Common use of Collateral Trust Clause in Contracts

Collateral Trust. (a) Within thirty (30) days following the Closing Date, the Reinsurer shall establish a collateral trust account (the “Collateral Trust Account”) with a third party trustee for the benefit of the Ceding Company pursuant to the terms of a reinsurance trust agreement substantially in the form of Exhibit D (the “Collateral Trust Agreement”), with such changes thereto as may be mutually agreed by the Parties. The Reinsurer shall maintain the Collateral Trust Account with Collateral Trust Authorized Investments having an aggregate Fair Market Value no less than the Collateral Trust Required Balance. The Collateral Trust Required Balance shall be adjusted as of the end of each Accounting Period. The Collateral Trust Authorized Investments shall be valued according to their current Fair Market Value. (b) Notwithstanding any other provision of this Agreement, the Ceding Company or any successor by operation of law, including any liquidator, rehabilitator, receiver or conservator of the Ceding Company may draw upon the assets held in the Collateral Trust Account at any time, without diminution because of the insolvency of any Party only for the following purposes: (i) to reimburse the Ceding Company for the Reinsurer’s share of premiums returned to the owners of the Covered Insurance Policies on account of cancellation of such policies; (ii) to reimburse the Ceding Company for the Reinsurer’s share of surrenders and benefits or losses paid by the Ceding Company pursuant to the provisions of the Covered Insurance Policies; (iii) to pay any other amount that the Ceding Company claims is due under this Agreement; or (iv) in the event that the Ceding Company receives notice of termination of the Collateral Trust Agreement, to fund an account with the Ceding Company in an amount at least equal to the Collateral Trust Required Balance. In the event that any amount drawn by the Ceding Company is subsequently determined not to be due, the Ceding Company shall promptly return to the Reinsurer the excess amounts so drawn and, until such excess amounts are returned to the Reinsurer, such amounts, together with interest thereon accrued at the Interest Rate (or the Alternative Rate, if applicable), shall be held by the Ceding Company in trust for the complete and sole benefit of the Reinsurer and the Reinsurer shall be entitled to all rights, title and interest in said amounts. (c) If as of the end of any Accounting Period the Fair Market Value of Collateral Trust Authorized Investments is less than the Collateral Trust Required Balance, the Reinsurer shall deposit Collateral Trust Authorized Investments into the Collateral Trust Account having an aggregate Fair Market Value sufficient to make up such difference. If as of the end of any Accounting Period the Fair Market Value of Collateral Trust Authorized Investments exceeds the Collateral Trust Required Balance, the Reinsurer may request the Ceding Company to release an amount up to such excess. (d) The Reinsurer shall arrange for assets to be deposited into the Collateral Trust Account. Prior to depositing any assets with the trustee of such Collateral Trust Account, the Reinsurer shall execute assignments or endorsements in blank, or transfer legal title of such assets to the trustee of all shares, obligations or any other assets requiring assignment so that the Ceding Company, or the trustee upon the Ceding Company’s direction, may, whenever necessary, negotiate any such assets without the consent or signature of the Reinsurer or any other entity. (e) Upon the Ceding Company’s approval, which shall not be unreasonably withheld, conditioned or delayed, the Reinsurer may withdraw all or any of the assets held in the Collateral Trust Account and replace the withdrawn assets with other Collateral Trust Authorized Investments having a Fair Market Value at least equal to the Fair Market Value of the assets so withdrawn so as to maintain at all times on deposit Collateral Trust Authorized Investments in an amount at least equal to the Collateral Trust Required Balance. (f) Notwithstanding any rule of any Applicable Law regarding the existence or non-existence of irreparable injury, the provisions of this Section 4.4 are agreed to be specifically enforceable including by motion for preliminary injunction or other provisional remedies.

Collateral Trust. (a) Within thirty (30) days following the Closing Date, the Reinsurer shall establish a collateral trust account (the “Collateral Trust Account”) with a third party trustee for the benefit of the Ceding Company pursuant to the terms of a reinsurance trust agreement substantially in the form of Exhibit D (the “Collateral Trust Agreement”), with such changes thereto as may be mutually agreed by the Parties. The Reinsurer shall maintain the Collateral Trust Account with Collateral Trust Authorized Investments having an aggregate Fair Market Value no less than the Collateral Trust Required Balance. The Collateral Trust Required Balance shall be adjusted as of the end of each Accounting Period. The Collateral Trust Authorized Investments shall be valued according to their current Fair Market Value. (b) Notwithstanding any other provision of this Agreement, the Ceding Company or any successor by operation of law, including any liquidator, rehabilitator, receiver or conservator of the Ceding Company may draw upon the assets held in the Collateral Trust Account at any time, without diminution because of the insolvency of any Party only for the following purposes: (i) to reimburse the Ceding Company for the Reinsurer’s share of premiums returned to the owners of the Covered Insurance Policies on account of cancellation of such policies; (ii) to reimburse the Ceding Company for the Reinsurer’s share of surrenders and benefits or losses paid by the Ceding Company pursuant to the provisions of the Covered Insurance Policies; (iii) to pay any other amount that the Ceding Company claims is due under this Agreement; or (iv) in the event that the Ceding Company receives notice of termination of the Collateral Trust Agreement, to fund an account with the Ceding Company in an amount at least equal to the Collateral Trust Required Balance. In the event that any amount drawn by the Ceding Company is subsequently determined not to be due, the Ceding Company shall promptly return to the Reinsurer the excess amounts so drawn and, until such excess amounts are returned to the Reinsurer, such amounts, together with interest thereon accrued at the Interest Rate (or the Alternative Rate, if applicable), shall be held by the Ceding Company in trust for the complete and sole benefit of the Reinsurer and the Reinsurer shall be entitled to all rights, title and interest in said amounts. (c) If as of the end of any Accounting Period the Fair Market Value of Collateral Trust Authorized Investments is less than the Collateral Trust Required Balance, the Reinsurer shall deposit Collateral Trust Authorized Investments into the Collateral Trust Account having an aggregate Fair Market Value sufficient to make up such difference. If as of the end of any Accounting Period the Fair Market Value of Collateral Trust Authorized Investments exceeds the Collateral Trust Required Balance, the Reinsurer may request the Ceding Company to release an amount up to such excess. (d) The Reinsurer shall arrange for assets to be deposited into the Collateral Trust Account. Prior to depositing any assets with the trustee of such Collateral Trust Account, the Reinsurer shall execute assignments or endorsements in blank, or transfer legal title of such assets to the trustee of all shares, obligations or any other assets requiring assignment so that the Ceding Company, or the trustee upon the Ceding Company’s direction, may, whenever necessary, negotiate any such assets without the consent or signature of the Reinsurer or any other entity. (e) Upon the Ceding Company’s approval, which shall not be unreasonably withheld, conditioned or delayed, the Reinsurer may withdraw all or any of the assets held in the Collateral Trust Account and replace the withdrawn assets with other Collateral Trust Authorized Investments having a Fair Market Value at least equal to the Fair Market Value of the assets so withdrawn so as to maintain at all times on deposit Collateral Trust Authorized Investments in an amount at least equal to the Collateral Trust Required Balance. (f) Notwithstanding any rule of any Applicable Law regarding the existence or non-non- existence of irreparable injury, the provisions of this Section 4.4 are agreed to be specifically enforceable including by motion for preliminary injunction or other provisional remedies.