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(3) ACCOMMODATION PROVISION. Accommodation shall be provided for only those claims for which reimbursement is provided under the terms of the Treaty and are not in excess of the Specific Retention Amount. The Reinsurer shall determine for each month of coverage during the Treaty Year whether the cumulative total of Claims Paid to date by the Company exceeds the Accumulated Aggregate Retention Amount or the accumulated pro rata portion of the Minimum Aggregate Retention Amount, if greater. If so, the Reinsurer shall pay to the Company the difference. If more than the greater of 1.5% of the estimated Aggregate Retention Amount or $1,000.00, by which the cumulative total of Claims Paid exceeds the Accumulated Aggregate Retention Amount or the accumulated pro rata portion of the Minimum Aggregate Retention Amount, if greater. The total amount of Accommodation made under this Agreement shall never be more than the amount by which such Claims Paid during the Treaty Year exceeds the Accumulated Aggregate Retention Amount and shall never be more than the overall aggregate limit of $1,000,000.00. Accommodations shall be repaid to the Reinsurer as provided below. (4) REPAYMENT OF ACCOMMODATION. Repayment of the Accommodation shall be made as follows. After an Accommodation has been paid, the Company shall begin making monthly repayments of the total outstanding amount of Accommodations starting with the first month in which Claims Paid by the Company for that month are less than (a) the Monthly Aggregate Retention Amount and the Company's Claims Paid for that month, or (b) the total amount of Accommodations to be repaid. Monthly repayments shall continue during the Treaty Year until all outstanding Accommodations are repaid. At the end of the Treaty Year, the total amount of outstanding Accommodations is immediately due and must be repaid within 15 days of notice by the Reinsurer to the Company of the amount to serve as final repayment under this Agreement. Failure of the Company to repay any Accommodation as provided in this paragraph shall result in the assessment of a penalty of 2% per month computed on the total amount of Accommodation to be repaid. (5) SETTLEMENT. (a) At the end of the Treaty Year, the amount of any Accommodation not repaid shall be deducted from the payment of any reimbursement otherwise due the Company under the terms of the Treaty. Payment of the remainder of any reimbursement due the Company shall be made as provided in the Treaty. (b) Operation of the prOVIsIons of this Article, for purposes of calculating the amount of Accommodation, will be determined on the basis of each Treaty Year. No Accommodation amount to be repaid to the Reinsurer shall be carried over into a subsequent Treaty Year but will be settled as provided in this Article. (6) TREATMENT OF ACCOMMODATION. The Accommodation provided under this Agreement shall be an obligation of the Company for which no interest shall be charged and shall be repaid as provided herein. The Accommodation is neither a loan nor an advance on any payments to be made pursuant to the Treaty. Any Accommodation shall at all times be considered funds of the Reinsurer for which the use by the Company of such funds is authorized by this Agreement. The Reinsurer shall have preference over all other claimants for the return of any Accommodation made under this Agreement. The Company shall be liable for all costs and expenses, including reasonable attorney's fees, incurred in the collection of any amount of Accommodation outstanding. (7) FEE FOR AGREEMENT. The Company agrees to pay a fee of~ per employee per month during the period this Agreement is in effect. This fee is due and payable on the first day of each Treaty Month or, if premiums are paid annually, on the first day of each Treaty Year. ELT-I AAA (rev. 9/98) Page 2 00