Exhibit 10.42
AMENDED AND RESTATED PUT OPTION AGREEMENT
Amended and Restated Put Option Agreement ("Agreement") effective as of
September 30, 2001, between Old Fort Insurance Company, Ltd., a Bermuda company
("Old Fort") and Allmerica Financial Corporation, a Delaware corporation
("AFC").
WHEREAS, Old Fort and AFC wish to modify the terms of the Put Option
Agreement between Old Fort and AFC dated as of September 30, 2001, as now in
effect (the "Original Agreement");
WHEREAS, Old Fort is licensed to engage in insurance and reinsurance
business by, among other things, establishing separate accounts for certain
insurance or reinsurance contracts entered into, and all collateral agreements,
pursuant to Old Fort Insurance Company, Ltd. (Separate Accounts) Act, 1999
("Act"); and
WHEREAS, pursuant to the Act, Old Fort has established a separate account
("Separate Account") (as that term is defined in the Act) for the transfer or
credit of assets, reserves and other property relating to the Old Fort
Retrocession Agreement (recited below) to the Separate Account with the effect
that the said assets, reserves and other property should be legally segregated
from the general assets of Old Fort and the assets of any other participants to
Separate Accounts established in Old Fort.
WHEREAS, pursuant to the reinsurance agreement dated as of September 30,
2001 ("Reinsurance Agreement") between Lincoln National Reassurance Company
("LNRAC"), an affiliate of Old Fort, and Allmerica Financial Life Insurance and
Annuity Company ("Allmerica"), an affiliate of AFC, LNRAC has agreed to reinsure
certain of the liability of Allmerica on policies of insurance as more fully
described in the Reinsurance Agreement; and
WHEREAS, pursuant to the retrocession agreement dated as of September 30,
2001 between LNRAC and Lincoln National Reinsurance Company Limited ("Lincoln"),
an affiliate of Old Fort (the "Lincoln Retrocession Agreement"), LNRAC ceded the
business in the Reinsurance Agreement to Lincoln; and
WHEREAS, pursuant to the retrocession agreement dated as of September 30,
2001 between Lincoln and Old Fort (the "Old Fort Retrocession Agreement"),
Lincoln ceded the business in the Lincoln Retrocession Agreement to Old Fort;
and
WHEREAS, in consideration of the foregoing and other good and valuable
consideration, AFC agrees that it will from time to time purchase non-voting
Preferred Shares - Class A, of par value U.S. $1.00 per share, the attributes of
which are set forth in Exhibit A, issued by Old Fort on behalf of the Separate
Account ("Preferred Shares - Class A") in accordance with the Resolutions to be
adopted by Old Fort's Board of Directors on November 6, 2001, and upon the terms
and conditions set forth in this Agreement, and AFC is willing to enter into
this Agreement to purchase the Preferred Shares - Class A upon such terms and
conditions.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree to amend and restate the
Original Agreement in its entirety as follows:
ARTICLE 1
DEFINITIONS
1.1 Settlement Period: any calendar quarter during which the absolute value of
the Experience Refund Loss Carry Forward, as defined in the Reinsurance
Agreement, plus the total payments previously made by Old Fort for redemption of
Preferred Shares - Class A, less the total of all payments previously made by
AFC for Preferred Shares - Class A results in a positive number.
1.2 Settlement Amount: for any Settlement Period, equals the absolute value of
the Experience Refund Loss Carry Forward plus the total payments previously made
by Old Fort for redemption of Preferred Shares - Class A, less the total of all
payments previously made by AFC for Preferred Shares - Class A.
ARTICLE 2
PREFERRED SHARES
2.1 Purchase of Preferred Shares - Class A
(a) For each Settlement Period, Old Fort shall have the right to sell, and
AFC shall be obligated to purchase, Preferred Shares - Class A in
accordance with the terms of this Agreement.
(b) AFC hereby covenants and agrees that it will, subject to Section
2.1(e), subscribe for and purchase one Preferred Share - Class A
within 10 days of receipt from Old Fort of a Notice of Settlement in
the form of Exhibit B hereto, and Old Fort covenants and agrees that
it will sell the Preferred Share - Class A to AFC for the purchase
price calculated in the manner set forth in Section 2.1(d). AFC shall
subscribe for the Preferred Shares - Class A by executing the
Subscription Agreement attached hereto as Exhibit C.
(c) Subject to Section 2.1(b), the closing of each purchase and sale of
Preferred Shares - Class A will take place at such place and on such
date as the parties may agree (the "Closing Date"). AFC will pay the
purchase price to Old Fort by wire transfer of immediately available
funds in United States Dollars on the Closing Date.
(d) The purchase price for the Preferred Shares - Class A for any
Settlement Period shall be an amount equal to the Settlement Amount
for that Settlement Period. The total amount paid by AFC to purchase
Preferred
Shares - Class A for any one Treaty Year, as defined in the
Reinsurance Agreement, shall not exceed U.S. $40,000,000.
(e) The purchase of any Preferred Share - Class A by AFC is subject to the
permission of the Bermuda Monetary Authority (Foreign Exchange
Control).
2.2 Redemption.
(a) Within ten (10) days following the date (the "Redemption Date") upon
which AFC shall deliver to Old Fort a written request for redemption
of all (but not less than all) of the Preferred Shares - Class A then
held by AFC (which request shall be accompanied by share
certificate(s) representing all such shares, duly endorsed for
cancellation), Old Fort shall redeem all shares of Preferred Shares -
Class A then held by AFC for a cash payment to AFC (made by wire
transfer of immediately available funds in United States dollars) in
an amount equal to the Redemption Amount (as hereinafter defined). The
Redemption Amount shall be an amount equal to the greater of (i) zero
(0) and (ii) (A) the cumulative aggregate total of all payments
previously made by AFC in respect of the acquisition thereby of
Preferred Shares - Class A pursuant to Article 2 hereof, reduced by
(B) the cumulative aggregate total of all payments previously made by
Old Fort for redemption of Preferred Shares - Class A pursuant to this
Agreement reduced by (C) the absolute value of the Experience Refund
Loss Carryforward plus (D) sixty-five percent (65%) of investment
income earned on Separate Account assets, other than any Risk Premium
Charges, as defined in the "Form of Retrocession Article" of the Old
Fort Retrocession Agreement (hereinafter "Risk Premium Charges"), as
shall have been maintained in the Separate Account, each determined as
of a date as near as practicable to the Redemption Date. The foregoing
shall be without prejudice to AFC's obligation to acquire additional
Preferred Shares following any Redemption Date pursuant to Section 2.1
hereof.
(b) Upon termination of this Agreement in accordance with Section 4.3, all
Preferred Shares - Class A then held by AFC shall be redeemed by Old
Fort in exchange for a payment by wire transfer of immediately
available funds in United States dollars of an amount equal to the
cumulative aggregate total of all payments previously made by AFC for
Preferred Shares - Class A, less the cumulative aggregate total of all
payments previously made by Old Fort for redemption of Preferred
Shares - Class A, less the absolute value of the Experience Refund
Loss Carryforward prior to reduction in this value for termination
payments plus any amounts paid by Allmerica to LNRAC upon termination
of the Reinsurance Agreement for the outstanding Experience Refund
Loss Carryforward Amount plus sixty-five percent (65%) of investment
income earned on Separate Account assets, other than any Risk Premium
Charges as shall
have been maintained in the Separate Account (the "Termination
Amount"). Payment shall be made by Old Fort under this Section 2.2
only upon delivery to Old Fort of the certificates representing the
Preferred Shares - Class A being redeemed.
2.3 No Resale. AFC shall not sell, exchange, transfer, assign, pledge, mortgage
or hypothecate (whether for or without consideration) the Preferred Shares -
Class A.
2.4 No Recourse. The Preferred Shares - Class A issued hereunder are a security
which constitutes a separate class of the capital of Old Fort having rights and
entitlements and being subject to limitations and restrictions which pertain
exclusively to the Separate Account and the assets from time to time credited
thereto; and in particular the Preferred Shares - Class A shall have no recourse
to the assets of any other Separate Account established by the Company, or to
the general assets of Old Fort not credited to any Separate Account, save as may
expressly be provided by this Agreement.
2.5 Liquidation. In the event of the liquidation of Old Fort prior to the
redemption of any Preferred Shares - Class A, the assets credited to the
Separate Account shall (for the avoidance of doubt) be held by the liquidator of
Old Fort subject to the terms of this Agreement.
2.6 Other Payments Upon Termination. In the event of termination of this
Agreement pursuant to Section 4.3, if all Preferred Shares - Class A have been
redeemed pursuant to Section 2.2, then Old Fort shall pay to AFC by wire
transfer of immediately available funds in United States dollars an amount equal
to the cumulative aggregate total of all payments previously made by AFC for
Preferred Shares - Class A, less the cumulative aggregate total of all payments
previously made by Old Fort for redemption of Preferred Shares - Class A, less
the absolute value of the Experience Refund Loss Carryforward prior to reduction
in this value for termination payments plus the aggregate of any amounts paid by
Allmerica to LNRAC upon termination of the Reinsurance Agreement for the
outstanding Experience Refund Loss Carryforward Amount, plus sixty-five percent
(65%) of investment income earned on Separate Account assets, other than any
Risk Premium Charges as shall have been maintained in the Separate Account (the
"Other Termination Amount").
2.7 Separate Account Investments. Assets held by the Separate Account shall be
held in cash and Permitted Cash Equivalents. Permitted Cash Equivalents for this
purpose shall mean as selected by Old Fort (i) debt instruments that are United
States governmental obligations, commercial paper rated at least P1 by Xxxxx'x
Investors Services, Inc.("Moody's") (or an equivalent rating from Moody's or any
successor rating organization) or at least A1 from Standard and Poor's
Corporation ("S&P")") (or an equivalent rating from S&P or any successor
rating organization); (ii) certificates of deposit or interest-bearing accounts
of any bank or trust company whose debt or the debt of whose parent holding
company is rated at least A by Moody's (or an equivalent rating from Moody's or
any successor rating organization) or at least A by S&P (or an equivalent rating
from S&P or any successor rating organization); (iii) money market
mutual funds, substantially all of which assets consist of the items described
in clauses (i) or (ii) above and (iv) other investments proposed by Old Fort and
approved in advance by AFC or its designee.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties by the Parties. Each party hereto represents
and warrants as follows:
(a) Due Formation or Incorporation; Authorization of Agreement. Such party
is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has the power and
authority to own its property and carry on its business as owned and
carried on at the date hereof and as contemplated hereby. Such party
is duly licensed or qualified to do business and is in good standing
in each of the jurisdictions in which the failure to be so licensed or
qualified would have a material adverse effect on its financial
condition or its ability to perform its obligations hereunder. Each
party has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and the execution,
delivery and performance of this Agreement has been duly authorized by
all necessary action. This Agreement constitutes the legal, valid and
binding obligations of such party enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors' rights and general principles
of equity.
b) No Conflict with Restrictions; No Default. Neither the execution,
delivery or performance of this Agreement by such party (i) will
conflict with, violate or result in a breach of any of the terms,
conditions or provisions of any law, regulation, order, writ,
injunction, decree, determination or award of any court, any
governmental department, board, agency or instrumentality, domestic or
foreign, or any arbitrator, applicable to such party, (ii) will
conflict with, violate, result in a breach of or constitute a default
under any of the terms, conditions or provisions of the articles of
incorporation, bylaws or partnership agreement of such party, as the
case may be, or of any agreement or instrument to which such party is
a party or by which such party is or may be bound or to which any of
its properties or assets is subject, (iii) will in any material
respect conflict with, violate, result in a breach of, constitute a
default under (whether with notice or lapse of time or both),
accelerate or permit the acceleration of the performance required by,
give to others any interests or rights or require any consent,
authorization or approval under any indemnity, mortgage, lease
agreement or instrument to which such party is a party or by which
such party is or may be bound, or (iv) will result in the creation or
imposition of any lien upon any of the properties or assets of such
party.
(c) Governmental Authorizations. Any registration, declaration or
notification with, or consent, approval, license, permit or other
authorization or order by, any governmental or regulatory authority
domestic or foreign, that is required in connection with the valid
execution, delivery acceptance and performance by such party under
this Agreement has been completed, made, or obtained on or before the
effective date of this Agreement.
(d) Suitability of Investment.
(i) AFC represents and warrants that it is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under
the Securities Act as presently in effect and is acquiring the
Preferred Shares - Class A for its own account for investment
purposes only and not with a view to the resale or distribution
thereof;
(ii) AFC will not, directly or indirectly, offer, sell, transfer,
assign, exchange or otherwise dispose of all or any part of the
Preferred Shares - Class A except to Old Fort in accordance with
the provisions of this Agreement;
(iii)AFC has been given the opportunity to obtain information and
documents relating to Old Fort and to ask questions of and
receive answers from representatives of Old Fort concerning Old
Fort and the investment in the Preferred Shares - Class A;
(iv) AFC has such knowledge and experience in financial, business and
tax matters that it can, and it has, adequately analyzed the
risks of an investment in the Preferred Shares - Class A and it
has determined the Preferred Shares - Class A are a suitable
investment for it and that it is able at this time, and in the
foreseeable future, to bear the economic risk of a total loss of
its investment; and
(v) AFC is aware that there are substantial risks incident to an
investment in the Preferred Shares - Class A.
ARTICLE 4
MISCELLANEOUS
4.1 No registration of Preferred Shares - Class A. AFC is aware that the
Preferred Shares - Class A have not been and will not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), that any offer and
issuance of the Preferred Shares - Class A is intended to be exempt from
registration under the Securities Act and the rules promulgated thereunder by
the United States Securities and Exchange
Commission, and that the Preferred Shares - Class A cannot be offered, sold,
assigned, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. AFC is also aware that sales or transfers of the Preferred Shares -
Class A are and will be further restricted by state securities laws and that the
certificates for the Preferred Shares - Class A will bear appropriate legends
restricting their transfer pursuant to applicable laws and this Agreement.
4.2 Financial Statements. AFC shall promptly deliver to Old Fort copies of all
of its filings with the United States Securities and Exchange Commission,
shareholder communications, and such other information as Old Fort shall
reasonably request.
4.3 Termination. This Agreement may be terminated by Old Fort by thirty (30)
days written notice to AFC, and the Agreement shall terminate automatically in
the event of, and as of the same date as, termination of the Reinsurance
Agreement; provided that AFC's obligations under this Agreement shall not
terminate unless and until Allmerica's and LNRAC's obligations under the
Reinsurance Agreement, Lincoln's and LNRAC's obligations under the Lincoln
Retrocession Agreement, Lincoln's and Old Fort's obligations under the Old Fort
Retrocession Agreement, and Old Fort's and AFC's obligations under this
Agreement have been fully satisfied.
4.4 Waiver of Defenses. To the extent permitted by law, AFC hereby waives all
rights and defenses it may have to avoid its obligations under this Agreement.
In particular, the obligations of AFC hereunder shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of LNRAC or Allmerica under the Reinsurance
Agreement, by operation of law or otherwise;
(b) any release, impairment, non-perfection or invalidity of any direct or
indirect security for any obligation of LNRAC or Allmerica under the
Reinsurance Agreement;
(c) any change in the corporate existence, structure or ownership of
LNRAC, Lincoln, Old Fort, Allmerica or AFC or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting
LNRAC, Lincoln, Old Fort, Allmerica or AFC or any of their respective
assets, or any resulting release or discharge of any obligation of
LNRAC or Allmerica contained in the Reinsurance Agreement;
(d) the existence of any claim, set-off or other rights which AFC may have
at any time against Old Fort or any other person, whether in
connection herewith or any unrelated transactions;
(e) any invalidity or unenforceability relating to or against LNRAC or
Allmerica for any reason under the Reinsurance Agreement or any
provision of applicable law or regulation purporting to prohibit the
payment by LNRAC or Allmerica of any amount payable by it under the
Reinsurance Agreement;
(f) a determination by any insurance regulatory authority that AFC should
have been licensed as an insurer or is otherwise subject to the
insurance laws of any such jurisdiction in connection with this
Agreement or the transactions contemplated in this Agreement; or
(g) any other act or omission to act or delay of any kind by any of the
parties or any other person or any other circumstance whatsoever which
might, but for the provisions of this Section, constitute a legal or
equitable discharge of or defense to AFC's obligations hereunder.
4.5 Binding Effect, Successors and Assigns. The provisions of this Agreement
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. This Agreement or the benefits
hereof or the obligations hereunder may not be assigned by any party hereto
without the prior written consent of the other party hereto.
4.6 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by either party hereto of any
provision hereof will be effective unless set forth in a writing executed by the
party so waiving.
4.7 Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement will be in writing and
will be deemed to have been duly given when received either by (i) telecopy (the
receipt of which is confirmed) or (ii) Express Mail, Federal Express or other
courier service, as follows:
If to Old Fort, to it at:
Address: 0000 Xxxxxxxx Xxx
X.X. Xxx 0000
Xxxx Xxxxx, XX 00000-0000
Attention: President
Telecopy: 000-000-0000
If to AFC, to it at:
Address: 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. XxXxxxxx
Vice President and Treasurer
Telecopy: 000-000-0000
4.8 Counterparts. This Agreement may be executed in two or more counterparts,
and by different parties on separate counterparts, each set of counterparts
showing execution by all parties will be deemed an original, but all of which
will constitute one and the same instrument.
4.9 Further Assurance. Each party hereto agrees to execute, acknowledge,
deliver, file and record such further certificates, amendments, instruments,
agreements and documents, and to do all such other acts and things, as may be
required by law or as may be necessary or advisable to carry out the intent and
purposes of this Agreement.
4.10 Rights Cumulative; Waiver. The rights and remedies of the parties hereto
will be cumulative and not exclusive of any rights or remedies which either
would otherwise have hereunder or at law or in equity or by statute, and no
failure or delay by either party in exercising any right or remedy will impair
any such right or remedy or operate as a waiver of such right or remedy, nor
will any single or partial exercise of any power or right preclude such party's
other or further exercise or the exercise of any other power or right. The
waiver by any party hereto of a breach of any provision of this Agreement will
not operate or be construed as a waiver of any preceding or succeeding breach
and no failure by either party to exercise any right or privilege hereunder will
be deemed a waiver of such party's rights or privileges hereunder or will be
deemed a waiver of such party's rights to exercise the same at any subsequent
time or times hereunder.
4.11 Governing Law. This Agreement will be governed by and construed and
enforced in accordance with the laws of Bermuda.
4.12 Arbitration. If AFC and Old Fort cannot mutually resolve a dispute
regarding the interpretation or operation of this Agreement, the dispute shall
be decided through arbitration as set forth in Exhibit D. The arbitrators shall
base their decision on the terms and conditions of this Agreement plus the
Reinsurance Agreement, the Lincoln Retrocession Agreement and the Old Fort
Retrocession Agreement, rather than solely on a strict interpretation of the
applicable law. There shall be no appeal from their decision, except that either
party may petition a court having jurisdiction over the parties and the subject
matter to reduce the arbitrator's decision to judgment.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
OLD FORT INSURANCE COMPANY, LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
ALLMERICA FINANCIAL CORPORATION
By: /s/ Xxxx X. XxXxxxxx
Name: Xxxx X. XxXxxxxx
Title: Vice President
EXHIBIT A
ATTRIBUTES OF PREFERRED SHARES - CLASS A
The Preferred Shares - Class A shall have the following rights, restrictions and
other attributes:
1. VOTING
Except in a case where a class vote is required by law or by the
Bye-Laws of Old Fort, the holders of Preferred Shares - Class A shall
have no right to vote or to receive notices of or attend at meetings
of Old Fort.
2. DIVIDEND
The holders of Preferred Shares - Class A shall be not be entitled to
receive dividends.
3. REDEMPTION
The holders of Preferred Shares - Class A shall enjoy redemption
rights as set forth in Article 2 of the Put Option Agreement
("Agreement") of September 30, 2001 between Old Fort and AFC.
4. RETURN OF CAPITAL
The holders of Preferred Shares - Class A shall enjoy return of
capital rights as set forth in the Agreement.
5. TRANSFERABILITY
The Preferred Shares - Class A will be non-transferable in accordance
with Article 2 of the Agreement.
6. OTHER
The holders of Preferred Shares - Class A shall have no pre-emptive,
preferential or other right to purchase, subscribe for or take any
other shares of Old Fort, whether now or hereafter authorised, or to
purchase, subscribe for or take any other securities or obligations of
Old Fort convertible into or carrying an option or right to vote or to
purchase any other shares of Old Fort.
EXHIBIT B
NOTICE OF SETTLEMENT
--------------------
To: Allmerica Financial Corporation ("AFC")
From: Old Fort Insurance Company, Ltd. ("Old Fort")
Attention: [ ]
Date: [ ]
Dear Sirs
Separate Account No. [ ] of Old Fort
We refer to the Notice of Settlement pursuant to section 2.1(b) of the Put
Option Agreement between AFC and Old Fort dated September 30, 2001 (the
"Agreement"). Capitalised terms in this Notice have the meanings given to
them in the Agreement.
1. We refer to the Settlement Period for the calendar quarter as follows:
[ ].
2. We hereby certify that the Settlement Amount is [ ].
3. The Settlement Amount has been calculated as follows:
Experience Refund Loss Carry Forward $[ ]
plus the total of all payments previously made
by Old Fort for redemption of Preferred Shares - Class A
Less: total of all payments previously made by AFC $[ ]
for Preferred Shares - Class A
_______
Settlement Amount $[ ]
=======
Accordingly we hereby request payment of the Settlement Amount pursuant to
section 2.1(b) of the Agreement.
The above information is hereby certified true and correct.
Authorised Signatory
For and behalf of Old Fort
Insurance Company, Ltd.
EXHIBIT C
SUBSCRIPTION SHEET
------------------
To: The Directors
Old Fort Insurance Company, Ltd.
("the Company")
_________________________________________________________________________
The undersigned subscriber hereby applies for the allotment to it of the number
of Preferred Shares - Class A set opposite its below at a price calculated in
accordance with Section 2.1(d) of the Put Option Agreement ("Agreement") as of
September 30, 2001 between the Company and Allmerica Financial Corporation which
is payable in accordance with Section 2.1 (b) of the Agreement and agrees that
this subscription shall be final, binding and unconditional upon allotment; and
that the Company need not issue a share certificate therefor until such shares
are fully paid.
The undersigned subscriber hereby represents and warrants to, and agrees with,
the Company that the representations and warranties as contained in Article 3 of
the Agreement remain true and accurate as of the date hereof.
Subscriber Number of Shares Signature
---------- ---------------- ---------
Bermudian: No
____________________________________
Duly authorized for and on behalf of
Allmerica Financial Corporation
EXHIBIT D
Any controversy or claim arising out of or relating to this Agreement will be
settled by arbitration.
There must be three (3) arbitrators who must be impartial and must be present or
former officers of life insurance or life reinsurance companies other than the
parties or their affiliates. Each of the parties will appoint one (1) of the
arbitrators and these two (2) arbitrators will select the third (the "Umpire").
In the event that either party should fail to choose an arbitrator within thirty
(30) days following a written request by the other party to do so, the
requesting party may choose two (2) arbitrators who will in turn choose an
Umpire before entering upon arbitration. If the two (2) arbitrators fail to
agree upon the selection of an Umpire within thirty (30) days following their
appointment, either party may ask XXXXX-US to appoint the Umpire. However, if
XXXXX-US is unable to appoint an Umpire who is impartial and who is or was an
officer of a life insurance or life reinsurance company other than the parties
or their affiliates, then either party may ask a court to appoint the Umpire
pursuant to the Uniform Arbitration Act or any similar statute empowering the
court to appoint an arbitrator, in which case the requirement that the Umpire be
a present or former officer of a life insurance or life reinsurance company
shall be waived.
The arbitrators will decide all matters by majority vote. They will establish
the procedural rules for the arbitration and allocate among the parties the
expenses of the arbitration. They shall interpret this Agreement as an honorable
engagement and are not bound by the strict formalities of law. They are not
empowered to assess punitive damages.
The arbitration panel shall determine all arbitration schedules and procedural
rules. Organizational and other meetings shall be held in Worcester,
Massachusetts, unless the panel shall select another location.
The award agreed by the arbitrators will be final, and judgement may be entered
upon it in any court having jurisdiction.
