Exhibit 10.15
EXCESS BOND TO SECURE PREMIUM AND DEDUCTIBLE OBLIGATIONS
Bond Number 45032750
KNOW ALL MEN BY THESE PRESENTS:
That Labor Ready, Inc., as Principal ('Principal') and Greenwich Insurance Company, as Surety ('Surety'), are held and firmly bound unto Mutual Indemnity (U.S.) Ltd., Legion Insurance Company and each of its affiliates and subsidiaries, as Obligee (herein collectively and individually referred to as 'Obligee') for the payment of the Obligations (hereafter defined), up to the maximum penal sum of Seven Million Five Hundred Sixty Thousand and 00/100 Dollars ($7,560,000.00***) lawful money of the United States for payment of which sum, Principal and Surety hereby bind themselves, their successors and assigns, jointly and severally, firmly by these presents.
WHEREAS, Obligee has issued certain insurance policies on behalf of the Principal and has entered into certain other agreements with the Principal which are described on Exhibit A hereto and as may be amended and/or renewed from time to time (herein collectively referred to as the 'Agreement(s)'), and;
WHEREAS, the Obligee requires security for the Principal's Obligations to Obligee under each of the Agreements ('Obligations'), and;
WHEREAS, the Obligee currently holds, or will hold, security for the Obligations ('Underlying Security') and now desires "excess” security, and;
WHEREAS, such excess security will not be liquidated until all other forms of Underlying Security for the Obligations have been liquidated.
NOW, THEREFORE, if and when the Obligations shall be fully and finally paid and satisfied, this Excess Bond shall be null and void, otherwise this Excess Bond shall remain in full force and effect and Principal and Surety in any event agree as follows:
| 1. |
Within ten (10) business days of Surety's
receipt of a demand for payment under this Excess Bond ("Demand'),
Surety shall pay to the Obligee the amount of such Demand. The Obligee's
Demand to the Surety of the amount due, either as security or for payment or
for reimbursement of Obligations pursuant to the Agreement(s), shall be
absolute proof of the existence and extent of the liability of the Principal
and the Surety to the Obligee hereunder. The Obligee may present one or more
Demands at any time in its sole discretion, provided, however, Surety shall
not be obligated to pay an aggregate amount in excess of the penal sum of the
Excess Bond. |
| 2. |
In the event that Obligee shall demand either
a portion of the penal sum of the Excess Bond or the entire penal sum of the
Excess Bond (less any previous amounts paid to Obligee under the Excess Bond)
under a Demand, Obligee shall hold all funds ("Excess Bond Collateral')
received as security for the Obligations and shall apply such Excess Bond
Collateral to the Obligations from time to time in its sole discretion;
provided, however, that the Obligee shall not apply such Excess Bond
Collateral to the Obligations until the full amount of all Underlying
Security has been applied to the Obligations. At such time as Obligee
determines in its sole discretion that all of the Obligations are fully and
finally paid and such payment is not subject to avoidance or other turnover,
Obligee shall return to the Surety the unapplied portion of the Excess Bond
Collateral. The Surety, whether in its capacity as Surety or subrogee of the
Principal, waives, to the fullest extent permitted by applicable law, each
and every right which it may have to contest Obligee's computation of the
Obligations or the application of the Excess Bond Collateral by the Obligee to
the Obligations, and waives, to the fullest extent permitted by applicable
law, each and every right which it may have to seek reimbursement,
restitution or recovery of any Excess Bond Collateral. Obligee shall not be
required to (i) segregate Excess Bond Collateral from its general funds, (ii)
hold or invest Excess Bond Collateral in an interest-bearing or
income-producing investment, or (iii) account to Surety for interest or
income in the event the same would be, otherwise attributable to Excess Bond
Collateral. The Principal shall not at any time have any rights or property
interests in this Excess Bond, the Excess Bond Collateral or other proceeds
of this Excess Bond. |
| 3. |
Failure to pay or reimburse the Obligee as
herein provided shall cause the Surety to be additionally liable for any and
all reasonable costs and expenses, including attorney's fees and interest,
incurred by the Obligee in enforcing this Excess Bond, such liability to be
in addition to the bond penalty. |
| 4. |
Surety's obligations hereunder shall not be
affected by (i) any matter or proceeding arising in connection with any
modification, limitation, discharge, assumption, or reinstatement with
respect to any Agreements or Obligations, (ii) any modification of or
amendment to any Agreements or Obligations without Surety's consent or prior
notification provided that, the penal sum of the Excess Bond may not be
increased without the consent of Surety; however, failure to give such
consent will not prevent Obligee from drawing up to the full amount of the
Excess Bond (less any previous amounts paid to Obligee under the Excess Bond)
either as security or for payment or for reimbursement under the Agreements,
or (iii) any other circumstances which might otherwise constitute a legal or
equitable discharge or defense for Surety. |
| 5. |
This Excess Bond shall become effective
February 17, 2001and shall
remain in full force and effect thereafter for a period of one year and will
automatically extend for additional one year periods from the expiry date hereof,
or any future expiration date, unless the Surety provides to the Obligee not
less than ninety (90) days advance written notice of its intent not to renew
this Excess Bond or unless this Excess Bond is earlier canceled pursuant to
the following. This Excess Bond may be canceled at any time upon ninety (90)
days advance written notice from Surety to Obligee, via overnight express
mail. It is understood and agreed that the Obligee may recover the full
amount of the Excess Bond (less any previous amounts thirty (30) days prior
to the effective date of cancellation or non renewal, the Obligee has not
received collateral acceptable to it to replace the Excess Bond. |
| 6. | Any notice, Demand or request for payment, given or made under this Excess Bond shall be made in writing and shall be given by a personal delivery or expedited delivery service, postage pre-paid, addressed to the parties at the addresses specified below or to such other address as shall have been specified by such parties to each of the parties to the transactions contemplated hereby. Such notice, Demand or request for payment shall be accompanied by the Obligee's written certification that: “All other bonds, letters of credit and other similar instruments required as security for Obligations under Agreements described in Exhibit A of Greenwich Insurance Company bond number 45032750 have been drawn upon and all funds thereunder have been received by Mutual Indemnity (U.S.) Ltd., Legion Insurance Company and each of its affiliates and subsidiaries as Obligee.”, together with satisfactory proof of actual receipt of said funds by the Obligee. |
If to the Surety:
Greenwich Insurance Company
c/o Avalon Risk Associates, Inc.
One Exchange Place
Suite 501
Jersey City, New Jersey 07302
Attention: Bond Claims
If to the Obligee:
Mutual Indemnity (U.S.) Ltd.
44 Church Street
Post Office Box HM 2064
Hamilton HM HX
Bermuda
Attention: David Alexander, President
If to the Principal:
Labor Ready, Inc.
1016 South 28" Street
Tacoma, Washington 98402
Attention: Richard King, President
| 7. | In no event shall the Surety be liable in the aggregate to any, some, or all entities listed as Obligee for more than the penalty of this bond, nor shall it be liable except for a single payment for each single Demand. At the Surety's election, any payment due to any entity or entities listed as Obligee may be made by its draft issued jointly to all. |
Notice given under this Excess Bond shall be effective only when received.
IN WITNESS THEREOF, the said Principal and Surety have signed and sealed this instrument on this 19th day of January , 2001 .
Labor Ready, Inc.
By: /s/ Ronald
L. Junck
Ronald L. Junck, Secretary
Greenwich Insurance Company
By: /s/ Patrick
D. Dineen
Patrick D. Dineen, Attorney-in-
EXHIBIT A
'Agreement(s)' shall be defined as those Agreements listed below, including any modifications that may be made from time to time, and the insurance policies described therein:
| 1. Agreement(s): | REINSURANCE AGREEMENT between | Date: | January 1, 1997 & |
| MUTUAL INDEMNITY (U.S.) LIMITED and | January 1, 1998 | ||
| LABOR READY ASSURANCE CO. | |||
| 2. Agreement(s): | MUTUAL INDEMNITY (U.S.) LTD. WORKERS' | ||
| COMPENSATION DEDUCTIBLE | |||
| REIMBURSEMENT COVERAGE issued to LABOR | |||
| READY, INC., | |||
| Policy Nos. | |||
| UST2 190–97 | Date: | January 1, 1997 | |
| UST2 190–98 | January 1, 1998 | ||
| 3. Agreement(s): | LEGION INSURANCE COMPANY WORKERS' | ||
| COMPENSATION/EMPLOYERS' LIABILITY | |||
| POLICY issued to LABOR READY, INC. | |||
| Policy Nos. | |||
| WC1 0575684 | Date: | January 1, 1998 | |
| WC1 0265679 | January 1, 1997 | ||
| XS1 01796661 | January 1, 1997 | ||
| 4. Agreement(s): | Date: | ||
| 5. Agreement(s): | Date: | ||
| 6. Agreement(s): |