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Assumption Agreement

This is an actual contract by Reliance Group Holdings.

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Sectors: Insurance
Governing Law: New York, View New York State Laws
Effective Date: October 02, 2000
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EXHIBIT 10.3


ASSUMPTION AGREEMENT


THIS ASSUMPTION AGREEMENT (this "Agreement"), dated as of October 2, 2000, is entered into by and between RELIANCE INSURANCE COMPANY, a Pennsylvania corporation ("Seller") and RELIANCE REINSURANCE COMPANY, a Delaware stock insurance company (the "Company").


W I T N E S S E T H


WHEREAS, Seller and Overseas Partners Ltd. ("Buyer") have entered into a Stock Purchase Agreement, dated as of June 30, 2000, (the "Stock Purchase Agreement"), pursuant to which Seller has agreed to sell, and Buyer has agreed to purchase, all of the issued and outstanding shares of the capital stock of the Company, upon the terms and subject to the conditions set forth therein; and


WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition to the Closing of the transactions contemplated by the Stock Purchase Agreement;


NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:


Section 1. Definitions. Capitalized terms used herein and not defined herein, unless otherwise indicated, have the respective meanings assigned to them in the Stock Purchase Agreement.


Section 2. Administrative Services. Seller shall assume responsibility for the administrative services, including claims services required of the Company, with respect to the policies reinsured under the RelianceDirect Quota Share Agreement.


Section 3. Assumption of Liabilities. Seller hereby assumes and agrees to pay, perform and discharge in full, and releases and discharges the Company, and its successors and assigns, completely, unconditionally and forever from all Liabilities (as defined below) of the Company, other than any Policy Liabilities (as such term is defined in the Stock Purchase Agreement), (i) outstanding on the Closing Date, (ii) relating to events occurring on or prior to the Closing Date or (iii) relating to the provision of administrative services pursuant to Section 2 herein. The Company shall notify Seller of any such Liabilities within 30 days after the Company is advised of any such Liability; provided, however, that the failure by the Company to give such notice to Seller will not prejudice any of the Company's rights under this Agreement. For purposes of this Agreement, "Liabilities" shall mean any direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility whether now known or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise.


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