Exhibit 10.16
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made this 11th day of
February, 1998, by and among Allstate Life Insurance Company, an Illinois
insurance corporation ("Buyer"), Allstate Life Insurance Company of New York, a
New York insurance company ("Buyer Subsidiary"), Charter National Life Insurance
Company, a Missouri insurance company ("Charter"), Intramerica Life Insurance
Company, a New York insurance company ("ILIC"), and Leucadia National
Corporation, a New York corporation ("Leucadia" and, together with Charter and
ILIC, the "Sellers").
RECITALS:
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WHEREAS, Charter and ILIC are engaged in the business of underwriting,
issuing and administering variable life insurance products, variable annuity
products and certain other life insurance products (the "Business");
WHEREAS, CNL, Inc., a Missouri corporation and wholly owned subsidiary of
Leucadia ("CNL"), acts as principal underwriter for Charter and ILIC in
connection with the Business;
WHEREAS, Sellers wish to sell to Buyer and Buyer Subsidiary, and Buyer and
Buyer Subsidiary wish to purchase from Sellers, the Business effective as of
January 1, 1998 (the "Effective Time") and Leucadia wishes to sell to Buyer, and
Buyer wishes to purchase from Leucadia, all of the outstanding capital stock of
CNL (collectively, the "Transaction");
WHEREAS, in connection with the Transaction, Charter desires to cede to
Buyer, and Buyer desires to reinsure from Charter, all of Charter's rights,
liabilities and obligations in respect of Charter's variable life insurance
products, variable annuity products and certain other life insurance and annuity
products identified in the Charter Coinsurance Agreement and the Charter
Reinsurance Agreement (as such terms are defined below) (collectively, the
"Charter Policies") effective as of the Effective Time;
WHEREAS, in connection with the Transaction, ILIC desires to cede to Buyer
Subsidiary, a wholly owned subsidiary of Buyer and Buyer Subsidiary desires to
reinsure from ILIC, all of ILIC's rights, liabilities and obligations in respect
of ILIC's variable annuity products identified in the ILIC Coinsurance Agreement
(as such term is defined
below) (the "ILIC Policies" and together with the Charter Policies, the
"Policies") effective as of the Effective Time;
WHEREAS, in connection with the Transaction, Leucadia desires to sell to
Buyer, and Buyer desires to purchase from Leucadia, all of the issued and
outstanding shares of common stock, no par value, of CNL (the "Common Stock"),
all in accordance with the provisions of this Agreement;
WHEREAS, in connection with the Transaction, the parties hereto desire
that Buyer or Buyer Subsidiary, as appropriate, (i) pay all costs and expenses
associated with the administration of the Business from the Effective Time
through the Closing Date and (ii) assume and provide all support and
administrative services relating to the Business effective from and after the
Closing Date;
WHEREAS, in connection with the Transaction, (i) Charter and Buyer
intend to enter into the Charter Administrative Services Agreement (as defined
in Section 6.1) and (ii) ILIC and Buyer Subsidiary intend to enter into the ILIC
Administrative Services Agreement (as defined in Section 6.1); and
WHEREAS, each of Buyer, Buyer Subsidiary, Charter, ILIC, and Leucadia
desire to make certain representations, warranties and agreements in connection
with the Transaction and also desire to set forth various conditions precedent
thereto.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
THE TRANSACTION
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SECTION 1.1. Reinsurance and Administration. On the terms and subject to
the conditions hereof, at the Closing (as hereinafter defined), Buyer and
Charter shall execute and deliver each of the Charter Coinsurance Agreement and
the Charter Reinsurance Agreement (as such terms are defined in Section 6.1),
and Buyer Subsidiary and ILIC shall execute and deliver the ILIC Coinsurance
Agreement (as such term is defined in Section 6.1).
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SECTION 1.2. Purchase and Sale of Common Stock. On the terms and subject
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to the conditions hereof, at the Closing, Leucadia will sell, assign, transfer
and convey to Buyer, and Buyer will purchase and acquire from Leucadia, all
right, title and interest of Leucadia in and to the Common Stock, free and clear
of all liens, claims, pledges, encumbrances and security interests ("Liens").
SECTION 1.3. Payment of Consideration. The aggregate consideration payable
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by Buyer and Buyer Subsidiary in respect of the Transaction shall be $30.25
million (the "Purchase Price"). The Purchase Price shall be allocable to the
Transaction as set forth in Exhibit A attached hereto. The Purchase Price shall
be payable in accordance with Exhibit A-1 attached hereto which exhibit contains
a schedule of payments and transfers contemplated under this Agreement, the
Charter Coinsurance Agreement, Charter Reinsurance Agreement, and ILIC
Coinsurance Agreement. Such schedule is intended to transfer to Buyer all of the
income of the Business (excluding CNL) from and after the Effective Time to the
Closing Date and to compensate Sellers fully for all expenses of the Business
from and after the Effective Time to the Closing Date. If and to the extent that
any items are inadvertently omitted from Exhibit A-1, such items shall be, for
all purposes of this Agreement, the Charter Coinsurance Agreement, Charter
Reinsurance Agreement, and ILIC Coinsurance Agreement, deemed to have been
included therein. On the Closing Date, Buyer and Buyer Subsidiary shall pay, in
the aggregate, that amount shown on Exhibit A-1 as "Total Cash Due Sellers at
Closing" (the "Closing Payment") by wire transfer of immediately available funds
to such account or accounts as Sellers shall have designated at least two days
prior to the Closing Date.
SECTION 1.4. Post-Closing Adjustment. As promptly as practicable after
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Closing (but in no event more than 30 days thereafter), Sellers shall
recalculate each item under the "Post-Effective Time Cash Flows" on Exhibit A-1
for the period beginning with the first day of the quarter in which the Closing
took place through the Closing Date (the "Adjustment Period"). Once the total of
such items (as provided for in Exhibit A-1) has been calculated, Sellers shall
send an exhibit in the same form as Exhibit A-1 for the Adjustment Period to
Buyer, Buyer shall have five business days to review Sellers' calculation.
Following such review period, Buyer and Buyer Subsidiary or Sellers (as
applicable) shall pay the total amount due for the Adjustment Period to the
appropriate party by wire transfer of immediately available funds to such
account or accounts as Buyer and Buyer Subsidiary or Sellers (as applicable)
shall have designated.
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SECTION 1.5. Closing.
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(a) The closing of the transactions contemplated by this Agreement
(the "Closing") will take place at the offices of Weil, Gotshal & Xxxxxx,
L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., local
time on the later of (a) the last day of the month in which the last
remaining condition set forth in ARTICLES V and VI hereof has been
satisfied or waived, or (b) such other date as Buyer and Sellers may agree
upon in writing (the "Closing Date").
(b) At the Closing, Buyer and Buyer Subsidiary shall (i) pay the
Closing Payment to Sellers by wire transfer of immediately available funds
to such accounts as Sellers specify to Buyer and Buyer Subsidiary; and
(ii) deliver to Sellers such documents and instruments required to be
delivered by Buyer and Buyer Subsidiary under the terms of this Agreement
(including without limitation the documents described in Section 6.2
required to be executed and delivered by Buyer and Buyer Subsidiary (the
"Buyer Documents")).
(c) At the Closing, Sellers shall deliver to Buyer and Buyer
Subsidiary such documents and instruments required to be delivered by
Sellers under the terms of this Agreement (including without limitation
the documents described in Section 6.1 required to be executed and
delivered by Sellers (the "Seller Documents")).
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller, jointly and not severally, makes the following
representations and warranties to Buyer and Buyer Subsidiary:
SECTION 2.1. Organization and Good Standing. Sellers and CNL are
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corporations duly organized, validly existing and in good standing under the
Laws (as defined below) of their respective jurisdictions of incorporation.
Sellers and CNL have all requisite corporate power and authority to own, lease
or otherwise hold their respective assets and to conduct their respective
portions of the Business as presently conducted. Each Seller and CNL is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
which its respective ownership, lease or use of assets or property or conduct of
business makes such
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qualification necessary, except where the failure to be so qualified does not
have and cannot reasonably be expected to have a Material Adverse Effect (as
defined below). As used in this Agreement, the term "Laws" shall mean all laws,
statutes, and regulations of the United States of America or any state or
commonwealth thereof. As used in this Agreement, the term "Material Adverse
Effect" shall mean a material adverse effect on (i) the Business, (ii) the
validity or enforceability of this Agreement, or (iii) on Sellers' ability to
perform their respective obligations under this Agreement.
SECTION 2.2. Authorization of Agreement; Binding Obligation. Sellers have
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all requisite corporate power and authority to execute and deliver this
Agreement and the Seller Documents and to perform their obligations hereunder
and thereunder. The execution and delivery by Sellers of this Agreement and the
Seller Documents and the performance by Sellers of their obligations hereunder
and thereunder have been duly authorized by all necessary corporate and
stockholder action on the part of Sellers. This Agreement has been (and the
Seller Documents will be) duly executed and delivered by duly authorized
officers of Sellers and, assuming the due execution and delivery of this
Agreement and the Seller Documents by the other parties hereto and thereto,
constitutes (and each of the Seller Documents will constitute) valid and binding
obligations of Sellers enforceable against them in accordance with their
respective terms, except to the extent enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting
creditors' rights in general and subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
SECTION 2.3. No Conflicts. The execution and delivery of this Agreement
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and the Seller Documents by Sellers do not, and the performance by Sellers of
their obligations hereunder and thereunder will not, (a) conflict with the
articles or certificate of incorporation or by-laws of any Seller, (b) except as
otherwise previously disclosed in writing to Buyer, conflict with, result in any
violation of, constitute a default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration under, any contract, permit, order, judgment or decree to which any
Seller is a party other than those that individually or in the aggregate with
other such conflicts, violations, defaults, and rights of termination,
cancellation, and acceleration, do not have and cannot reasonably be expected to
have a Material Adverse Effect, (c) subject to obtaining the approvals and
making the filings described on Schedule 2.3, constitute a violation of any Law
applicable to any Seller other than those that, individually or in the aggregate
with other such violations, do not have and cannot reasonably be expected to
have a Material Adverse Effect, (d)
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require any Seller to obtain or make any consent, approval, order or
authorization of, or registration, declaration or filing with, any domestic or
foreign court, government, governmental agency, authority, entity or
instrumentality ("Governmental Entity") or other person or entity (a "Person"),
other than (i) as described on Schedule 2.3 and (ii) those which the failure to
obtain, make, or give individually or in the aggregate with other such failures
do not have and cannot reasonably be expected to have a Material Adverse Effect.
SECTION 2.4. Capitalization of CNL. The authorized capital stock of CNL
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consists of 30,000 shares, all of which are designated Common Stock. As of the
date hereof, CNL has 10,000 shares of Common Stock issued and outstanding, all
of which have been validly issued, are fully paid and non-assessable and were
not issued in violation of any preemptive rights. There are no options,
warrants, calls, subscriptions, conversion or other rights, agreements or
commitments obligating CNL to issue any additional shares of capital stock or
any other securities convertible into, exchangeable for or evidencing the right
to subscribe for any shares of capital stock of CNL.
SECTION 2.5. Title to Common Stock of CNL. Leucadia is the holder of
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record and owns beneficially all of the shares of Common Stock free and clear of
any Liens.
SECTION 2.6. Licenses.
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(a) Sellers and CNL own or hold all licenses, permits and
authorizations required in connection with the conduct of their respective
portions of the Business other than those that the failure to own or hold
individually or in the aggregate with other such failures do not have and
cannot reasonably be expected to have a Material Adverse Effect.
(b) Sellers and CNL have complied with the material terms and
conditions of each license, permit and authorization required in
connection with the conduct of their respective portions of the Business,
and all such licenses, permits and authorizations are valid, binding and
in full force and effect.
(c) Charter has the right to use, free and clear of any royalty or
other payment obligations, claims of infringement or alleged infringement
or other liens, the Transferred Software (as defined in Section 4.8); and
none of the Sellers is in conflict with or violation or infringement of,
nor has any Seller received any notice of any
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such conflict with or violation or infringement of, any asserted rights of
any other Person with respect to the Transferred Software.
SECTION 2.7. Reinsurance. Set forth on Schedule 2.7 is a list of all
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reinsurance agreements relating to all or any portion of the Business. Each such
reinsurance agreement is in full force and effect and constitutes a legal,
valid, and binding obligation of each party thereto. Neither Seller has received
any notice, whether written or oral, of termination or intention to terminate
from any other party to such reinsurance agreements. Neither Seller nor, to the
best knowledge of Sellers, any other party to such reinsurance agreements is in
violation or breach of or default under any such reinsurance agreements (or with
or without notice or lapse of time or both, would be in violation or breach of
or default under any such reinsurance agreements) other than those violations,
breaches, or defaults that individually or in the aggregate with other such
violations, breaches, or defaults do not have and cannot reasonably be expected
to have a Material Adverse Effect.
SECTION 2.8. Litigation. There are no actions, suits, investigations,
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arbitrations, or similar proceedings pending, or (to the knowledge of Sellers)
threatened, against any Seller or CNL or any of their respective assets or
properties, at law or in equity, in, before, or by any Governmental Entity other
than actions, suits, investigations, arbitrations or proceedings that
individually or in the aggregate with other such actions, suits, investigations,
arbitrations or proceedings do not have and cannot reasonably be expected to
have a Material Adverse Effect. There is no order, writ, judgment, injunction or
decree outstanding against any Seller or CNL or any of their respective assets
or properties other than orders, writs, judgments, injunctions or decrees that
individually or in the aggregate with other such orders, writs, judgments,
injunctions or decrees do not have and cannot reasonably be expected to have a
Material Adverse Effect.
SECTION 2.9. Compliance with Laws. Sellers and CNL are not in violation
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(or with or without notice or lapse of time or both, would be in violation) of
any Law, order, writ, judgment, injunction or decree applicable to their
respective business, operations, affairs, assets or properties other than such
violations which individually or in the aggregate with other such violations do
not have and cannot reasonably be expected to have a Material Adverse Effect.
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SECTION 2.10. Seller Financial Statements. Sellers have previously
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delivered or made available to Buyer true and complete copies of the following:
(a) the annual statements for Charter and ILIC as of and for the
years ended December 31, 1995 and 1996; and
(b) the quarterly statements for Charter and ILIC as of and for the
quarters ended March 31, 1997, June 30, 1997, and September 30, 1997.
Each such statement (i) was prepared in all material respects in
accordance with the accounting practices required or permitted by the insurance
regulatory authority in the applicable state, consistently applied throughout
the specified period and in the comparable period in the immediately preceding
year and (ii) presents fairly in all material respects the financial position of
Charter or ILIC (as appropriate) as of the respective dates thereof and the
related summary of operations and changes in capital and surplus and in cash
flows of Charter or ILIC (as appropriate) for and during the respective periods
covered thereby (subject, in the case of the quarterly statements, to normal
year-end adjustments).
SECTION 2.11. CNL Financial Statements.
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(a) Sellers have previously delivered or made available to Buyer
true and complete copies of the CNL's audited statements of financial
condition as of December 31, 1995 and 1996, together with the related
audited statements of income, changes in stockholders' equity and cash
flows for the calendar years then ended. Each such statement (i) was
prepared in all material respects in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout the
specified period and in the comparable period in the immediately preceding
year and (ii) presents fairly in all material respects the financial
position of CNL as of the respective dates thereof and the related results
of operations and changes in cash flows of CNL for and during the
respective periods covered thereby.
(b) Sellers have previously delivered or made available to Buyer
true and complete copies of CNL's unaudited FOCUS Reports - Part II(A)
containing statements of assets, liabilities, and ownership equity as of
March 31, 1997, June 30, 1997, and September 30, 1997, together with the
related income statements for the respective quarters ended on such dates.
The totals presented in the statements of
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assets, liabilities, ownership equity, and income contained therein (i)
were prepared in all material respects in accordance with GAAP
consistently applied throughout the specified period and in the comparable
period in the immediately preceding year and (ii) present fairly in all
material respects the financial position of CNL as of the respective dates
thereof and the related results of operations of CNL for and during the
respective periods covered thereby.
SECTION 2.12. Material Changes. Except as disclosed in Schedule 2.12 or
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as permitted or otherwise contemplated by this Agreement, since September 30,
1997:
(a) there has not been, occurred, or arisen any change, event
(including without limitation any damage, destruction, or loss, whether or
not covered by insurance), condition, circumstance, or development of any
character other than those that individually or in the aggregate with
other such changes, events, conditions, circumstances, and developments do
not have and cannot reasonably be expected to have a Material Adverse
Effect; and
(b) Sellers and CNL have conducted their respective portions of the
Business solely in the ordinary course of business and consistent with
past practice.
SECTION 2.13. Brokers' Fees and Commissions. None of Sellers (or any of
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their respective directors, officers, employees or agents) has employed any
investment banker, broker or finder in connection with the transactions
contemplated hereby.
SECTION 2.14. Tax Matters.
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(a) Except as set forth on Schedule 2.14(a)(i), Sellers have filed
or caused to be filed, or will file or cause to be filed on or prior to
the Closing Date, all Tax Returns (as defined in Section 2.14(c) below)
that are required to be filed by, or with respect to, any subsidiaries
included with the affiliated group that includes or included CNL on or
prior to the Closing Date (collectively, the "Seller Returns"); (ii) CNL
has filed or caused to be filed, or will file or cause to be filed on or
prior to the Closing Date, all Tax Returns that are required to be filed
by, or with respect to CNL on or prior to the Closing Date (collectively,
the "CNL Returns"); (iii) the Seller Returns and CNL Returns are true,
complete and accurate in all material respects; (iv) all Taxes (as defined
in Section 2.14(c) below) due and payable by or with respect to
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CNL have been, or prior to the Closing Date will be, timely paid or
adequate reserves have been or will have been established therefor; (v)
there is no claim, audit, action, suit, proceeding or investigation now
pending or, to the knowledge of Sellers, threatened against or with
respect to CNL with respect to any Tax for which CNL could be liable; (vi)
there are no requests for rulings or determinations in respect of any Tax
pending between CNL and any taxing authority; (vii) CNL has not been a
member of an affiliated, consolidated, combined or unitary group other
than the one of which any of Sellers is the common parent; (viii) CNL is
not currently under any obligation to pay any amounts as a result of being
party, or having been a party, to any tax sharing agreement other than the
tax sharing agreement between Sellers and CNL; (ix) to the knowledge of
Sellers, there are no Liens for Taxes upon the assets of CNL; (x) CNL will
not be required to include any adjustment in taxable income for any tax
period ending after the Closing Date under Section 481(c) of the Internal
Revenue Code of 1986, as amended (the "Code") (or any similar provision of
the Tax laws of any jurisdiction), as a result of a change in method of
accounting for a taxable period ending before, or beginning before and
ending after, the Closing Date or pursuant to the provisions of any
agreement entered into with any taxing authority with regard to the Tax
liability of CNL; and (xi) all Taxes that CNL is required by Law to
withhold or collect have been duly withheld or collected, and have been
paid over to the appropriate authorities to the extent due and payable.
(b) Except to the extent that the tax treatment of any Policy is not
materially less favorable than the tax treatment of substantially similar
products sold or offered by other insurance companies, the tax treatment
under the Code of all Policies is and at all times has been the same to
the purchaser, policyholder or intended beneficiaries thereof as the tax
treatment under the Code for which such Policies were purported to qualify
or were treated as qualifying, and Sellers have complied in all respects
with all requirements of the Code with respect to the Policies, including
without limitation withholding and reporting requirements. For purposes of
this Section 2.14(b), the provisions of the Code relating to the tax
treatment of such contracts shall include, but not be limited to, Sections
72, 79, 101, 401, 408, 457, 818, 7702 and 7702A.
(c) For purposes of this Agreement, (i) the term "Tax Return" means
any return, declaration, report, claim for refund, or information return
or statement relating to Taxes including any schedule or attachment
thereto; and (ii) the term
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"Taxes" means (A) any federal, foreign, state or local income, business,
alternative or add-on minimum tax, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, transfer gains, net worth,
franchise, profits, license, withholding, payroll, employment, salaries,
interest, production, excise, severance, stamp, occupation, premium,
property (real or personal), environmental or windfall profit tax, custom,
duty or other tax, governmental fee, or other like assessment or charge of
any kind whatsoever, together with any interest, penalty, addition to tax,
or additional amount imposed by any governmental or taxing authority and
(B) any liability of the relevant Person or any subsidiary of the relevant
Person for the payment of any amounts of the type described in (i) as a
result of being a member of an affiliated, consolidated, combined or
unitary group, or being a party to any agreement or arrangement whereby
liability of the relevant Person or any subsidiary of the relevant Person
for payment of such amounts was determined or taken into account with
reference to the liability of any other Person.
SECTION 2.15. CNL Closing Date Equity. On the Closing Date, CNL will have
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net shareholders' equity (determined on a GAAP basis) of not less than $250,000.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to each Seller:
SECTION 3.1. Organization and Qualification. Each of Buyer and Buyer
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Subsidiary is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation, with all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its businesses as now being conducted. Each of Buyer and Buyer
Subsidiary is qualified or licensed to do business and is in good standing in
each jurisdiction in which the ownership or leasing of property by it or the
conduct of its business requires such licensing or qualification, except where
the failure to be so qualified or licensed does not have and cannot reasonably
be expected to have a Buyer Material Adverse Effect (as defined below). As used
in this Agreement, the term "Buyer Material Adverse Effect" shall mean a
material adverse effect on (i) the validity or enforceability of this Agreement
or (ii) on Buyer's and/or Buyer Subsidiary's ability to perform its obligations
under this Agreement
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SECTION 3.2. Authorization of Agreement; Binding Obligation. Each of Buyer
and Buyer Subsidiary has all requisite corporate power and authority to execute
and deliver this Agreement and the Buyer Documents to which it is a party and to
perform its obligations hereunder and thereunder. The execution and delivery by
Buyer and Buyer Subsidiary of this Agreement and the Buyer Documents to which it
is a party and the performance by it of its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action on the part of Buyer
and Buyer Subsidiary. This Agreement has been (and the Buyer Documents to which
it is a party will be) duly executed and delivered by Buyer and Buyer Subsidiary
and, assuming the due execution and delivery of this Agreement and the Buyer
Documents by the other parties hereto and thereto, constitutes (and each of the
Buyer Documents to which it is a party will constitute) valid and binding
obligations of Buyer and Buyer Subsidiary, enforceable against Buyer and Buyer
Subsidiary in accordance with their terms, except to the extent enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar Laws affecting creditors' rights in general and subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 3.3. No Conflicts. The execution and delivery of this Agreement
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and the Buyer Documents by Buyer and Buyer Subsidiary do not, and the
performance by Buyer and Buyer Subsidiary of their respective obligations
hereunder and thereunder will not, (a) conflict with the articles or certificate
of incorporation or by-laws of Buyer or Buyer Subsidiary, (b) conflict with,
result in any violation of, constitute a default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration under, any contract, permit, order, judgment or
decree to which Buyer or Buyer Subsidiary is a party other than those which
individually or in the aggregate with other such conflicts, violations,
defaults, and rights of termination, cancellation, and acceleration do not have
and cannot reasonably be expected to have a Buyer Material Adverse Effect, (c)
subject to obtaining the approvals described on Schedule 3.3, constitute a
violation of any Law applicable to Buyer or Buyer Subsidiary, other than
violations which individually or in the aggregate with other such violations do
not have and cannot reasonably be expected to have a Buyer Material Adverse
Effect, (d) require Buyer or Buyer Subsidiary to obtain or make any consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity or other Person, other than (i) as described on
Schedule 3.3 and (ii) those which the failure to obtain, make, or give
individually or in the aggregate with other such failures do not have and cannot
reasonably be expected to have a Buyer Material Adverse Effect.
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SECTION 3.4. Licenses.
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(a) Each of Buyer and Buyer Subsidiary owns or holds all licenses,
permits and authorizations required in order to perform its obligations
under this Agreement and the Buyer Documents to which it is a party other
than those that the failure to own or hold individually or in the
aggregate with other such failures do not have and cannot reasonably be
expected to have a Buyer Material Adverse Effect.
(b) Each of Buyer and Buyer Subsidiary has complied with the
material terms and conditions of each license, permit and authorization
required in order to perform its obligations under this Agreement and the
Buyer Documents to which it is a party, and all such licenses, permits and
authorizations are valid, binding and in full force and effect.
SECTION 3.5. Brokers' Fees and Commissions. Except for Global Reinsurance
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Intermediaries (all of the fees, expenses, and other liabilities of which will
be paid by Buyer), neither Buyer nor Buyer Subsidiary nor any of their
respective directors, officers, employees or agents has employed any investment
banker, broker or finder in connection with the transactions contemplated
hereby.
SECTION 3.6. Litigation. There are no actions, suits, investigations,
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arbitrations, or similar proceedings pending, or (to the knowledge of Buyer or
Buyer Subsidiary) threatened, against Buyer or Buyer Subsidiary or any of their
respective assets or properties, at law or in equity, in, before, or by any
Governmental Entity other than actions, suits, investigations, arbitrations, or
proceedings that individually or in the aggregate with other such actions,
suits, investigations, arbitrations, and proceedings do not have and cannot
reasonably be expected to have a Buyer Material Adverse Effect. There is no
order, writ, judgment, injunction or decree outstanding against Buyer or Buyer
Subsidiary or any of their respective assets or properties other than orders,
writs, judgments, injunctions or decrees that individually or in the aggregate
with other such orders, writs, judgments, injunctions or decrees do not have and
cannot reasonably be expected to have a Buyer Material Adverse Effect.
SECTION 3.7. Compliance with Laws. Neither Buyer nor Buyer Subsidiary
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is in violation (or with or without notice or lapse of time or both, would be in
violation) of any
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Law, order, writ, judgment, injunction or decree applicable to its business,
operations, affairs, assets or properties other than such violations which
individually or in the aggregate with other such violations do not have and
cannot reasonably be expected to have a Buyer Material Adverse Effect.
SECTION 3.8. Certain Agreements. Buyer has received and reviewed (i) the
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Marketing and Solicitation Agreement dated September 30, 1988 by and among
Xxxxxxx Fund Distributors, Inc. ("Xxxxxxx"), Charter, Charter National Variable
Annuities Account and CNL and (ii) the Marketing and Solicitation Agreement
dated October 25, 1989 by and among Scudder, ILIC, ILIC Variable Annuities
Account and CNL (collectively, the "Xxxxxxx Agreements"). Buyer understands and
acknowledges that the services under the Xxxxxxx Agreements are not exclusive
and that each party thereunder is free to render similar services to others. In
addition, Buyer understands and acknowledges that the Xxxxxxx Agreements (i) are
not assignable without the consent of the parties thereto and (ii) may be
terminated by Xxxxxxx, Charter, or ILIC at any time upon 90 days written notice.
Buyer has also received and reviewed (i) the Participation Agreement
dated September 3, 1993 by and between Xxxxxxx Variable Life Investment Fund
(the "Fund Organization") and Charter and (ii) the Participation Agreement dated
May 11, 1994 by and between the Fund Organization and ILIC (collectively, the
"Participation Agreements"). Buyer understands and acknowledges that the
Participation Agreements (i) are not assignable without the consent of the
parties thereto and (ii) may be terminated by any of the parties thereto at any
time upon 120 days written notice.
ARTICLE IV.
COVENANTS
Each of the parties hereto covenants and agrees that it shall comply with
all covenants and provisions of this ARTICLE IV applicable to it, except to the
extent (i) Buyer may otherwise consent in writing, (ii) otherwise required by
applicable Law, or (iii) otherwise required or permitted by this Agreement.
SECTION 4.1. Access to Information. Prior to the Closing, Charter and ILIC
---------------------
will (and Leucadia will cause CNL to) provide to the officers, employees,
attorneys, accountants and other representatives of Buyer full access during
normal business hours to the employees, agents, facilities and books and records
of such entities reasonably related to this
14
Agreement and the transactions contemplated hereby. Buyer will be permitted to
make copies of such books and records at Buyer's sole expense as may be
reasonably necessary in connection therewith.
SECTION 4.2. Conduct of Business. Except as otherwise provided by this
-------------------
Agreement, during the period from the date of this Agreement and continuing
until the Closing Date:
(a) Charter and ILIC shall carry on their respective portions of the
Business in the usual, regular and ordinary course as presently conducted
and consistent with past practice;
(b) Charter and ILIC shall use all commercially reasonable efforts
to (i) maintain in full force and effect all licenses, permits and
authorizations necessary to conduct their respective portions of the
Business, (ii) keep available the services of the present employees of
their respective portions of the Business, and (iii) maintain the goodwill
associated with their respective portions of the Business, including but
not limited to preserving the relationships with policyholders, agents,
suppliers and others having business dealings with Charter and ILIC;
(c) Charter and ILIC shall refrain from taking any action to
terminate the Xxxxxxx Agreements or the Fund Distribution Agreements; and
(d) Leucadia shall cause CNL to refrain from (i) paying any
dividends or other distributions to Leucadia (provided, however, that
Leucadia may cause CNL to pay one or more dividends to Leucadia at or
prior to the Closing so long as CNL's shareholders' equity (determined in
accordance with GAAP) on the Closing Date is not less than $250,000) or
(ii) entering into any agreements of any kind outside of the ordinary
usual, regular and ordinary course of business as presently conducted and
consistent with past practice.
SECTION 4.3. Consents. Each party hereto will (a) use all commercially
--------
reasonable efforts to obtain before Closing all consents, approvals, orders and
authorizations of (and prepare and submit all filings and notifications to)
every Governmental Entity and other Person necessary for such party to perform
its obligations hereunder; and (b) cooperate with the other parties hereto in
obtaining before Closing all consents, approvals, orders and
15
authorizations of (and preparing and submitting all filings and notifications
to) every Governmental Entity and other Person necessary for such other parties
to perform their obligations hereunder.
SECTION 4.4. Public Announcements and Employee Communications. At all
------------------------------------------------
times prior to the Closing Date, Buyer and Sellers will consult with each other
and will mutually agree (the agreement of each party not to be unreasonably
withheld) upon the content and timing of any press release or any written or
oral communication with employees with respect to the Transaction, and shall not
issue any such press release or employee communication prior to such
consultation and agreement, except as may be required by applicable Law or by
obligations pursuant to any listing agreement with any securities exchange or
any stock exchange regulations; provided, however, that, if possible, Buyer and
Sellers will give prior notice to the other party as promptly as practicable
under the circumstances of the content and timing of any such press release or
employee communication required by applicable Law or by obligations pursuant to
any listing agreement with any securities exchange or any stock exchange
regulations.
SECTION 4.5. Disclosure Supplements. From time to time prior to the
----------------------
Closing, each of the parties hereto will supplement or amend the schedules
delivered in connection herewith with respect to any matter which, if existing
or occurring at or prior to the date of this Agreement, would have been required
to be set forth or described in any such schedule or which is necessary to
correct any information in such schedule which has been rendered inaccurate
thereby. If the Closing occurs, Buyer waives any right or claim it may otherwise
have or have had on account of any matter so disclosed in such supplement or
amendment.
SECTION 4.6. Financial Statements.
--------------------
(a) As promptly as practicable until the Closing Date, Sellers shall
deliver to Buyer true and complete copies of (i) the annual statement
filed by Charter and ILIC with their respective states of domicile for the
year ended December 31, 1997; and (ii) each quarterly statement filed by
Charter and ILIC with their respective states of domicile for calendar
quarters ended after December 31, 1997. Each such statement will be
prepared in all material respects in accordance with the accounting
practices required or permitted by the insurance regulatory authority in
the applicable state, consistently applied throughout the specified period
and in the comparable period in the immediately preceding year.
16
(b) As promptly as practicable until the Closing Date, Sellers shall
deliver to Buyer true and complete copies of CNL's audited statement of
financial condition as of December 31, 1997, together with the related
audited statements of income, changes in stockholders' equity and cash
flows for the calendar year then ended. Such statement will be prepared in
all material respects in accordance with GAAP consistently applied
throughout the specified period and in the comparable period in the
immediately preceding year.
(c) As promptly as practicable until the Closing Date, Sellers shall
deliver to Buyer true and complete copies of CNL's unaudited FOCUS Reports
- Part II(A) containing statements of assets, liabilities, and ownership
equity as of the last day of each calendar quarter after December 31,
1997, together with the related income statements for the respective
quarters ended on such dates.
SECTION 4.7. Administration.
--------------
(a) Administration of the Business. From and after the Closing Date,
Buyer and Buyer Subsidiary shall administer the Business pursuant to and
in accordance with the terms of the Charter Administrative Services
Agreement and the ILIC Administrative Services Agreement, respectively. At
the Closing, in accordance with Section 1.3 above, Buyer and Buyer
Subsidiary shall pay Sellers an amount of cash equal to the sum of all
expenses incurred by Sellers for costs relating to Sellers' operations
conducted at the Facility and for all amounts paid to third parties in
administering the Business, in each case from the Effective Time through
the end of the last quarter preceding the Closing Date (collectively,
"Administrative Expenses"). The term "Administrative Expenses" shall
include without limitation the following expense categories: employee
benefits, payroll, taxes, rent, supplies and other overhead expenses.
(b) Employee Matters. (i) Effective as of the Closing, (x) Buyer
shall offer employment to the employees of Sellers identified on Schedule
4.7 (the "Employees") at annual salaries not less than those identified on
such schedule and (y) Buyer shall grant or make available (as appropriate)
to such Employees all employee benefits granted or made available to other
employees of Buyer employed in comparable positions at comparable
locations; (ii) on or before February 18, 1998, Buyer will give each of
the Employees individual letters detailing (x) the severance
17
program for such Employee, which for the two Employees identified on
Schedule 4.7 with an asterisk (the "Identified Employees") will at least
equal 26 weeks of severance, and which for each of the other Employees
shall not exceed two weeks of severance for each year of service as an
employee of Charter or Buyer, and (y) the terms of a retention bonus for
each such Employee which shall be mutually acceptable to Buyer and
Sellers; (iii) Sellers shall be responsible for all items listed on the
May 5, 1997 letter to each of the Identified Employees (previously
provided to Buyer), other than the severance provisions outlined in the
first bullet point of each such letter for which Buyer's severance program
shall be substituted; and (iv) in no event shall Buyer be liable or
responsible for accrued liabilities under any of Seller's employee benefit
plans. Nothing in this Agreement shall be construed as limiting in any way
the rights of Buyer as the employer of the Employees on and after the
Closing Date, including, but not limited to the right to change salary or
wages or to modify benefits or other terms and conditions of employment of
Employees to the extent that any such changes are done in accordance with
Buyer's normal practices and to the further extent that any modification
to benefits or other terms and conditions of employment of any Employee
apply generally to employees of Buyer.
(c) Facility Matters. At Closing, Buyer shall assume from Charter,
and Charter shall assign to Buyer, all of Charter's rights and obligations
under that certain lease agreement, dated April 1, 1994, between Xxxxxx
Xxxxxx Properties, Inc. and Charter (as amended through the Closing Date)
relating to Charter's offices at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000 (the "Facility").
(d) Sale of Facility Assets. At the Closing, Buyer shall purchase
from Charter all of the furniture, fixtures, and other assets located at
the Facility and described on Schedule 4.7(d) (the "Facility Assets") at
the net book value thereof (determined in accordance with GAAP) as of
December 31, 1997 (the "Assets Payment"), the consideration for which will
be paid pursuant to Section 1.3.
(e) Transition Services. To the extent that Sellers' Employees are
reasonably able to perform such services, Sellers shall provide to Buyer
reasonable and normal services relating to the effectuation of an orderly
transition of the operation and administration of the Business to Buyer
(the "Transition Services"). To the extent that Sellers' employees are not
reasonably able to perform Transition Services requested by Buyer, Sellers
shall promptly offer to arrange for the provision
18
of such Transition Services by one or more third parties (a "Third Party
Provider"). Such offer shall be made by means of a written notice to Buyer
indicating the estimated fees and expenses of such Third Party Provider to
perform such services. Should Buyer respond in writing to Sellers that
Buyer desires the Third Party Provider to provide such services, Sellers
shall arrange for the provision of such services by the Third Party
Provider and Buyer shall be solely responsible for all fees, expenses, and
other costs of such Third Party Provider. In addition, prior to the
Closing Date, Sellers shall provide to Buyer copies of all policy forms,
and all other related forms, including drafts and check stock, used by
Sellers in its administration of the Reinsured Policies.
Buyer agrees to provide reasonable expense reimbursement to Sellers
in the event that Sellers are requested by Buyer to provide services
beyond the reasonable and normal Transition Services described in Section
2(e) above, such reimbursement to be negotiated by the parties in advance
which shall be reasonable and customary under industry standards. In
addition, Buyer shall reimburse Sellers for any amounts paid by Sellers to
Third Party Providers in connection with Section 2(e) above.
If and to the extent that Buyer requests that Sellers perform
Transition Services, on or before the 15th day of each month, Sellers
shall provide Buyer with a reasonably detailed invoice setting forth
amounts due from Buyer with respect to Transition Services provided
hereunder during the immediately preceding month. Within ten business days
after receipt by Buyer of each such invoice, Buyer shall pay to Sellers in
cash the amounts reflected on such invoice to the extent that such amounts
have not already been paid to Sellers.
SECTION 4.8. Transfer of Software Licenses. At Closing, Charter shall
-----------------------------
assign and transfer to Buyer, and Buyer shall assume from Charter, all of
Charter's right, title, and interest in and to the software licenses described
on Schedule 4.8 hereto (the "Transferred Software").
19
SECTION 4.9. Termination and Recapture of Reinsurance. From and after the
----------------------------------------
Closing Date, Sellers shall use all commercially reasonable efforts to terminate
all reinsurance agreements relating to the Business and recapture all policy
liabilities thereunder (other than the Charter Coinsurance Agreement, Charter
Reinsurance Agreement, and ILIC Coinsurance Agreement). Notwithstanding the
foregoing, Sellers shall not be obligated to terminate any reinsurance agreement
if the costs and expenses associated with such termination, together with the
costs and expenses associated with all other such terminations, is reasonably
estimated to exceed 10% of the reinsurance reserve credits under such
reinsurance agreements. Buyer shall reimburse Sellers for any costs and expenses
incurred by Sellers in connection with such terminations, but in no event shall
such costs and expenses exceed 10% of the reinsurance reserve credits under such
reinsurance agreements. Upon termination of each such reinsurance agreement,
Buyer shall reinsure (pursuant to and in accordance with the Charter Coinsurance
Agreement and the Charter Reinsurance Agreement) all obligations under the
portions of the Business that were covered by such agreement. To the extent that
Sellers are unable to terminate any such reinsurance agreement on or before the
first anniversary of the Closing Date, Sellers shall use all commercially
reasonable efforts to assign all of Sellers' rights and obligations under such
reinsurance agreement to Buyer. To the extent that any termination or recapture
amounts are paid to Sellers as a result of any termination or recapture effected
pursuant to this Section 4.9, Sellers shall promptly pay such amounts to Buyer.
SECTION 4.10. New Policies. Pursuant to and in accordance with the Charter
------------
Coinsurance Agreement, Charter will, at Buyer's request, continue to underwrite
and issue new annuity contracts at and after the Closing Date to residents of
certain states until the earlier to occur of (i) 90 days after receipt by
Charter of a written notice from Buyer requesting that Charter cease
underwriting and issuing such contracts or (ii) the third anniversary of the
Closing Date. Pursuant to and in accordance with the ILIC Coinsurance Agreement,
ILIC will, at Buyer Subsidiary's request, continue to underwrite and issue new
annuity contracts at and after the Closing Date to residents of the State of New
York until the earlier to occur of (i) 90 days after receipt by ILIC of a
written notice from Buyer Subsidiary requesting that ILIC cease underwriting and
issuing such contracts or (ii) the third anniversary of the Closing Date.
SECTION 4.11. Xxxxxxx and Participation Agreements. The parties agree
------------------------------------
that: (i) neither the Xxxxxxx Agreements nor the Participation Agreements will
be assigned to Buyer or Buyer Subsidiary and (ii) under the Administrative
Services Agreements, Buyer and
20
Buyer Subsidiary shall administer, perform and enforce the Xxxxxxx Agreements
and the Participation Agreements, insofar as they relate to the Business, on
behalf of Sellers, and will bear the cost of such administration, performance
and enforcement. Buyer shall have the right to cause Sellers to effect the
termination of any Xxxxxxx Agreement and/or Participation Agreement and/or to
enter into new marketing and/or participation agreements relating to the
Business or underlying funding media for the Separate Accounts. Any such
termination shall be on terms and conditions acceptable to Buyer at no cost to
Sellers. Without the prior written consent of Buyer, Sellers shall not agree to
any amendment or termination of any of the Xxxxxxx Agreements or Participation
Agreements or any other agreements or arrangements with Xxxxxxx or the Fund
Organization.
SECTION 4.12. Principal Underwriter Agreements. Immediately after Closing,
--------------------------------
Buyer shall cause CNL to enter into, and Sellers shall enter into, any
agreements (the "New CNL Underwriter Agreements") between CNL and Sellers that
are required for CNL to perform, commencing on the Closing Date, the functions
of a principal underwriter (as such term is defined in the Investment Company
Act of 1940, as amended, together with related rules, regulations,
interpretations, and releases thereunder) of the Policies and any New Policies
sold pursuant to the Charter Coinsurance Agreement and the ILIC Coinsurance
Agreement. Any such agreements shall contain terms substantially similar to
those contained in the Principal Underwriter Agreements to which CNL is
currently a party with Charter and ILIC.
SECTION 4.13. Disclosure. Buyer and Sellers shall (i) draft disclosure
----------
materials describing the transactions contemplated by this Agreement to be
distributed to policyholders and contractholders of Charter and ILIC in
accordance with applicable Law and (ii) ensure that such materials are finalized
by the Closing Date. As promptly as practicable after the Closing Date (but in
no event more than 10 Business Days thereafter), Buyer and Buyer Subsidiary
shall distribute such materials by first class U.S. mail to all holders of
insurance policies and annuity contracts constituting part of the Business. In
addition to the foregoing, Buyer, Buyer Subsidiary and Sellers shall draft
post-effective amendments to the registration statements as may be necessary for
the Policies describing the transactions contemplated by this Agreement. Such
post-effective amendments shall include as exhibits material documents relating
to the Transaction, including the Charter Coinsurance Agreement, the Charter
Reinsurance Agreement, the Charter Administrative Services Agreement, the ILIC
Coinsurance Agreement, and the ILIC Administrative Services Agreement.
21
SECTION 4.14. Post-Closing Form BD. As promptly as practicable following
--------------------
the Closing Date (but in any event within the time prescribed therefor by
applicable requirements of the National Association of Securities Dealers
("NASD")), Buyer shall cause CNL to file an amended FORM BD for CNL with the
NASD reflecting the change in ownership of CNL resulting from the consummation
of the transactions contemplated by this Agreement.
SECTION 4.15. Cooperation; Contest. From and after the Closing Date, each
--------------------
of Sellers and Buyer agrees to provide or cause its affiliates to provide at no
cost and within a reasonable time any information reasonably necessary for the
preparation of any Tax Returns or for addressing any audit issues. Each of
Sellers, on the one hand, and Buyer, on the other hand, shall promptly notify
the other (the "Other Party") in the event it becomes aware of any claim, audit,
examination or proceeding relating to any Tax for which the Other Party would be
responsible under the terms of this contract. The Other Party shall control
every aspect of any such claim, examination or proceeding, including the
contest, disposition and settlement thereof.
SECTION 4.16. Other Tax Matters. Without limiting the generality of
-----------------
Section 10.4 below, Buyer shall promptly notify Sellers of any claim, audit,
examination, or proceeding of which it becomes aware relating to the matters
described in Section 2.14 above. Responses to any such claim, audit,
examination, or proceeding shall be subject to the prior review and approval of
Sellers. Sellers shall file (or prior to the Closing Date cause CNL to file) (i)
all federal tax returns for CNL for the period commencing on the Effective Time
and ending on the Closing Date and (ii) all other tax returns for CNL that are
required to be filed prior to the Closing Date. From and after the Closing Date,
Buyer shall file (or cause CNL to file) all other tax returns for CNL that are
required to be filed on and after the Closing Date. Sellers and Buyer shall
cooperate fully with each other and make available to each other in a timely
fashion such Tax data and other information as may be reasonably required by
Sellers or Buyer in connection with the preparation or filing of any Tax Return
and any audit, claim, examination, or proceeding in respect of Taxes.
SECTION 4.17. Transfer of Administration. From and after the date hereof,
--------------------------
Buyer and Sellers shall use all commercially reasonable efforts to (i) set up in
the Facility information systems of Buyer to be used in providing administrative
services under the Charter Administrative Services Agreement and the ILIC
Administrative Services Agreement and (ii) transfer all data necessary to
administer the Business to such information systems.
22
SECTION 4.18. Interim Administrative Platform. If the Closing does not
-------------------------------
occur on or before the date of termination of Charter's temporary license (the
"Continuum License") with CSC Continuum, Inc., as such may, at Buyer's sole
expense, be (i) extended beyond June 30, 1998, (ii) modified or (iii) replaced
with a permanent license or another temporary license, in each case upon
consultation with Buyer (the "Expiration Date"), from and after the Expiration
Date until the Closing Date, Buyer shall provide, to the extent permitted under
Buyer's licenses (at Buyer's sole cost and expense), all software and
information systems which, together with the Transferred Software, will enable
Sellers to continue to administer the Business during such period in compliance
with applicable Law and Sellers' administrative practices in effect as of the
date hereof (collectively, the "Interim Administrative Platform"). Buyer shall
make such software and information systems available to Sellers at the Facility.
In the event that this Agreement is terminated for any reason, Buyer shall (i)
continue to provide the Interim Administrative Platform to Sellers for a period
of one year following the termination of this Agreement, (ii) assist and
cooperate with Sellers to effectuate a prompt and orderly transfer to Sellers or
its designee(s) of all data and other materials transferred to the Interim
Administrative Platform pursuant to this Section and Section 4.17, and (iii)
otherwise assist and cooperate with Sellers in transitioning the administration
of the Business from the Interim Administrative Platform to a platform of
Sellers' choice. In the event that this Agreement is terminated for any reason,
Sellers shall (i) pay Buyer an aggregate fee of $10,000 per month for each month
from the Expiration Date through the first anniversary of the termination of
this Agreement and (ii) reimburse Buyer for any reasonable out-of-pocket costs
and expenses incurred by Buyer in connection with such transition.
If Buyer is unable to provide the Interim Administrative Platform
under Buyer's software licenses then in effect, from and after the Expiration
Date to the Closing Date (or, if this Agreement shall be terminated, from and
after the Expiration Date to the first anniversary of the date of termination of
this Agreement), Buyer shall pay all costs of obtaining licenses necessary to
permit Sellers to continue to administer the Business in compliance with
applicable Law and Sellers' administrative practices in effect on the date
hereof.
SECTION 4.19. Books and Records. On the Closing Date, Sellers will deliver
-----------------
to Buyer all books and records of CNL. If (at any time after the Closing) any of
Sellers discovers in its possession or under its control any other books and
records of CNL, such Seller will promptly deliver such books and records to
Buyer.
23
SECTION 4.20. CNL True-Up. Within 30 days after the Closing Date, either
-----------
(i) Buyer shall pay Leucadia an amount of cash equal to the excess of the net
shareholders' equity (determined on a GAAP basis) of CNL as of the Closing Date
over $250,000 or (ii) Leucadia shall pay Buyer an amount of cash equal to the
deficiency of the net shareholders' equity (determined on a GAAP basis) of CNL
as of the Closing Date under $250,000.
ARTICLE V.
CONDITIONS TO CLOSING
SECTION 5.1. Conditions Precedent to Obligations of Buyer and Buyer
------------------------------------------------------
Subsidiary. The obligations of Buyer and Buyer Subsidiary under this Agreement
----------
to consummate the transactions contemplated hereby will be subject to the
satisfaction, at or prior to Closing, of all of the following conditions, any
one or more of which may be waived in whole or in part at the option of Buyer:
(a) Representations, Warranties and Covenants.
(i) All representations and warranties of Sellers contained in
this Agreement (or in any exhibit, schedule, certificate or document
delivered pursuant to this Agreement) that are qualified as to
materiality shall be true and correct and all representations and
warranties of Sellers made in this Agreement (or in any exhibit,
schedule, certificate or document delivered pursuant to this
Agreement) that are not so qualified shall be true and complete in
all material respects, in each case as of the date hereof and on and
as of the Closing Date as if made on and as of the Closing Date
(except to the extent that they expressly relate only to an earlier
time, in which case they shall have been true and complete as of
such earlier time).
(ii) All of the terms, covenants and conditions to be complied
with and performed by Sellers on or prior to the Closing Date shall
have been complied with or performed in all materials respects.
24
(iii) Buyer and Buyer Subsidiary shall have received a
certificate, dated as of the Closing Date, executed by Sellers,
certifying that the conditions specified in Sections 5.1(a)(i) and
(ii) have been satisfied.
(b) Closing Documents. Sellers shall have executed and delivered the
Seller Documents.
(c) No Injunction. There shall not be in effect on the Closing Date
any writ, judgment, injunction, decree, or similar order of any court or
governmental or regulatory authority restraining, enjoining, or otherwise
preventing consummation of any of the transactions contemplated by this
Agreement in accordance with the terms of this Agreement.
(d) Consents. The consents, approvals, orders, authorizations,
filings, and notifications described on Schedules 2.3 and 3.3 shall have
been obtained or made.
(e) Xxxxxxx Agreements. Buyer and Xxxxxxx and Buyer Subsidiary and
Xxxxxxx shall have entered into marketing and solicitation agreements in
form and substance reasonably satisfactory to Buyer.
(f) Termination of Tax Allocation Agreement. Any tax allocation
or tax sharing agreement that may have been entered into by CNL,Inc. shall
be terminated as of the Closing Date.
SECTION 5.2. Conditions Precedent to Obligations of Sellers. The
----------------------------------------------
obligations of Sellers under this Agreement to consummate the transactions
contemplated hereby will be subject to the satisfaction, at or prior to the
Closing, of all the following conditions, any one or more of which may be waived
at the option of Sellers:
(a) Representations, Warranties and Covenants.
(i) All representations and warranties of Buyer contained in
this Agreement (or in any exhibit, schedule, certificate or document
delivered pursuant to this Agreement) that are qualified as to
materiality shall be true and correct and all representations and
warranties of Buyer made in this Agreement (or in any exhibit,
schedule, certificate or document delivered
25
pursuant to this Agreement) that are not so qualified shall be true
and complete in all material respects, in each case as of the date
hereof and on and as of the Closing Date as if made on and as of the
Closing Date (except to the extent that they expressly relate only
to an earlier time, in which case they shall have been true and
complete as of such earlier time).
(ii) All of the terms, covenants and conditions to be complied
with and performed by Buyer and Buyer Subsidiary on or prior to the
Closing Date shall have been complied with or performed in all
material respects.
(iii) Sellers shall have received a certificate, dated as of
the Closing Date, executed by Buyer, certifying that the conditions
specified in Sections 5.2(a)(i) and (ii) have been satisfied.
(b) Closing Documents. Each of Buyer and Buyer Subsidiary shall have
executed and delivered the Buyer Documents to which it is a party.
(c) No Injunction. There shall not be in effect on the Closing Date
any writ, judgment, injunction, decree, or similar order of any court or
governmental or regulatory authority restraining, enjoining, or otherwise
preventing consummation of any of the transactions contemplated by this
Agreement in accordance with the terms of this Agreement.
(d) Consents. The consents, approvals, orders, authorizations,
filings, and notifications described on Schedules 2.3 and 3.3 shall have
been obtained or made.
ARTICLE VI.
DOCUMENTS TO BE DELIVERED AT THE CLOSING
SECTION 6.1. Documents to be Delivered by Sellers. At the Closing, Sellers
------------------------------------
shall deliver to Buyer and Buyer Subsidiary, as applicable, the following:
(a) Officer's Certificate. The certificate, dated the Closing Date,
duly executed by Sellers as required by Section 5.1(a)(iii).
26
(b) Stock Certificates. A certificate or certificates representing
all the shares of Common Stock in appropriate form for transfer to Buyer
or accompanied by stock powers duly executed in blank.
(c) Charter Coinsurance Agreement. A coinsurance agreement, in the
form attached hereto as Exhibit B (the "Charter Coinsurance Agreement"),
duly executed by Charter.
(d) Charter Reinsurance Agreement. A reinsurance agreement, in the
form attached hereto as Exhibit C (the "Charter Reinsurance Agreement"),
duly executed by Charter.
(e) Charter Administrative Services Agreement. An administrative
services agreement, in the form attached hereto as Exhibit D (the "Charter
Administrative Services Agreement"), duly executed by Charter.
(f) ILIC Coinsurance Agreement. A coinsurance agreement, in the form
attached hereto as Exhibit E (the "ILIC Coinsurance Agreement"), duly
executed by ILIC.
(g) ILIC Administrative Services Agreement. An administrative
services agreement, in the form attached hereto as Exhibit F (the "ILIC
Administrative Services Agreement"), duly executed by ILIC.
(h) Evidence of Approvals. Evidence of receipt of the consents and
approvals described on Schedule 2.3 and Section 4.3.
(i) Xxxx of Sale. A xxxx of sale in a form mutually acceptable to
the parties hereto effecting the sale of the Facility Assets to Buyer in
exchange for the Assets Payment pursuant to Section 4.7(d), duly executed
by Charter.
27
SECTION 6.2. Documents to be Delivered by Buyer. At the Closing, Buyer and
Buyer Subsidiary, as applicable, will deliver to Sellers the following:
(a) Closing Payment. Evidence of a wire transfer in the amount of
the Closing Payment in accordance with Section 1.3.
(b) Officer's Certificate. The certificate, dated the Closing Date,
duly by Buyer as required by Section 5.2(a)(iii).
(c) Other Buyer Documents. The Charter Coinsurance Agreement, the
Charter Reinsurance Agreement, and the Charter Administrative Services
Agreement, each duly executed by Buyer.
(d) Other Buyer Subsidiary Documents. The ILIC Coinsurance Agreement
and the ILIC Administrative Services Agreement, each duly executed by
Buyer Subsidiary.
(e) Evidence of Approvals. Evidence of receipt of the consents and
approvals described on Schedule 3.3 and Section 4.3.
ARTICLE VII.
TERMINATION AND ABANDONMENT
SECTION 7.1. Termination. This Agreement may be terminated and the
-----------
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Sellers and Buyer; or
(b) by any Seller or Buyer:
(i) if a court of competent jurisdiction or Governmental
Authority shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling the parties hereto shall
use their reasonable best efforts to lift), in each case permanently
restraining, enjoining or otherwise
28
prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final
and nonappealable; or
(ii) if the Closing shall not have occurred on or before
September 30, 1998; provided, however, that (A) Sellers shall have
the right, in their sole discretion, to extend the time period in
this Section 7.1(b)(ii) for an additional 60 days and (B) the right
to terminate this Agreement shall not be available to any party
whose breach of this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date.
SECTION 7.2. Procedure and Effect of Termination. In the event of
-----------------------------------
termination and abandonment of the transactions contemplated hereby pursuant to
Section 7.1, written notice thereof shall be given to the other parties to this
Agreement and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned, without further action by any of the parties hereto.
If this Agreement is terminated as provided herein:
(a) Upon request therefor, each party will redeliver all documents,
work papers and other material of any other party relating to the
transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same; and
(b) No party hereto shall have any liability or further obligation
to any other party to this Agreement resulting from such termination
except (i) that the provision of this Section 7.2 and Sections 4.18, 11.4,
11.11 and 11.13 shall remain in full force and effect, and (ii) no party
waives any claim or right against a breaching party to the extent that
such termination results from the breach by a party hereto of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
ARTICLE VIII.
NON-COMPETITION
SECTION 8.1. Non-Competition. In consideration of the benefits of this
Agreement to Leucadia and in order to induce Buyer and Buyer Subsidiary to enter
into this Agreement, Leucadia hereby covenants and agrees that for a period of
(a) three years following the
29
Closing Date neither Leucadia nor any of its affiliates under actual control of
Leucadia shall commence selling any variable annuity contracts or variable life
insurance policies in the United States and (b) ten years following the Closing
Date, neither Leucadia nor any of its affiliates under actual control of
Leucadia will enter into any form of a marketing and solicitation agreement with
Xxxxxxx Xxxxxx Investments, Inc., Xxxxxxx Fund Distributors, Inc., Xxxxxxx
Variable Life Investment Fund, or any successor thereto for the sale of variable
annuity products and variable life insurance products. Notwithstanding the
foregoing, Leucadia retains the right to acquire insurance companies that are
not engaged primarily in the business of offering variable annuity contracts or
variable life insurance policies. Leucadia specifically agrees that this
covenant is an integral part of the inducement of Buyer to enter into this
Agreement and that Buyer (or its successor assigns) shall be entitled to
injunctive relief in addition to all other legal and equitable rights and
remedies available to it in connection with a breach by Leucadia or any of its
affiliates of any provision of this Section 8.1 and that, notwithstanding the
foregoing, no right, power or remedy conferred upon or reserved or exercised by
Buyer in this Section 8.1 is intended to be exclusive of any other right, power
or remedy, each and every one of which (now or hereafter existing at law, in
equity, by status or otherwise) shall be cumulative and concurrent. Each of
Leucadia and Buyer agrees that in the event that either the length of time or
area set forth herein is deemed too restrictive by any governmental entity of
competent jurisdiction, the covenants and agreements in this Section 8.1 shall
be enforceable for such time and within such geographical area as such
governmental entity may deem reasonable under the circumstances.
ARTICLE IX.
SURVIVAL OF PROVISIONS
SECTION 9.1. Survival. The representations and warranties required to be
--------
made by the Sellers and Buyer in this Agreement or in any certificate delivered
pursuant hereto will survive until the second anniversary of the Closing Date,
except that (i) the representations and warranties of Sellers set forth in
Sections 2.4, 2.5, 2.13, and 2.14 hereof will survive until 30 days after the
expiration of all statutes of limitation applicable to each such Section and
(ii) the representations and warranties of Buyer set forth in Section 3.5 hereof
will survive until 30 days after the expiration of all statutes of limitation
applicable to such Section. Notwithstanding the foregoing, any representation or
warranty shall survive the time it would otherwise terminate pursuant to this
Section to the extent that notice of a
30
breach thereof giving rise to a right of indemnification shall have been given
by a party hereto prior to the expiration of the relevant survival period in
accordance with Article X below.
ARTICLE X.
INDEMNIFICATION
SECTION 10.1. Indemnification by Sellers. Subject to the provisions of
--------------------------
Sections 9.1, 10.3, and 10.4 hereof, the Sellers shall indemnify and hold
harmless Buyer and Buyer Subsidiary for (a) any and all monetary damages,
charges, losses, deficiencies, liabilities, obligations, costs, fees, and
expenses (including, without limitation, reasonable fees and disbursements of
counsel incident to the enforcement of rights under Section 10.1 or 10.2 hereof)
(collectively, "Damages") resulting from or relating to any breach by the
Sellers of any representation, warranty, covenant, or agreement made by the
Sellers in this Agreement, (b)(i) any Taxes of CNL with respect to taxable
periods ending on or before the Closing Date; (ii) any Taxes imposed on or in
respect of CNL with respect to taxable periods including but not ending on the
Closing Date which are allocable to the portion of such taxable period ending on
the Closing Date; and (iii) any Taxes imposed on or in respect of any
corporation (other than any Taxes imposed on CNL or Buyer or any affiliate of
Buyer for any Tax period) with which CNL filed a Tax Return on a combined or
consolidated basis for any taxable period that includes the Closing Date, or
that ends on, as of the close of or before the Closing Date (including, without
limitation, any Taxes for which CNL would be liable pursuant to the provisions
of Treasury Regulation Section 1.1502-6), and (c) any Direct Economic Loss (as
defined below) suffered by Buyer as a result of the rejection by Charter or ILIC
of a recommendation of Buyer or Buyer Subsidiary, as the case may be (a
"Recommendation"), pursuant to Article II(D) of the Charter Coinsurance
Agreement, Article II(D) of the ILIC Coinsurance Agreement or Article II(D) of
the Charter Reinsurance Agreement. Notwithstanding the foregoing, Sellers shall
have no liability under clause (c) above if (i) following the Recommendation
would create a violation of any applicable Law (a "Violation"), (ii) following
the Recommendation would cause a breach of any Policy (a "Policy Breach"), or
(iii) Buyer does not cause to be delivered to Sellers (within 30 days after
receipt by Buyer of a request therefor based upon Sellers' good faith belief
that implementation of such Recommendation could result in a Violation or a
Policy Breach) an opinion of counsel reasonably acceptable to Sellers to the
effect that following the Recommendation would neither create a Violation nor a
Policy Breach. The term "Direct
31
Economic Loss" shall mean the amount due to holders of Policies in respect of
the period to which such Recommendation relates in excess of the amount due to
such holders in respect of such period if Charter or ILIC (as applicable) had
followed such Recommendation.
SECTION 10.2. Indemnification by Buyer. Subject to the provisions of
------------------------
Sections 9.1, 10.3, and 10.4 hereof, Buyer shall indemnify and hold harmless
each Seller (a) in respect of any and all Damages resulting from or relating to
any breach by Buyer of any representation, warranty, covenant, or agreement made
by Buyer in this Agreement and (b)(i) any Taxes of CNL with respect to taxable
periods that begin on or after the Closing Date, and (ii) any Taxes imposed on
or in respect of CNL with respect to taxable periods including but not ending on
the Closing Date which are allocable to the portion of such period beginning
after the Closing Date.
SECTION 10.3. Limitations on Indemnification.
------------------------------
(a) No claim by any Person for indemnification under this Article X
(an "Indemnitee") against any Person (an "Indemnifying Party"), which
claim relates to a breach of a representation or warranty made in this
Agreement, may be made unless notice of such breach is given in accordance
with this Article X prior to the time the survival period for such
representation or warranty expired.
(b) Notwithstanding anything to the contrary contained in this
Agreement, (i) Sellers will not be liable under any circumstances for
indemnification under Section 10.1 hereof in an aggregate amount in excess
of $2,000,000 and (ii) Buyer will not be liable under any circumstances
for indemnification under Section 10.2 hereof in an aggregate amount in
excess of $2,000,000.
(c) If an Indemnitee recovers from any third party (including
insurers) all or any part of any amount paid to it by an Indemnifying
Party pursuant to Section 10.1 or 10.2 hereof, such Indemnitee will
promptly pay over to the Indemnifying Party the amount so recovered (after
deducting therefrom the full amount of the expenses incurred by it in
procuring such recovery, including any taxes and net of any tax benefit
resulting from such recovery and payment), but not in excess of any amount
previously so paid by the Indemnifying Party. If an Indemnitee recovers
from any third party (including insurers) any amount as to which
indemnification may be
32
claimed pursuant to Section 10.1 or 10.2 hereof, such Indemnitee will have
no right to claim indemnification for such amount from the Indemnifying
Party.
(d) The Indemnitee shall prosecute diligently and in good faith any
claim for indemnification with any applicable third party (including
insurers) prior to collecting any indemnification payment pursuant to
Section 10.1 or 10.2 hereof.
SECTION 10.4. Notice of Defense of Claims. Promptly after receipt of
---------------------------
notice of any claim or Damages for which an Indemnitee seeks indemnification
under this Article, such Indemnitee shall give written notice thereof to the
Indemnifying Party, but such notification shall not be a condition to
indemnification hereunder except to the extent of actual prejudice to the
Indemnifying Party. The notice shall state the information then available
regarding the amount and nature of such claim or Damages and shall specify the
provision or provisions of this Agreement under which the right to
indemnification is asserted. If within 30 days after receiving such notice the
Indemnifying Party gives written notice to the Indemnitee stating that it
intends to defend against such claim or Damages at its own cost and expense,
then defense of such matter, including selection of counsel (subject to the
consent of the Indemnitee which consent shall not be unreasonably withheld),
shall be by the Indemnifying Party and the Indemnitee shall make no payment in
respect of such claim or Damages as long as the Indemnifying party is conducting
a good faith and diligent defense. Notwithstanding the foregoing, the Indemnitee
shall at all times have the right to fully participate in such defense at its
own expense directly or through counsel; provided, however, if the named parties
to the action or proceeding include both the Indemnifying Party and the
Indemnitee and representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the expenses
of one separate counsel for the Indemnitee shall be paid by the Indemnifying
Party. If no such notice of intent to dispute and defend is given by the
Indemnifying Party, or if such diligent good faith defense is not being or
ceases to be conducted, the Indemnitee shall, at the expense of the Indemnifying
Party, undertake the defense of such claim or Damages with counsel selected by
the Indemnitee, and shall have the right to compromise or settle the same
exercising reasonable business judgment with the consent of the Indemnifying
Party, which consent shall not be unreasonably withheld. The Indemnitee shall
make available all information and assistance that the Indemnifying Party may
reasonably request and shall cooperate with the Indemnifying Party in such
defense. Notwithstanding anything herein to the contrary, the Indemnifying Party
shall have the right to settle all claims of third parties for which
indemnification is payable hereunder without the consent of the Indemnitee so
long
33
as such settlement releases the Indemnitee from all liability for or in
connection with such action and does not materially and adversely impair the
ability of the Indemnitee to carry on its business and does not contain any
admission of wrong doing on the part of the Indemnitee.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
SECTION 11.1. Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented by a written instrument signed by the parties hereto.
SECTION 11.2. Waiver of Compliance; Consents. Any failure of Buyer or
------------------------------
Buyer Subsidiary, on the one hand, or of Sellers on the other hand, to comply
with any obligation, covenant, agreement or condition contained herein may be
waived in writing by Sellers or Buyer, respectively, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
other failure.
SECTION 11.3. Validity. The invalidity or unenforceability of any
--------
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
SECTION 11.4. Expenses and Obligations. All costs and expenses incurred in
------------------------
connection with the consummation of the transactions contemplated by this
Agreement by Buyer or Buyer Subsidiary shall be paid by Buyer or Buyer
Subsidiary, and all costs and expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement by Sellers shall
be paid by Sellers.
SECTION 11.5. Notices. Any notice or other communication given pursuant to
-------
this Agreement must be in writing and (a) delivered personally, (b) sent by
telefacsimile or other similar facsimile transmission, (c) delivered by
overnight express, or (d) sent by registered or certified mail, postage prepaid,
as follows:
34
If to Buyer or Buyer Subsidiary, to:
Allstate Life Insurance Company
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile No.: (000) 000-0000
with a copy to:
Allstate Insurance Company
0000 Xxxxxxx Xxxx, Xxxxx X0
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile No.: (000) 000-0000
If to Sellers, to:
Charter National Life Insurance Company
Intramerica Life Insurance Company
c/o Xxxxxxx X. Xxxxxx
Empire Insurance Group
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
and to:
Leucadia National Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, President
Facsimile No.: (000) 000-0000
35
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
All notices and other communications required or permitted under this Agreement
that are addressed as provided in this Section will (A) if delivered personally
or by overnight express, be deemed given upon delivery; (B) if delivered by
telefacsimile or similar facsimile transmission, be deemed given when
electronically confirmed; and (C) if sent by registered or certified mail, be
deemed given when received. Any party from time to time may change its address
for the purpose of notices to that party by giving a similar notice specifying a
new address, but no such notice will be deemed to have been given until it is
actually received by the party sought to be charged with the contents thereof.
SECTION 11.6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the Laws of the State of New York.
SECTION 11.7. No Third Party Beneficiary. The terms and provisions of this
--------------------------
Agreement are intended solely for the benefit of Sellers, Buyer, Buyer
Subsidiary, and their respective successors and permitted assigns, and it is not
the intention of the parties to confer third-party beneficiary rights upon any
other Person.
SECTION 11.8. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
SECTION 11.9. Headings. The article and section headings contained in this
--------
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not affect in any way the meaning or interpretation of
this Agreement.
36
SECTION 11.10. Entire Agreement. This Agreement and the exhibits and
----------------
schedules attached hereto embody the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein or therein.
There are no agreements, representations, warranties or covenants other than
those expressly set forth herein or therein. This Agreement and the exhibits and
schedules attached hereto supersede all prior agreements and understandings
between the parties with respect to such subject matter.
SECTION 11.11. Assignment. Neither this Agreement nor any right or
----------
obligation hereunder or part hereof may be assigned by any party hereto without
the prior written consent of the other party hereto (and any attempt to do so
will be void), except as otherwise specifically provided herein.
SECTION 11.12. Jurisdiction and Venue. The parties hereto agree that any
----------------------
suit, action or proceeding arising out of or relating to this Agreement shall be
instituted only in the County of New York in the State of New York. Each party
waives any objection it may have now or hereafter to the laying of the venue of
any such suit, action or proceeding, and irrevocably submits to the jurisdiction
of any such court in any such suit, action or proceeding.
SECTION 11.13. Confidentiality. Subject to Section 4.13 hereof, for the
---------------
three years following the Effective Time, Buyer shall refrain, and shall cause
its officers, directors, employees, agents, auditors, counsel, affiliates and
other representatives (collectively, "Representatives") to refrain, from
directly or indirectly:
(a) disclosing to any Person, other than Representatives of Buyer or
Buyer Subsidiary ("Buyer's Representatives") the terms and conditions of
this Agreement or any records, files, documents, data (including without
limitation claims or loss data), or information concerning any of Sellers
or CNL or their respective affiliates that the Buyer or Buyer Subsidiary
prepares, maintains, uses, or receives in connection with the transactions
contemplated by this Agreement, unless (i) disclosure is compelled by any
court or administrative agency or by other applicable requirements of law
or (ii) such records, files, documents, data, or information can be shown
to have been (x) generally available to the public other than as a result
of a disclosure by Buyer, Buyer Subsidiary or Buyer's Representatives or
(y) available to Buyer on a non-confidential basis from a source other
than Sellers or their Representatives, provided that such source is not
known by Buyer or Buyer Subsidiary to be bound by a
37
confidentiality agreement with, or other obligation of secrecy of, any
Seller or another party; or
(b) using such records, files, documents, data or information for
any purpose (including without limitation directly or indirectly competing
with Sellers or any affiliate thereof) except pursuant to this Agreement.
Notwithstanding the foregoing, from and after the Closing Date, Buyer and
Buyer Subsidiary shall be entitled to use information concerning, derived from,
or related to the Business for any lawful purpose in connection with the
transaction of Buyer's or Buyer Subsidiary's business under the Charter
Coinsurance Agreement, the Charter Reinsurance Agreement, and the ILIC
Coinsurance Agreement, provided that Buyer and Buyer Subsidiary shall comply
with all Laws applicable to the use of such information (including, without
limitation, Laws relating to the use of such information that would otherwise be
applicable to Charter or ILIC, as applicable, as the issuers of the insurance
policies and annuity contracts constituting the Business).
38
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed on its behalf by its duly authorized officers, all as of
the day and year first above written.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxx
----------------------------------------
Name: Xxxxx X. Xxxx
Title: Treasurer
CHARTER NATIONAL LIFE INSURANCE
COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx,
Chairman and Chief Executive Officer
INTRAMERICA LIFE INSURANCE
COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx,
Chairman and Chief Executive Officer
LEUCADIA NATIONAL CORPORATION
By: /s/ Xxxxxx X. Orlando
----------------------------------------
Xxxxxx X. Orlando,
Vice President and Chief
Financial Officer
ALLSTATE LIFE INSURANCE COMPANY OF
NEW YORK
By: /s/ Xxxxx X. Xxxx
----------------------------------------
Name: Xxxxx X. Xxxx
Title: Treasurer
DAFS01...:\30\76830\0137\1170\AGRD157T.55L
