Common use of Funding Requirements Clause in Contracts

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's request, subject to receipt of satisfactory information from the Company, its share of the Company's ceded unearned premium and outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contract, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. For the purpose of this Contract, the Lloyd's U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement premiums paid by the Company under the terms of the Underlying Contract, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO) 3. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss reserves funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reserves, if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's request, subject to receipt of satisfactory information from the Company, fund its share of the Company's ’s ceded unearned premium and premium, outstanding loss and Loss Adjustment Expense reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contract including incurred but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contract, if anyreported loss reserves) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, or confirmed by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authoritiesthe Company; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; only if the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding funding, a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, statement it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding is are acceptable to the Company and to the insurance regulatory authorities involved. For the purpose purposes of this Contract, Contract the Lloyd's U.S. ’s United States Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "“evergreen clause," ” which automatically extends the term for at least one additional year at each expiration date unless written notice Notice of non-renewal non­renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authoritiesdate. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's ’s share of reinstatement unearned premiums paid by the Company under the terms returned to insureds on account of the Underlying ContractPolicy cancellations, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's ’s share of losses and/or Loss Adjustment Expense paid under the terms of Policies reinsured hereunder, unless paid in cash by the Reinsurer; 3. To reimburse itself for the Reinsurer’s share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 34. To fund a cash account in an amount equal to the Reinsurer's ’s share of any ceded unearned premium and/or premium, outstanding loss and Loss Adjustment Expense reserves (including incurred but not reported loss reserves) funded by means of a letter of credit which is under non-renewal noticenon­renewal Notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 45. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's ’s share of the Company's ’s ceded unearned premium and/or outstanding loss and Loss Adjustment Expense reserves (including incurred but not reported loss reserves), if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1), B(2) or B(3B(4), or in the case of B(2B(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's request, subject to receipt of satisfactory information from the Company, its share of the Company's ceded unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid including incurred but not reported loss reserves for known loss occurrences established by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contract, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding funding, a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. For the purpose of this Contract, the Lloyd's U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement premiums losses and/or loss adjustment expense paid by the Company under the terms of the Underlying Contractpolicies reinsured hereunder, unless paid in cash by the Reinsurer;; (XXXXXXXX LOGO) 2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 3. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reservesand loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company), if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's ’s request, subject to receipt of satisfactory information from the Company, its share of the Company's ’s ceded unearned premium and outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's ’s reserves for reinstatement premiums due under the Underlying Contract, if any, determined as of the date that this paragraph A first applies to the Reinsurer according to the provisions of subparagraph (a) and/or (b) below) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if the Reinsurer is Reinsurer: a. Is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding funding, a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved; or b. Has an A.M. Best’s rating below A- (inclusive of “Not Rated” ratings) and/or a Standard & Poor’s rating below BBB+. However, this funding requirement will not apply to authorized reinsurers who at inception are rated A or higher by A.M. Best and have a policyholders’ surplus of $2,000,000,000 or more. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. 07\M2U1140 Page 7 For the purpose of this Contract, the Lloyd's ’s U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "“evergreen clause," ” which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 60 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's ’s share of reinstatement premiums paid by the Company under the terms of the Underlying Contract, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's ’s share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 3. To fund a cash account in an amount equal to the Reinsurer's ’s share of any ceded unearned premium and/or outstanding loss reserves funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's ’s share of the Company's ’s ceded unearned premium and/or outstanding loss reserves, if so requested by the Reinsurer; and 5. To reimburse itself for the Reinsurer’s portion of the unearned reinsurance premium paid to the Reinsurer hereunder. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's request, subject to receipt of satisfactory information from the Company, its share of the Company's ceded unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid including incurred but not reported loss reserves for known loss occurrences established by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contract, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; 06\P2Z1057 (XXXXXXXX LOGO) if the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding funding, a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. For the purpose of this Contract, the Lloyd's U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement premiums losses and/or loss adjustment expense paid by the Company under the terms of the Underlying Contractpolicies reinsured hereunder, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 3. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reservesand loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company), if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.. 06\P2Z1057 (XXXXXXXX LOGO)

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's ’s request, subject to receipt of satisfactory information from the Company, its share of the unearned portion of any deposit premium (determined as of the date that this paragraph A first applies to the Reinsurer according to the provisions of subparagraph (a) and/or (b) below) and the Company's ’s ceded unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid including incurred but not reported loss reserves for known loss occurrences established by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contract, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if the Reinsurer is Reinsurer: a. Is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding funding, a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved; or b. Has an A.M. Best’s rating below A- (inclusive of “Not Rated” ratings) and/or a Standard & Poor’s rating below BBB+. However, this funding requirement will not apply to authorized reinsurers who at inception are rated A or higher by A.M. Best and have a policyholders’ surplus of $2,000,000,000 or more. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. 07\P2Z1059 Page 15 For the purpose of this Contract, the Lloyd's ’s U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "“evergreen clause," ” which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's ’s share of reinstatement premiums losses and/or loss adjustment expense paid by the Company under the terms of the Underlying Contractpolicies reinsured hereunder, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's ’s share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 3. To fund a cash account in an amount equal to the Reinsurer's ’s portion of the unearned deposit premium and/or the Reinsurer’s share of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's ’s portion of the unearned deposit premium and/or the Reinsurer’s share of the Company's ’s ceded unearned premium and/or outstanding loss reservesand loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company), if so requested by the Reinsurer; and 5. To reimburse itself for the Reinsurer’s portion of the unearned deposit premium paid to the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's request, subject to receipt of satisfactory information from the Company, its share of the Company's ceded unearned premium and outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contract, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; 06\M2U1132 (XXXXXXXX LOGO) if the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. For the purpose of this Contract, the Lloyd's U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement premiums paid by the Company under the terms of the Underlying Contract, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 3. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss reserves funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reserves, if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's request, subject to receipt of satisfactory information from the Company, its share of the Company's ceded unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid including incurred but not reported loss reserves for known loss occurrences established by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contract, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding funding, a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. For the purpose of this Contract, the Lloyd's U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement premiums losses and/or loss adjustment expense paid by the Company under the terms of the Underlying Contractpolicies reinsured hereunder, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 3. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reservesand loss adjustment expense reserves (including incurred but not reported loss reserves for known loss occurrences established by the Company), if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Funding Requirements. A. The Reinsurer agrees to fund, within 30 days of the Company's ’s request, subject to receipt of satisfactory information from the Company, its share of the Company's ’s ceded unearned premium and outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contract but not yet recovered from the Reinsurer, plus the Company's ’s reserves for reinstatement premiums due under the Underlying Contract, if any, determined as of the date that this paragraph A first applies to the Reinsurer according to the provisions of subparagraph (a) and/or (b) below) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or 07\M2U1141 Page 6 banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if the Reinsurer is Reinsurer: a. Is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding funding, a penalty would accrue to the Company on any financial statement, including but not limited to quarterly filings, it is required to file with the insurance regulatory authorities involved; or b. Has an A.M. Best’s rating below A- (inclusive of “Not Rated” ratings) and/or a Standard & Poor’s rating below BBB+. However, this funding requirement will not apply to authorized reinsurers who at inception are rated A or higher by A.M. Best and have a policyholders’ surplus of $2,000,000,000 or more. The Reinsurer, at its sole option, may fund in other than cash if its method of funding is acceptable to the Company and to the insurance regulatory authorities involved. For the purpose of this Contract, the Lloyd's ’s U.S. Credit for Reinsurance Trust Fund shall be considered an acceptable funding instrument. B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "“evergreen clause," ” which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 60 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's ’s share of reinstatement premiums paid by the Company under the terms of the Underlying Contract, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's ’s share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 06\M2U1137 (XXXXXXXX LOGO); 3. To fund a cash account in an amount equal to the Reinsurer's ’s share of any ceded unearned premium and/or outstanding loss reserves funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's ’s share of the Company's ’s ceded unearned premium and/or outstanding loss reserves, if so requested by the Reinsurer; and 5. To reimburse itself for the Reinsurer’s portion of the unearned reinsurance premium paid to the Reinsurer hereunder. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.