EXHIBIT 10.2
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into on
December 29, 1998, by and among Life Reassurance Corporation of America, a
Connecticut corporation ("Buyer"), Eureko B.V., a company organized under the
laws of the Netherlands ("Eureko") and Seaboard Life Insurance Company (USA), an
Indiana insurance corporation ("Seller").
RECITALS:
WHEREAS, Seller is engaged in, among other things, the business of
underwriting, issuing and administering certain life insurance and annuity
products, as more particularly described in Exhibit A hereto (the "Business");
---------
WHEREAS, Seller desires to cede to Buyer, and Buyer desires to reinsure
from Seller, all of Seller's rights, liabilities and obligations in respect of
the life insurance products and annuity products constituting the Business
effective as of the Effective Date;
WHEREAS, the parties hereto desire that Buyer assume and provide all
support and administrative services relating to the Business effective as of the
Effective Date; and
WHEREAS, each of Buyer, Eureko and Seller desire to make certain
representations, warranties and agreements in connection with the transactions
contemplated by this Agreement (the "Transactions") 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 TRANSACTIONS
----------------
SECTION 1.1. Reinsurance and Administration. Concurrently with the
------------------------------
execution of this Agreement, (i) Buyer and Seller are executing and delivering
an indemnity reinsurance agreement (the "Indemnity Reinsurance Agreement"), and
(ii) Buyer, Seller and Seaboard Life Insurance Company ("SLIC-Canada") are
executing and delivering an administrative services agreement (the
"Administrative Services Agreement").
SECTION 1.2. Consideration for the Transaction. The aggregate consideration
---------------------------------
payable by Buyer in respect of the Transactions shall be a cash ceding
commission equal to $8.32 million (the "Purchase Price").
SECTION 1.3. Closing.
-------
(a) "Closing" means the closing of the Transactions. "Effective
Date" means July 1, 1998. "Closing Date" means (i) the first day of the month
immediately following the month in which the last of the conditions to closing
set forth in this Agreement is satisfied or waived in writing, if the last of
such conditions was so satisfied or waived on or prior to the 15th day of such
prior month or (ii) the first day of the second month immediately following the
month in which the last of such conditions is so satisfied or waived, if the
last of such conditions was so satisfied or waived after the 15th day of such
prior month; provided, however, that if such date is not a Business Day, the
-------- -------
Closing Date shall be the immediately succeeding Business Day, and provided
further, that the Closing may occur on such other day as the parties may agree
to in writing. "Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in Indiana are permitted or obligated by law
to be closed.
(b) The Closing will take place at the offices of Xxxxxxxxxx, Xxxxxx &
Xxxxxxx LLP, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 10:00
a.m., Eastern Time on the Closing Date or such other time or place as the
parties may mutually agree (the "Closing Date").
(c) At the Closing, Buyer shall (i) pay the Purchase Price to Seller,
together with interest thereon from and including July 1, 1998, to but excluding
the Closing Date at a rate of 7 percent per annum, by wire transfer of
immediately available funds to such accounts as Seller shall specify to Buyer;
and (ii) deliver to Seller such documents and instruments as are required to be
delivered by Buyer under the terms of this Agreement (including without
limitation the documents required to be executed and delivered by Buyer pursuant
to Section 6.2, the "Buyer Documents").
(d) At the Closing, Seller shall deliver to Buyer such documents and
instruments as are required to be delivered by Seller under the terms of this
Agreement (including without limitation the documents required to be executed
and delivered by Seller pursuant to Section 6.1, the "Seller Documents").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EUREKO AND SELLER
----------------------------------------------------
Eureko and Seller make the following representations and warranties to
Buyer:
SECTION 2.1. Organization and Good Standing. Seller is a corporation duly
------------------------------
organized, validly existing and in good standing under the Laws (as defined
below) of Indiana. Seller has all requisite corporate power and authority to
own, lease or otherwise hold its assets and to conduct the Business as presently
conducted. Seller is duly qualified as a foreign corporation and is in good
standing in each jurisdiction which its ownership, lease or use of assets or
property or conduct of business makes such 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). Eureko is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation (to the extent that the concept of good standing
has legal significance in such jurisdiction) and has all corporate powers
required to carry on its business as now conducted. As used in this Agreement,
the term "Laws" shall mean all domestic or foreign federal, state, local
statutes, laws, ordinances or regulations. 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
Eureko's or Seller's ability to perform its obligations under this Agreement.
SECTION 2.2. Authorization of Agreement; Binding Obligation. Each of
----------------------------------------------
Eureko and Seller has all requisite corporate power and authority to execute and
deliver this Agreement and the Seller Documents and to perform its respective
obligations hereunder and thereunder. The execution and delivery by Eureko and
Seller of this Agreement and the Seller Documents and the performance by Eureko
and Seller of their respective obligations hereunder and thereunder have been
duly authorized by all necessary corporate and stockholder action on the part of
Eureko and Seller. This Agreement has been (and the Seller Documents will be)
duly executed and delivered by duly authorized officers of Eureko and Seller
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 Eureko and
Seller enforceable against Eureko and Seller 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 and
------------
the Seller Documents by Eureko and Seller do not, and the performance by Eureko
and Seller of their respective obligations hereunder and thereunder will not,
(a) conflict with the articles or certificate of incorporation or by-laws of
Eureko or Seller, (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 Eureko or 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 Eureko or 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) require Eureko or 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 (collectively, "Governmental Entity") or other person
or entity, 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. Licenses.
--------
(a) Seller owns or holds all licenses, permits and authorizations
required in connection with the conduct 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) Seller has complied with the material terms and conditions of each
license, permit and authorization required in connection with the conduct of the
Business, and all such licenses, permits and authorizations are valid, binding
and in full force and effect.
SECTION 2.5. Reinsurance. Set forth on Schedule 2.5 is a list of all
-----------
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. Seller has not received any
written notice of termination or intention to terminate from any other party to
such reinsurance agreements. Neither Seller nor, to the best knowledge of
Seller, 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 2.6. Litigation. Except as set forth on Schedule 2.6, there are no
----------
actions, suits, investigations, arbitrations, or similar proceedings pending, or
(to the knowledge of Eureko or Seller) threatened, against Eureko or Seller or
any of their 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 Eureko or Seller or any
of their 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 2.7. Compliance with Laws. Seller is not in violation (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 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 Material Adverse Effect.
SECTION 2.8. Seller Financial Statements. Seller has previously delivered
---------------------------
or made available to Buyer true and complete copies of the annual statements for
Seller as of and for the years ended December 31, 1996 and 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 Seller as of the
respective dates thereof and the related summary of operations and changes in
capital and surplus and in cash flows of Seller for and during the respective
periods covered thereby (subject, in the case of the quarterly statements, to
normal year-end adjustments).
SECTION 2.9. Material Changes. Except as disclosed in Schedule 2.9, since
----------------
December 31, 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) Seller has conducted the Business solely in the ordinary course of
business and consistent with past practice.
SECTION 2.10. Brokers' Fees and Commissions. Except for Xxxxxxx Xxxxx (all
-----------------------------
of the fees, expenses, and other liabilities of which will be paid by Eureko or
SLIC-Canada), neither Seller nor any of its directors, officers, employees or
agents has employed any investment banker, broker or finder in connection with
the Transactions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer makes the following representations and warranties to Eureko and
Seller:
SECTION 3.1. Organization and Qualification. Buyer 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 conduct its business
as presently conducted. Buyer 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 ability to perform its obligations under this
Agreement.
SECTION 3.2. Authorization of Agreement; Binding Obligation. Buyer has all
----------------------------------------------
requisite corporate power and authority to execute and deliver this Agreement
and the Buyer Documents and to perform its obligations hereunder and thereunder.
The execution and delivery by Buyer of this Agreement and the Buyer Documents
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. This
Agreement has been (and the Buyer Documents will be) duly executed and delivered
by Buyer 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 will constitute) valid and binding obligations of Buyer,
enforceable against Buyer 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
------------
and the Buyer Documents by Buyer do not, and the performance by Buyer of its
obligations hereunder and thereunder will not, (a) conflict with the articles or
certificate of incorporation or by-laws of Buyer, (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 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, 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 to obtain or make any consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity or other person or entity, 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.
SECTION 3.4. Licenses.
--------
(a) Buyer owns or holds all licenses, permits and authorizations
required in order to perform its obligations under this Agreement and the Buyer
Documents 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) Buyer 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, and all such licenses, permits and
authorizations are valid, binding and in full force and effect.
SECTION 3.5. Brokers' Fees and Commissions. Neither Buyer nor any of its
-----------------------------
directors, officers, employees or agents has employed any investment banker,
broker or finder in connection with the Transactions.
SECTION 3.6. Litigation. There are no actions, suits, investigations,
----------
arbitrations, or similar proceedings pending, or (to the knowledge of Buyer)
threatened, against Buyer or any of its 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 any of its 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. Buyer is not in violation (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 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.
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, Seller will
---------------------
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 entity reasonably
related to this Agreement and the Transactions. 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 and except as set forth in Schedule 4.2, during the period from the
date of this Agreement and continuing until the Closing Date:
(a) Seller shall carry on the Business in the usual, regular and
ordinary course as presently conducted and consistent with past practice; and
(b) Seller shall use all commercially reasonable efforts to (i)
maintain in full force and effect all licenses, permits and authorizations
necessary to conduct the Business, (ii) keep available the services of the
present employees of the Business, and (iii) maintain the goodwill associated
with the Business, including but not limited to preserving the relationships
with policyholders, agents, suppliers and others having business dealings with
Seller.
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 or entity 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
authorizations of (and preparing and submitting all filings and notifications
to) every Governmental Entity and other person or entity necessary for such
other parties to perform their obligations hereunder.
SECTION 4.4. Public Announcements. At all times prior to the Closing Date,
--------------------
Buyer and Seller 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 with respect to the Transactions and shall not issue
any such press release prior to such consultation and agreement, except as may
be required by applicable Law; provided, however, that, if possible, Buyer and
-------- -------
Seller 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
required by applicable Law.
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. As promptly as practicable until the
--------------------
Closing Date, Seller shall deliver to Buyer true and complete copies of each
quarterly statement filed by Seller with its state 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 Indiana, consistently applied
throughout the specified period and in the comparable period in the immediately
preceding year.
SECTION 4.7. Administration. From and after the Closing Date, the Business
--------------
will be administered pursuant to and in accordance with the terms of the
Administrative Services Agreement.
SECTION 4.8. Reinsurance. Prior to the Closing Date, Seller shall use its
-----------
commercially reasonable efforts to obtain any endorsements from the reinsurers
under all reinsurance agreements relating to the Business (other than the
Indemnity Reinsurance Agreement) to ensure that Buyer is entitled to enforce
such reinsurance agreements against the reinsurer in its own name; provided,
--------
however, that Seller shall be under no obligation to make payments or incur
-------
other liabilities to any person in connection with such endorsements. If Seller
is unable to obtain such endorsements notwithstanding such efforts, Seller shall
place Buyer in the same net economic position as if such endorsements had been
obtained (by continuing to use commercially reasonable efforts to enforce its
rights under such reinsurance agreements and ensuring that all benefits
thereunder received, directly or indirectly, by the Seller flow to Buyer).
SECTION 4.9. Disclosure. Buyer and Seller shall (i) draft disclosure
----------
materials describing the Transactions to be distributed to policyholders and
contractholders of Seller 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 shall distribute such materials by first class U.S. mail to all holders of
insurance policies and annuity contracts constituting the Business.
ARTICLE V
CONDITIONS TO CLOSING
---------------------
SECTION 5.1. Conditions Precedent to Obligations of Buyer. The obligations
--------------------------------------------
of Buyer under this Agreement to consummate the Transactions 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 Seller made in this
Agreement or in any Exhibit, Schedule, certificate or document delivered
pursuant to this Agreement shall be true and complete in all material
respects 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 Seller on or prior to the Closing Date shall have been
complied with or performed in all material respects.
(iii) Buyer shall have received a certificate, dated as of the
Closing Date, executed by Seller, certifying that the conditions specified
in Sections 5.1(a)(i) and (ii) have been satisfied.
(b) Closing Documents. Seller 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 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.
SECTION 5.2. Conditions Precedent to Obligations of Seller. The
---------------------------------------------
obligations of Seller under this Agreement to consummate the Transactions 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 Seller:
(a) Representations, Warranties and Covenants.
-----------------------------------------
(i) All representations and warranties of Buyer made in this
Agreement or in any Exhibit, Schedule, certificate or document delivered
pursuant to this Agreement shall be true and complete in all material
respects 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 on or prior to the Closing Date shall have been
complied with or performed in all material respects.
(iii) Seller 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. Buyer shall have executed and delivered the Buyer
-----------------
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 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 Seller. At the Closing, Seller
-----------------------------------
shall deliver to Buyer the following:
(a) Certified Resolutions. Certified resolutions of the Boards of
---------------------
Directors of Seller approving the execution and delivery of this Agreement and
each of the other documents delivered by Seller pursuant hereto and authorizing
the consummation of the Transactions.
(b) Officer's Certificate. The certificate, dated the Closing Date,
---------------------
duly executed by Seller as required by Section 5.1(a)(iii).
(c) Evidence of Approvals. Evidence of receipt of the consents and
---------------------
approvals described on Schedule 2.3.
SECTION 6.2. Documents to be Delivered by Buyer. At the Closing, Buyer
----------------------------------
shall deliver to Seller the following:
(a) Purchase Price. Evidence of a wire transfer in the amount of the
--------------
Purchase Price in accordance with Section 1.2.
(b) Certified Resolutions. Certified resolutions of the Board of
---------------------
Directors of Buyer approving the execution and delivery of this Agreement and
each of the other documents delivered by Buyer pursuant hereto and authorizing
the consummation of the Transactions.
(c) Officer's Certificate. The certificate, dated the Closing Date,
---------------------
duly executed by Buyer as required by Section 5.2(a)(iii).
(d) Evidence of Approvals. Evidence of receipt of the consents and
---------------------
approvals described on Schedule 3.3.
ARTICLE VII
TERMINATION AND ABANDONMENT
---------------------------
SECTION 7.1. Termination. This Agreement may be terminated and the
-----------
Transactions may be abandoned at any time prior to the Closing:
(a) by mutual consent of Seller and Buyer; or
(b) by Seller or Buyer:
(i) if a court of competent jurisdiction or any Governmental
Entity shall have issued an order, decree or ruling or taken any other
action (which order, decree or ruling the parties hereto shall use
their best efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the Transactions, 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 April
30, 1999; provided, however, that 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 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 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,
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 10.4 and 10.13 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
SURVIVAL OF PROVISIONS
----------------------
SECTION 8.1. Survival. (a) The representations and warranties required to
--------
be made by Seller and Buyer in this Agreement or in any certificate delivered
pursuant hereto will expire on the first anniversary of the Closing Date, except
that (i) the representations and warranties of Seller set forth in Section 2.10
hereof will survive until 30 days after the expiration of all statutes of
limitation applicable to 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 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 IX below.
(b) Eureko's obligation to indemnify Buyer against Company Extra
Contractual Obligations (as defined in the Indemnity Reinsurance Agreement)
shall terminate and expire on the second anniversary of the Closing Date, other
than such claims for which a notice of claim has been given by Buyer to Eureko
prior to such expiration date.
ARTICLE IX
INDEMNIFICATION
---------------
SECTION 9.1. Indemnification by Eureko. Subject to the provisions of
-------------------------
Sections 8.1, 9.3, and 9.4 hereof, Eureko shall indemnify and hold harmless
Buyer for 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 9.1 or 9.2 hereof) (collectively, "Damages")
resulting from or relating to (i) any breach by Seller or Eureko of any
representation, warranty, covenant, or agreement made by Seller or Eureko in
this Agreement, the Indemnity Reinsurance Agreement or the Administrative
Services Agreement, and (ii) any Company Extra Contractual Obligations (as
defined in the Indemnity Reinsurance Agreement) arising from actions or
omissions prior to the Closing Date.
SECTION 9.2. Indemnification by Buyer. Subject to the provisions of
------------------------
Sections 8.1, 9.3, and 9.4 hereof, Buyer shall indemnify and hold harmless
Seller in respect of any and all Damages resulting from or relating to (i) any
breach by Buyer of any representation, warranty, covenant, or agreement made by
Buyer in this Agreement, the Indemnity Reinsurance Agreement or the
Administrative Services Agreement, (ii) all Policy Liabilities (as defined in
the Indemnity Reinsurance Agreement), (iii) any claims that constitute Reinsurer
Extra Contractual Obligations (as defined in the Indemnity Reinsurance
Agreement), and (iv) any claims that constitute Company Extra Contractual
Obligations as to which Eureko's indemnification obligation has expired pursuant
to Section 8.1(b) hereof.
SECTION 9.3. Limitations on Indemnification.
------------------------------
(a) No claim by any person for indemnification under this Article IX
(an "Indemnitee") against any person (an "Indemnifying Party"), relating 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 IX prior to the time the
survival period for such representation or warranty expired.
(b) 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 9.1 or 9.2 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 claimed pursuant to Section 9.1 or 9.2
hereof, such Indemnitee will have no right to claim indemnification for such
amount from the Indemnifying Party.
(c) 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 9.1 or 9.2
hereof.
(d) Eureko shall be obligated to provide indemnification on account of
(i) any misrepresentation or breach of warranty referred to in Section 9.1 and
(ii) Company Extra Contractual Obligations only to the extent that the aggregate
dollar amount of Damages with respect thereto exceeds $332,800.
(e) The maximum aggregate liability of Eureko for indemnification for
all Damages subject to indemnification under this Article IX including, without
limitation, any amount paid pursuant to Section 9.3(d) shall be $2,912,000.
SECTION 9.4. 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 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 X
MISCELLANEOUS PROVISIONS
------------------------
SECTION 10.1. Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented by a written instrument signed by the parties hereto.
SECTION 10.2. Waiver of Compliance; Consents. Any failure of Buyer, on
------------------------------
the one hand, or of Seller on the other hand, to comply with any obligation,
covenant, agreement or condition contained herein may be waived in writing by
Seller 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 10.3. 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 10.4. Expenses and Obligations. All costs and expenses incurred
------------------------
in connection with the consummation of the Transactions by Buyer shall be paid
by Buyer, and all costs and expenses incurred in connection with the
consummation of the Transactions by Seller shall be paid by Seller. Buyer shall
pay the cost of the filing fees in connection with the filings by any of the
parties hereto under the HSR Act with respect to the Transactions.
SECTION 10.5. Notices. Any notice or other communication given pursuant
-------
to this Agreement must be in writing and (a) delivered personally, (b) sent by
facsimile or other similar facsimile transmission, (c) delivered by overnight
express, or (d) sent by registered or certified mail, postage prepaid, as
follows:
If to Buyer, to:
Life Re Corporation
000 Xxxx Xxxxx Xxxx, Xxxxxxxx XX 00000
Attention: W. Xxxxxx Xxxxxx
Facsimile No.: (000)000-0000
If to Eureko, to:
Eureko, B.V.
Xxxxxxx 000, X. X. Xxx 00000
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Attention: Xxxx Xxxxxxx
Fax: 000-00-00-0000-000
with a copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Seller, to:
Seaboard Life Insurance Company (USA)
000 Xxxxx Xxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
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
facsimile 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 10.6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the Laws of the State of Indiana.
SECTION 10.7. No Third Party Beneficiary. The terms and provisions of this
--------------------------
Agreement are intended solely for the benefit of Eureko, Seller, Buyer, 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 or
entity.
SECTION 10.8. 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 10.9. 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.
SECTION 10.10. Entire Agreement. This Agreement (including the Exhibits
----------------
and Schedules attached hereto), the Indemnity Reinsurance Agreement, and the
Administrative Services Agreement 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
(including the Exhibits and Schedules attached hereto), the Indemnity
Reinsurance Agreement, and the Administrative Services Agreement supersede all
prior agreements and understandings between the parties with respect to such
subject matter.
SECTION 10.11. 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 10.12. 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 United States District Court for the Southern District of
Indiana or any Indiana court sitting in Indiana. 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 10.13. Confidentiality. From and after the date hereof, 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 or entity (other than 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 Seller or its affiliates that Buyer 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 or its
Representatives or (y) available to Buyer on a non-confidential basis from a
source other than Seller or its Representatives, provided that such source is
not known
by Buyer to be bound by a confidentiality agreement with, or other obligation of
secrecy of, 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
Seller or any affiliate thereof) except pursuant to this Agreement.
Notwithstanding the foregoing, from and after the Closing Date, Buyer 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
business under the Indemnity Reinsurance Agreement, provided that Buyer 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 Seller as the issuer of the insurance policies and
annuity contracts constituting the Business).
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.
LIFE REASSURANCE CORPORATION
OF AMERICA
By:________________________________
Name:
Title:
EUREKO B.V.
By:________________________________
Name:
Title:
SEABOARD LIFE INSURANCE
COMPANY (USA)
By:________________________________
Name:
Title:
Exhibit A
Description of Life Insurance Policies and Annuity Contracts
------------------------------------------------------------
A. All individual life insurance policies and annuity contracts issued or
assumed by Seller.
B. All group life insurance certificates acquired with California Casualty &
Life Insurance Company which are in force under waiver of premium benefit
provisions.
C. California Casualty & Life Insurance Company Pension Certificate A and B
monthly payments.
Schedule 2.3
Governmental Approvals
----------------------
Approval of California Department of Insurance
Approval of Indiana Department of Insurance
Approval of Wisconsin Department of Insurance
Schedule 2.5
Reinsurance
-----------
Policies issued by Seller:
-------------------------
Swiss Re Life & Health #A044-89 dated Xxxxxxx 0, 0000
Xxxxx Re Life & Health #A057-90 dated November 1, 1989
Swiss Re Life & Health #AF111-91 dated February 1, 1991
Transamerica Occidental Life #6302-3 dated August 1, 1988
Transamerica Occidental Life #6302-4 dated January 1, 1991
Transamerica Occidental Life #6302-14 dated January 1, 0000
Xxxxxx American Reassurance Company #1488 dated May 1, 1997
Policies acquired with Enumclaw Life Insurance Company:
------------------------------------------------------
Connecticut General Life dated May 1, 1989
Transamerica Occidental Life dated August 1, 1973
Transamerica Occidental Life #2118-2 dated October 1, 1986
Transamerica Occidental Life #2118-3 dated March 1, 1988
Transamerica Occidental Life #2118-4 dated October 1, 1988
Transamerica Occidental Life #2118-5 dated January 1, 1989
Policies acquired with California Casualty & Life:
--------------------------------------------------
Lincoln National Life dated July 1, 1972
Lincoln National Life dated October 1, 1984
Lincoln National Life dated March 1, 1987
Transamerica Occidental Life #6302-15 dated November 1, 0000
Xxxxxx American Reassurance dated December 21, 1966
Schedule 2.6
Litigation
----------
None.
Schedule 2.9
Material Changes
----------------
Seller ceased accepting new individual life insurance policies and annuity
contracts on October 1, 1998.
Schedule 3.3
Governmental Approvals
----------------------
None.
Schedule 4.2
Conduct of Business Exceptions
------------------------------
The Seller shall not accept new individual life insurance policies or annuity
contracts after the date of this Agreement.
