ASSUMPTION REINSURANCE AGREEMENT
between
UNIVERSAL GUARANTY LIFE INSURANCE COMPANY
and
FIRST INTERNATIONAL LIFE INSURANCE COMPANY
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
ARTICLE II BUSINESS ASSUMED 3
ARTICLE III ASSUMPTION CERTIFICATES 5
ARTICLE IV GENERAL PROVISIONS 7
ARTICLE V CONSIDERATION FOR ASSUMPTION
REINSURANCE 10
ARTICLE VI DUTY OF COOPERATION 10
ARTICLE VII ARBITRATION 11
ARTICLE VIII INDEMNIFICATION 11
ARTICLE IX EXECUTORY CONTRACT AND INSOLVENCY-
SETOFF 12
ARTICLE X MISCELLANEOUS PROVISIONS 13
EXHIBITS
A Policyholder Notice
B Certificate of Assumption
C Notice of Objection to Assumption
ASSUMPTION REINSURANCE AGREEMENT
This Assumption Reinsurance Agreement (the
"Assumption Agreement"), is made and entered into as of
September 30, 1996, by and between Universal Guaranty Life
Insurance Company, a life insurance company (the "Company"),
and First International Life Insurance Company, a life insurance
company (the "Reinsurer").
WHEREAS, the Company and the Reinsurer have
entered into a Coinsurance Agreement, as of the date hereof
(the "Coinsurance Agreement"), pursuant to which the Company
has agreed to cede to the Reinsurer, and the Reinsurer has
agreed to accept and indemnity reinsure, on a 100%
coinsurance basis, all of the Reserves and Liabilities (as
hereinafter defined), but not reserves for incurred but not
reported claims and immediate payment of claims, arising
under or with respect to the Reinsured Policies (as
hereinafter defined); and
WHEREAS, the Coinsurance Agreement provides that,
upon the occurrence of certain events as specified in
Article XVI therein, the Reinsurer shall have the right, in
its sole discretion, to elect to assumption reinsure the
Reinsured Policies, with a concurrent novation and complete
release of the Company from any liability under such
Reinsured Policies, on a state by state basis after the
Effective Date upon the receipt of any and all applicable
regulatory approvals and notice to relevant Policyholders
followed by expiration of the applicable period with no opt
out by such Policyholders or the obtaining of required
consents from such Policyholders, as the case may be, under
the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the foregoing
and the mutual agreements set forth herein, the Company and
the Reinsurer mutually agree as follows:
ARTICLE I
DEFINITIONS
As used in this Assumption Agreement, the
following capitalized terms shall have the following
meanings (definitions are applicable to both the singular
and the plural forms of each term defined in this
Article I):
"ASSUMPTION DATE" shall have the meaning set forth
in Section 2.4.
"BUSINESS DAY" means any day other than a Saturday
or Sunday or a day on which banking institutions in the
States of New York, Ohio and Delaware are permitted or
obligated by law to be closed.
"CERTIFICATE OF ASSUMPTION" shall have the meaning
set forth in Section 3.1.
"COINSURANCE AGREEMENT" shall have the meaning set
forth in the first recital hereof.
"EFFECTIVE DATE" shall have the same meaning as in
the Coinsurance Agreement.
"EXTRA CONTRACTUAL LIABILITIES" shall have the
same meaning as in the Coinsurance Agreement.
"INSOLVENCY PROCEEDINGS" shall have the meaning
set forth in Section 9.5.
"NOTICE OF OBJECTION" shall have the meaning set
forth in Section 3.1.
"NOVATED POLICIES" means the Reinsured Policies
with respect to which no rejection of assumption has been
filed by a Policyholder pursuant to the terms of Section 3.2
of this Assumption Agreement (or with respect to which other
applicable regulatory requirements have been met), and with
respect to which the terms of Section 3.4 apply.
"PERSON" means any corporation, individual, joint
stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state
or political subdivision thereof, trust or other entity.
"POLICYHOLDER" means a holder of a Reinsured
Policy.
"POLICYHOLDER NOTICE" shall have the meaning set
forth in Section 3.1.
"POLICY LOANS" shall have the same meaning as set
forth in the Coinsurance Agreement.
"REINSURED POLICIES" means all paid-up insurance
policies, issued by the Company, that are in force on the
Effective Date, except policies offered in settlement to so
called "HIV" policyholders and paid-up business associated
with the Company's Jr./Sr. Plan Single Premium Interest
Sensitive Whole Life Policies, including, without
limitation, policy loans.
"RESERVES AND LIABILITIES" means the statutory
reserves held by the Company as of the Effective Date in
support of the policy liabilities arising under the
Reinsured Policies and payable after the Effective Date
(determined by reference to lines 1, 5, 7 and 8 on page 3 of
its 1995 Annual Statement Blank) less Policy Loans.
"REINSURANCE AGREEMENT" shall have the same
meaning as in the Coinsurance Agreement.
ARTICLE II
BUSINESS ASSUMED
2.1. COVERAGE. After the Effective Date and upon
the terms and subject to the conditions, including Section
XVI of the Coinsurance Agreement, and other provisions of
this Assumption Agreement and any required governmental and
regulatory consents and approvals, the Company, if requested
to do so by the Reinsurer, hereby agrees to cede to the
Reinsurer and the Reinsurer hereby agrees to accept and
reinsure, on an assumption basis, any Reinsured Policy.
Reinsurance pursuant to this Section 2.1 shall occur no less
frequently than on a monthly basis until all Reinsured
Policies have been assumed pursuant to the provisions of
Article III hereunder; provided, however, that reinsurance
may occur more frequently if the parties hereto agree.
2.2. EXCLUSIONS. This Assumption Agreement does
not apply to and specifically excludes from coverage any
Extra Contractual Liabilities. In addition, the Reinsurer
shall not assume, and shall be indemnified by the Company
for, all guaranty fund assessments and premium taxes or
similar charges imposed on or with respect to the Reinsured
Policies to the extent that such assessments, taxes or
charges are based on premiums remitted prior to the
Effective Date.
2.3. TRANSFER OF RESERVES. Notwithstanding the
provisions of Section 2.1 hereof, the Reinsurer will not be
deemed to have accepted and reinsured, on an assumption
basis, any Reinsured Policy unless the Reserves and
Liabilities underlying such Reinsured Policy shall have been
ceded by the Company to the Reinsurer, and accepted by the
Reinsurer, pursuant to Article II of the Coinsurance
Agreement, effective as of the Effective Date.
2.4. ASSIGNMENT OF CEDED REINSURANCE.
(a) Regardless of whether reinsurance
novation agreements are entered into between the Reinsurer
and any reinsurer, the Reinsurer shall be substituted for
and succeed to all of the rights and liabilities of the
Company, and shall, as between the parties hereto, be
recognized for all purposes as the "Company" thereunder in
substitution for the Company, under any Reinsurance
Agreements in effect as of the date that the provisions of
Section 2.1 hereunder take effect (the "Assumption Date")
with any reinsurer relating to the Reinsured Policies. For
consideration which has already been provided for in Article
IV of the Coinsurance Agreement, as of the Assumption Date,
the Company shall assign, transfer and convey, and the
Reinsurer shall be bound by and assume, any and all rights
and obligations of the Company under any Reinsurance
Agreement including amounts held by or which may become due
from reinsurers for policy liabilities under the Reinsured
Policies or for benefits or other amounts paid by the
Company prior to the Assumption Date. The Company and the
Reinsurer shall use their best efforts to effect, as
promptly as possible, an endorsement to each Reinsurance
Agreement substituting the Reinsurer for the Company and to
amend the Ceded Reinsurance Agreement to comply with the
credit for reinsurance provisions of (i) the Delaware
Insurance Law and (ii) any other statute or regulation
applicable to the cession of reinsurance by foreign life
insurance companies. The Company agrees to enter into such
endorsements and, if reasonably requested by the Reinsurer,
aid the Reinsurer, at the Reinsurer's expense, in obtaining
any such endorsement.
(b) From the Assumption Date, the Company
hereby agrees that all amounts due the Reinsurer hereunder
pursuant to the Reinsurance Agreements shall be paid
directly to the Reinsurer by reinsurers and reinsurance
brokers. The Company shall, if reasonably requested by the
Reinsurer, aid the Reinsurer, at the Reinsurer's expense, in
collection of all amounts due from reinsurers. From the
Assumption Date, the collectibility of such reinsurance
shall be the ultimate responsibility of the Reinsurer and
shall be at the risk and for the account of the Reinsurer in
the event such reinsurance is not collected.
(c) From the Assumption Date, the Reinsurer
shall have full power and authority as attorney-in-fact for
the Company to act for and on behalf of the Company with
respect to any and all letters of credit and trust funds
outstanding for the benefit of the Company pursuant to the
terms of any of the Reinsurance Agreements. The Company and
the Reinsurer shall, at the expense of the Reinsurer, each
use their best efforts to the extent mutually agreed to be
necessary, to cause the reinsurers of the Company under the
Reinsurance Agreements to post replacement letters of credit
or establish replacement trust funds to be issued or
established directly in favor and for the benefit of the
Reinsurer in the same or a greater amount and on terms
equally as favorable to the Reinsurer, unless the Reinsurer
shall otherwise consent. The Company agrees to transfer to
the Reinsurer all funds withheld from reinsurers under the
Reinsurance Agreements.
ARTICLE III
ASSUMPTION CERTIFICATES
3.1. POLICYHOLDER NOTICES. Upon the request of
the Reinsurer to reinsure, on an assumption basis, a
Reinsured Policy pursuant to Section 2.1 hereof, and to the
extent that the reinsurance of such Reinsured Policy is
permitted or approval therefore has been granted under
applicable laws, rules or regulations or positions of
insurance regulatory authorities, the Reinsurer shall
prepare, with the cooperation of the Company, a Policyholder
notice ("Policyholder Notice"), certificate of assumption
("Certificate of Assumption") and objection form ("Objection
Form"), and mail them to the Policyholder of such Reinsured
Policy. Subject to regulatory requirements of the various
states, the Policyholder Notices, Certificates of Assumption
and Objection Forms to be delivered to Policyholders
pursuant to this Section 3.1 shall be substantially in the
forms attached hereto as Exhibits A, B and C, respectively.
3.2. RIGHT TO OBJECT. Subject to regulatory
requirements of the various states, the Company and the
Reinsurer agree that a Policyholder will be allowed to
remain a Policyholder of the Company if such Policyholder
refuses to effect the assumption of its Reinsured Policy in
accordance with this Article III during the applicable
period set forth in the Policyholder notice, and all of the
rights and obligations of the Company and the Policyholder
under such Reinsured Policy and of the Company and the
Reinsurer under the Coinsurance Agreement with respect to
such Reinsured Policy, shall remain the same.
3.3. NOVATED POLICIES. In the event that a
Reinsured Policy defined herein as a Novated Policy is
determined by applicable regulatory authorities or by
judicial decision (in either case, following the exhaustion
of all rights of appeal) not to have been novated, such
Reinsured Policy shall, for all purposes of this Assumption
Agreement, be deemed never to have been a Novated Policy.
Notwithstanding the foregoing, the fact that a Reinsured
Policy has not been or cannot be assumed and novated by the
Reinsurer pursuant to the terms and conditions of this
Assumption Agreement, for whatever reason, shall in no event
cause it not to be a Reinsured Policy under the Coinsurance
Agreement.
3.4. DIRECT OBLIGATIONS. The Reinsurer shall be
the successor to the Company under the Novated Policies as
if the Novated Policies were direct obligations originally
issued by the Reinsurer. The Reinsurer shall be substituted
in the place and stead of the Company, and each
Policyholder, insured or beneficiary under a Novated Policy
shall disregard the Company as a party thereto and treat the
Reinsurer as if it had been originally obligated thereunder.
Such Persons shall have the right to file claims or take
other actions under the Novated Policies on or after the
effective date of such novation directly with the Reinsurer,
and shall have a direct right of action for insurance
liabilities reinsured thereunder against the Reinsurer, and
the Reinsurer hereby consents to be subject to direct action
taken by any such Persons under a Novated Policy. The
Reinsurer accepts and assumes the Novated Policies subject
to any and all defenses, setoffs and counterclaims to which
the Company would be entitled with respect to such insurance
liabilities, it being expressly understood and agreed by the
parties hereto that no such defenses, setoffs or
counterclaims are waived by the execution of this Assumption
Agreement or the consummation of the transactions
contemplated hereby and that the Reinsurer shall be fully
subrogated to all such defenses, setoffs and counterclaims.
3.5. RELEASE OF COMPANY; INDEMNITY. Upon the
consummation of the assumption reinsurance of a Reinsured
Policy from the Company to the Reinsurer under this
Reinsurance Agreement, the Company shall be released from
any and all liability, except for Extra Contractual
Liabilities, with respect to such Reinsured Policy. From
and after the consummation of the assumption reinsurance of
a Reinsured Policy pursuant to this Assumption Agreement,
the Reinsurer agrees to indemnify the Company for any and
all damages, costs and expenses, including reasonable legal
counsel fees and disbursements, arising out of, based upon
or relating to such Novated Policy; provided, however, that
the Reinsurer shall be under no obligation to indemnify the
Company for any Extra Contractual Liabilities.
ARTICLE IV
GENERAL PROVISIONS
4.1. POLICY ADMINISTRATION. To the extent that
such transfers have not already taken place pursuant to the
terms and conditions of the Coinsurance Agreement, the
Company agrees to cooperate fully with the Reinsurer in the
transfer of all books, records, papers or any other
documents relating to such Novated Policies.
4.2. BILLING AND COLLECTIONS. Effective on the
respective dates on which the novation of any Reinsured
Policy is effective, the Reinsurer shall have sole
responsibility for billing and collecting policy loan
repayments, interest and the making of payments of dividends
in respect of the Novated Policies, subject to the terms of
any administrative or other agreements between the parties
hereto that have been or heretofore may be entered into and
the terms of agreements between the Reinsurer and its agents
or subcontractors.
4.3. MISUNDERSTANDINGS AND OVERSIGHTS. If any
delay, omission, error or failure to pay amounts due or to
perform any other act required by this Assumption Agreement
is unintentional and caused by misunderstanding or
oversight, the Company and the Reinsurer will adjust the
situation to what it would have been had the
misunderstanding or oversight not occurred. The party first
discovering such misunderstanding or oversight, or act
resulting from the misunderstanding or oversight, will
notify the other party in writing promptly upon discovery
thereof, and the parties shall act to correct such
misunderstanding or oversight within thirty (30) Business
Days of receipt of such notice. However, this Section shall
not be construed as a waiver by either party of its right to
enforce strictly the terms of this Assumption Agreement.
4.4. LITIGATION; CLAIMS. The Reinsurer shall be
responsible for the handling of, and all costs and expenses,
including legal fees, relating to, litigation or other
claims under the Novated Policies. Notwithstanding the
foregoing, the Reinsurer shall have no liability for such
costs and expenses to the extent they arise out of or are
based on any Extra Contractual Liabilities, and to the
extent that the Reinsurer incurs any such costs or expenses,
the Reinsurer shall be indemnified by the Company.
4.5. NON-COMPETE. The Company shall take no
action directly or indirectly to induce any Policyholder of
a Novated Policy to terminate, reinstate, lapse or exchange
such policy.
4.6. COMPLIANCE WITH APPLICABLE LAWS AND
REGULATIONS.
(a) INTENT OF PARTIES. It is the intention
of the parties that this Assumption Agreement shall be
interpreted in accordance with the laws as of the date of
execution hereof by both parties and comply with all
existing applicable state and federal laws and regulations,
and as from time to time are or may be in effect, in such a
way that the Reinsured Policies remain reinsured on the
coinsurance plan and contingent assumption plan.
(b) PROCEDURES TO REFLECT CHANGES IN LAWS OR
REGULATIONS. In the event that it is determined by an
insurance regulatory authority or the Internal Revenue
Service or by either party upon the advice of an insurance
regulatory authority or the Internal Revenue Service that
this Assumption Agreement fails to conform to the
requirements of existing applicable laws and regulations and
that the Assumption Agreement may be brought into conformity
with said requirements only by means of a material change to
the Assumption Agreement, or in the event that such laws or
regulations are changed subsequent to the Effective Date and
such change has a material adverse affect on either party or
requires a material change to the Assumption Agreement in
order for the Assumption Agreement to conform with
applicable laws and regulations, the parties shall exercise
reasonable efforts to reach an agreement to amend the
Assumption Agreement so as to return the parties to the
economic position that they would have been in had no such
change occurred or so that both parties share the economic
position that they would have been in had no such change
occurred or so that both parties share the economic
detriment of such change equally. If the parties are unable
to reach an agreement to amend the Assumption Agreement,
then the differences between the parties shall be resolved
through arbitration in accordance with the provisions of
Article VII. In the event that any change required to
conform the Assumption Agreement to the requirements of
applicable law or regulation is not material, the Assumption
Agreement shall be amended accordingly. In no event,
however, shall this provision prevent either party from
exercising any right it otherwise has under this Assumption
Agreement. For purposes of this Section 4.6(b), the word
"material" shall mean, when used with respect to (i) any
change in law or regulation, or any change into the
Assumption Agreement necessary to bring the Assumption
Agreement into conformity with the requirements of any law
or regulation; or (ii) any delay, omission, error or failure
to pay amounts due or to perform any other act required
under this Assumption Agreement; or (iii) any default, that
the effect or effects of any of (i), (ii) or (iii) above
(either individually or cumulatively) results in a deviation
from a projected return under this Assumption Agreement
(absent the occurrence of (i), (ii) or (III) above, either
individually or cumulatively) by at least five percent (5%),
measured from the first day that the occurrence of (i), (ii)
or (iii) above, or series thereof, taken into account on a
cumulative basis, occurred or becomes effective.
(c) NOTIFICATION OF DISAPPROVAL OR CHANGE IN
LAW. The Company shall promptly notify the Reinsurer of any
disapprovals, recommended changes or statements regarding
the Assumption Agreement that are made by any insurance or
tax regulatory authorities and of any change in law,
regulation or rulings affecting this Assumption Agreement.
The Reinsurer shall be allowed to make its own defense of
the Assumption Agreement with said authorities.
4.7. RECOUPMENT AND FAILURE OF CONSIDERATION. If
either party to this Assumption Agreement fails to perform
this Assumption Agreement in full, then the other party has
the right to suspend performance, and if the defaults cannot
be cured, within one hundred and twenty (120) days following
delivery of written notice from the non-defaulting party to
the defaulting party, to terminate this Assumption
Agreement. Alternatively, the non-defaulting party can
recoup damages (including, without limitation, the amount
owed plus interest from the date owed and calculated at the
Chase Bank prime rate plus two points) from future
settlements between the parties.
ARTICLE V
CONSIDERATION FOR ASSUMPTION REINSURANCE
5.1 CONSIDERATION. The consideration provided
for in Article IV of the Coinsurance Agreement shall be the
consideration for the assumption of the Novated Policies (as
direct obligations) by the Reinsurer, and there shall be no
additional consideration or premium due or payable under
this Assumption Agreement.
ARTICLE VI
DUTY OF COOPERATION
6.1. DUTY OF COOPERATION. Each party hereto
shall cooperate fully with the other in all reasonable
respects in order to accomplish the objectives of this
Assumption Agreement. This duty to cooperate shall include
obtaining the governmental and regulatory consents and
approvals and taking the other steps necessary for the
assumption of the Reinsured Policies, as described in
Article III hereof. In addition, this duty to cooperate
shall include making available any Reinsured Policy records
which either party subsequently may require to resolve
issues related to claims or liabilities. The Company and
the Reinsurer agree to perform such additional acts and
execute such additional documents and agreements as may be
necessary or desirable to carry out the purposes and
objectives of this Assumption Agreement; provided however,
that Reinsurer shall reimburse the Company for reasonable
out-of-pocket expenses incurred by the Company.
ARTICLE VII
ARBITRATION
7.1. GENERAL. Any dispute or difference between
the parties with respect to the operation or interpretation
of, or arising from or relating to, this Assumption
Agreement on which an amicable understanding cannot be
reached shall be decided pursuant to and in accordance with
the terms, conditions and procedures set forth in Article XI
of the Coinsurance Agreement.
7.2. SURVIVAL. This Article shall survive
termination of this Assumption Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1. THE COMPANY. The Company hereby agrees on
demand to indemnify and hold harmless the Reinsurer, and its
respective officers, directors and employees from and
against any and all demands, actions, proceedings, suits (by
any Person) and liabilities, paid or incurred (including
reasonable attorneys' fees), resulting from or arising out
of the breach of or failure to perform any of the duties,
obligations, covenants or agreements of the Company
contained in this Assumption Agreement.
8.2. THE REINSURER. The Reinsurer hereby agrees
to indemnify and hold harmless the Company, and its
respective officers, directors and employees from and
against any and all demands, actions, proceedings, suits (by
any Person) and liabilities, paid or incurred (including
reasonable attorneys' fees), resulting from or arising out
of the breach of or failure to perform any of the duties,
obligations, covenants or agreements of the Reinsurer
contained in this Assumption Agreement.
8.3. SURVIVAL OF ARTICLE. This Article shall
survive termination of this Assumption Agreement.
ARTICLE IX
EXECUTORY CONTRACT AND INSOLVENCY-SETOFF
9.1. INSOLVENCY-SETOFF (OR OFFSET). In the event
either party to the Assumption Agreement shall be the
subject of insolvency proceedings ("Insolvency Proceedings")
all independent debts on unrelated contracts between the
parties shall be setoff to the extent:
(a) the debt from the creditor to the insolvent arose
pre-petition.
(b) the debt from the insolvent to the creditor arose
pre-petition.
(c) the debts are mutual, meaning they are between the
two parties to this Assumption Agreement, and in the same
right and the same capacity.
The cash payment due on each reinsurance agreement between
the parties shall constitute the "debt" on such agreement.
9.2. ADEQUATE ASSURANCE. In the event of
Insolvency Proceedings involving the Company, the
Reinsurer's future performance is conditioned on receiving
adequate assurance of future performance, as defined in the
Uniform Commercial Code, Section 2-206, and the Official Comments
thereunder.
9.3. IPSO FACTO CLAUSE. If the receiver,
including any liquidator or rehabilitator, of one of the
parties assigns the rights or delegates the duties of this
Assumption Agreement, and the assignee is the subject of
Insolvency Proceedings then the other party may immediately
terminate the Assumption Agreement without further
performance.
9.4. EXECUTORY CONTRACT. In the event either
party to the Assumption Agreement is the subject of
Insolvency Proceedings the receiver of the insolvent, with
respect to future account settlements, may affirm or reject
the Assumption Agreement, but not affirm the rewards and
reject the burdens. If this Assumption Agreement is neither
affirmed nor rejected within one hundred and twenty (120)
days after a party becomes the subject of Insolvency
Proceedings, then the Assumption Agreement shall be deemed
to be rejected.
If either party is the subject of Insolvency
Proceedings other than liquidation proceedings, then the
other party may request adequate assurance of continued
performance and the first priority administrative expense
with respect to future performance prior to the time the
Assumption Agreement is either affirmed or rejected, and if
such is not provided, then, after one hundred and twenty
(120) days, the other party may treat its future performance
as canceled.
9.5. INSOLVENCY PROCEEDINGS. For purposes of
this Assumption Agreement the term "Insolvency Proceedings"
shall include, but not be limited to, any action by a state
insurance regulatory authority to place a party in, or the
actual commencement of, delinquency proceedings, including
conservatorship, receivership, rehabilitation,
reorganization, "adjustment of debts," "voluntary
supervision," or liquidation.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. NO THIRD PARTY BENEFICIARIES. This Assumption Agreement
is between the Company and the Reinsurer, and the performance of the
obligations of each party under this Assumption Agreement shall be
rendered solely to the other party. In no instance shall anyone other
than the Company or the Reinsurer, or their successors or permitted
assigns, have any rights, benetfits or remedies under this Assumption
Agreement. Until the Reinsurer has reinsured a Reinsured Policy on
an assumption reinsurance basis pursuant to this Assumption Reinsurance
Agreement, the Reinsurer shall not be liable to any insured, contract
owner, or beneficiary under any Reinsured Policy.
10.2. HEADINGS AND EXHIBIT. Headings used herein are imserted
solely for the convenience of reference and are not a part of this
Assumption Agreement and shall not affect the terms hereof. The
attached Exhibits are part of this Assumption Agreement.
10.3. NOTICES. All notices and communications hereunder shall
be in writing and shall be deemed to have been received three (3)
Business Days after mailing, or if by telefax or by hand, when received,
and if by overnight mail, on the next Business Day. Any written notice
shall be by either certified or registered mail, return receipt
requested, or overnight delivery service (providing for delivery
receipt) or delivered by hand. All notices or communications with the
Reinsurer under this Assumption Agreement shall be addressed as
follows:
First International Life Insurance Company
c/o The Guardian Life Insurance Company of America
201 Park Avenue South
New York, New York 10003
Attention: Jeremy Starr
Telefax No.: (212) 598-8659
All notices and communications with the Company under this
Assumption Agreement shall be directed to:
Universal Guaranty Life Insurance Company
5250 South Sixth Street
Springfield, Illinois 62750-5147
Attention: James Melville
Telefax No.: (217) 786-4372
10.4. SEVERABILITY. If any term or provision of this
Assumption Agreement shall be held void, illegal, or unenforceable,
the validity of the remaining portions or provisions of this
Assumption Agreement shall not be affected thereby; provided,
however, that to the extent that such remaining portions or
provisions affect the economic positions of the parties hereunder,
this Assumption Agreement shall be amended by the parties so as to
return the parties to the economic positions that they would have
been in had no such serverance occurred or so that both parties
share the economic detriment of such severance equally.
10.5. ASSIGNMENT. This Assumption Agreement may not be
assigned by either party without the prior written consent of the
other and any attempted assignment without such consent shall be
void.
10.6. SUCCESSORS AND ASSIGNS. The provisions of this
Assumption Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
10.7. EXECUTION IN CONTERPARTS. This Assumption Agreement
may be executed by the parties hereto in any number of counterparts,
and by each of the parties hereto in separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed
to be an original, blut all such counterparts shall together
constitute but one and the same instrument.
10.8. AMENDMENTS. This Assumption Agreement may be
amended only by written amendment hereto executed by the parties.
10.9. WAIVER. The failure of the Company or Reinsurer to
insist on strict compliance with this Assumption Agreement, or to
exercise any right or remedy under this Assumption Agreement, shall
not constitute a waiver of any rights provided under this Reinsurance
Agreement, nor stop the parties from tereafter demanding full and
complete compliance nor prevent the parties from exercising such
a right or remedy in the future.
10.10. INTERPRETATION. No provision of this Assumption
Agreement shall be construed against any party on the ground that
such party drafted the provision or caused it to be drafted.
10.11. ENTIRE AGREEMENT. This Assumption Agreement and
the Coinsurance Agreement constitute the sole and entire agreement
and understanding between the parties hereto, and supersedes all prior
agreements, whether oral or writte, between the parties, with respect
to the subject matter hereof.
10.12. GOVERNING LAW AND FORUM. This Assumption Agreement
shall be governed by the laws of the State of New York, without giving
effect to principles of conflicts of law thereof. Both parties hereby
irrevocably and unconditionally submit themselves to the exclusive
jurisdiction of the Courts of the State of New York for any actions,
suits or proceedings of or relating to this Assumption Agreement and
the transactions contemplated thereby that cannot by resolved pursuant
to the provisions of Article VII hereof.
10.13. CONFIDENTIALITY. Except as required by law or regulatory
authority, neither the Company nor the Reinsurer shall publicly disclose
the purchase price or other terms of the transfer proposed herein, but
this restriction shall terminate if such price and terms shall
otherwisebecome public knowledge. In the event that the Reinsurer
or its representative are requested or required by oral questions,
interrogatories, requests for information or documents, subpoena,
civil investigation, demand or similar process to disclose any terms
or information regarding such transfer it may disclose any terms
or information regarding such transfer provided, however, that to the
extent practicably under the circumstances the Reinsurer shall give
the Company reasonable notice of the order or request before making the
disclosure provided that such notice can be provided without cost to
the Reinsurer. This Section 10.13 shall survive termination of this
Assumption Agreement and the Coinsurance Agreement.