LOSS PORTFOLIO TRANSFER AND 100% QUOTA SHARE REINSURANCE CONTRACT
(hereinafter called the "AGREEMENT")
between
BUSINESS INSURANCE COMPANY
(to be renamed "CENTRE INSURANCE COMPANY")
(hereinafter called the "REINSURED")
and
CALIFORNIA COMPENSATION INSURANCE COMPANY
(hereinafter called the "REINSURER")
ARTICLE I - BUSINESS COVERED
Subject to the terms, conditions and limitations of this Agreement, the
Reinsured obligates itself to cede and the Reinsurer obligates itself to
accept as reinsurance from the Reinsured a quota share participation of 100%
of the Reinsured's Net Liability resulting from any loss or losses occurring
under any and all policies, certificates, endorsements, bonds, contracts, and
binders of insurance or reinsurance written or renewed prior to the Effective
Date (each a "POLICY" and collectively "POLICIES").
ARTICLE 2 - TERM
This Agreement shall become effective immediately prior to the Closing of the
Acquisition (the "EFFECTIVE DATE") and shall remain in force until all the
obligations of the Reinsurer shall have been satisfied or discharged in full
(the "TERMINATION DATE").
ARTICLE 3 - TERRITORY
The territorial limits of this Agreement shall be identical with those of the
Policies and shall apply to losses wheresoever occurring.
ARTICLE 4 - CONSIDERATION
The Reinsured acknowledges receipt of good and valuable consideration for the
reinsurance assumed under this Agreement. On the Effective Date the Reinsured
shall remit to the Reinsurer: (a) an amount equal to 100% of the Reinsured's
Gross Net Unearned Premium Reserve net of the Ceding Commission on the
Policies that were in force on the Effective Date, and (b) an amount equal to
the unearned portion of the Reinsured's Gross Net Written Premium collected
on or before the Effective Date. It is currently estimated that this amount
will be, in the aggregate, $144,514,051 (including an estimated $118,354,000
of Losses as of December 10, 1998, an estimated $19,004,000 of loss
adjustment expenses as of December 10, 1998 and an estimated $7,156,051 of
unearned Premium as of September 30, 1998). The actual amounts will be
determined as of the Effective Date.
ARTICLE 5 - CEDING COMMISSION
The Reinsured shall be entitled to retain:
1
(i) an amount equal to the actual expenses of the Reinsured, including,
but not limited to, all commissions (including, without limitation,
commissions paid to the Underwriting Manager) and brokerages, taxes
(including, without limitation, taxes on premiums paid to the Reinsurer
under this Agreement), boards and bureau fees, residual market charges,
insolvency assessments and all other expenses whatsoever which are the
obligations of the Reinsured (excluding Loss Adjustment Expenses) (the
"Reinsured's Expense"); and
(ii) 2.5% of Gross Net Written Premium (the "Ceding Commission").
ARTICLE 6 - REPORTS AND REMITTANCES
1. (i) Promptly following the execution and delivery of this Agreement by
the Reinsured and the Reinsurer, the Reinsured shall deliver to the Reinsurer
(with a copy to the Underwriting Manager), a written notice (the "Initial
Three Month Net Liability Notice"), setting forth the Reinsured's estimate of
the amount of Net Liability (the "Estimated Net Liability Amount") for the
three month period commencing on the Effective Date and ending three months
after the Effective Date. The Reinsurer shall, within five (5) business days
after receipt from the Reinsured of the Initial Three Month Net Liability
Notice, pay the Estimated Net Liability Amount by wire transfer into the
Claims Fiduciary Account established pursuant to the Claims Services
Agreement and maintained by the TPA in the name and on behalf of the
Reinsured.
(ii) Periodically during the term of this Agreement (but no more
frequently than monthly), the Reinsured shall have the right to deliver to
the Reinsurer (with a copy to the Underwriting Manager), written notice (each
a "Revised Three Month Net Liability Notice"), setting forth the Reinsured's
revised estimate of the amount of Net Liability (the "Revised Estimated Net
Liability Amount") for the three month period commencing on the date of such
Revised Three Month Net Liability Notice and ending three months thereafter.
The Reinsurer shall, within five (5) business days after receipt from the
Reinsured of the Revised Three Month Net Liability Notice, pay by wire
transfer into the Claims Fiduciary Account, the amount (if a positive number)
equal to: (A) the Revised Estimated Net Liability Amount, minus (B) the
balance in the Claims Fiduciary Account on the date of such Revised Three
Month Net Liability Notice.
2. If, at any time or times during the term of this Agreement, the
Reinsured has paid, or intends to pay, Net Liability ceded under this
Agreement in an amount that exceeds (or will exceed) Fifty Percent (50%) of
the then-current balance of the Claims Fiduciary Account, then the Reinsurer
shall, within five (5) business days after receipt from the Reinsured of the
Cash Call Notice, pay the Cash Call Amount by wire transfer into the Claims
Fiduciary Account. The term "Cash Call Amount" shall mean the amount by which
any such payments (or intended payments) by the Reinsured exceeds (or will
exceed) Fifty Percent (50%) of the then-current balance of the Claims
Fiduciary Account. The term "Cash Call Notice" shall mean written notice from
the Reinsured to the Reinsurer setting forth the Cash Call Amount and
accompanied by reasonably satisfactory proof of loss or similar documentation.
3. Within fifteen (15) days after the close of each calendar month during
the term of this Agreement, and until all claims, losses or disputes arising
out of the Policies have been finally resolved, the Underwriting Manager
shall render a report (the "Monthly Report") to the Reinsured and the
Reinsurer on forms established by the Reinsured and reasonably acceptable to
the Reinsurer, setting forth the following information with respect to such
month or as of the end of such month (as the case may be):
i) Gross Net Written Premium;
ii) Ceding Commission;
iii) Collected Gross Net Written Premium;
iv) Gross Net Unearned Premium Reserve;
v) Reinsured Expense;
2
vi) Net Liability ceded under this Agreement which has not been paid
by the Reinsured (segregated by case reserves and incurred but not
reported reserves) ("Unpaid Net Liability");
vii) Net Liability ceded under this Agreement which has been paid by
the Reinsured; ("Paid Net Liability"); and
viii) Cash Call Amounts.
The Gross Net Unearned Premium Reserves, the Unpaid Net Liability Reserves
and the Paid Net Liability reserves shall hereinafter be collectively
referred to as the "Reserves."
4. If the Monthly Report shows a positive balance of (a) the sum of (i)
collected Gross Net Written Premium, plus (ii) Cash Call Amounts, minus (b)
the sum of (i) Ceding Commission, (ii) the Reinsured's Expense, and (iii) any
Paid Net Liability, then the Reinsured shall, within thirty (30) days of such
Monthly Report, remit by certified check or wire transfer, such positive
balance to the Reinsurer from the Premium Account or otherwise. If the
Monthly Report shows a negative balance of (a) the sum of (i) collected Gross
Net Written Premium, plus (ii) Cash Call Amounts, minus, (b) the sum of (i)
the Ceding Commission, (ii) the Reinsured's Expense, and (iii) any Paid Net
Liability, then the Reinsurer shall, within thirty (30) days of such Monthly
Report, remit such negative balance to the Reinsured. Such remittance to the
Reinsured shall be made by certified check or wire transfer to the Reinsured;
provided, however, that such remittance shall be deemed to have been made by
Reinsurer to the extent of Reinsurer's payment(s) to the Claims Fiduciary
Account made pursuant to Sections 6.1(i) and (ii) during the month that is
the subject of such Monthly Report.
5. The Underwriting Manager and TPA shall also periodically update and
render to the Reinsured and the Reinsurer such other reports or information
as are required by the Underwriting Management Agreement and/or the Claims
Services Agreement or as may reasonably be required by the Reinsured or the
Reinsurer and reasonably available to the Underwriting Manager or the TPA, as
the case may be.
ARTICLE 7 - LOSS SETTLEMENTS
The liability of the Reinsurer shall follow that of the Reinsured in every
case. Any settlement made by or on behalf of the Reinsured of any claim or
loss which is alleged to arise under the Policies shall be unconditionally
binding upon the Reinsurer, whether under strict Policy conditions
(including, but not limited to, the general and specific stipulations,
clauses, waivers, extensions, modifications and endorsements of any of the
Reinsured's Policies), or by way of compromise (including, without
limitation, EX GRATIA payments)
ARTICLE 8 - DEFINITIONS
"ACQUISITION" shall mean the purchase by Centre Solutions Holdings (Delaware)
Limited, pursuant to that certain Purchase Agreement by and among Centre
Solutions Holdings (Delaware) Limited and Superior National Insurance Group
dated as of December 7, 1998 (the "Acquisition Agreement") of all of the
issued and outstanding shares of capital stock of Business Insurance Company.
"CLAIMS SERVICES AGREEMENT" shall mean that certain Claims Administration
Services Agreement entered into and effective on the Effective Date between
the Reinsured and the TPA.
"CLOSING" shall mean the closing of the Acquisition.
"GROSS NET UNEARNED PREMIUM RESERVE" shall be defined as the gross unearned
premium reserve of the Reinsured (including the reserve for unearned premiums
associated with risks assumed by the Reinsured
3
pursuant to any residual market mechanism, pools, associations, syndicates
and similar assignments) on all Policies, less return premiums for
cancellations and reductions.
"GROSS NET WRITTEN PREMIUM" shall be defined as the gross direct and assumed
audit or other additional written premium of the Reinsured on all Policies
(including the reserve for unearned premiums associated with risks assumed by
the Reinsured pursuant to any residual market mechanism, pools, associations,
syndicates and similar assignments), less return premium for cancellations
and reductions, and, if applicable, less premium paid for reinsurance which
inures to the benefit of the Reinsurer under this Agreement Gross Net Written
Premium shall not include any premiums ultimately determined to be
uncollectible.
"LOSS ADJUSTMENT EXAM" shall mean all costs and expenses incurred by the
Reinsured in connection with the investigation, appraisal, adjustment,
settlement, litigation, defense or appeal of any claim or loss which arises
under the Policies or incurred in connection with declaratory judgment
actions with respect to the Policies, including court costs and costs of
supersedeas and appeal bonds, and shall include a) prejudgment interest,
unless included as part of the award or judgment; and b) post-judgment
interest. As used herein, "SUPERSEDEAS BOND" shall mean a bond required of
one who petitions to set aside a judgment or execution and from which the
other party may be made whole if the action is unsuccessful. The terms Loss
Adjustment Expense shall include all such claim or loss expenses, except the
salaries of the Reinsured's employees (including, but not limited to, in
house counsel, medical xxxx reviewers and claims investigators) office
expenses, overhead and other expenses of the Reinsured generally treated as
unallocated loss adjustment expenses (collectively, the "OVERHEAD EXPENSES");
provided, however, that to the extent that all or any portion of such
Overhead Expenses are allocated by the Reinsured on its books and records to
any or all claims or losses arising under the Policies, such Overhead
Expenses shall be treated as Loss Adjustment Expenses.
"NET LIABILITY" shall mean all the Reinsured's liability with respect to each
Policy reinsured under this Agreement, including pre-judgment interest or
delay damages, Excess of Policy Limits and Extra Contractual Obligations, as
specified in Article 9 and Article 10, after deduction of all other
reinsurance which inures to the benefit of the Reinsurer under this
Agreement, if any. The term Net Liability shall include Loss Adjustment
Expense. Nothing herein shall be construed to mean that losses under this
Agreement are not recoverable until the Reinsured's Net Liability has been
ascertained
"PREMIUM ACCOUNT" shall mean the premium fiduciary account maintained by the
Underwriting Manager in the name and on behalf of the Reinsured pursuant to
and in accordance with the Underwriting Management Agreement
"SNIS" shall mean SN Insurance Services, Inc.
"TPA" shall mean the third party administrator under the Claims Services
Agreement.
"UNDERWRITING MANAGER" shall mean the entity acting as underwriting manager
for the Reinsured with respect to the Policies pursuant to the Underwriting
Management Agreement. The initial Underwriting Manager shall be SNIS.
"UNDERWRITING MANAGEMENT AGREEMENT" shall mean that certain Underwriting
Management Agreement entered into and effective on the Effective Date between
the Reinsured and the Underwriting Manager.
ARTICLE 9 - EXCESS OF ORIGINAL POLICY LIMITS LOSS
4
This Agreement shall indemnify the Reinsured where the Net Liability includes
any Excess of Original Policy Limits Loss. Notwithstanding the foregoing, in
no event shall indemnification be provided to the extent such indemnification
is not permitted under New York law.
"EXCESS OF POLICY LIMITS LOSS" shall mean any loss of the Reinsured in
excess of the limit of its Policy that has been incurred because of failure
by it to settle within the Policy limit or by reason of its alleged or actual
negligence, fraud or bad faith in rejecting an offer of settlement or in the
preparation of the defense or in the trial of any action against its insured
or in the preparation or prosecution of an appeal consequent upon such action.
For the purposes of this Article, the word "LOSS" shall mean any amounts for
which the Reinsured would have been contractually liable to pay had it not
been for the limit of the Policy.
ARTICLE 10 - EXTRA CONTRACTUAL, OBLIGATIONS
This Agreement shall protect the Reinsured where the Net Liability includes
any Extra Contractual Obligations. Notwithstanding the foregoing, in no event
shall coverage be provided to the extent such coverage is not permitted under
New York law.
"EXTRA CONTRACTUAL OBLIGATIONS" shall mean those liabilities not covered
under any other provision of this Agreement and which arise from the handling
of any claim under any of the Policies, including, but not limited to,
liabilities arising because of the following: failure by the Reinsured to
settle within the Policy limit, or by reason of alleged or actual negligence,
fraud or bad faith in rejecting an offer of settlement or in the preparation
of the defense or in the trial of any action against its insured or in the
preparation or prosecution of an appeal consequent upon such action.
The date on which any Extra Contractual Obligation is incurred by the
Reinsured shall be deemed, in all circumstances, to be the date of the
original accident, casualty, disaster, loss, event or occurrence (or, if
there is a question or dispute about the applicable date, the date
established by the Reinsured).
ARTICLE 11 - SALVAGE AND SUBROGATION
The Reinsured shall pay to or credit the Reinsurer with any recovery
connected with a Paid Net Liability which is obtained from salvage,
subrogation, or other insurance or any other recovery, after charging the
Reinsurer with the expenses incurred by the Reinsured in obtaining any such
recovery.
Any such recoveries received subsequent to any loss or claim settlement
hereunder shall be applied as if received prior to the aforesaid loss or
claim settlement and all necessary adjustments in such regard shall be made
accordingly.
ARTICLE 12 - LATE PAYMENTS
Any late payment by either party shall accrue simple interest at the rate of
1% per month.
ARTICLE 13 - ACCESS TO RECORDS
Each of the parties and their respective duly appointed representatives shall
have access to the books, records and papers of the other party and such
other party's agents at all reasonable times during the term of this
Agreement or until the natural expiration of the Policies or until all
claims, losses or disputes arising
5
out of the Policies have been finally resolved, whichever is later, for the
purpose of obtaining information concerning this Agreement or the subject
matter hereof.
ARTICLE 14 - ARBITRATION
Any dispute arising out of the interpretation, performance or breach of this
Agreement, including the formation or validity thereof, shall be submitted
for decision to a panel of three arbitrators. Notice requesting arbitration
must be in writing and sent certified or registered mail, return receipt
requested.
One arbitrator shall be chosen by each party, and the two arbitrators shall,
before instituting the hearing, choose an impartial third arbitrator (the
"UMPIRE") who shall preside at the hearing. If either party fails to appoint
its arbitrator within 30 days after being requested to do so by the other
party, the latter, after 10 days notice by certified or registered mail of
its intention to do so, may appoint the second arbitrator.
If the two arbitrators are unable to agree upon the Umpire within 30 days of
their appointment, each of the arbitrators shall nominate three individuals.
Each arbitrator shall then decline two of the nominations presented by the
other arbitrator, and the Umpire shall then be chosen from the remaining two
individuals by drawing of lots by the two arbitrators. The Umpire shall
promptly notify in writing all parties to the arbitration of his selection.
The arbitrators shall be active or former officers of insurance or
reinsurance companies, who shall not have a personal or financial interest in
the result of the arbitration
Within 30 days after notice of appointment of all arbitrators, the panel
shall meet and determine timely periods for briefs, discovery procedures and
schedules for hearings.
The panel shall be relieved of all judicial formality and shall not be bound
by the strict rules of procedure and evidence. Unless the panel agrees
otherwise, arbitration shall take place in New York, New York, but the venue
may be changed when deemed by the panel to be in the best interest of the
arbitration proceeding. The decision of any two arbitrators when rendered in
writing shall be final and binding. The panel is empowered to grant interim
relief as it may deem appropriate but shall not be authorized to award any
punitive or exemplary damages.
In reaching its decision, the panel shall apply the laws of the State of New
York, without giving effect to the conflict of laws principles thereof, and
shall keep in mind the purpose of this Agreement. To the extent, and only to
the extent, that the provisions of this Agreement arc ambiguous or unclear,
the panel shall make its decision considering the custom and practice of the
applicable insurance and reinsurance business. The panel shall render its
decision within 60 days following the termination of hearings, which decision
shall be in writing, stating the reasons thereof.
Judgment upon the award may be entered in any court having jurisdiction
thereof. Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the cost of the Umpire. The
remaining costs of the arbitration shall be allocated by the panel. The panel
may, at its discretion, award such further costs and expenses as it considers
appropriate, including but not limited to, attorneys fees, to the extent
permitted by law.
ARTICLE 15 - ERRORS AND OMISSIONS
The Reinsurer shall not be relieved of liability because of an error or
accidental omission by the Reinsured, provided that the error or omission is
rectified promptly after discovery.
6
ARTICLE 16 - TAXES
The Reinsured shall be liable to the appropriate governmental authorities for
all taxes on premiums paid to the Reinsurer under this Agreement, except
income or profit taxes of the Reinsurer.
ARTICLE 17 - INSOLVENCY
In the event of insolvency and the appointment of a conservator, liquidator,
or statutory successor of the Reinsured, the portion of any risk or
obligation assumed by the Reinsurer shall be payable to the conservator,
liquidator, or statutory successor on the basis of claims allowed against the
insolvent company by any court of competent jurisdiction or by any
conservator, liquidator, or statutory successor of the Reinsured having
authority to allow such claims, without diminution because of that
insolvency, or because the conservator, liquidator, or statutory successor
has failed to pay all or a portion of any claims. Payments by the Reinsurer
as set forth in this subdivision shall be made directly to the Reinsured or
to its conservator, liquidator, or statutory successor, except where the
Policy specifically provides another payee of such reinsurance in the event
of the insolvency of the Reinsured.
It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of the Reinsured shall give written notice to the
Reinsurer of the pendency of a claim against the Reinsured involving a
possible liability on the part of the Reinsurer (indicating the Policy under
which such claim arises) within a reasonable time after such claim is filed
in the conservation or liquidation proceeding or the receivership, and that
during the pendency of such claim, the Reinsurer may investigate such claim
and interpose, at its own expense, in the proceeding where such claim is to
be adjudicated, any defense or defenses that it may deem available to the
Reinsured or its liquidator, receiver, conservator or statutory successor.
The expense thus incurred by the Reinsurer shall be chargeable, subject to
the approval or the court, against the Reinsured as part of the expense of
conservation or liquidation to the extent of a pro rata share of the benefit
which may accrue to the Reinsured solely as a result of the defense
undertaken by the Reinsurer.
As to all reinsurance made, ceded, renewed or otherwise becoming effective
under this Agreement, the reinsurance shall be payable as set forth above by
the Reinsurer to the Reinsured or to its liquidator, receiver, conservator,
or statutory successor (except as provided by Sections 4118(a) (1) (A) and
1114 (c) of the New York Insurance Law or the Delaware Insurance Law or other
similar applicable state insurance laws relating to Fidelity and Surety risks
or) except (1) where the Policy specifically provides another payee in the
event of the insolvency of the Reinsured, and (2) where the Reinsurer with
the consent of the direct insured or insured has assumed such Policy
obligations of the Reinsured as direct obligations of the Reinsurer to the
payees under such Policies and in substitution for the obligations of the
Reinsured to the payees. Then, and in that event only, the Reinsured with the
prior approval of the certificate of assumption on New York risks by the
Superintendent of Insurance of the State of New York and the Delaware
Department of Insurance, is entirely released from its obligation and the
Reinsurer pays any loss directly to payees under such Policies.
ARTICLE 18 - OFFSET
Subject to applicable laws governing offset entitlement, the Reinsured and
the Reinsurer may offset any balance or amount due from one party to the
other under this Agreement.
ARTICLE 19 - CURRENCY
Whenever the word "DOLLARS" or the "$" sign appear in this Agreement, they
shall be construed to mean United States Dollars, and all transactions under
this Agreement shall be in United States Dollars.
7
ARTICLE 20- NO ASSIGNMENT; NO THIRD PARTY BENEFICIARIES
This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors, assigns and legal representatives. Neither
this Agreement, not any right hereunder, may be assigned by any party without
the written consent of the other party hereto. This Agreement is not intended
to, and shall not be construed to, confer rights on any persons other than
the signatories to this Agreement and their respective successors and
permitted assigns.
ARTICLE 21 - AMENDMENTS
This Agreement shall not be amended in whole or in part except by written
agreement executed by the Reinsured and the Reinsurer.
ARTICLE 22 - SECURITY
Promptly after the receipt of the first Monthly Report, and every third
Monthly Report thereafter, the Reinsurer shall provide security in an amount
equal to the Reserves, to secure the Reinsurer's performance of its
obligations under this Agreement (the "Reinsurer's Obligations") by trust
agreement, cash advances or a Letter of Credit. Subject to the consent of the
Reinsured, which shall not be unreasonably withheld, the Reinsurer shall have
the option of determining the method of security, provided it is in a form
acceptable to the applicable insurance regulatory authorities.
When providing security by a Letter of Credit, the Reinsurer agrees to apply
for and secure timely delivery to the Reinsured of a "clean", irrevocable and
unconditional Letter of Credit issued by a bank and containing provisions
acceptable to the applicable insurance regulatory authorities in an amount
equal to such Reserves. Such Letter of Credit shall be issued for a period of
not less than one year, and shall be automatically extended for one year from
its date of expiration or any future expiration date unless thirty (30) days
(sixty (60) days where required by any insurance regulatory authorities)
prior to any expiration date, the issuing bank shall notify the Reinsured by
certified or registered mail that the issuing bank elects not to extend or
renew the Letter of Credit for any additional period.
The Letters of Credit provided by the Reinsurer pursuant to the provisions of
this Agreement may be drawn upon at any time, notwithstanding any other
provision of this Agreement, and be utilized by the Reinsured or any
successor, by operation of law, of the Reinsured including, without
limitation, any liquidator, rehabilitator, receiver or conservator of the
Reinsured for the following purposes, unless otherwise provided for in a
separate Trust Agreement:
(a) to reimburse the Reinsured an amount equal to the Paid Net Liability
for which the Reinsurer has not reimbursed the Reinsured;
(b) to make refund of any sum which is in excess of the actual amount
required to pay the Reinsurer's Obligations under this Agreement;
(c) to fund an account with the Reinsured for the Reinsurer's Obligations.
Such cash deposit shall be held in an interest bearing account separate
from the Reinsured's other assets, and interest thereon not in excess of
the prime rate shall accrue to the benefit of the Reinsurer;
(d) to pay the Reinsures share of any other amounts the Reinsured claims
are due under this Agreement.
8
In the event the amount drawn by the Reinsured on any Letter of Credit is in
excess of the actual amount required for (a), (c), and (d), the Reinsured
shall promptly return to the Reinsurer the excess amount so drawn. All of the
foregoing shall be applied without diminution because of insolvency on the
part of the Reinsured or the Reinsurer.
The issuing bank shall have no responsibility whatsoever in connection with
the propriety of withdrawals made by the Reinsured or the disposition of
funds withdrawn, except to ensure that withdrawals are made only upon the
order of properly authorized representatives of the Reinsured.
At quarterly intervals (i.e. upon receipt of every third Monthly Report), the
Reinsured or the Reinsurer (as the case may be) shall cause the Letter of
Credit to be amended in the following manner.
(a) If the Monthly Report shows that the Reserves exceed the balance of the
Letter of Credit as of the Monthly Report date, the Reinsurer shall,
within thirty (30) days after receipt of notice of such excess, secure
delivery to the Reinsured of an amendment to the Letter of Credit
increasing the amount of the Letter of Credit by the amount of such
difference
(b) If, however, the Monthly Report shows that the Reserves are less than
the balance of the Letter of Credit as of the Monthly Report date, the
Reinsured shall, within thirty (30) days after receipt of written
request from the Reinsurer, release such excess credit by agreeing to
secure an amendment to the Letter of Credit reducing the amount of the
Letter of Credit available by the amount of such excess.
ARTICLE 23 - GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York,
without giving effect to the conflict of laws principles thereof, and of the
United States, including the United States Arbitration Act, 9 U.S.C. Section
I ET SEQ.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
_______ day of December, 1998.
For and on behalf of:
BUSINESS INSURANCE COMPANY
/s/ J. XXXXX XXXXXX
---------------------------------
Name: J. Xxxxx Xxxxxx
Vice President
For and on behalf of:
CALIFORNIA COMPENSATION INSURANCE COMPANY
/s/ J. XXXXX XXXXXX
---------------------------------
Name: J. Xxxxx Xxxxxx
Title: Vice President
9
