The verified Application of the Insurance Commissioner of the State of California having been filed herein and it appearing to this Court from said Application that said Commissioner has (1) found Fremont Indemnity Company to be in such condition that its further transaction of business will be hazardous to its policyholders, creditors, and the public; (2) determined that said insurer does not comply with the requirements for the issuance to it of a certificate of authority; and (3) found that the last report of examination of said insurer shows it to be insolvent within the meaning of the Insurance Code,

IT IS HEREBY ORDERED (for all purposes in this order, the term "Fremont," wherever used and used in whatever context or reference, shall mean Fremont Indemnity Company and shall moan for all purposes, wherever used and in whatever context or reference, all the following entities: the former Fremont Indemnity Company, Comstock Insurance Company, Fremont Industrial Indemnity Insurance Company, Fremont Compensation Insurance Company, Fremont Casualty Company, and Fremont Pacific Insurance Company) that:

1. The Commissioner is hereby appointed as Conservator (hereinafter "Conservator" of Fremont and directed to conduct the business of Fremont or so much thereof as he may deem appropriate; and the Conservator is authorized, in his discretion, to pay or defer payment of some or all proper claims, expenses, liabilities and obligations of Fremont, in whole or in part, accruing prior or subsequent to his appointment as Conservator;
2. The Conservator is authorized to assume or reject, or to modify, any executory contracts, including without limitation, any lease, rental or utilization contract or agreement (including any schedule to any such contract or agreement), and any license or other arrangement for the use of computer software of business information systems, to which Respondent is a party or as to which Respondent agrees to accept an assignment of such contract; the Conservator is directed to effect any such assumption or rejection or modification of any executory contract not later than 120 days of the date of the Order Appointing Conservator, unless such date is extended by application to and further order of this Court; all executory contracts that are not expressly assumed by the Commissioner as Conservator shall be deemed rejected;
3. The Conservator is authorized to take possession of all of the assets of Fremont, including books, records and property, both real and personal, accounts, safe deposit boxes, rights of action, and all such assets as may be in the name of Fremont, wheresoever situated;
4. Title to all property and assets of Fremont, including deposits, securities, contracts, rights of actions, books, records and other assets of every type and nature, and including both those presently in Fremont's possession and those which may be discovered hereafter, wheresoever situated, is vested in the Conservator or his successor in office, in his official capacity as Conservator; the Conservator is authorized to deal with the same in his own name as Conservator or in the name of Fremont, and all persons are enjoined from interfering with Conservator's possession and title thereto;
5. The Conservator shall have all the powers of the directors, officers and managers of Fremont, whose authorities are suspended except as such powers may be redelegated by the Conservator;
6. The Conservator is authorized to terminate compensation arrangements with employees, to enter into new compensation arrangements with employees, including arrangements containing retention incentives, and the Conservator is authorized to hire employees on such terms and conditions as he deems reasonable;
7. Except upon the express authorization of the Conservator, Fremont, its officers, directors, agents and employees are enjoined from transacting any of the business of Fremont, whether in the State of California or elsewhere, or from disposing of, using, transferring, selling, assigning, canceling, alienating, hypothecating or concealing in any manner or any way, or assisting any person in any of the foregoing, of the property or assets of Fremont or property or assets in the possession of Fremont, of any nature or kind, including claims or causes of action, until further order of this Court and further, such persons are enjoined from obstructing or interfering with the Conservator's conduct of his or her duties as Conservator;
8. All persons are enjoined from instituting or prosecuting or maintaining any action at law or suit in equity, including but not limited to actions or proceedings to compel discovery or production of documents or testimony and matters in arbitration, except in matters before either the California Workers Compensation Appeals Board or equivalent administrative boards or organizations performing such functions in other states in which Fremont issued workers compensation policies, against Fremont, or against Conservator and from attaching, executing upon, redeeming of or taking any other legal proceedings against any of the property of Fremont and from doing any act interfering with the conduct of said business by Conservator, except after an order from this Court obtained after reasonable notice to Conservator;
9. Fremont and all officers, directors, agents and employees of Fremont shall deliver to, and immediately make available to, Conservator all assets, books, records, accounts, records, information, computers, tapes, discs, writings, other recordings of information, equipment and other property of Fremont, wheresoever situated, in said persons custody or control and further, the aforesaid persons shall disclose verbally, or in writing if requested by the Conservator, the exact whereabouts of the foregoing items if such items are not in the possession custody or control of said persons;
10. All officers, directors, trustees, employees or agents of Fremont, or any other person, firm, association, partnership, corporate parent, holding company, affiliate or other entity in charge of any aspect of Fremont's affairs, either in whole or in part, and including but not limited to banks, savings and loan associations, financial or lending institutions, brokers, stock or mutual associations, or any parent, holding company, subsidiary or affiliated corporation or any other representative acting in concert with Fremont, shall cooperate with the Conservator in the performance of his or her duties.
11. The Conservator is authorized to pay all reasonable costs of taking possession of and conserving Fremont (including but not limited to Commissioner's pre-conservation costs in examining Fremont's financial condition, and preparing to take possession and conserve Fremont) out of the funds and assets of the Fremont;
12. The Conservator is authorized to pay all reasonable costs of operating Fremont as Conservator (including direct and allocated direct costs, direct and allocated general and administrative costs and overhead, and all other allocated costs) out of any and all funds and assets of Fremont; and if there are insufficient funds, to pay for the costs out of the Insurance Fund pursuant to Insurance Code section 1035;
13. All funds and assets, including certificates of deposit, bank accounts, and mutual fund shares of Fremont, in various financial depositary institutions, including banks, savings and loan associations, industrial loan companies, mutual funds or stock brokerages, wheresoever situated, shall be vested in the Conservator and subject to withdrawal upon his order only;
14. All persons who maintain records for Fremont, pursuant to written contract or any other agreement, shall maintain such records and deliver to the Conservator such records upon his request;
15. All agents of Fremont, and all brokers who have done business with Fremont, shall make all remittances of all funds collected by them or in their hands directly to the Conservator;
16. All persons having possession of any lists of policyholders or escrow holders of Fremont shall deliver such lists to Conservator; and that all persons are enjoined from using any such lists or any information contained therein without the consent of Conservator;
17. The Conservator is authorized to initiate such equitable or legal actions or proceedings in this or other states as may appear to him necessary to carry out his functions as Conservator;
18. The Conservator is authorized to appoint and employ special deputies, estate officers and managers, other professionals, clerks and assistants and to give each of them such power and authority as may be deemed necessary by him and the Conservator is authorized to compensate these persons from the assets of Fremont as he shall deem appropriate;
19. The Conservator is authorized to divert, take possession of and secure all mail of Fremont, in order to screen such mail, and to effect a change in the rights to use any and all post office boxes and other mail collection facilities used by Fremont;
20. Fremont and its officers, directors, agents, servants, employees, successors, assigns, affiliates, and other persons or entities under their control and all persons or entities in concert or participation with Fremont, and each of them, shall turn over to Conservator all records, documentation, charts and/or descriptive materials of all funds, assets, property (owned beneficially or otherwise), and all other assets of Fremont wherever situated, and all books and records of accounts, title documents and other documents in their possession or under their control, which relate, directly or indirectly to assets or property owned or held by Fremont or to the business or operations of Fremont;
21. Except with leave of court issued after a hearing in which Conservator has received reasonable notice, all persons are enjoined from obtaining preferences, judgments, attachments or other liens, or making any levy against Fremont or its assets or property, and from executing or issuing or causing the execution or issuance of any court attachment, subpoena, replevin, execution or other process for the purpose of impounding or taking possession of or interfering with or creating or enforcing a lien upon any property or assets owned or in the possession of Fremont or Conservator, wheresoever situated, and from doing any act interfering with the conduct of said business by Conservator;
22. Except with leave of court issued after a hearing in which Conservator has received reasonable notice, all persons are enjoined from accelerating the due date of any obligation or claimed obligation; exercising any right of set-off; taking, retaining, retaking or attempting to retake possession of any real or personal property; withholding or diverting any rent or other obligation; doing any act or other thing whatsoever to interfere with the possession of or management by Conservator of the property and assets, owned or controlled by Fremont or in the possession of Fremont or in any way interfering with Conservator or interfering in any manner during the pendency of this proceeding with the exclusive jurisdiction of this Court over Fremont;
23. Any and all provisions of any agreement entered into by and between any third party and Fremont, including by way of illustration, but not limited to, the following types of agreements (as well as any amendments, assignments, or modifications thereto); financial guarantee bonds, promissory notes, loan agreements, security agreements, deeds of trust, mortgages, indemnification agreements, subrogation agreements, subordination agreements, pledge agreements, assignments of rents or other collateral, financial statements, letters of credit, leases, insurance policies, guaranties, escrow agreements, management agreements, real estate brokerage and rental agreements, servicing agreements, attorney agreements, consulting agreements, easement agreements, license agreements, franchise agreements, or employment contracts that provide in any manner that selection, appointment or retention of a conservator, receiver or trustee by any court, or entry of any order such as hereby made, shall be deemed to be, or otherwise operate as, a breach, violation, event of default, termination, event of dissolution, event of acceleration, insolvency, bankruptcy, or liquidation shall be stayed, and the assertion of any and all rights and remedies relating thereto shall also be stayed and barred, except as otherwise ordered by this Court, and this Court shall retain jurisdiction over any cause of action that has arisen or may otherwise arise under any such provision;
24. The Conservator is authorized to invest Fremont's assets and funds in such a manner as to him may seem suitable for the best interest of Fremont creditors, which funds are not immediately distributable to Fremont's. However, no investment or reinvestment shall be made exceeding the sum of $100,000 without first obtaining permission of this Court, except the Conservator may make investments or reinvestments in excess of $100,000, but not exceeding $5,000,000 per investment or reinvestment, without prior approval if such investments or reinvestments are made pursuant to the investment guidelines of the Conservator's Conservation & Liquidation Office, a true and correct copy of which is attached hereto as Exhibit A and incorporated herein by this reference. The Conservator shall file quarterly reports of such investments in excess of $100,000 with the Court, with notice to all persons on the service list, such reports to be filed within 60 days of the end of each quarter;
25. The Conservator is authorized to pay for his costs and fees in bringing and maintaining this action, and such other actions as are necessary to carry out his functions as Conservator, out of the funds and assets of Fremont; and
26. All persons are enjoined from the waste of the assets of Fremont.
    

    DATED: JUN 04 2003
    	David P. Yaffe JUDGE OF THE SUPERIOR COURT

27. Nothing herein is intended to modify any of the provisions of the letter agreement dated July 2, 2002, executed by Commissioner Low.