Exhibit 2.4
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
Zurich Life Insurance Company of America ("Ceding Company").
WHEREAS, ALRe and Ceding Company are parties to the reinsurance agreements
(the "Subject Agreements") 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 Agreements 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 Agreements 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 each Subject Agreement on the inception
date thereof, XL is hereby substituted as the Reinsurer under each of the
Subject Agreements in place and instead of ALRe. XL and Ceding Company hereby
ratify and confirm that the Subject Agreements shall be treated as always having
been agreements 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 each Subject
Agreement on the inception date thereof, XL hereby assumes all of
ALRe's interests, rights, duties, obligations, and liabilities under
the Subject Agreements, and XL shall be bound by all terms and
conditions of the Subject Agreements.
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 Agreements 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
Agreements, 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 Agreements, the Ceding Company shall not have the
right to cede any new business, new issues, future issuances or
further new reinsurance policies under the Subject Agreements after
the Novation Date. This exclusion shall include, without limitation,
policies with an effective date after the Novation Date,
non-mandatory renewals of policies in effect prior to the Novation
Date and non-mandatory changes to policies in effect prior to the
Novation Date that increase the insurance provided thereunder.
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.
8. This Novation Agreement shall be subject to the arbitration
provisions of the Subject Agreements and shall be governed by and
construed in accordance with the laws applicable to the Subject
Agreements.
9. This Novation Agreement may be executed in counterparts.
10. 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
11. 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 US $ 14,500,000
in substantially the form of Exhibit B hereto issued by the banks
listed in Exhibit B and XL shall have received in Bermuda (including
by facsimile transmission) a receipt for the Letter of Credit in the
form of Exhibit C hereto, provided that if these conditions to the
occurrence of the Novation Date are satisfied, the Novation Date
shall be December 31, 2002.
12. Simultaneous to item 11 above, the assets of the reserve trusts
provided for in Subject Agreements shall be transferred as set forth
in the letter agreement among ALRe, XLFA, the Ceding Company and
Mellon Bank, as trustee attached hereto as Exhibit A.
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: 12/31/02
---------------------------- -------------------------
ZURICH LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxx
---------------------------- -------------------------
Title: SVP Title: SVP
---------------------------- -------------------------
Date: December 31, 2002 Date: 12/31/02
---------------------------- -------------------------
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
SUBJECT AGREEMENTS
- Term Life Coinsurance Agreement effective April 1, 2000, between Zurich
Life Insurance Company of America and Annuity & Life Reassurance, Ltd.
- Amendment #l effective January 1, 200l to the Term Life Coinsurance
Agreement effective April 1, 2000, between Zurich Life Insurance Company
of America and Annuity & Life Reassurance, Ltd.
- Amendment #2 effective December 1, 200l to the Term Life Coinsurance
Agreement effective April 1, 2000, between Zurich Life Insurance Company
of America and Annuity & Life Reassurance, Ltd.
- Amendment #3 effective January 1, 2001 to the Term Life Coinsurance
Agreement effective April 1, 2000, between Zurich Life Insurance Company
of America and Annuity & Life Reassurance, Ltd.
- Amendment #4 effective January 1, 2002 to the Term Life Coinsurance
Agreement effective April 1, 2000, between Zurich Life Insurance Company
of America and Annuity & Life Reassurance, Ltd.
- Amendment #5 effective January 1, 2002 to the Term Life Coinsurance
Agreement effective April 1, 2000, between Zurich Life Insurance Company
of America and Annuity & Life Reassurance, Ltd.