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AMENDMENT NO. 1
TO THE
ASSET PURCHASE AND SALE AGREEMENT
DATED NOVEMBER 29, 1996
BY AND BETWEEN
XXXX XXXXX LIFE INSURANCE COMPANY
AND
SUNAMERICA LIFE INSURANCE COMPANY
This Amendment is made and entered into as of this 31st day of
March, 1997, and is hereby made a part of and incorporated into the Asset
Purchase and Sale Agreement dated November 29, 1996 (the "Agreement") by and
between Xxxx Xxxxx Life Insurance Company, a Minnesota stock insurance company
("Seller"), and SunAmerica Life Insurance Company, an Arizona stock insurance
company ("Purchaser"). Capitalized terms used herein and not otherwise defined
shall have the respective meaning ascribed thereto in the Agreement.
WHEREAS, JALIC and SunAmerica have entered into the Agreement;
and
WHEREAS, JALIC and SunAmerica desire to amend the Agreement in
the manner hereinafter set forth.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree that:
1. Closing Date Portfolio Securities.
(a) JALIC/Oxford Mortgage Loans. Schedule 1.2(a)(i) to
the Agreement is hereby amended to delete any and all references to the
JALIC/Oxford Mortgage Loans.
(b) Waters Edge Mortgage. Schedules 1.2(a)(i) to the
Agreement is hereby amended to delete any and all references to the Waters Edge
Group Mortgage.
(c) State Insurance Deposits. Schedule 1.2(a)(i) hereto
is hereby amended to delete any and all references to the State Insurance
Deposits.
In addition to cash otherwise to be delivered pursuant to
Section 1.2(a)(iv) of the Agreement, the parties hereto further agree that (i)
if, at Closing, the Book Value of the State Insurance Deposits is greater than
the Market Value, then Purchaser shall deliver to Seller cash in an amount
equal to the difference between the Book Value and
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Market Value of the State Insurance Deposits and (ii) if, at Closing, the Book
Value of the State Insurance Deposits is less than the Market Value, then
Seller shall deliver to Purchaser cash in an amount equal to the difference
between the Book Value and Market Value of the State Insurance Deposits. An
estimate of such amount shall be included on the Estimated Closing Date
Statement and paid by the appropriate party at the Closing. The difference
between the amount so estimated and the actual amount based on Book Value and
Market Value at Closing shall be included on the Post Closing Date Statement
and paid as a post closing adjustment in accordance with Section 1.6.
2. Put Value Increase. The parties hereto hereby agree
that the Pooled Mortgage Loans and the Marconi Mortgage shall not be sold,
assigned or transferred by Seller to Purchaser. The Pooled Mortgage Loans and
the Marconi Mortgage shall be included in the Rejected Mortgages. In
connection therewith, Section 1.2(c) shall be deleted and restated to read, in
its entirety, as follows:
"Notwithstanding anything contained in this section 1.2 to the
contrary, Purchaser shall have the right not to purchase up to $64,150,000 Book
Value of (i) mortgages or (ii) mortgage related private placements which
comprise a portion of the October 21 Portfolio Securities (the "Rejected
Mortgages"), and such Rejected Mortgages shall not be sold, assigned,
transferred, conveyed or delivered to Purchaser hereunder; provided, however,
that upon written notice by Purchaser to Seller delivered not less than 10 days
prior to Closing specifying such Rejected Mortgages, Seller shall deliver to
the Trust, as part of the Reinsurance Premium, an amount equal to the Book
Value of the Rejected Mortgages. Rejected Mortgages shall include the Pooled
Mortgage Loans and the Marconi Mortgage."
3. Restriction on Put Mortgages. Seller hereby agrees
that it shall not sell, transfer, convey or otherwise assign to Oxford Life
Insurance Company any Mortgage or Mortgages which are included in the Rejected
Mortgages.
4. Assets Transferred to Trust Account and Purchaser .
Section 1.2(b) is hereby amended and restated in its entirety as follows:
"On the Closing Date, delivery of the Closing Date Portfolio
Securities (other than the following: (i) the Mortgage Loans identified on
Schedule A-1 hereto and (ii) the private placement instruments identified on
Schedule A-2 hereto) shall be made by transfer to the trust account (the
"Trust") established pursuant to the Trust Agreement. The cash portion of the
Reinsurance Premium shall be transferred by Seller to the Trust by wire
transfer of immediately available funds. Securities, cash equivalents and
other assets included among the Closing Date Portfolio Securities shall be
transferred by such instruments of transfer as are acceptable to the Trustee
and reasonably acceptable to Purchaser. The gross amount of the cash payment
wired by Seller shall be reduced by an amount equal to one day's interest on
such gross amount at an interest rate equal to the
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three month LIBOR rate in effect on the Business Day preceding the Closing Date
plus 25 basis points.
In addition, on the Closing Date, delivery of the Mortgage
Loans identified on Schedule A-1 hereto and the private placement instruments
identified on Schedule A-2 hereto shall be made by transfer to the Purchaser.
Such assets shall be transferred by such instruments of transfer as are
commercially necessary to effect the transfer.
In addition, on the Closing Date, delivery of cash, publicly
traded investment grade bonds and/or treasuries, which will cause the Trust to
continue to meet the terms of Purchaser's investment policies, with an
aggregate Book Value on Purchaser's books equal to the total of (i) and (ii),
less (iii), where (i) is Seller's Book Value on the Closing Date of those
Mortgage Loans identified on Schedule A-1 hereto, (ii) is Seller's Book Value
on the Closing Date of the private placement instruments identified on Schedule
A-2 hereto, and (iii) is the Statutory Reserves with respect to the Annuity
Contracts and Additional Policies reinsured under the RSL Agreements, shall be
made by Purchaser to the Trust. Such delivery by Purchaser shall be made by
such instruments of transfer as are acceptable to the Trustee and reasonably
acceptable to Seller."
5. "Annuity Contract" Definition. The third sentence of
the definition of "Annuity Contract" as set forth in Annex A is amended to and
restated in its entirety to read as follows:
"Notwithstanding anything to the contrary in this Agreement,
"Annuity Contracts" shall not include (i) any policy for which the reserves or
applicable premiums are not actually transferred to Purchaser, (ii) any policy
not described in Schedule 3.8(b) attached hereto, (iii) Annuity Contracts
issued on or prior to April 1, 1978, (iv) single premium immediate annuities
and supplementary contracts involving life contingencies which are not ceded to
Oxford Life Insurance Company or Lincoln National Reinsurance Company Limited,
(v) universal life flexible premium deferred annuity riders, and (vi) annuity
policies assumed by Seller from Aristar Life Insurance Company. "
6. Recapture. Schedule 3.11 to the Agreement is hereby
amended to delete any and all references to the RSL 1 Jr. Agreement.
7. Payments Received After Closing. Section 8.1 is
hereby amended to add new Section 8.1(c) to read as follows:
"(c) Following the Closing Date, if Seller receives
any interest, dividends, return of principal or other payments with respect to
any Closing Date Portfolio Securities, Purchaser shall at all times be the
owner of any such payments, Seller shall hold such payments for the benefit of
Purchaser, and Seller shall promptly, remit such payment to Purchaser. Seller
shall use commercially reasonable efforts to remit such payments to Purchaser
no later than two business days after receipt by Seller.
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If any such payment is not remitted by Seller to Purchaser within two business
days after receipt thereof by Seller, Seller shall remit such payment to
Purchaser at the xxxx Xxxxxx makes settlement payments to Purchaser pursuant to
Section 4.1 of the Indemnity Reinsurance Agreement with interest calculated at
a rate equal to the three month LIBOR rate plus 25 basis points on the amount
due from the date of receipt by Seller but not including the date on which such
amount is actually paid to Purchaser. "
8. Policyholder Consents. The first sentence of
Section 8.9 shall be amended and restated in its entirety to read as follows:
"Promptly after the Closing, Purchaser shall (i) distribute
to policyholders of Annuity Contracts (other than Contracts reinsured under the
RSL Agreements) notice of the transactions reflected herein and (ii) use
commercially reasonable efforts to obtain Novations of all Annuity Contracts
(other than Contracts reinsured under the RSL Agreements) (as contemplated by
Section 2.4 of the Assumption Reinsurance Agreement)."
9. Additional Definitions. The following
definitions are hereby added to Annex A of the agreement.
"JALIC/Oxford Mortgage Loans" means that pool of
conventional mortgage loans owned by the Seller and Oxford Life Insurance
Company on a 50/50 pari passu basis pursuant to that Participation and
Servicing Agreement Series A 1990 dated as of February 14, 1990, and identified
on Schedule A-3 attached hereto.
"Marconi Mortgage" means and that certain Mortgage Loan
identified as loan number 900656, referred to by Seller as the Marconi
Mortgage.
"Pooled Mortgage Loans" means collectively, the pooled
mortgage loans held by Seller under (i) that certain Sale and Servicing
Agreement dated as of May 18, 1989 by and between Morsemere Federal Savings
Bank, Originator, Company, and Initial Class B Certificateholder and Purchaser,
as Initial Class A Certificateholder, (ii) that certain Participation and
Servicing Agreement dated as of May 26, 1988 by and between Ensign Bank,
F.S.B., as seller, servicer and purchaser of the subordinated certificate and
Xxxxxx Xxxxxxx Xxxxxxx MRP Inc., as initial purchaser of the senior
certificates, (iii) that certain Representations, Warranties, Purchase and
Participation Agreement dated and effective as of June 30, 1988 by and among
Seller, as purchaser and initial Class A Certificateholder, Investors Florida
Savings Bank and IFS Service Corporation, and (iv) that certain Servicing
Agreement dated as of December 1, 1992 by and among Seller, Federal Deposit
Insurance Corporation, as receiver for Mechanics and Farmers Savings Bank,
F.S.B., Citytrust, a Connecticut bank and trust company, and Xxxx Xxxxx Asset
Management Company, as Servicer, and identified on Schedule A-4 attached
hereto.
"RSL 1 Jr. Agreement" means that certain Coinsurance
Agreement effective January 1, 1989 by and between Seller and Reliance Standard
Life Insurance Company.
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"RSL Agreements" means collectively, (i) that Coinsurance
Agreement effective June 30, 1990 by and between Seller and Reliance Standard
Life Insurance Company and (ii) that Coinsurance Agreement effective October
31, 1990 by and between Seller and Reliance Standard Life Insurance Company.
"State Insurance Deposits" means all instruments held on
deposit for the benefit of policyholders by state insurance departments on
behalf of Seller and identified on Schedule A-5.
"Statutory Reserves" means a reserve not less than the
aggregate statutory reserves and claims reserves calculated in a manner and on
a consistent basis with Seller's past practices.
"Waters Edge Group Mortgage" means and that certain
Mortgage Loan identified as loan number 7140, referred to by Seller as the
Waters Edge Group Mortgage.
10. Recording Costs. The costs of recordation in
connection with the transfer of any of the Closing Date Portfolio Securities,
including, without limitation, recording costs and fees of a title company to
record any documents in connection with the transfer of Closing Date Portfolio
Securities shall be borne equally by the Seller and the Purchaser. Recording
costs excludes, without limitation, any fees or costs for title policies or
endorsements to title policies and title searches in connection therewith.
11. Changes in Schedules. To the extent set forth
below, the Schedules to the Agreement shall be amended to include, restate or
delete the following information, as the case may be, provided that the
representations, warranties and indemnification contained in the Agreement
shall in no way be affected by any such amendment, restatement or deletion of
any Schedules:
a. Schedule 3.3 Schedule 3.3 shall be revised by Schedule
A-6 hereto.
b. Schedule 3.8(a) The information contained in
Schedule 3.8(a) under the heading "XXXX XXXXX LIFE INSURANCE COMPANY Annuities
In-Force" shall be amended to: (i) change the form name of form # J-1035-P to
"SPIA": (ii) add form number J-5905-P to form name "Flex", (iii) add the word
"(Oregon)" after the form names for the form numbers J-8014-P and J-8013-C.
The information contained in Schedule 3.8(a) under the
heading "XXXX XXXXX LIFE INSURANCE COMPANY Forms Approved in 1996" shall be
amended to
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include the following information:
Forms Approved in 1997
LTC Waiver Endorsement Pennsylvania
J-0748-E(PA)
TSA Endorsement Alaska, Arizona, Arkansas,
J-O816-E(1/97) California, Colorado, Georgia, Idaho,
Kansas, Kentucky, Maine, Michigan,
Mississippi, New Hampshire, Oklahoma,
South Carolina, Tennessee, Wyoming
TSA Endorsement Alaska, Arizona, Arkansas,
J-O817-E(1/97) California, Colorado, Georgia, Idaho,
Indiana, Kentucky, Maine, Michigan,
Minnesota, Mississippi, Missouri, New
Hampshire, Oklahoma, South Carolina,
Tennessee, Texas, Virginia, Wyoming
The information contained in Schedule 3.8(a) under the heading
"Approved JALIC Annuity Endorsements (Standard & State Specific)" shall be
amended to include "Tax Sheltered Annuity Endorsement, J-0816-E(1/97)," "Tax
Sheltered Annuity Endorsement, J-0817-E(1/97)," "Tax Sheltered Annuity
Endorsement, J-0817-E(1/97)(PA)," and "Endorsement - Long Term Care Facility
Waiver, J-0748-E(PA)." And form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively.
c. Schedule 3.9 Schedule 3.9(a) shall be amended so as
to replace the lists of policy forms for Indiana, Iowa, Utah and Wisconsin with
the lists attached hereto as Schedule A-7 hereto.
In addition, the following changes to Schedule 3.9(a) shall
also be made:
- the list of Xxxx Xxxxx Life Endorsement Approvals for Alaska shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include forms "TSA Endorsement," form number J-0816-E(1/97) and "TSA
Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Arizona shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include forms "TSA Endorsement," form number J-0816-E(1/97) and "TSA
Endorsement," form number J-0817-E(1/97)
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- the list of Xxxx Xxxxx Life Endorsement Approvals for California shall
be amended such the form "Individual Retirement Annuity Rider," form
number J-0710-E(9/88) shall be deleted in its entirety and form numbers
J-O614-E(7/86) and J-0619-E shall be restated as J-0617(7/86) and
J-0691-E, respectively, and the list shall include forms "TSA
Endorsement," form number J-0816-E(1/97) and "TSA Endorsement," form
number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Georgia shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include forms "TSA Endorsement," form number J-0816-E(1/97) and "TSA
Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Idaho shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include forms "TSA Endorsement," form number J-0816-E(1/97) and "TSA
Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Indiana shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include form "TSA Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Kansas shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include form "TSA Endorsement," form number J-0816-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Kentucky shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include forms "TSA Endorsement," form number J-0816-E(1/97) and "TSA
Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Maryland shall be
amended to delete in its entirety reference to form "Individual
Retirement Annuity Rider," J-0710-E (9/88) and form numbers
J-O614-E(7/86) and J-0619-E shall be restated as J-0617(7/86) and
J-0691-E, respectively
- the list of Xxxx Xxxxx Life Endorsement Approvals for Minnesota shall
be amended to delete in its entirety reference to form "Individual
Retirement Annuity Rider," J-0710-E (9/88) and form numbers
J-O614-E(7/86) and J-0619-E shall be restated as J-0617(7/86) and
J-0691-E, respectively
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- the list of Xxxx Xxxxx Life Endorsement Approvals for Missouri shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include form "TSA Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Pennsylvania
shall be restated in its entirety by Schedule A-8 hereto
- the list of Xxxx Xxxxx Life Endorsement Approvals for Oklahoma shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include forms "TSA Endorsement," form number J-0816-E(1/97) and "TSA
Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Oregon shall be
amended to delete in its entirety reference to the forms "Individual
Retirement Annuity Rider," form number J-0710-E, and "Individual
Retirement Annuity Rider, form number J-0710-E(9/88) and form numbers
J-O614-E(7/86) and J-0619-E shall be restated as J-0617(7/86) and
J-0691-E, respectively,
- the list of Xxxx Xxxxx Life Endorsement Approvals for South Carolina
shall be amended to delete in its entirety reference to the forms
"Individual Retirement Annuity Rider," form number J-0710-E, and
"Individual Retirement Annuity Rider, form number J-0710-E(9/88) and
form numbers J-O614-E(7/86) and J-0619-E shall be restated as
J-0617(7/86) and J-0691-E, respectively, and the list shall include
form "TSA Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Tennessee shall
be amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively, and the list shall
include forms "TSA Endorsement," form number J-0816-E(1/97) and "TSA
Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Texas shall be
amended to delete in its entirety reference to the forms "Individual
Retirement Annuity Rider," form number J-0710-E, and "Individual
Retirement Annuity Rider, form number J-0710-E(9/88) and form numbers
J-O614-E(7/86) and J-0619-E shall be restated as J-0617(7/86) and
J-0691-E, respectively, and the list shall include form "TSA
Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Washington shall
be amended to delete in its entirety reference to the forms "Individual
Retirement Annuity Rider," form number J-0710-E, and "Individual
Retirement Annuity
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Rider, form number J-0710-E(9/88) and form numbers J-O614-E(7/86) and
J-0619-E shall be restated as J-0617(7/86) and J-0691-E, respectively
- the list of Xxxx Xxxxx Life Endorsement Approvals for West Virginia
shall be amended to delete in its entirety reference to the form
"Individual Retirement Annuity Rider," form number J-0710-E, and form
numbers J-O614-E(7/86) and J-0619-E shall be restated as J-0617(7/86)
and J-0691-E, respectively
- the list of Xxxx Xxxxx Life Endorsement Approvals for Virginia shall be
amended such that form numbers J-O614-E(7/86) and J-0619-E shall be
restated as J-0617(7/86) and J-0691-E, respectively and the list shall
include form "TSA Endorsement," form number J-0817-E(1/97)
- the list of Xxxx Xxxxx Life Endorsement Approvals for Utah shall be
amended to delete in its entirety reference to the form "Individual
Retirement Annuity Rider," form number J-0710-E, and form numbers
J-O614-E(7/86) and J-0619-E shall be restated as J-0617(7/86) and
J-0691-E, respectively
c. Schedule 3.11 Schedule 3.11 shall be deleted and replaced
by Schedule A-9 hereto.
d. Schedule 3.20 Number 24 to Schedule 3.20, "General Agent
Agreement by and between Xxxx Xxxxx Life Insurance Company and Progressive
Financial effective October 29, 1993" shall be deleted as such agreement was
terminated February 8, 1997.
e. Schedule 3.22(a) Schedule 3.22(a) shall be deleted and
replaced by Schedule A-10 hereto.
f. Schedule 3.22(l) Schedule 3.22(l) shall be deleted and
replaced by Schedule A-11 hereto.
g. Schedule 3.24 Schedule 3.24 shall be deleted and replaced
by Schedule A-12 hereto.
12. Marketing Agreement. From and after the Ledger
Cut-Off Date (as defined in the Indemnity Reinsurance Agreement) through and
including the date of termination of the Transition Services Agreement, Seller
shall continue to underwrite and make its annuity products available for sale
and marketed through NSM Sales Corporation. Any annuity contracts issued by
Seller during such period shall be deemed to be Additional Policies (as defined
in the Indemnity Reinsurance Agreement) and automatically reinsured with the
Purchaser as provided in the Indemnity Reinsurance Agreement.
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13. Additional Ancillary Agreement. The last page of
Section 1.4(a) is amended to include within the definition of "Ancillary
Agreements" that certain Asset Repurchase Agreement by and between Seller and
Purchaser dated as of March 31, 1997.
14. Headings. The headings in this Amendment have been
inserted for convenience of reference only, and shall not be considered a part
of this Amendment and shall not limit, modify or affect in any way the meaning
or interpretation of this Amendment.
15. Counterparts. This Amendment may be executed 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 be 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 parties,
regardless of whether each of the parties has executed the 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 parties.
16. Miscellaneous. All other terms and conditions of the
Agreement shall remain unchanged and the Agreement shall remain in full force
and effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first written above.
XXXX XXXXX LIFE INSURANCE COMPANY
By /s/ XXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: SVP & CEO
SUNAMERICA LIFE INSURANCE COMPANY
By /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Secretary
(Amendment to the Asset Purchase Agreement)
