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Assignment of Net Premium Receivables

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Sectors: Insurance
Governing Law: Delaware, View Delaware State Laws
Effective Date: July 01, 2003
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EXHIBIT 10.19


ASSIGNMENT OF NET PREMIUM RECEIVABLES


BY AND BETWEEN


LASALLE BANK NATIONAL ASSOCIATION


AND


ROYAL INDEMNITY COMPANY,


ROYAL SURPLUS LINES INSURANCE COMPANY,


LANDMARK AMERICAN INSURANCE COMPANY


-------------------------------


JULY 1, 2003


------------------------------


This ASSIGNMENT OF NET PREMIUM RECEIVABLES (the "Assignment Agreement"), dated as of July 1, 2003, is entered into by and between Royal Indemnity Company ("RIC"), Royal Surplus Lines Insurance Company ("RSLIC"), Landmark American Insurance Company ("Landmark", and together with RIC and RSLIC, the "Ceding Companies") and LaSalle Bank National Association (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Acquisition Agreement (defined below).


W I T N E S S E T H


WHEREAS, the Trustee is the trustee of "Underwriters Reinsurance Company, Grantor" trust (the "Trust");


WHEREAS, each of the Ceding Companies is a wholly-owned subsidiary of Royal Group, Inc., a Delaware corporation ("RGI"), and named beneficiary of the Trust;


WHEREAS, pursuant to an Acquisition Agreement by and between RGI and Alleghany Insurance Holdings LLC, a Delaware limited liability company, dated June 6, 2003 (the "Acquisition Agreement"), RGI agreed to cause the Ceding Companies to place Qualifying Assets in an amount equal to their respective portions of the Estimated NUPR, net of their respective portions of the Aggregate Ceding Commission, into the Trust, subject to the terms and conditions set forth in the Acquisition Agreement; and


WHEREAS, in connection with the transfer of the Estimated NUPR, each of the Ceding Companies have agreed to enter into this Assignment Agreement, pursuant to which the Ceding Companies will assign to the Trust, and grant the Trust a first priority perfected security interest in, all of the Ceding Companies' right, title and interest in, to and under all premium receivables related to the Reinsured Contracts, net of premiums ceded to third party reinsurers relating to such Reinsured Contracts (the "Assignment").


NOW, THEREFORE, in consideration of the foregoing and the respective covenants, agreements and conditions set forth herein and in the Acquisition Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:


Section 1. ASSIGNMENT AND ASSUMPTION.


(a) Subject to Section 1(b) hereto, each of the Ceding Companies hereby assigns, transfers, and conveys to the Trust all of Ceding Companies' right, title and interest in and to all of the premium receivables related to the Reinsured Contracts, net of premium receivables to be ceded to third party reinsurers relating to such Reinsured Contracts ("Net Premium Receivables").


(b) The parties hereto agree and acknowledge that Ceding Companies will not be obligated to pay any Net Premium Receivables to the Trust, unless such premiums are actually collected by the Ceding Companies.


Section 2. ACCEPTANCE OF ASSIGNMENT. Trustee hereby accepts the Assignment.


Section 3. ALL ACTIONS NECESSARY. Each party hereto, as reasonably requested by the other from time to time, shall take all reasonably appropriate action and execute any reasonably necessary and appropriate additional documents, instruments or conveyances of any kind (not containing additional representations and warranties, covenants or indemnities) which may be reasonably necessary to carr
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