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(5) The escrow amount is automatically recalculated on an annual basis. <br />E. It is expressly understood that Sedgwick shall not be required to advance its own <br />funds to pay losses or allocated loss adjustment expenses for any Qualified Claim <br />hereunder. It is further understood that if Client fails to promptly provide funds <br />sufficient to allow required payments to be made timely, or if funds previously <br />provided by or on behalf of Client are seized, frozen or otherwise unavailable to <br />Sedgwick to allow required payments to be made timely on account of the <br />bankruptcy, receivership, or other insolvency proceeding of Client [or Insurer, in <br />cases where Insurer funds claim account, Sedgwick will have no obligation to <br />perform any claims payments services during any period of underfunding. <br />F. Sedgwick shall have full discretion to make an individual payment of an allocated <br />loss adjustment expense in an amount up to 525,000 on any Qualified Claim and <br />shall not need the approval of Client to make such payments. This amount may be <br />changed at any time by Client upon ten (10) days prior written notice to Sedgwick. <br />It is agreed that Sedgwick shall have full authority and control in all matters <br />pertaining to the payment, processing, investigation and administration of Qualified <br />Claims within the limit established by this paragraph. <br />G. Sedgwick shall have full discretion to redeem, compromise or settle any Qualified <br />Claim for an amount not to exceed $0 and shall not need the approval of Client to <br />consummate such redemption, compromise or settlement. This amount may be <br />changed at any time by Client upon ten (10) days prior written notice to Sedgwick. <br />Failure of Sedgwick to settle a Qualified Claim within such limit, however, shall not <br />subject Sedgwick to any liability whatsoever in the event of an adverse judgment <br />entered by any court or the settlement of such Qualified Claim for an amount in <br />excess of such limit. <br />H. Should Client fail to make timely payments of any service fees due Sedgwick or <br />should Client in any other way breach a material term of this Agreement, Sedgwick <br />shall then have the right to refuse to perform any further services or terminate this <br />Agreement. If Sedgwick elects to exercise its rights under this paragraph, in addition <br />to all other legal or equitable remedies, Sedgwick will have the right to its full <br />minimum fee, if any, as well as any other fees for which Sedgwick may be eligible, <br />and may collect such fees from any loss fund that may be in Sedgwick's care, custody <br />and control. <br />I. Upon receipt of any form of notice advising of facts which are or may be a Qualified <br />Claim, Client shall promptly assign the Qualified Claim to Sedgwick for <br />management. Client shall promptly provide Sedgwick with such information as <br />Sedgwick may require, including, but not limited to, any copy of documents <br />describing its Program, including but not limited to documents submitted to any <br />legal, administrative or regulatory authority for approval of the Program, as well as <br />incident reports and related information in Client's possession and otherwise <br />cooperate with Sedgwick in carrying out Sedgwick's tasks hereunder. <br />C/20912 4 <br />