Common use of Withdrawal of Assets from the Trust Account Clause in Contracts

Withdrawal of Assets from the Trust Account. (a) In the absence of a Reserve Credit Event: (i) The Ceding Company and Reinsurer agree that the assets maintained in the Trust Account may be withdrawn by the Ceding Company, or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of Insolvency on the part of the Ceding Company or Reinsurer, upon prior written notice to the Trustee and the Reinsurer and in accordance with the terms of the Trust Agreement, but only for the purpose of paying or reimbursing the Ceding Company to the extent the Reinsurer fails to pay any undisputed amounts due to the Ceding Company hereunder, which default has not been cured by the Reinsurer within ten (10) Business Days following its receipt of specific written demand for payment of such undisputed amounts (which demand shall not be provided until the due date for such amounts under this Agreement has passed). (ii) The Ceding Company shall return to the Trust Account, within five (5) Business Days, assets withdrawn in excess of all amounts due under Section 5.6(a)(i). Any such excess amount (together with investment income thereon) shall at all times be held by the Ceding Company (or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company) in constructive trust for the benefit of the Reinsurer for the sole purpose of funding the payments and reimbursements described in Section 5.6(a)(i). The Ceding Company shall pay to the Reinsurer interest on the assets in such account equal to the greater of (x) the actual amount of interest and (y) the Interest Rate, dividends and other investment income earned on the assets in such account for the period that such assets are held by the Ceding Company. 1006844591v17 (b) Following the occurrence and during the continuance of a Reserve Credit Event: (i) The Ceding Company and Reinsurer agree that the assets maintained in the Trust Account may be withdrawn by the Ceding Company, or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of Insolvency on the part of the Ceding Company or Reinsurer, at any time without notice or consent from the Reinsurer but only for one or more of the following purposes: 1. to pay or reimburse the Ceding Company for the Reinsurer’s share of premiums returned to the owners of the Reinsured Policies reinsured hereunder because of cancellations of such Reinsured Policies; 2. to pay or reimburse the Ceding Company for the Reinsurer’s share of surrenders, benefits, losses or other amounts payable by the Ceding Company pursuant to the provisions of the Reinsured Policies reinsured hereunder; 3. to fund an account with the Ceding Company in an amount at least equal to the deduction, for reinsurance ceded, from the Ceding Company liabilities for Reinsured Policies ceded hereunder. The account must include, but not be limited to, amounts for policy reserves, claims and losses incurred, including losses incurred but not reported, loss adjustment expenses, and unearned premium reserves; or 4. to pay any other amounts the Ceding Company claims are due hereunder. (ii) The Ceding Company shall return to the Trust Account, within five (5) Business Days, assets withdrawn in excess of all amounts due under Sections 5.6(b)(i)(1), (2) and (3), or, in the case of Section 5.6(b)(i)(4) immediately above, assets that are subsequently determined not to be due. Any such excess amount withdrawn and not so deposited (together with investment income thereon) shall at all times be held by the Ceding Company (or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company) in constructive trust for the benefit of the Reinsurer for the sole purpose of funding the payments and reimbursements described in Sections 5.6(b)(i)(1), (2) and (4). The Ceding Company shall pay to the Reinsurer interest on the assets in the account under Section 5.6(b)(i)(3) equal to the actual amount of interest at a rate not to exceed the Interest Rate, dividends and other investment income earned on the assets in such account for the period that such assets are held by the Ceding Company. 1006844591v17

Withdrawal of Assets from the Trust Account. (a) In the absence of a Reserve Credit Event: (i) The Ceding Company and Reinsurer agree that the assets maintained in the Trust Account may be withdrawn by the Ceding Company, or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of Insolvency on the part of the Ceding Company or Reinsurer, upon prior written notice to the Trustee and the Reinsurer and in accordance with the terms of the Trust Agreement, but only for the purpose of paying or reimbursing the Ceding Company to the extent the Reinsurer fails to pay any undisputed amounts due to the Ceding Company hereunder, which default has not been cured by the Reinsurer within ten (10) Business Days following its receipt of specific written demand for payment of such undisputed amounts (which demand shall not be provided until the due date for such amounts under this Agreement has passed). (ii) The Ceding Company shall return to the Trust Account, within five (5) Business Days, assets withdrawn in excess of all amounts due under Section 5.6(a)(i). Any such excess amount (together with investment income thereon) shall at all times be held by the Ceding Company (or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company) in constructive trust for the benefit of the Reinsurer for the sole purpose of funding the payments and reimbursements described in Section 5.6(a)(i). The Ceding Company shall pay to the Reinsurer interest on the assets in such account equal to the greater of (x) the actual amount of interest and (y) the Interest Rate, dividends and other investment income earned on the assets in such account for the period that such assets are held by the Ceding Company. 1006844591v17 (b) Following the occurrence and during the continuance of a Reserve Credit Event: (i) The Ceding Company and Reinsurer agree that the assets maintained in the Trust Account may be withdrawn by the Ceding Company, or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company, without diminution because of Insolvency on the part of the Ceding Company or Reinsurer, at any time without notice or consent from the Reinsurer but only for one or more of the following purposes: 1. to pay or reimburse the Ceding Company for the Reinsurer’s share of premiums returned to the owners of the Reinsured Policies reinsured hereunder because of cancellations of such Reinsured Policies; 2. to pay or reimburse the Ceding Company for the Reinsurer’s share of surrenders, benefits, losses or other amounts payable by the Ceding Company pursuant to the provisions of the Reinsured Policies reinsured hereunder; 3. to fund an account with the Ceding Company in an amount at least equal to the deduction, for reinsurance ceded, from the Ceding Company liabilities for Reinsured Policies ceded hereunder. The account must include, but not be limited to, amounts for policy reserves, claims and losses incurred, including losses incurred but not reported, loss adjustment expenses, and unearned premium reserves; or 4. to pay any other amounts the Ceding Company claims are due hereunder. (ii) The Ceding Company shall return to the Trust Account, within five (5) Business Days, assets withdrawn in excess of all amounts due under Sections 5.6(b)(i)(1), (2) and (3), or, in the case of Section 5.6(b)(i)(4) immediately above, assets that are subsequently determined not to be due. Any such excess amount withdrawn and not so deposited (together with investment income thereon) shall at all times be held by the Ceding Company (or any successor by operation of law of the Ceding Company including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Company) in constructive trust for the benefit of the Reinsurer for the sole purpose of funding the payments and reimbursements described in Sections 5.6(b)(i)(1), (2) and (4). The Ceding Company shall pay to the Reinsurer interest on the assets in the account under Section 5.6(b)(i)(3) equal to the actual amount of interest at a rate not to exceed the Interest Rate, dividends and other investment income earned on the assets in such account for the period that such assets are held by the Ceding Company. 1006844591v17in