Exhibit 2.2
NOVATION AGREEMENT
THIS NOVATION AGREEMENT is made as of December 31, 2002 (the "Novation
Date") among Annuity and Life Reassurance, Ltd ("ALRe"), XL Life Ltd ("XL"), and
Continental Assurance Company ("Ceding Company").
WHEREAS, ALRe and Ceding Company are parties to a reinsurance agreement
(the "Subject Agreement") set forth in Schedule A hereto; and
WHEREAS, as of December 31, 2002, the parties to this Novation Agreement
have agreed to novate the Subject Agreement by substituting XL for ALRe as
reinsurer thereunder, such that XL will assume all of ALRe's interests, rights,
duties, obligations, and liabilities under the Subject Agreement and that ALRe
shall be released and discharged from any further liability or obligations
whatsoever thereunder; and
WHEREAS, Ceding Company wishes to consent and agree to such novation.
NOW, THEREFORE, in consideration of the foregoing and of the following
mutual terms, conditions, covenants, and agreements, the parties agree that on
the Novation Date, but effective as to the Subject Agreement on the inception
date of such Subject Agreement, XL is hereby substituted as the Reinsurer under
the Subject Agreement in place and instead of ALRe. XL and Ceding Company hereby
ratify and confirm that the Subject Agreement shall be treated as always having
been an agreement solely between them. In implementation and not in limitation
of the foregoing, the parties further agree as follows:
1. From and after the Novation Date, but effective as to the Subject
Agreement on the inception date thereof, XL hereby assumes all of
ALRe's interests, rights, duties, obligations, and liabilities under
the Subject Agreement, and XL shall be bound by all terms and
conditions of the Subject Agreement.
2. Performance and/or breach prior to the Novation Date by ALRe shall
after the Novation Date be treated for all purposes as having been
performance or breach by XL.
3. Effective as of the Novation Date, Ceding Company hereby releases and
discharges ALRe from and against any and all duties, obligations,
and/or liabilities whatsoever, express or implied, under or in
connection with the Subject Agreement and shall look solely to XL for
performance thereof.
4. From and after the Novation Date, the Ceding Company shall have no
further duties, obligations, and/or liabilities whatsoever, express or
implied, to ALRe under or in connection with the Subject Agreement,
but any such duties, obligations, and/or liabilities theretofore
existing shall continue as duties, obligations, and/or liabilities of
the Ceding Company to XL.
5. Notwithstanding anything contained in this Novation Agreement or in
the Subject Agreement, the Ceding Company shall not have the right to
cede any policies under the Subject Agreement with an issue date after
the date hereof.
6. Each party agrees to do all things as may be necessary to give full
effect to this Novation Agreement.
7. This Novation Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
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8. This Novation Agreement shall be subject to the arbitration provisions of
the Subject Agreement and shall be governed by and construed in accordance
with the laws applicable to the Subject Agreement.
9. The Ceding Company agrees to relinquish its rights as beneficiary to the
Citibank Letter of Credit as provided by ALRe in accordance with the
Subject Agreement by providing written notice of such to the issuing bank
simultaneously with its receipt of the Letter of Credit referred to in
paragraph 12 below.
10. This Novation Agreement may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be deemed an
original.
11. This Novation Agreement will become effective when it has been executed in
Bermuda by XL after having been executed by ALRe and the Ceding Company.
12. The Novation Date will not occur unless and until the Ceding Company shall
have received (including by facsimile transmission) a letter of credit (the
"Letter of Credit") in the amount of $1.5 Million in substantially the form
of Exhibit A hereto issued by the banks listed in Exhibit A and XL
shall have received in Bermuda (including by facsimile transmission) a
receipt for the Letter of Credit in the form of Exhibit B hereto, provided
that if these conditions to the occurrence of the Novation Date are
satisfied, the Novation Date shall be December 31, 2002.
IN WITNESS WHEREOF the parties have executed this Novation Agreement as of
December 31, 2002.
ANNUITY AND LIFE REASSURANCE, LTD.
By: /s/ R Xxxxx By: /s/ Xxx Xxxxxx
__________________________________ ___________________________________
Title: SVP & CU Title: VP
_______________________________ ________________________________
Date: 12/31/2002 Date: 12/31/2002
________________________________ __________________________________
CONTINENTAL ASSURANCE COMPANY
By: /s/ [SIGNATURE ILLEGIBLE] By: /s/ [SIGNATURE ILLEGIBLE]
__________________________________ ___________________________________
Title: Sr. Vice President Title: Sr. Vice President
_______________________________ ________________________________
Date: 12/28/2002 Date: 12/28/2002
_______________________________ _________________________________
XL LIFE LTD
By: /s/ Xxxx Xxxxxxxx By: /s/ [SIGNATURE ILLEGIBLE]
__________________________________ ___________________________________
Title: Secretary Title: Vice President
_______________________________ ________________________________
Date: 31 Dec 2002 Date: 31 Dec 2002
_______________________________ ________________________________
Schedule A
Automatic Reinsurance Agreement CALR019
Between
Continental Assurance Company
(Domiciled in Chicago, Illinois)
and
XL Life Ltd., as amended by Amendment No. 1
(Annuity & Life Reassurance (Bermuda) Ltd., prior to Novation)