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Execution Copy
ASSUMPTION REINSURANCE AGREEMENT
By and Between
▇▇▇▇ ▇▇▇▇▇ LIFE INSURANCE COMPANY
and
SUNAMERICA LIFE INSURANCE COMPANY
Dated as of March 31, 1997
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TABLE OF CONTENTS
Page
ARTICLE 1
ASSUMPTION; INDEMNIFICATION............................................................................ -3-
ARTICLE 2
NOTICES; ASSUMPTION CERTIFICATES; NOVATIONS............................................................ -4-
2.1 Policyholder Consent Required........................................................ -4-
2.2 Policyholder Consent Not Required.................................................... -5-
2.3 Compliance of Forms.................................................................. -6-
2.4 Effective Date of Novation........................................................... -6-
2.5 Costs of Compliance.................................................................. -8-
ARTICLE 3
APPROVALS.............................................................................................. -8-
Section 3.1 Regulatory Approvals............................................... -8-
ARTICLE 4
TRANSFER OF POLICY LIABILITIES......................................................................... -9-
Section 4.1 Novation........................................................... -9-
Section 4.2 Effect of Novation................................................. -9-
Section 4.3 Forwarding of Premiums and Other
Payments by Reinsured.............................................. -10-
ARTICLE 5
EFFECT ON EXISTING REINSURANCE......................................................................... -12-
ARTICLE 6
FURTHER ASSURANCES..................................................................................... -13-
Section 6.1 Further Assurances................................................. -13-
ARTICLE 7
RECORDS AND ACCOUNTING................................................................................. -13-
Section 7.1 Books and Records.................................................. -13-
ARTICLE 8
RESERVED............................................................................................... -15-
ARTICLE 9
MISCELLANEOUS.......................................................................................... -15-
Section 9.1 Notices............................................................ -15-
Section 9.2 Integration........................................................ -17-
Section 9.3 Amendments......................................................... -19-
Section 9.4 Waivers............................................................ -19-
Section 9.5 Governing Law...................................................... -20-
Section 9.6 Arbitration........................................................ -20-
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Section 9.7 Binding Effect; Assignment; Third
Party Beneficiaries............................................... -22-
Section 9.8 Severability...................................................... -23-
Section 9.9 Headings.......................................................... -24-
Section 9.10 Counterparts...................................................... -24-
Section 9.11 Errors and Omissions.............................................. -25-
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SCHEDULES: Schedule 5.1 - Reinsurance Agreements
EXHIBITS:
Exhibit A - Notice of Transfer
Exhibit B - Assumption Certificate
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ASSUMPTION REINSURANCE AGREEMENT
ASSUMPTION REINSURANCE AGREEMENT (the "Agreement") dated as of March
31, 1997 (the "Closing Date"), by and between ▇▇▇▇ ▇▇▇▇▇ Life Insurance Company,
a Minnesota corporation ("Ceding Company"), and SunAmerica Life Insurance
Company, an Arizona corporation ("Reinsurer").
WHEREAS, Ceding Company is engaged in, among other businesses, the
business of selling, issuing and administering annuity policies and related
activities in the United States other than the State of New York (the "Annuity
Business");
WHEREAS, Reinsurer is engaged in, among other businesses, the business
of selling, issuing and administering annuity policies and related activities in
certain states of the United States;
WHEREAS, Ceding Company and Reinsurer are parties to an Asset Purchase
and Sale Agreement dated as of November 29, 1996 as amended by Amendment No. 1
dated as of March 31, 1997, and as may be subsequently amended from time to time
(as amended, the "Asset Purchase Agreement"), which provides for the transfer to
Reinsurer of certain assets used in the Annuity Business (all capitalized terms
used herein and not otherwise defined shall have the meanings ascribed thereto
in the Asset Purchase Agreement, except that for purposes of the terms
"Insurance Liabilities," "Other Liabilities" and "Extra Contractual
Obligations," the words "Annuity Contracts" shall be replaced with the term
"Policies");
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WHEREAS, the Asset Purchase Agreement contemplates that Reinsurer will
reinsure the Insurance Liabilities of Ceding Company arising under the Annuity
Contracts on the terms and conditions set forth herein and in the Indemnity
Reinsurance Agreement;
WHEREAS, pursuant to an Indemnity Reinsurance Agreement, Ceding Company
has ceded on a coinsurance basis Ceding Company's Insurance Liabilities and
Other Liabilities arising under the Annuity Contracts after the Closing Date and
under the Additional Policies (as defined in the Indemnity Reinsurance
Agreement) on the terms and conditions set forth therein pending assumption of
the Annuity Contracts and Additional Policies (other than those Annuity
Contracts and Additional Policies reinsured under the RSL Agreements, which
Annuity Contracts and Additional Policies shall not be assumed by Novation by
Reinsurer but shall only be ceded to Reinsurer on a coinsurance basis) (the
"Policies") as contemplated in this Agreement.
WHEREAS, on the Novation Date (as defined herein), Ceding Company
desires to assign and transfer the rights and Insurance Liabilities of the
Policies to Reinsurer on an assumption reinsurance basis on the terms and
conditions set forth herein.
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WHEREAS, Reinsurer desires to assume the rights and Insurance
Liabilities of the Policies on the terms and conditions set forth herein; and
WHEREAS, it is a condition to the obligations of the parties under the
Asset Purchase Agreement that Ceding Company and Reinsurer enter into this
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and other good, valuable and
sufficient consideration including the consideration provided by the Asset
Purchase Agreement, the receipt and sufficiency of which are hereby
acknowledged, Reinsurer and Ceding Company (collectively, the "Parties" and,
sometimes individually a "Party"), intending to be legally bound, hereby agree
as follows:
ARTICLE 1
ASSUMPTION; INDEMNIFICATION
Ceding Company hereby agrees to sell, cede and convey all of its right,
title and interest in and to the Policies to Reinsurer, and Reinsurer, subject
to the terms and conditions set forth herein, hereby agrees to accept and
reinsure, on an assumption basis, all (100%) of the Insurance Liabilities and
the Other Liabilities, but no other liabilities or obligations of any nature
whatsoever, fixed or contingent, known or unknown. Without limiting the
foregoing, Reinsurer shall not
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accept and reinsure the Excluded Liabilities or Extra Contractual Obligations
arising out of or with respect to the Policies.
Ceding Company will indemnify and hold harmless the Reinsurer in
accordance with the terms of the Asset Purchase Agreement against all
liabilities other than the Insurance Liabilities and the Other Liabilities.
ARTICLE 2
NOTICES; ASSUMPTION CERTIFICATES; NOVATIONS
Section 2.1 Policyholder Consent Required. The provisions of this
Section 2.1 shall apply in those states in which the consent of the holder of a
Policy (each, a "Policyholder") is required for the assumption of the Policies
by the Reinsurer.
(a) Policyholder Notice. Promptly following the receipt of all
required regulatory approvals in a particular state (or promptly after the
Closing Date with respect to those states in which regulatory approval is not
required), Reinsurer shall prepare for mailing to each holder of an Annuity
Contract or Additional Policy which did not have an assumption endorsement
attached when issued in each such state an option letter, including a rejection
form, substantially in the form of Exhibit A attached hereto (the "Policyholder
Notices").
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Reinsurer will use its best efforts to distribute such
Policyholder Notices promptly to each such Policyholder. Each Policyholder
Notice shall be dated the date upon which it is mailed. Reinsurer shall use
commercially reasonable efforts to obtain the consent of each such Policyholder
to the assumption by Reinsurer of the Policyholder's Policy. Ceding Company
shall provide such assistance to Reinsurer as Reinsurer shall reasonably request
in order to obtain such consents.
(b) Certificate of Assumption. The Reinsurer shall also
prepare and mail a certificate of assumption substantially in the form of
Exhibit B attached hereto (the "Certificate of Assumption") to Policyholders
resident in states which require the mailing of a separate Certificate of
Assumption. Such certificates may be mailed separately or together with the
Policyholder Notice at the option of the Reinsurer, but subject to any
applicable regulatory requirements.
Section 2.2 Policyholder Consent Not Required. In those states in which
the consent of a Policyholder is not required for this assumption of the
Policies by the Reinsurer, Reinsurer shall prepare and mail to each such
Policyholder a Certificate of Assumption. The Certificate of Assumption shall be
mailed promptly following the receipt of any regulatory approval required with
respect to such certificate
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(or immediately following the Closing Date if no such approval is required).
Reinsurer will use its commercially reasonable efforts to distribute such
Certificates of Assumption promptly to each such Policyholder.
Section 2.3 Compliance of Forms. Notwithstanding the form of Exhibit A
and Exhibit B referred to in this Article 2. Ceding Company and Reinsurer agree
that such exhibits will be modified for use in the various states to the extent
required to comply with local regulatory requirements or as agreed to by Ceding
Company and Reinsurer.
Section 2.4 Effective Date of Novation. Unless a rejection of
assumption has been received from a Policyholder, a Policy assumed by Reinsurer
pursuant to this Agreement shall be deemed to have effected a Novation as
follows (each, a "Novated Contract"):
(a) With respect to those states which have enacted the
Assumption Reinsurance Model Act promulgated by the National
Association of Insurance Commissioners (the "Model Act"), unless
expressly rejected before the date of deemed Novation as provided
herein, an Annuity Contract will be deemed to have been novated upon
the earlier to occur of (i) the first day of the month immediately
following the date that the Policyholder's consent to such Novation
arrives at the Reinsurer's administrative office, or (ii) the first day
of the month
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immediately following the second anniversary of the date on which the
Policyholder Notice was mailed to such Policyholder (the "Second
Anniversary"), unless a second notice is required to be mailed, in
which case the date of Novation will be the first day of the month
immediately following the Second Anniversary. Notwithstanding the above
sentence, no Novation shall be effective prior to the earliest date
specified by the Reinsurer for Novation in such state; provided,
however, that Reinsurer shall use commercially reasonable efforts to
obtain Novations.
(b) With respect to those states which have not enacted the
Model Act but which otherwise impose advance notice or consent
requirements, a Policy will be deemed to have been novated upon the
earliest date specified in the Policyholder Notice. Notwithstanding the
above sentence, no Novation shall be effective prior to the earliest
date specified by the Reinsurer for Novation in such state; provided,
however, that Reinsurer shall use commercially reasonable efforts to
obtain Novations.
(c) With respect to those states which do not require express
acceptance of the assumption by a Policyholder or where advance notice
of the assumption is not otherwise required, the Novation will be
deemed
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effective as of the date specified in the mailing of the
Certificate of Assumption.
(d) As used herein, a Novation is the substitution of
Reinsurer for Ceding Company as obligor with respect to a Policy and
the release of Ceding Company as obligor on such Policy (but only with
respect to the Insurance Liabilities), with the effects set forth in
Section 4.2 hereof.
The effective date of Novation with respect to a particular
Policy as provided above shall be deemed the "Novation Date" with respect to
such contract.
Section 2.5 Costs of Compliance. The costs and expenses of compliance
with this Article 2 will be borne by Reinsurer, including out of pocket expenses
incurred by Ceding Company in the provision of assistance at the request of
Reinsurer.
ARTICLE 3
APPROVALS
Section 3.1 Regulatory Approvals. Reinsurer shall diligently pursue and
use its commercially reasonable efforts to obtain necessary regulatory approval
in all applicable states to the transactions contemplated hereby (other than any
approvals that relate solely to Ceding Company, which Ceding Company shall use
its commercially reasonable efforts to obtain). Ceding Company shall provide
such assistance to
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Reinsurer as Reinsurer shall reasonably request in order to obtain such
approvals. Reinsurer shall bear the cost of obtaining required insurance
regulatory approvals, consents and orders (other than any approvals that relate
solely to Ceding Company) necessary to permit Ceding Company and Reinsurer to
execute, deliver and perform this Agreement.
ARTICLE 4
TRANSFER OF POLICY LIABILITIES
Section 4.1 Novation. Notwithstanding any provision of this Agreement
to the contrary, in the event that a Policy defined herein as a Novated Contract
is determined by an applicable regulatory authority or by judicial decision (in
either case, following the exhaustion of all rights of appeal) to be not novated
from Ceding Company to Reinsurer, such Policy shall for all purposes of this
Agreement be deemed retroactive to the respective effective dates of Novation to
not have been assumed by Reinsurer and the holder of such Policy shall have no
direct right of action against Reinsurer with respect to such Policy. Reinsurer
may prepare a new form of policyholder notice and certificate of assumption
believed by Reinsurer to be sufficient to obtain a Novation of any Policies
judicially determined to be not novated and may deliver same to all
policyholders of such Policies.
Section 4.2 Effect of Novation. Subject to this Section 4.2, Reinsurer
shall be the successor to Ceding
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Company under the Novated Contracts as if the Novated Contracts were direct
obligations originally issued by Reinsurer. Subject to this Section 4.2,
Reinsurer shall be substituted in the place and stead of Ceding Company, and
each holder of a Novated Contract shall be entitled to disregard Ceding Company
as a party thereto and treat Reinsurer as if it had been originally obligated
thereunder. On or after the effective date of such Novation, the holders of
Novated Contracts shall have the right to file claims arising under the Novated
Contracts directly with Reinsurer and shall have a direct right of action
against Reinsurer for the Insurance Liabilities. Reinsurer hereby consents to be
subject to direct action taken by any such holders under a Novated Contract with
respect to the Insurance Liabilities. Reinsurer accepts and assumes the Novated
Contracts subject to any and all defenses, setoffs and counterclaims to which
Ceding Company would be entitled with respect to Insurance Liabilities, it being
expressly understood and agreed by the Parties that no such defenses, setoffs or
counterclaims are waived by the execution of this Agreement or the consummation
of the transactions contemplated hereby and that Reinsurer shall be fully
subrogated to all such defenses, setoffs and counterclaims.
Section 4.3 Forwarding of Premiums and Other Payments by Reinsured.
Premiums due or paid with respect to the
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Novated Contracts on and after the relevant Novation Date, and any loan
repayments (and interest payments thereon) made on the Novated Contracts on and
after the relevant Novation Date, shall be the sole property of Reinsurer. From
and after the relevant Novation Date, all holders under the Novated Contracts
shall pay all premiums and make any loan repayments (and interest payments
thereon) on their Policies directly to Reinsurer. All such payments received by
Ceding Company related to Novated Contracts after the relevant Novation Date
shall be delivered to Reinsurer, together with information, if available,
regarding the payor, nature of payment, policy number and period with respect to
which the payment relates. Reinsurer will assume all obligations to administer
the Novated Contracts.
Ceding Company agrees that, after the respective Novation
Dates of the Novated Contracts, it will forward to Reinsurer immediately upon
receipt all notices and other written communications received by it relating to
Novated Contracts (including, without limitation, all inquiries or complaints
from state insurance regulators, agents, brokers and policyholders and all
notices of claims, suits and actions for which it receives service of process).
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ARTICLE 5
EFFECT ON EXISTING REINSURANCE
Schedule 5.1 sets forth all reinsurance or co-insurance agreements
(together with all other agreements related thereto) related to the Annuity
Contracts to which Ceding Company is a party and all such contracts,
arrangements, treaties, understandings and agreements under which Ceding Company
has any obligation to cede or assume insurance (the "Reinsurance Agreements").
As of the Closing Date, the assignment and Novation to Reinsurer of the
reinsurance agreements and related agreements between Ceding Company and all
third party reinsurers related to the Annuity Contracts naming Reinsurer as a
direct party to each such agreement with respect to rights of the Ceding Company
and the Insurance Liabilities and Other Liabilities has been obtained. The
collectability of reinsurance payable to Reinsurer under the Reinsurance
Agreements shall be at the sole risk and for the account of Reinsurer.
Notwithstanding the foregoing, nothing contained herein is intended to require
Reinsurer to assume by Novation the Annuity Contracts and Additional Policies
reinsured under the RSL Agreements, which Annuity Contracts and Additional
Policies shall be ceded to Reinsurer on a coinsurance basis only.
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ARTICLE 6
FURTHER ASSURANCES
Section 6.1 Further Assurances. From time to time after the date
hereof, without further consideration, each Party shall execute and deliver such
other instruments of assumption, conveyance, assignment, transfer and delivery,
and take such other action as the other Party reasonably requests, in order to
more effectively accomplish the Novation of the Policies contemplated herein.
ARTICLE 7
RECORDS AND ACCOUNTING
Section 7.1 Books and Records.
(a) Following the Closing Date, Ceding Company shall (i) allow
Reinsurer, upon reasonable prior notice and during regular business hours,
through its employees and Representatives (as defined in the Asset Purchase
Agreement), at Reinsurer's expense to examine and make copies of any books and
records retained by Ceding Company within its possession or control ("control"
for the purposes of this Section 7.1(a) being defined as the ability to cause
delivery to Ceding Company or access to Reinsurer) and furnish Reinsurer with
such financial and reporting data and other information with respect to the
Policies as Reinsurer may from time to time reasonably request, to the extent
they relate to the Annuity Business, for any reasonable business purpose,
including,
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without limitation, the preparation or examination of tax returns, regulatory
filings and financial statements and the conduct of any Action, whether pending
or threatened concerning the Annuity Business at Ceding Company's offices or
other facilities or properties and (ii) maintain such books and records for
Reinsurer's examination and copying. Access to such books and records shall be
at Reinsurer's expense, may not unreasonably interfere with Ceding Company's or
any successor company's business operations and Reinsurer shall reimburse Ceding
Company for all reasonable out-of-pocket expenses incurred by Ceding Company in
copying such records. Ceding Company shall retain such books and records for a
period of at least seven years (extended by a period equal to any extension of
the statute of limitations with respect to tax matters with respect to which
such books and records are necessary and of which Reinsurer shall notify Ceding
Company), after which time such books and records shall be delivered to
Reinsurer. Reinsurer shall not copy or remove from Ceding Company's premises the
accountant's work papers made available to Reinsurer and its Representatives.
(b) Following the Closing Date, Reinsurer shall (i) allow
Ceding Company, upon reasonable prior notice and during regular business hours,
through its employees and other Representatives, at Ceding Company's expense to
examine and make copies of the books and records transferred to Reinsurer
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at the Closing for any reasonable business purpose, including, without
limitation, the preparation or examination of tax returns, regulatory filings
and financial statements and the conduct of any Action or the conduct of any
regulatory, contract holder, participant or other dispute resolution, whether
pending or threatened, at Reinsurer's offices or other facilities or properties
and (ii) maintain such books and records for Ceding Company's examination and
copying. Access to such books and records shall be at Ceding Company's expense
and may not unreasonably interfere with Reinsurer's or any successor company's
business operations and Ceding Company shall reimburse Reinsurer for all
reasonable out-of-pocket expenses incurred by Reinsurer in copying such records.
Reinsurer shall retain any such books and records for a period of at least seven
years (extended by a period equal to any extension of the statute of limitations
with respect to tax matters with respect to which such books and records are
necessary and of which Ceding Company shall notify Reinsurer).
ARTICLE 8
RESERVED
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices. Any notice or other communication required or
permitted hereunder shall be
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delivered personally (by courier or otherwise), sent by certified, registered or
express mail, postage prepaid and return receipt requested, or transmitted by
facsimile, (with a copy of such notice or other communication and a confirmation
of a transmission sent by certified, registered or express mail, postage prepaid
and return receipt requested no later than the close of business on the next
business day following such transmission), and shall be addressed as follows:
when Reinsurer is to be notified:
SunAmerica Life Insurance Company
▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
SunAmerica Life Insurance Company
▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Controller
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
O'Melveny & ▇▇▇▇▇
1995 Avenue of the Stars
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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when Ceding Company is to be notified:
▇▇▇▇ ▇▇▇▇▇ Life Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
A Party may, by notice given in accordance with this Section 9.1 to the other
Party, designate another address or Person to which notices required or
permitted to be given pursuant to this Agreement shall thereafter be
transmitted. Each notice transmitted in the manner described in this Section 9.1
shall be deemed to have been given, received and become effective for all
purposes at the time it shall have been (i) delivered to the addressee as
indicated by the return receipt (if transmitted by mail), transmitted to the
addressee (if transmitted by facsimile and subject to delivery of the mailed
copy thereof) or the affidavit of the messenger (if transmitted by personal
delivery) or (ii) presented for delivery to the addressee as so indicated during
normal business hours, if such delivery shall have been refused for any reason.
Section 9.2 Integration. This Agreement (including the Exhibits and the
Schedules attached hereto), along with
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the JANY Stock Purchase Agreement, the Asset Purchase Agreement including the
Ancillary Agreements and other agreements contemplated hereby and thereby, the
Annex, the Exhibits and the Schedules attached thereto (as each defined therein)
(the "Transaction Agreements"), contains the entire agreement and understanding
between the Parties with respect to the subject matter hereof and cancels and
supersedes all of the previous or contemporaneous agreements, Representations,
warranties and understandings, whether written or oral, by or between the
Parties with respect to the subject matter hereof. Nothing contained in any
document or instrument of conveyance, transfer, assignment or delivery executed
or delivered at the Closing pursuant to this Agreement shall amend, extend,
modify, renew or alter in any manner any representation, warranty, covenant,
agreement or indemnity contained herein. Nothing contained in the Transaction
Agreements or any other agreements contemplated hereby or thereby shall
constitute or be interpreted or construed as an admission by any Party or any of
its Affiliates, of liability to third parties, whether under any Laws, or as an
admission that any Party or any of its Affiliates are in violation of or have
ever violated any Laws. In the event of any conflict between this Agreement and
the Asset Purchase Agreement, the Asset Purchase Agreement shall control. In the
event of any ambiguity (or inconsistency with the Asset Purchase Agreement) in
this
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Agreement, such ambiguity or inconsistency shall be resolved by reference to the
Asset Purchase Agreement.
Section 9.3 Amendments. No addition to, and no cancellation, renewal,
extension, modification or amendment of or approval under, this Agreement shall
be binding upon a Party unless such addition, cancellation, renewal, extension,
modification, amendment or approval is set forth in a written instrument which
states that it adds to, amends, cancels, renews or extends this Agreement or
grants an approval hereunder and which is executed and delivered on behalf of
each Party by an officer of, or attorney-in-fact for, such Party.
Section 9.4 Waivers. No waiver of any provision of this Agreement shall
be binding upon a Party unless such waiver is expressly set forth in a written
instrument which is executed and delivered on behalf of such Party by an officer
of, or attorney-in-fact for such Party. Such waiver shall be effective only to
the extent specifically set forth in such written instrument. Neither the
exercise (from time to time or at any time) nor the delay or failure (at any
time or for any period of time) to exercise any right, power or remedy shall
operate as a waiver of, the right to exercise, or impair, limit or restrict the
exercise on the part of any Party of any such right, power or remedy or any
other right, power or remedy at any time and from time to time thereafter.
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No waiver of any right, power or remedy of a Party shall be deemed to be a
waiver of any other right, power or remedy of such Party or shall, except to the
extent so waived, impair, limit or restrict the exercise of such right, power or
remedy.
Section 9.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS OF THEREOF. Each Party consents
and submits to the non-exclusive personal jurisdiction of any federal court in
the State of Delaware in respect of any proceeding for the sole purpose of
injunctive relief or to enforce an arbitration award under Section 9.6 hereof.
Each Party consents to service of process upon it with respect to any such
proceeding by registered mail, return receipt requested, and by any other means
permitted by applicable Laws. Each Party waives any objection that it may now or
hereafter have to the laying of venue of any such proceeding in federal court in
the State of Delaware and any claim that it may now or hereafter have that any
such proceeding in any such court has been brought in an inconvenient forum.
Section 9.6 Arbitration. The Parties acknowledge and agree that the
transactions contemplated herein, as well as the issuance of and payment of
claims relating to the Annuity Contracts that are the subject of this Agreement,
substantially affect and impact interstate commerce.
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Therefore, all disputes or differences between Ceding Company and Reinsurer
arising under or which are related to this Agreement (other than proceedings for
the sole purpose of injunctive relief or to enforce an arbitration award set
forth in Section 9.5 above) upon which an amicable understanding cannot be
reached within thirty (30) days shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
except as hereinafter provided, and judgment upon the award entered by the
Arbitrators (as defined below) may be entered in any court having jurisdiction
thereof. The Arbitrators provided for herein shall construe this Agreement in
light of the prevailing custom and practices for acquisition transactions of a
similar nature. The "Arbitrators" shall consist of one neutral arbitrator (or as
provided below, three neutral arbitrators). The Parties agree that the
arbitration, if implemented under this Agreement, shall be held at a site
selected by the Arbitrators. The Parties agree to arbitrate within ninety (90)
days following the transmittal of written demand of either Party to arbitrate
any dispute arbitrable under this Agreement. The Parties will in good faith,
within fifteen (15) days following notice of written demand to arbitrate attempt
to agree on a single Arbitrator. If the Parties cannot within fifteen (15) days
thereafter agree on a single arbitrator, each of the Parties shall appoint an
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Arbitrator, notifying the other Party of the name and address of such
Arbitrator. The Arbitrators appointed by each Party shall agree upon and appoint
a third neutral Arbitrator. If either Party shall fail to appoint an Arbitrator
as herein provided, or should the two Arbitrators so named fail to select the
third Arbitrator within thirty (30) days of their appointment, then, in either
event, the President of the American Arbitration Association or its successor
shall appoint such second and/or third Arbitrator. A decision of a majority of
the Arbitrators shall be final and binding and there shall be no appeal
therefrom. The Arbitrators shall within forty-five (45) days after the final
hearing enter an award and the award shall be supported by a written opinion.
The fees of the Arbitrators and the direct costs of the arbitration shall be
shared equally by the Parties; all other costs of the respective Parties,
including without limitation fees and expenses of the respective Party's
attorneys, witnesses, and discovery shall be paid by the respective Party,
except to the extent that the Arbitrators otherwise direct based on the equities
of the situation. The arbitration shall be held in New York, New York unless
otherwise agreed between the Parties.
Section 9.7 Binding Effect; Assignment; Third Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors
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and permitted assigns. Neither Ceding Company nor Reinsurer shall assign any of
its rights or delegate any of its duties hereunder, (in whole or in part and by
operation of law or otherwise) without the prior written consent of the other
Party hereto except that Reinsurer may assign its rights and obligations under
this Agreement to any of its Affiliates provided Reinsurer shall remain liable
for its obligations hereunder notwithstanding such assignment; and provided
further that this Section 9.7 shall not limit the right of Reinsurer to reinsure
or coinsure Novated Contracts or to cause such Novated Contracts to be novated
to another insurer. Any assignment of rights or delegation of duties under this
Agreement by a Party without the prior written consent of the other Party, if
such consent is required hereby, shall be void. No Person (including, without
limitation, any employee of a Party) shall be, or be deemed to be, a third party
beneficiary of this Agreement.
Section 9.8 Severability. If any provision of this Agreement shall
hereafter be held to be invalid, unenforceable or illegal, in whole or in part,
in any jurisdiction under any circumstances for any reason, (i) such provision
shall be reformed to the minimum extent necessary to cause such provision to be
valid, enforceable and legal while preserving the intent of the Parties as
expressed in, and the benefits to the Parties provided by, this Agreement or
(ii) if such
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provision cannot be so reformed, such provision shall be severed from this
Agreement and an equitable adjustment shall be made to this Agreement
(including, without limitation, addition of necessary further provisions to this
Agreement) so as to give effect to the intent as so expressed and the benefits
so provided. Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or under
any other circumstances. Neither such holding nor such reformation or severance
shall affect or impair the legality, validity or enforceability of any other
provision of this Agreement.
Section 9.9 Headings. The headings in this Agreement have been inserted
for convenience of reference only, and shall not be considered a part of this
Agreement and shall not limit, modify or affect in any way the meaning or
interpretation of this Agreement.
Section 9.10 Counterparts. This Agreement may be executed by the
parties in any number of counterparts, each of which when so executed and
delivered shall constitute an original instrument, but all such counterparts
shall together constitute one and the same instrument. This Agreement shall
become effective and deemed to have been executed and delivered by all of the
Parties at such time as counterparts shall have been executed and delivered by
both of the Parties, regardless of whether each of the Parties has executed the
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same counterpart. It shall not be necessary when making proof of this Agreement
to account for any counterparts other than a sufficient number of counterparts
which, when taken together, contain signatures of both of the Parties.
Section 9.11 Errors and Omissions. Inadvertent delays, errors or
omissions made by either Ceding Company or Reinsurer in connection with this
Agreement or any transaction hereunder shall not relieve the other party from
any liability which would have attached to such party had such delay, error or
omission not occurred, provided that the party causing such delay error or
omission rectifies the same as soon as possible after its discovery thereof.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
REINSURER: SUNAMERICA LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Title: Senior Vice President
-------------------------
CEDING COMPANY: ▇▇▇▇ ▇▇▇▇▇ LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Title: Senior Vice President
-------------------------
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Schedule 5.1
Reinsurance Agreements
JALIC Reinsurance: all ceded
1. Indemnity Reinsurance Agreement between ▇▇▇▇
▇▇▇▇▇ Life Insurance Company and Aristar Life
Insurance Company, effective October 28, 1987.
2. Coinsurance Agreement between ▇▇▇▇ ▇▇▇▇▇ Life
Insurance Company and Lincoln National
Reinsurance Company Ltd., effective September
30, 1995.
- Trust Agreement among Lincoln National
Reinsurance Company Limited, ▇▇▇▇ ▇▇▇▇▇
Life Insurance Company and The Chase
Manhattan Bank, N.A., effective as of
October 9, 1995.
3. Indemnity Coinsurance Agreement between ▇▇▇▇
▇▇▇▇▇ Life Insurance Company and Oxford Life
Insurance Company, effective January 1, 1989.
- Trust Agreement among Oxford Life
Insurance Company, ▇▇▇▇ ▇▇▇▇▇ Life Insurance
Company and The Chase Manhattan Bank, N.A.,
dated February 13, 1990.
4. Coinsurance Agreement between ▇▇▇▇ ▇▇▇▇▇ Life
Insurance Company and Reliance Standard Life
Insurance Company, effective June 30, 1990.
(Annuity Contracts and Additional Policies
reinsured under the RSL Agreements shall not
be assumed by Novation by Reinsurer but shall
only be ceded to Reinsurer on a coinsurance
basis.)
- Trust Agreement among Reliance Standard
Life Insurance Company, ▇▇▇▇ ▇▇▇▇▇ Life
Insurance Company and CTC Illinois Trust
Company, dated July 9, 1990.
5. Coinsurance Agreement between ▇▇▇▇ ▇▇▇▇▇ Life
Insurance Company and Reliance Standard Life
Insurance Company, effective October 31, 1990.
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(Annuity Contracts and Additional Policies reinsured
under the RSL Agreements shall not be assumed by
Novation by Reinsurer but shall only be ceded to
Reinsurer on a coinsurance basis.)
- Trust Agreement among Reliance Standard
Life Insurance Company, ▇▇▇▇ ▇▇▇▇▇ Life
Insurance Company and CTC Illinois Trust
Company, dated October 30, 1990.
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EXHIBIT A
▇▇▇▇ ▇▇▇▇▇ LIFE INSURANCE COMPANY
SUNAMERICA LIFE INSURANCE COMPANY
__________, 1997
Dear Policyholder:
This notifies you of an agreement reached between ▇▇▇▇ ▇▇▇▇▇
LIFE INSURANCE COMPANY ("▇▇▇▇ ▇▇▇▇▇") and SUNAMERICA LIFE INSURANCE COMPANY
("SunAmerica") for the assumption of your annuity contract __________ by
SunAmerica. SunAmerica will become your insurer and will assume all of the
rights, obligations and liabilities of ▇▇▇▇ ▇▇▇▇▇ under your coverage. This
assumption will be effective as of 12:01 a.m., Eastern Time, on __________,
1997.
The assumption has been approved by the Insurance Department
of the State of Minnesota and the Insurance Department of the State of Arizona,
the insurance departments of the domiciliary states of ▇▇▇▇ ▇▇▇▇▇ and
SunAmerica.
To introduce you to SunAmerica, attached is a summary of
essential information about SunAmerica.
You have the following options with regard to the assumption
of your contract:
Option 1. Accept the transfer of your contract from
▇▇▇▇ ▇▇▇▇▇ to SunAmerica.
Option 2. Reject the proposed transfer of your
contract from ▇▇▇▇ ▇▇▇▇▇ to SunAmerica. If
you choose this option, ▇▇▇▇ ▇▇▇▇▇ will
remain as your insurer and you will have no
rights to claim any payments from
SunAmerica.
If you wish to choose option 1, simply do not return the
Rejection Form and you will automatically be deemed to have accepted this option
upon the expiration of thirty (30) days from the date of this Notice. You should
then attach the enclosed Certificate of Assumption to your contract.
If you wish to choose option 2, you must complete the enclosed
Rejection Form, sign it and return it within
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thirty (30) days of the date of this Notice, along with the enclosed Certificate
of Assumption.
Except for the substitution of SunAmerica for ▇▇▇▇ ▇▇▇▇▇ as
your insurer, your rights under your contract will not change as a result of the
assumption of your contract.
If you have any questions about the assumption of your contact
or about SunAmerica, please feel free to call ( ) _________. Written inquiries
may be mailed to:
SunAmerica Life Insurance Company
(address)
Sincerely,
▇▇▇▇ ▇▇▇▇▇ LIFE INSURANCE COMPANY
--------------------------------
By:
SUNAMERICA LIFE INSURANCE COMPANY
--------------------------------
By:
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REJECTION FORM
To: ▇▇▇▇ ▇▇▇▇▇ LIFE INSURANCE COMPANY
[address]
Re: ANNUITY CONTRACT NUMBER __________ ("Contract")
I reject the proposed transfer of my Contract from ▇▇▇▇ ▇▇▇▇▇ Life
Insurance Company to SunAmerica Life Insurance Company. Enclosed is the
Certificate of Assumption that
was sent to me.
DATE:____________ ____________________________
POLICYHOLDER SIGNATURE
_____________________________
PRINT OR TYPE NAME
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[For use with all Option Letters]
INFORMATION SUMMARY
[Description of SunAmerica]
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EXHIBIT B
ASSUMPTION CERTIFICATE
[Contract Number]
Effective Date: ________________, 1996
This is to certify that SunAmerica Life Insurance Company ("SunAmerica)
has assumed responsibility for your annuity insurance policy and the attached
riders, if any, issued by ▇▇▇▇ ▇▇▇▇▇ Life Insurance Company ("▇▇▇▇ ▇▇▇▇▇").
All provisions of such policy remain in full force and effect; except
that from and after the Effective Date all references in your policy to ▇▇▇▇
▇▇▇▇▇ are changed to SunAmerica and SunAmerica shall have all rights and will
perform all the obligations contained in such policy.
All inquiries and future correspondence should be directed to
SunAmerica at the address listed above.
This certificate becomes a part of your policy and should be attached
thereto.
IN WITNESS WHEREOF, SUNAMERICA LIFE INSURANCE COMPANY has executed this
Assumption Certificate at its Administrative Office in _______________ as of its
Effective Date.
SUNAMERICA LIFE INSURANCE COMPANY
By:
-------------------------------
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