY PERSON OR GROUP(S) OF PERSONS, WHETHER
ACTING ALONE OR ON BEHALF OF OR IN CONNECTION WITH ANY ORGANIZATION(S) OR
GOVERNMENT(S), COMMITTED FOR POLITICAL, RELIGIOUS, IDEOLOGICAL OR SIMILAR
PURPOSES INCLUDING THE INTENTION TO INFLUENCE ANY GOVERNMENT AND/OR TO PUT THE
PUBLIC, OR ANY SECTION OF THE PUBLIC, IN FEAR THAT HAS BEEN DETERMINED BY THE
APPROPRIATE FEDERAL AUTHORITY TO HAVE BEEN AN ACT OF TERRORISM.
Terrorism will include loss, damage, cost of expense of whatsoever nature
directly or indirectly caused by, resulting from or in connection with any
action taken in controlling, preventing, supervising or in any way relating to
any act of terrorism.
"TRUST ACCOUNT" SHALL HAVE THE MEANING SPECIFIED IN ARTICLE XVI.
"TRUST AGREEMENT" SHALL HAVE THE MEANING SPECIFIED IN ARTICLE XVI.
"TRUSTEE" SHALL HAVE THE MEANING SPECIFIED IN ARTICLE XVI.
IN THE EVENT ANY PORTION OF THIS DEFINITION SECTION IS FOUND TO BE INVALID OR
UNENFORCEABLE, THE REMAINDER WILL REMAIN IN FULL FORCE AND EFFECT.
ARTICLE III
COMMENCEMENT AND
TERMINATION
A.
THIS AGREEMENT IS EFFECTIVE AT 12:01 A.M.,
EASTERN STANDARD TIME, APRIL 1, 2006 (THE "EFFECTIVE DATE") AND SHALL HAVE A
TERM OF THREE (3) YEARS. EITHER PARTY MAY TERMINATE THE AGREEMENT AS OF THE DATE
TWELVE (12) MONTHS AFTER THE EFFECTIVE DATE AND ON THE TWELVE MONTH ANNIVERSARY
THEREAFTER BY GIVING AT LEAST SIXTY (60) DAYS PRIOR WRITTEN NOTICE TO THE OTHER
PARTY BY CERTIFIED OR REGISTERED MAIL, OR AS OTHERWISE PROVIDED BELOW.
B.
THE REINSURER SHALL ALSO HAVE THE RIGHT
TO TERMINATE THIS AGREEMENT AS OF THE DATE TWENTY FOUR (24) MONTHS AFTER THE
EFFECTIVE DATE BY GIVING SIXTY (60) DAYS PRIOR WRITTEN NOTICE BY CERTIFIED OR
REGISTERED MAIL TO THE COMPANY IF THE SUM OF THE NET LOSS RATIO PLUS (WEIGHTED)
4
CEDING COMMISSION PERCENTAGE HEREUNDER FOR THE BUSINESS COVERED HEREUNDER SINCE
THE EFFECTIVE DATE EQUALS OR EXCEEDS 99 % AT THE END OF THE CALENDAR QUARTER
IMMEDIATELY PRECEDING THE DATE OF SUCH NOTICE. IF THE PARTIES CANNOT AGREE AS TO
THE CALCULATION OF THE NET LOSS RATIO OR CEDING COMMISSION, WITHIN 30 DAYS OF
RECEIVING THE APPROPRIATE REPORT, THE CALCULATION SHALL BE ARBITRATED. THE
ACTUARIAL FIRM OF TOWERS PERRIN SHALL FURNISH AN ARBITER FOR COMPANY AND
REINSURER WILL CHOOSE ANOTHER ACTUARIAL FIRM TO FURNISH ITS ARBITER. THOSE TWO
ARBITERS WILL SELECT A THIRD INDEPENDENT ACTUARIAL FIRM TO FURNISH THE THIRD
ARBITER. HOWEVER, IT IS AGREED THAT IN THE EVENT OF TERMINATION BY REINSURER
PURSUANT TO THIS PROVISION, THE PARTIES WILL ACT REASONABLY TO NEGOTIATE A NEW
REINSURANCE AGREEMENT ON TERMS SIMILAR TO THOSE THEN BEING OFFERED BY OTHER
REINSURERS.
C.
IN THE EVENT EITHER PARTY TERMINATES THIS
AGREEMENT IN ACCORDANCE WITH PARAGRAPH A,OR B. ABOVE, THE REINSURER SHALL
PARTICIPATE IN ALL POLICIES CEDED WITHIN THE TERMS OF THIS AGREEMENT WRITTEN OR