Exhibit 10.26 CONSOLIDATED SERVICE AGREEMENT AGREEMENT effective January 1, 1998, between ALLMERICA FINANCIAL CORPORATION ("Parent") and AAM GROWTH & INCOME FUND L.L.C., AAM HIGH YIELD FUND, L.L.C., AAM EQUITY FUND, AFC CAPITAL TRUST I, ALLMERICA ASSET MANAGEMENT, INC., ALLMERICA BENEFITS, INC., ALLMERICA EQUITY INDEX POOL, ALLMERICA FINANCIAL ALLIANCE INSURANCE COMPANY, ALLMERICA FINANCIAL BENEFIT INSURANCE COMPANY, ALLMERICA FINANCIAL INSURANCE BROKERS, INC., ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY, ALLMERICA FINANCIAL SERVICES INSURANCE AGENCY, INC., ALLMERICA FUNDING CORP., ALLMERICA FUNDS, ALLMERICA, INC., ALLMERICA INSTITUTIONAL SERVICES, INC., ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC., ALLMERICA INVESTMENTS, INC., ALLMERICA INVESTMENT TRUST, ALLMERICA PLUS INSURANCE AGENCY, INC., ALLMERICA PROPERTY & CASUALTY COMPANIES, INC., ALLMERICA SECURITIES TRUST, ALLMERICA SERVICES CORPORATION, ALLMERICA TRUST COMPANY, N.A., AMGRO, INC., APC FUNDING CORP., CITIZENS CORPORATION, CITIZENS INSURANCE COMPANY OF AMERICA, CITIZENS INSURANCE COMPANY OF ILLINOIS, CITIZENS INSURANCE COMPANY OF THE MIDWEST, CITIZENS INSURANCE COMPANY OF OHIO, CITIZENS MANAGEMENT INC., FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY, GREENDALE SPECIAL PLACEMENTS FUND, THE HANOVER AMERICAN INSURANCE COMPANY, THE HANOVER INSURANCE COMPANY, HANOVER TEXAS INSURANCE MANAGEMENT COMPANY, INC., HANOVER LLOYD'S INSURANCE COMPANY, LOGAN WELLS WATER COMPANY, INC., LLOYDS CREDIT CORP., MASSACHUSETTS BAY INSURANCE COMPANY, SMA FINANCIAL CORP., SOMERSET SQUARE, INC., STERLING RISK MANAGEMENT SERVICES, INC. The above listed companies known collectively as "Affiliated Group". WHEREAS, the Cost Distribution Policy adopted by the Affiliated Group on June 15, 1993 and amended as of October 21, 1997, for implementation in calendar year 1998 ("Policy"), and as supplemented by the Cost Distribution Policy Implementation Manual, as may be created or amended by Parent's management from time to time to conform to State or Federal law, regulation or requirement or for other sound reason "Implementation Manual") has been determined to be an appropriate method of achieving fair distribution of servicing costs between the Affiliated Group. NOW, THEREFORE, the Affiliated Group hereby agree as follows: 1. Each Company hereby agrees to provide any other Company in the Affiliated Group with such services as it may require for its operations. The Policy and Implementation Manual shall be the basis for allocating cost for various services between each Company. The Policy and Implementation Manual will become a part of this Agreement. 2. The servicing company agrees to provide each serviced company with a quarterly report covering the items of service performed on behalf of serviced company. 3. This Agreement may be canceled in whole upon 60 days written notice by any party delivered to the other members of the Affiliated Group, or in part by any party giving the other 60 days written notice that certain services will no longer be performed by the servicing company or will no longer be purchased by the serviced company. This Agreement will automatically be canceled with respect to a company that leaves the Affiliated Group. 4. The parties to the Agreement acknowledge that First Allmerica Financial Life Insurance Company ("FAFLIC") shall be the single employer within the Affiliated Group and that all employment costs shall be paid by FAFLIC. Each member of the Affiliated Group shall then be charged by FAFLIC for services performed by employees of FAFLIC on behalf of such affiliate. Employees of FAFLIC shall not be directly compensated by an affiliate under this Agreement. 5. The parties hereto specifically recognize that from time to time other companies may become members of the Affiliated Group and hereby agree that such new members must become parties to this Agreement. Such new members should execute the master copy of this Agreement (or a counterpart thereto, which shall be deemed to be the original agreement) and it will not be necessary for all the other members to sign the agreement, but it will be effective as if the old members had signed the agreement. 6. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto, and each such executed counterpart shall be, and shall be deemed to be, an original instrument. 7. This Agreement supersedes all previous agreements or understandings of any nature whatsoever regarding the subject matter of this Agreement. 8. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts. IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers as of the 1st day of January, 1998. ALLMERICA FINANCIAL CORPORATION By: /s/ Richard J. Baker ---------------------- Richard J. Baker Secretary 2 AAM GROWTH & INCOME FUND L.L.C. By: Allmerica Asset Management, Investment Manager By: /s/ Henry L. Ferguson III --------------------------- Henry L. Ferguson III Clerk AAM HIGH YIELD FUND, L.L.C. By: First Allmerica Financial Life Insurance Company, Member By: Citizens Insurance Company of America, Member By: The Hanover Insurance Company, Member By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Assistant Secretary/Secretary/Clerk AAM EQUITY FUND By: Allmerica Asset Management, Inc., Trustee By: /s/ Henry L. Ferguson III --------------------------- Henry L. Ferguson III Clerk AFC CAPITAL TRUST I By: /s/ John P. Kavanaugh ----------------------- John P. Kavanaugh Administrative Trustee ALLMERICA ASSET MANAGEMENT, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk 3 ALLMERICA BENEFITS, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary ALLMERICA EQUITY INDEX POOL By: Allmerica Asset Management, Inc. Trustee By: /s/ Henry L. Ferguson III --------------------------- Henry L. Ferguson III Clerk ALLMERICA FINANCIAL ALLIANCE INSURANCE COMPANY By: /s/ William J. Cahill, Jr. --------------------------- William J. Cahill, Jr. Secretary ALLMERICA FINANCIAL BENEFIT INSURANCE COMPANY By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Secretary ALLMERICA FINANCIAL INSURANCE BROKERS, INC. By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Clerk ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary 4 ALLMERICA FINANCIAL SERVICES INSURANCE AGENCY, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk ALLMERICA FUNDING CORP. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk ALLMERICA FUNDS By: /s/ George M. Boyd -------------------- George M. Boyd Secretary ALLMERICA, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk ALLMERICA INSTITUTIONAL SERVICES, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk ALLMERICA INVESTMENT MANAGEMENT COMPANY, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk 5 ALLMERICA INVESTMENTS, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk ALLMERICA INVESTMENT TRUST By: /s/ George M. Boyd -------------------- George M. Boyd Secretary ALLMERICA PLUS INSURANCE AGENCY, INC. By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Clerk ALLMERICA PROPERTY & CASUALTY COMPANIES, INC. By: /s/ Richard J. Baker ---------------------- Richard J. Baker Secretary ALLMERICA SECURITIES TRUST By: /s/ George M. Boyd -------------------- George M. Boyd Secretary ALLMERICA SERVICES CORPORATION By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk ALLMERICA TRUST COMPANY, N.A. By: /s/ Charles F. Cronin ----------------------- Charles F. Cronin Secretary 6 AMGRO, INC. By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Clerk APC FUNDING CORP. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk CITIZENS CORPORATION By: /s/ Richard J. Baker ---------------------- Richard J. Baker Secretary CITIZENS INSURANCE COMPANY OF AMERICA By: /s/ Karen Livingston-Wilson ----------------------------- Karen E. Livingston-Wilson Secretary CITIZENS INSURANCE COMPANY OF ILLINOIS By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Secretary CITIZENS INSURANCE COMPANY OF THE MIDWEST By: /s/ Karen E. Livingston-Wilson -------------------------------- Karen E. Livingston-Wilson Secretary 7 CITIZENS INSURANCE COMPANY OF OHIO By: /s/ Karen E. Livingston-Wilson -------------------------------- Karen E. Livingston-Wilson Secretary CITIZENS MANAGEMENT INC. By: /s/ Karen E. Livingston-Wilson -------------------------------- Karen E. Livingston-Wilson Secretary FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary GREENDALE SPECIAL PLACEMENTS FUND By: Allmerica Asset Management, Inc., Trustee By: /s/ Henry L. Ferguson III --------------------------- Henry L. Ferguson III Clerk THE HANOVER AMERICAN INSURANCE COMPANY By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Secretary THE HANOVER INSURANCE COMPANY By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Secretary 8 HANOVER TEXAS INSURANCE MANAGEMENT COMPANY, INC. By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Secretary HANOVER TEXAS INSURANCE MANAGEMENT COMPANY, INC. ATTORNEY-IN-FACT FOR HANOVER LLOYD'S INSURANCE COMPANY By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Secretary LOGAN WELLS WATER COMPANY, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk LLOYDS CREDIT CORP. By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Clerk MASSACHUSETTS BAY INSURANCE COMPANY By: /s/ William J. Cahill, Jr. ---------------------------- William J. Cahill, Jr. Secretary SMA FINANCIAL CORP. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary/Clerk 9 SOMERSET SQUARE, INC. By: /s/ Henry L. Ferguson III --------------------------- Henry L. Ferguson III Secretary/Clerk STERLING RISK MANAGEMENT SERVICES, INC. By: /s/ Abigail M. Armstrong -------------------------- Abigail M. Armstrong Secretary 10 Allmerica Financial Corporation ("Parent") AAM Growth & Income Fund L.L.C. AAM High Yield Fund, L.L.C. AAM Equity Fund AFC CAPITAL TRUST I Allmerica Asset Management, Inc. Allmerica Benefits, Inc. Allmerica Equity Index Pool Allmerica Financial Alliance Insurance Company Allmerica Financial Benefit Insurance Company Allmerica Financial Insurance Brokers, Inc. Allmerica Financial Life Insurance and Annuity Company Allmerica Financial Services Insurance Agency, Inc. Allmerica Funding Corp. Allmerica Funds Allmerica, Inc. Allmerica Institutional Services, Inc. Allmerica Investment Management Company, Inc. Allmerica Investments, Inc. Allmerica Investment Trust Allmerica Plus Insurance Agency, Inc. Allmerica Property & Casualty Companies, Inc. Allmerica Securities Trust Allmerica Services Corporation Allmerica Trust Company, N.A. AMGRO, Inc. APC Funding Corp. Citizens Corporation Citizens Insurance Company of America Citizens Insurance Company of Illinois Citizens Insurance Company of the Midwest Citizens Insurance Company of Ohio Citizens Management Inc. First Allmerica Financial Life Insurance Company Greendale Special Placements Fund The Hanover American Insurance Company The Hanover Insurance Company Hanover Texas Insurance Management Company, Inc. Hanover Lloyd's Insurance Company Logan Wells Water Company, Inc. Lloyds Credit Corp. Massachusetts Bay Insurance Company SMA Financial Corp. Somerset Square, Inc. Sterling Risk Management Services, Inc. 11