EXHIBIT [G]
--------------------------------------------------------------------------------
RENEWAL RIGHTS AGREEMENT
by and among
EACH OF THE SUBSIDIARIES OF ONEBEACON CORPORATION
LISTED ON EXHIBIT A HERETO
and
LIBERTY MUTUAL INSURANCE COMPANY
Dated as of November ___, 2001
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS...................................................1
ARTICLE II. RENEWALS AND TERM.............................................1
ARTICLE III. CONSIDERATION.................................................2
ARTICLE IV. COVENANTS AND AGREEMENTS......................................2
ARTICLE V. DISPUTE RESOLUTIONS...........................................3
ARTICLE VI. MISCELLANEOUS PROVISIONS......................................4
EXHIBITS
Exhibit A Glossary of Terms
Exhibit B Form of Letter to Policyholders
SCHEDULES
Schedule 1 RAM Group Companies
Schedule 4.3 Roll-over Commission Criteria
RENEWAL RIGHTS AGREEMENT
This
RENEWAL RIGHTS AGREEMENT (this "Agreement"), dated as of November
___, 2001, is entered into by each of the insurance company subsidiaries of
OneBeacon Corporation ("OneBeacon") listed on Exhibit A hereto (each a
"OneBeacon Insurer" and collectively, the "OneBeacon Insurers") and Liberty
Mutual Insurance Company, a mutual insurance company organized under the laws of
the Commonwealth of
Massachusetts ("Liberty") on behalf of the RAM Group
Companies.
W I T N E S S E T H
WHEREAS, the Master Agreement, dated as of October __, 2001 by and among
White Mountains Insurance Group, Ltd., OneBeacon Corporation and Liberty Mutual
Insurance Company provides, among other things, for the sale by OneBeacon and
OneBeacon Subsidiaries and purchase by Liberty of certain of the assets of and
rights to the Business; and
WHEREAS, each of the OneBeacon Insurers and Liberty have agreed that, in
accordance with the terms and conditions of this Agreement, each of the
OneBeacon Insurers shall assist in the rewriting of the Insurance Policies and
the Post-Closing Policies by one or more of the RAM Group Companies upon the
terms and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Glossary of Term, which
is attached hereto as Exhibit A and incorporated herein.
ARTICLE II.
RENEWALS AND TERM
Section 2.1 REWRITTEN POLICIES. Until such time as the Transition Plan has
been fully implemented, from and after the Effective Date, each of the OneBeacon
Insurers shall assist the RAM Group Companies in offering Rewritten Policies to
those insureds holding Insurance Policies. Such assistance shall be provided by
each of the OneBeacon Insurers in accordance with terms of this Agreement and
the Post-Closing Serviced Policies Administrative Services Agreement.
Section 2.2 RENEWAL RIGHTS. In connection with the non-renewal of the
Insurance Policies, the Renewal Policies or the Required Renewal Policies by
each of the OneBeacon Insurers in accordance with the terms of the Post-Closing
Serviced Policies Administrative Services Agreement, and to the extent permitted
by applicable law and contractual obligations, Liberty, or its designated
Affiliate, on behalf of each of the OneBeacon Insurers shall, from time to time,
send to each insured, through such Insured's Independent Producer, under each
such policy to whom any of the RAM Group Companies determines to issue a
Rewritten Policy, a written notice substantially in the form of Exhibit B
hereto, or in such other form as the parties hereto shall mutually agree upon
[in writing], informing such insured of this Agreement and encouraging such
insured to have his or her policy rewritten by one of the RAM Group Companies.
Section 2.3 TERM. This Agreement shall commence on the Effective Date and
shall terminate on the earlier to occur of (i) one year following full
implementation of the Transition Plan, or (ii) December 31, 2006.
ARTICLE III.
CONSIDERATION
Section 3.1 CONSIDERATION. In consideration for this Agreement, on March
15, 2004, Liberty shall pay to the OneBeacon Insurers an aggregate amount equal
to 3% of the direct written premium generated by the Rewritten Policies, the
Renewal Policies and the Required Renewal Policies with effective dates which
fall during the twelve month period ending December 31, 2003.
ARTICLE IV.
COVENANTS AND AGREEMENTS
Section 4.1 EXPENSES. The parties to this Agreement shall bear their
respective expenses incurred in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated hereby.
2
Section 4.2 EXAMINATION OF THE BOOKS AND RECORDS. Following the
termination of this Agreement, Liberty and the RAM Group Companies shall be
entitled, through their employees, counsel, accountants, or other
representatives, to make such examination of the Books and Records (to the
extent not in the possession of the applicable RAM Group Company) as any of the
RAM Group Companies may reasonably request for the purpose of effectuating the
Rewritten Policies; PROVIDED, that a representative from the OneBeacon Insurers
shall have the right to be present during such examination. Any such examination
shall be conducted during normal business hours and upon reasonable prior
notice.
Section 4.3 ROLL-OVER COMMISSION. Liberty agrees to pay a roll-over
commission to qualifying agents ranging from 0% to 10% of the direct written
premium received on each Rewritten Policy and on each Renewal Policy; PROVIDED,
that no agent shall be entitled to a roll-over commission on any Rewritten
Policy that was a Renewal Policy. The roll-over commission shall be paid to each
qualifying agent based upon the profitability of the relevant policies sold by
such agent and other criteria established by Liberty and set forth on SCHEDULE
4.3 attached hereto. The OneBeacon Insurers agree to share the cost of the agent
roll-over commission equally with Liberty up to a maximum aggregate amount of
$20 million payable by the OneBeacon Insurers. [Provide language on payment to
delinquent agents.]
Section 4.4 ISSUANCE AND RENEWAL OF INSURANCE POLICIES AND POST-CLOSING
POLICIES. Except as provided in the Post-Closing Serviced Policies
Administrative Services Agreement, each of the OneBeacon Insurers covenant and
agree not to issue or renew any Insurance Policies or Post-Closing Policies.
Section 4.5 FURTHER ASSURANCES. During and after the term of this
Agreement, without further consideration, each of the parties shall execute such
documents and other papers, and take such further actions as may be reasonably
required or desirable or required under the state insurance laws to carry out
the provisions hereof and the transactions contemplated hereby.
ARTICLE V.
DISPUTE RESOLUTIONS
Section 5.1 DISPUTE RESOLUTION. As a condition precedent to any right of
action hereunder, if any dispute shall arise between the OneBeacon Insurers and
Liberty with reference to the interpretation or performance of this Agreement,
including the formation or validity thereof, or their rights with respect to any
transaction involved, whether such dispute arises before or after the
termination of this Agreement, such dispute, upon the written request of either
party, shall be submitted for resolution by arbitration. Within 30 days after
receipt of such written request, each party shall select one arbitrator (for a
total of two), and such selected arbitrators shall select a third arbitrator
within 60 days after receipt of such written request for arbitration. If either
party fails to select an arbitrator within such time period, the arbitrator that
was timely selected by the other party shall serve as the sole arbitrator. If
the two arbitrators fail to agree upon the selection of a third arbitrator
within the time limit allowed, the third arbitrator shall be selected by the two
arbitrators from a panel of five arbitrators proposed by the American
Arbitration Association or, if the two arbitrators fail to agree upon a
selection within 10 days, the
3
third arbitrator shall be selected in accordance with the rules of the American
Arbitration Association. All arbitrators shall be active or retired
disinterested officers of a property and casualty insurance or reinsurance
company. No arbitrator shall be or have been affiliated with or employed by any
party hereto or their respective Affiliates.
The arbitrators shall interpret this Agreement as an honorable engagement
and not merely as a legal obligation; they are relieved of all judicial
formalities and may abstain from following the strict rules of law and they
shall make their award with a view to effecting the general purpose of this
Agreement in a reasonable manner rather than in accordance with a literal
interpretation of the language. The arbitration shall occur in Boston,
Massachusetts or a mutually acceptable location. The arbitrators shall make
their determination within 60 days after the appointment of the last arbitrator.
The decision of any two arbitrators, or of the sole arbitrator in the
event of untimely appointment, when filed with the parties hereto, shall be
final and binding on both parties and need not be in writing; PROVIDED that the
amount of the award, if any, shall be in writing by the arbitrator or
arbitrators as the case may be. Judgment may be entered upon the final decision
of the arbitrators in any court having jurisdiction. The final judgment of the
arbitrators and any award rendered thereon, shall not be subject to appeal.
Unless otherwise provided in the arbitration award, each party shall bear
the expense of its own arbitrator and shall jointly and equally bear with the
other party the expense of the third arbitrator and of the arbitration. If the
panel consists of only one arbitrator due to the failure of one party to timely
appoint an arbitrator, the party that appointed such arbitrator shall be
responsible for the fees and expenses of such arbitrator.
ARTICLE VI.
MISCELLANEOUS PROVISIONS
Section 6.1 HEADINGS. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.
Section 6.2 EXHIBITS. The Exhibits to this Agreement that are specifically
referred to herein are a part of this Agreement as if fully set forth herein.
All references herein to articles, sections, subsections, paragraphs,
subparagraphs, clauses and Exhibits shall be deemed references to such parts of
this Agreement, unless the context shall otherwise require.
Section 6.3 NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be deemed given if delivered
personally, by facsimile (which is confirmed) with a duplicate copy sent by
overnight courier (providing proof of delivery) or sent by overnight courier
(providing proof of delivery), to the parties at the following address:
4
If to OneBeacon Subsidiaries:
OneBeacon Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Facsimile: [ ]
If to Liberty:
Liberty Mutual Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may, by notice given in accordance with this Section 6.3 to the
other parties, designate another address or person for receipt of notices
hereunder; PROVIDED, that notice of such a change shall be effective upon
receipt.
Section 6.4 BINDING EFFECT; ASSIGNMENT. This Agreement will be binding
upon and inure to the benefit of Liberty and the OneBeacon Insurers and their
respective successors, assigns and legal representatives. Neither this
Agreement, nor any rights, interests or obligations hereunder, may be assigned,
in whole or in part, by operation of law or otherwise, by any party without the
prior written consent of the other party and any such assignment that is not
consented to shall be null and void.
Section 6.5 EXECUTION IN COUNTERPARTS. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute the same instrument.
Section 6.6 WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES; PRESERVATION
OF REMEDIES. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by each of the OneBeacon Insurers and Liberty or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or
privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.
5
Section 6.7 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED AS TO
FORMATION, PERFORMANCE, INTERPRETATION AND ENFORCEMENT BY THE LAWS OF THE
COMMONWEALTH OF
MASSACHUSETTS WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS
PRINCIPLES.
Section 6.8 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no general or specific warranties, representations or other agreements by or
among the parties in connection with the entering into of this Agreement or the
subject matter hereof except as specifically set forth or contemplated herein or
therein.
Section 6.9 NEGOTIATED AGREEMENT. This Agreement has been negotiated by
the parties and the fact that the initial and final draft has been prepared by
either party or an intermediary will not give rise to any presumption for or
against any party to this Agreement or be used in any respect or forum in the
construction or interpretation of this Agreement or any of its provisions.
Section 6.01 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, OneBeacon and Liberty directs that such court interpret
and apply the remainder of this Agreement in the manner that it determines most
closely effectuates their intent in entering into this Agreement, and in doing
so particularly take into account the relative importance of the term,
provision, covenant or restriction being held invalid, void or unenforceable.
Section 6.11 INTERPRETATION. Whenever the words "include," "includes," or
"including," are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives.
[ONEBEACON INSURERS]
By:
-------------------------------------------
Name:
Title:
LIBERTY MUTUAL INSURANCE COMPANY
By:
-------------------------------------------
Name:
Title:
7
EXHIBIT A
Glossary of Terms
EXHIBIT B
Form of Letter to Policyholders
NOTICE DATE: ____________
[Name of OneBeacon Insurance Subsidiary]
Dear Policyholder:
As [Name of Agent] has advised you, [Name of OneBeacon Insurer] is no
longer writing [line of business] business in this state. As such, [Name of
OneBeacon Insurer] will be non renewing your current [Name of OneBeacon Insurer,
line of business] policy upon its expiration.
We are pleased to announce, however, that your agent will be providing you
with a quote from [Name of RAM Group Company] prior to the expiration of your
[Name of OneBeacon Insurer, line of business] policy. Your agent will be
enclosing with this letter information about [Name of RAM Group Company] that
will introduce you to both the company and to its product offerings. If you have
any questions, or would like any additional information about [Name of RAM Group
Company], please contact your agent.
In addition, your agent will be providing you with a comparison of the
terms and conditions of your current [Name of OneBeacon Insurer] policy to a
similar [line of business] policy offered by [Name of RAM Group Company]. Your
agent will be able to answer any questions you may have regarding any
differences in terms, conditions, coverages and premium rates between your
current policy with [Name of OneBeacon Insurer] and the policy being offered by
[name of RAM Group Company].
We have appreciated the opportunity to have been of service to you. Again,
please do not hesitate to contact your agent if you have any questions about
this letter or [Name of RAM Group Company].
Sincerely,
[OneBeacon Subsidiary]
By:
-------------------------------------------
Name:
Title:
cc: Agent
SCHEDULE 1
RAM Group Companies
[Note: List to indicate that Oregon Auto and North Pacific shall be included in
the RAM Group Companies upon the closing of the Stock Purchase Agreement.]
SCHEDULE 4.3
Roll-over Commission Criteria
