THE HARMON ARBITRATION

Bobby N. Harmon, CPCU, ARM

Louisville, Kentucky 40229-1655

January 27, 2004

VIA fax only @ (808) 540-4301

Ms. Lori Chung

Aon Insurance Managers

201 Merchant Street, Suite 2400

Honolulu, HI 96813

RE: Notice of Claim Against Aon Insurance Managers

Ref. Harmon Ch. 7 Bankruptcy Case No. 99-04339

Dear Ms. Chung:

This acknowledges your letter of January 26, 2004, in which you state:

“In response to your letter dated January 26, 2004, received via fax, Aon Insurance Managers contract as the captive manager of P&C Insurance Company, Inc. (P&C), was terminated on June 30, 2003. Please contact P&C or Kamehameha Schools for information regarding the new captive manager of P&C as we are not authorized to disclose this confidential information.

“In addition, in reference to your letter dated December 20, 2003, please be advised that Mr. Craig Watanabe does not work, nor has ever worked for Aon Insurance Managers.”

To respond to your second paragraph first, I obtained Mr. Watanabe’s name and address from the Aon Insurance Manager’s website which states that he is the “Official Contact” person for your Hawaii office. I am including a copy of this page from your website for your reference. Now that you have advised that Mr. Watanabe does not work for you, I presume that I should have directed my December 20, 2003, letter to Scott Frazier who is listed as the “Local AIM Contact.”

I apologize for my mistake, but I feel that your web page is misleading in two respects - there is no indication as to what organization Mr. Watanabe represents, and there is no address shown for Scott Frazier. I would also advise you that no one from your office, P&C Insurance Company, or Kamehameha Schools has ever previously notified me that there was a change in captive managers on June 30, 2003.

Because I did send your Notice of Claim to the wrong individual and the wrong address, however, I must ask if you will accept my letter of December 20, 2003, addressed to Mr. Watanabe, as an official Notice of Claim against Aon, or do you require me to write another letter addressed to your office? If you do require a new letter, will you accept December 20, 2003 as the “Claims Made” date under the terms of your Professional Liability Insurance policy?

Since Aon’s contract with P&C was not terminated until June 30, 2003, your office would have been responsible for the handling of my initial tender of defense which I submitted on May 27, 2003. This tender letter was addressed to P&C Insurance Company, c/o Aon Insurance Managers, Attn: Jill Miura. As I did not receive a response to this letter, I sent a follow-up letter to Ms. Miura on June 16, 2003. This second letter was sent by Certified Mail, and I have the return receipt showing a delivery date of June 21, 2003. Copies of both these letters are enclosed for your information and review.

As the arbitration proceedings in this case are currently underway, I ask that you please have an authorized Claims Administrator contact me as soon as possible for further information regarding this claim.

Very truly yours,

Bobby N. Harmon, CPCU, ARM

encls.

cc: Mr. Clyde Mark, Pres., P&C Insurance Company

c/o Kamehameha Schools

VIA fax only @ 808-523-6313

Hugh Jones, Deputy Attorney General

VIA fax only @ 808-586-1239

Justin W. Schuck, Case Manager, American Arbitration Association

VIA fax only @ 559-490-1919

Trustee Mary Lou Woo,

c/o Steven Guttman, Esq., Kessner Duca Umebayashi Bain & Matsunaga