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EXECUTION COPY
TRANSITION SERVICES AGREEMENT
Between
XXXX XXXXX LIFE INSURANCE COMPANY
and
XXXX XXXXX LIFE INSURANCE COMPANY OF NEW YORK
Dated: March 31, 1997
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TABLE OF CONTENTS
Page
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ARTICLE 1 APPOINTMENT OF JALIC; SERVICES AND AUTHORITY.................................................. 2
1.1 Engagement........................................................................... 2
1.2 General Description of the Services.................................................. 2
1.3 Performance by Affiliates............................................................ 2
1.4 Financial Services................................................................... 3
1.5 Maintenance of Books and Records..................................................... 3
1.6 Claims-Payment Instructions.......................................................... 4
1.7 Complaint-Handling Procedure......................................................... 4
1.8 Filings.............................................................................. 4
ARTICLE 2 COMPENSATION; PAYMENT......................................................................... 5
2.1 Fee.................................................................................. 5
2.2 Invoice; Payment..................................................................... 5
2.3 Disputes............................................................................. 5
ARTICLE 3 TRANSITION PERIOD............................................................................. 6
ARTICLE 4 INTENTIONALLY DELETED......................................................................... 6
ARTICLE 5 TERM AND TERMINATION.......................................................................... 7
5.1 Term................................................................................. 7
5.2 Termination for Breach............................................................... 7
5.3 Termination for Receivership......................................................... 7
5.4 Termination Upon Notice.............................................................. 7
5.5 Automatic Termination................................................................ 7
ARTICLE 6 REPRESENTATIONS............................................................................... 8
ARTICLE 7 INDEPENDENT CONTRACTOR........................................................................ 8
ARTICLE 8 FORCE MAJEURE................................................................................. 8
ARTICLE 9 HOLD HARMLESS................................................................................. 9
ARTICLE 10 MISCELLANEOUS................................................................................. 10
10.1 Notices.............................................................................. 10
10.2 Entire Agreement..................................................................... 12
10.3 Amendments........................................................................... 12
10.4 Waivers.............................................................................. 13
10.5 Governing Law........................................................................ 13
10.6 Arbitration.......................................................................... 14
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TABLE OF CONTENTS
(cont'd)
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10.7 Certain Definitions.................................................................. 15
10.8 Binding Effect; Assignment; Third Party Beneficiaries................................ 15
10.9 Severability......................................................................... 15
10.10 Headings............................................................................. 16
10.11 Counterparts......................................................................... 16
10.12 Further Assurances................................................................... 16
SCHEDULES:
Schedule 1.1 - Services
Schedule 2.1 - Compensation of JALIC
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TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT (the "Agreement") dated March 31, 1997
(the "Effective Date") between Xxxx Xxxxx Life Insurance Company, a Minnesota
corporation ("JALIC"), and Xxxx Xxxxx Life Insurance Company of New York, a New
York corporation (the "Company").
WHEREAS, the Company is engaged in the business of issuing, selling and
administering annuity, life and health related insurance policies and related
activities solely in the State of New York;
WHEREAS, pursuant to a Stock Purchase and Sale Agreement dated as of
November 29, 1996 (the "Stock Purchase Agreement") between JALIC and SunAmerica
Life Insurance Company, an Arizona corporation ("SunAmerica"), JALIC is selling
to SunAmerica all of the issued and outstanding capital stock of the Company;
WHEREAS, the Company desires that JALIC provide to the Company on an
interim basis technical and administrative services, assistance and support with
respect to the In Force Insurance Contracts (hereinafter referred to as
"Policies").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, and other good, valuable and
sufficient consideration including the consideration provided hereunder, the
receipt of which is hereby acknowledged, the Company and JALIC (collectively,
the "Parties" and, sometimes individually a "Party"), intending to be legally
bound, hereby agree as follows:
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ARTICLE 1
APPOINTMENT OF JALIC; SERVICES AND AUTHORITY
1.1 Engagement. The Company hereby engages JALIC to perform and provide
the technical and administrative service, assistance and support functions
described in Schedule 1.1 attached hereto (the "Services"). JALIC hereby accepts
such appointment.
1.2 General Description of the Services. The purpose of this Agreement
is to set forth the terms upon which JALIC shall provide to the Company the
Services on an interim basis in order to permit the Company the opportunity to
obtain alternative sources of supply of the Services. In general, the Services
shall be consistent with, and limited to, the comparable services provided by
JALIC with respect to the Policies immediately prior to the date hereof;
provided, however that the Company shall have the discretion to require JALIC to
make such changes to such Services, at the Company's sole cost and expense, as
the Company deems necessary to be provided in a manner that is reasonable and
consistent with the current prevailing standards of the life insurance industry
or applicable Law.
1.3 Performance by Affiliates. The Parties recognize that the Services
may include services which, by their nature, are more effectively to be provided
by Affiliates of JALIC. Subject to the next sentence of this Section 1.3, JALIC
shall, to the extent required in order for its Affiliates to provide such
Services, cause its Affiliates to provide such Services hereunder as if such
Affiliates were themselves parties hereto. In connection with the provision of
such Services, JALIC's Affiliates shall be entitled, as if such Affiliates were
themselves parties hereto, to the benefits of (i) the limitations on liability
set forth herein and (ii) the limitations on the obligation to provide Services
set forth herein.
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1.4 Financial Services. For the Term (as defined in Article 3), upon
the reasonable request of the Company, JALIC shall provide such accounting
services as JALIC previously provided to the Company immediately prior to the
date hereof in the ordinary course.
1.5 Maintenance of Books and Records. (a) For the Term, JALIC shall
assist the Company in maintaining books and records of all transactions
pertaining to the Policies, as JALIC previously provided to the Company
immediately prior to the date hereof in the ordinary course. These books and
records, to the extent maintained by JALIC, shall be maintained, in all material
respects, in accordance with any and all applicable Laws. All such books and
records pertaining to a Policy shall be the property of the Company. JALIC shall
(i) allow the Company, upon reasonable prior notice and during regular business
hours, through its employees and other Representatives, at the Company's expense
to examine and make copies of any books and records pertaining to the Policies
retained by JALIC within its possession or control (which for purposes of this
section shall be defined as the ability to cause delivery to the Company or
access by the Company) for any reasonable business purpose, including, without
limitation, the preparation or examination of Tax Returns, regulatory filings
and financial statements and the conduct of any Action, whether pending or
threatened, concerning the Company, at JALIC's offices of other facilities or
properties and (ii) maintain such books and records for the Company's
examination and copying. Access to such books and records shall be at the
Company's expense, may not unreasonably interfere with JALIC's or any successor
company's business operations and the Company shall reimburse JALIC for all
reasonable out-of-pocket expenses incurred by JALIC in copying such records.
Except for such books and records as may be required or permitted to be
maintained by JALIC pursuant to the Stock Purchase
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Agreement, upon expiration of the Term, JALIC shall deliver to the Company all
books and records pertaining to the Policies.
(b) JALIC shall back up and maintain the computer files used
by JALIC in Miami, Florida in the performance of the Services hereunder in the
same manner that JALIC backed up and maintained such computer files relating to
Policies prior to the date hereof.
(c) JALIC shall maintain facilities and procedures for
safekeeping all records used in the performance of Services under this Agreement
of the same kind used to safekeep JALIC'S own Records.
(d) Each Party and its Representatives may audit and review
the other's records relating to the Services provided hereunder during
reasonable business hours and upon reasonable advance notice; provided, however,
that such audit or review may be postponed during any such period if it will be
unreasonably disruptive to the Party being audited or reviewed.
1.6 Claims-Payment Instructions. JALIC will provide systems support in
the processing of claims as JALIC previously provided to the Company immediately
prior to the date hereof in the ordinary course.
1.7 Complaint-Handling Procedure. The Parties will cooperate with each
other in providing information necessary to respond to any inquiries and
complaints concerning the Policies as JALIC previously provided to the Company
immediately prior to the date hereof in the ordinary course.
1.8 Filings. To the extent JALIC has previously provided such service
to the Company immediately prior to the date hereof in the ordinary course,
JALIC shall handle all compliance and regulatory matters relating to the
administration of Policies, including monitoring
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changes in applicable Laws, implementing the appropriate and necessary changes
to forms and rates as required by applicable Laws, filing and refiling forms and
rates as required by applicable Laws, and preparing and filing all reports and
other filings required by applicable Laws. JALIC shall use its reasonable
efforts to provide copies of all reports and filings with respect to a Policy
required to be made with any governmental entity to the Company.
ARTICLE 2
COMPENSATION; PAYMENT
2.1 Fee. The Company shall pay to JALIC a fee for each Service
determined in accordance with Schedule 2.1 attached hereto (a "Fee").
2.2 Invoice; Payment. JALIC shall invoice the Company for the Fees at
such intervals as JALIC may deem appropriate, but not more frequently than
monthly. Payment of each such invoice shall be made by wire transfer to JALIC
within 5 days after receipt by the Company of such invoice.
2.3 Disputes. (a) If within 90 days following the end of the Term, the
Company notifies JALIC that it questions all or any part of any of the Fees paid
hereunder, JALIC shall, at the request of the Company, provide to the Company
within 30 days after receipt of such request a written explanation, which
explanation shall be signed and certified by a senior financial officer of
JALIC, explaining the matter or matters in question in reasonable detail
sufficient to permit the Company to verify the accuracy of such Fee. Pending
receipt and review of such explanation, the Company shall pay the full amount of
any balance set forth on such Monthly Accounting to JALIC when due. Upon receipt
of such explanation, the Company shall have 60 days in which to deliver to JALIC
a written notice of disagreement specifying in reasonable detail the nature and
extent of the disagreement.
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(b) If the Company and JALIC are unable to resolve any
disagreement with respect to the Fee within 30 days after JALIC receives a
timely notice of disagreement, the items of disagreement alone shall be referred
for final determination to the U.S. national office of Price Waterhouse LLP or,
if such firm is unable or unwilling to make such final determination, to such
other independent accounting firm as the Parties shall mutually designate. The
firm making such determination is referred to herein as the "Independent Party."
The Fee shall be deemed to be binding on the Company and JALIC upon the earlier
to occur of (i) the Company's failure to deliver to JALIC a notice of
disagreement within 30 days after its receipt of such written explanation
prepared by JALIC, (ii) resolution of any disagreement by mutual agreement of
the Parties after a timely notice of disagreement has been delivered to JALIC,
or (iii) notification by the Independent Party of its final determination of the
items of disagreement submitted to it. The fees and disbursements of the
Independent Party shall be borne equally, one-half by JALIC and one-half by the
Company. If pursuant to this Section 2.3, it is ultimately determined that JALIC
owes the Company any amount, JALIC shall pay such amount to the Company in cash
within 10 days of such determination along with interest calculated at a rate
equal to the three month LIBOR rate plus 25 basis points on the amount due from
the date on which the Company paid or settled the Fee which is the subject of
the dispute.
ARTICLE 3
TRANSITION PERIOD
Subject to Article 5 hereof, the Company agrees to engage JALIC for the
provision of the Services for a period of nine months (the "Term"). The Term may
be extended or reduced by mutual written agreement of the Parties.
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ARTICLE 4
INTENTIONALLY DELETED
ARTICLE 5
TERM AND TERMINATION
5.1 Term. Unless sooner terminated pursuant to the provisions of this
Article 5, this Agreement shall remain in effect until the end of the Term;
provided, however, that this Agreement shall terminate with respect to each
Policy that has been transitioned to the Company and/or converted over to the
Company's administration system.
5.2 Termination for Breach. In the event of a breach by either Party of
any obligation of any provision of this Agreement, the non-breaching Party shall
give written notice of breach to the breaching Party, detailing the nature of
such breach in sufficient detail to allow the breaching party to cure, if cure
is possible. If such breach is not cured by the breaching Party within 15 days
after such notice of breach, then the non-breaching Party may terminate this
Agreement by giving notice of termination to the breaching Party. Such
termination shall be effective on notice of termination by the non-breaching
Party to the breaching Party.
5.3 Termination for Receivership. In the event of a receivership or
insolvency of either Party, this Agreement may be terminated immediately by the
other Party upon written notice.
5.4 Termination Upon Notice. The Company may terminate this Agreement
for any reason after the first 30 days of the Term upon the giving of 30 days
prior written notice to JALIC in accordance with Section 10.1 hereof.
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5.5 Automatic Termination. This Agreement shall terminate upon
termination of the Transition Services Agreement, dated concurrently herewith,
between SunAmerica and JALIC.
ARTICLE 6
REPRESENTATIONS
THERE ARE NO REPRESENTATIONS OR WARRANTIES BY JALIC OR ITS AFFILIATES
WITH RESPECT TO THE SERVICES, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
THE STOCK PURCHASE AGREEMENT AND THE ANCILLARY AGREEMENTS. NO REPRESENTATION OR
WARRANTY SHALL BE IMPLIED UNDER THIS AGREEMENT OR AT LAW, INCLUDING, WITHOUT
LIMITATION, WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE AS TO THE SERVICES.
ARTICLE 7
INDEPENDENT CONTRACTOR
JALIC and its Affiliates shall be independent contractors to the
Company and its Affiliates with respect to the performance of the Services
hereunder. Nothing contained in this Agreement shall make JALIC, its Affiliates
or their employees the employees of SunAmerica or the Company.
ARTICLE 8
FORCE MAJEURE
JALIC and its Affiliates shall not be liable for its or their failure
to perform hereunder to the extent that such performance is made impracticable,
delayed or prevented, in whole or in part, due to any acts of God; fires; wars;
Laws or Orders, whether valid or invalid (including, without limitation,
requisitions, allocations and price adjustment restrictions) or inability to
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obtain or unavoidable delay in obtaining necessary power. JALIC and its
Affiliates shall use commercially reasonable efforts (which shall be
substantially similar to those used by JALIC immediately prior to the date
hereof) to minimize the likelihood of any damage, loss of data, delay or error
resulting from such occurrence beyond its or their control. If JALIC or its
Affiliates fails to perform hereunder as a result of any occurrence described in
the preceding sentence, JALIC shall (i) give written notice to that effect to
Company within 10 days after such occurrence together with a statement setting
forth reasonably full particulars concerning such occurrence and (ii) during the
period any Service required to be provided hereunder cannot be provided as a
result of such occurrence, use reasonable efforts to remedy such occurrence. To
the extent required by any such occurrence, the performance by JALIC or its
Affiliates hereunder shall be suspended during the continuance of any such
occurrence and this Agreement shall otherwise remain unaffected (except for the
Company's obligation to pay the Fees, which shall also be suspended). If such
occurrence is remedied during the time that any Service affected by such
occurrence is required to be provided under this Agreement, JALIC or its
Affiliates shall promptly notify the Company and any such suspension shall end.
ARTICLE 9
HOLD HARMLESS
The Company shall indemnify and hold JALIC and each of its Affiliates
harmless from any and all damages, claims, suits, actions, causes of action,
proceedings, investigations, losses, liabilities, assessments, judgments,
deficiencies and expenses (including, without limitation, reasonable legal,
accounting and other professional expenses) ("Liabilities") asserted against or
incurred or sustained by JALIC or any of its Affiliates relating to, associated
with or arising out of providing the Services hereunder, except to the extent
such Liabilities resulted from the
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negligence, bad faith or willful misconduct of JALIC or its Affiliates. JALIC
shall indemnify and hold the Company and its Affiliates harmless from any and
all Liabilities directly arising from JALIC's or its Affiliates breach of any
provision of this Agreement, including acts of negligence, bad faith or willful
misconduct by JALIC or its Affiliates in providing the Services. The
indemnification provisions under this Article 9 shall survive the Term for all
Liabilities arising from omissions or acts committed during the Term.
ARTICLE 10
MISCELLANEOUS
10.1 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally (by courier or
otherwise), sent by certified, registered or express mail, postage prepaid and
return receipt requested, or transmitted by facsimile (with a copy of such
notice or other communication and a confirmation of transmission sent by
certified, registered, or express mail, postage prepaid and return receipt
requested no later than the close of business on the next Business Day following
such transmission) and shall be addressed as follows:
when the Company is to be notified:
Xxxx Xxxxx Life Insurance Company of New York
c/o SunAmerica Life Insurance Company
0 XxxXxxxxxx Xxxxxx, Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile No.: (000) 000-0000
With a copy to:
SunAmerica Life Insurance Company
0 XxxXxxxxxx Xxxxxx, Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Controller
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Facsimile No.: (000) 000-0000
and
O'Melveny & Xxxxx
1999 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
when JALIC is to be notified:
Xxxx Xxxxx Life Insurance Company
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx, XX 00000-0000
Attention: General Counsel
Facsimile No.: (000) 000-0000
With copies to:
Xxxx Xxxxx Financial Corporation
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx, XX 00000-0000
Attention: General Counsel
Facsimile No.: (000) 000-0000
Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
A Party may, by notice given in accordance with this Section 10.1 to the other
Party, designate another address or Person to which notices required or
permitted to be given pursuant to this Agreement shall thereafter be
transmitted. Each notice transmitted in the manner described in this Section
10.1 shall be deemed to have been given, received and become effective for all
purposes at the time it shall have been (i) delivered to the addressee as
indicated by the return receipt (if transmitted by mail), transmitted to the
addressee (if transmitted by facsimile and
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subject to delivery of the mailed copy thereof) or the affidavit of the
messenger (if transmitted by personal delivery), or (ii) presented for delivery
to the addressee as so indicated during normal business hours, if such delivery
shall have been refused for any reason.
10.2 Entire Agreement. This Agreement (including the Schedules attached
hereto) and the Stock Purchase Agreement (including the Ancillary Agreements and
the Annex, Exhibits and Schedules attached thereto) contain the entire agreement
and understanding between the Parties with respect to the subject matter hereof
and cancels and supersedes all of the previous or contemporaneous agreements,
representations, warranties and understandings, whether written or oral, by or
between the Parties with respect to the subject matter hereof. Nothing contained
in this Agreement or any of the Schedules hereto shall constitute or be
interpreted or construed as an admission by any Party or any of its Affiliates
of liability to third parties, whether under any Laws or otherwise, or as an
admission that any Party or any of its Affiliates are in violation of or have
ever violated any such Laws. In the event of any conflict between this Agreement
and the Stock Purchase Agreement as to the rights or obligations of JALIC or the
Company, the Stock Purchase Agreement shall control. In the event of any
ambiguity in this Agreement as to the rights or obligations of JALIC or the
Company, the Stock Purchase Agreement shall control.
10.3 Amendments. No addition to, and no cancellation, renewal,
extension, modification or amendment of, or approvals under, this Agreement
shall be binding upon a Party unless such addition, cancellation, renewal,
extension, modification, amendment or approval is set forth in a written
instrument which states that it adds to, amends, cancels, renews or extends this
Agreement or grants an approval hereunder and which is executed and delivered on
behalf of each Party by an officer of, or attorney-in-fact for, such Party.
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10.4 Waivers. No waiver of any provision of this Agreement shall be
binding upon a Party unless such waiver is expressly set forth in a written
instrument which is executed and delivered on behalf of such Party by an officer
of, or attorney-in-fact for, such Party. Such waiver shall be effective only to
the extent specifically set forth in such written instrument. Neither the
exercise (from time to time or at any time) nor the delay or failure (at any
time or for any period of time) to exercise any right, power or remedy shall
operate as a waiver of, the right to exercise, or impair, limit or restrict the
exercise by, any Party of any such right, power or remedy any other right, power
or remedy at any time and from time to time thereafter. No waiver of any right,
power or remedy of a Party shall be deemed to be a waiver of any other right,
power or remedy of such Party or shall, except to the extent so waived, impair,
limit or restrict the exercise of such right, power or remedy.
10.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ITS CONFLICTS OF LAWS. Each Party consents and submits to the non-exclusive
personal jurisdiction of any federal court in the State of Delaware in respect
of any proceeding for the sole purpose of injunctive relief or to enforce an
arbitration award under Section 10.6 hereof. Each Party consents to service of
process upon it with respect to any such proceeding by registered mail, return
receipt requested, and by any other means permitted by applicable Laws. Each
Party waives any objection that it may now or hereafter have to the laying of
venue of any such proceeding in federal court in the State of Delaware and any
claim that it may now or hereafter have that any such proceeding in any such
court has been brought in an inconvenient forum.
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10.6 Arbitration. The Parties acknowledge and agree that the
transactions contemplated herein substantially affect and impact interstate
commerce. Therefore, all disputes or differences between JALIC and the Company
arising under or which are related to this Agreement upon which an amicable
understanding cannot be reached within 30 days shall be settled by arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, except as hereinafter provided, and judgment upon the award entered
by the Arbitrators (as defined below) may be entered in any court having
jurisdiction thereof. The Arbitrators provided for herein shall construe this
Agreement in light of the prevailing custom and practices for transactions of a
similar nature in the insurance industry. The "Arbitrators" shall consist of one
neutral arbitrator (or as provided below, three neutral arbitrators). The
Parties agree that the arbitration, if implemented under this Agreement, shall
be held at a site selected by the Arbitrators. The Parties agree to arbitrate
within 90 days following the transmittal of written demand of either Party to
arbitrate any dispute arbitrable under this Agreement. The Parties will in good
faith, within 15 days following notice of written demand to arbitrate attempt to
agree on a single Arbitrator. If the Parties cannot within 15 days thereafter
agree on a single Arbitrator, each of the Parties shall appoint an Arbitrator,
notifying the other Party of the name and address of such Arbitrator. The
Arbitrators appointed by each Party shall agree upon and appoint a third neutral
Arbitrator. If either Party shall fail to appoint an Arbitrator as herein
provided, or should the two Arbitrators so named fail to select the third
Arbitrator within 30 days after their appointment, then, in either event, the
President of the American Arbitration Association or its successor shall appoint
such second and/or third Arbitrator. A decision of a majority of the Arbitrators
shall be final and binding and there shall be no appeal therefrom. The
Arbitrators shall within 45 days after the last hearing enter an award and the
award shall
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be supported by a written opinion. The fees of the Arbitrators and the direct
costs of the arbitration shall be shared equally by the Parties; all other costs
of the respective Parties, including without limitation fees and expenses of the
respective Party's attorneys, witnesses and discovery shall be paid by the
respective Party, except to the extent that the Arbitrators otherwise direct
based on the equities of the situation. The arbitration shall be held in New
York, New York, unless otherwise agreed between the Parties.
10.7 Certain Definitions. Capitalized terms used herein without
definition shall have the meanings ascribed to them in the Stock Purchase
Agreement.
10.8 Binding Effect; Assignment; Third Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns. Except as otherwise provided
herein, neither JALIC nor the Company shall assign any of its rights or delegate
any of its duties hereunder (in whole or in part and by operation of law or
otherwise) without the prior written consent of the other Party hereto. Any
other assignment of rights or delegation of duties under this Agreement by a
Party without the prior written consent of the other Party, if such consent is
required hereby, shall be void. No Person (including, without limitation, any
employee of a Party) shall be, or be deemed to be, a third party beneficiary of
this Agreement.
10.9 Severability. If any provision of this Agreement shall hereafter
be held to be invalid, unenforceable or illegal, in whole or in part, in any
jurisdiction under any circumstances for any reason, (i) such provision shall be
reformed to the minimum extent necessary to cause such provision to be valid,
enforceable and legal while preserving the intent of the Parties as expressed
in, and the benefits to the Parties provided by, this Agreement or (ii) if such
provision cannot be so reformed, such provision shall be severed from this
Agreement and an equitable
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adjustment shall be made to this Agreement (including, without limitation,
addition of necessary further provisions to this Agreement) so as to give effect
to the intent as so expressed and the benefits so provided. Such holding shall
not affect or impair the validity, enforceability or legality of such provision
in any other jurisdiction or under any other circumstances. Neither such holding
nor such reformation or severance shall affect or impair the legality, validity
or enforceability of any other provision of this Agreement.
10.10 Headings. The headings in this Agreement have been inserted for
convenience of reference only, and shall not be considered a part of this
Agreement and shall not limit, modify or affect in any way the meaning or
interpretation of this Agreement.
10.11 Counterparts. This Agreement may be executed by the Parties in
any number of counterparts, each of which when so executed and delivered shall
constitute an original instrument, but all such counterparts shall together
constitute one and the same instrument. This Agreement shall become effective
and be deemed to have been executed and delivered by all of the Parties at such
time as counterparts shall have been executed and delivered by both of the
Parties, regardless of whether each of the Parties has executed the same
counterpart. It shall not be necessary when making proof of this Agreement to
account for any counterparts other than a sufficient number of counterparts
which, when taken together, contain signatures of both of the Parties.
10.12 Further Assurances. Subject to the provisions of this Agreement,
JALIC and the Company will use their commercially reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws to provide the Services
required herein. With regard to any matters not expressly stated herein, the
Parties agree to furnish such information, to execute such additional documents,
and to
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cooperate with each other as may be reasonably necessary to carry out the
purposes of this Agreement, in accordance with industry practice for
transactions of this kind. If either Party becomes aware that any Action has
been or is about to be initiated with respect to the Policies, or any other
matter reasonably related thereto, it shall inform the other Party as soon as
practicable. The Parties agree to cooperate in furnishing to each other any
files or other information needed by the other to respond to any Action or
threatened Action.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
XXXX XXXXX LIFE INSURANCE COMPANY
By:s/ Xxxxx X. Xxxxxxx
-------------------------------------
Title: Senior Vice President and CFO
----------------------------------
XXXX XXXXX LIFE INSURANCE COMPANY
OF NEW YORK
By:s/ Xxxxx X. Xxxxx
-------------------------------------
Title: Senior Vice President
----------------------------------
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Schedule 1.1
SERVICES
I. ADMINISTRATIVE SERVICES
Administrative Services with respect to the Policies as conducted by
JALIC shall consist of those services, and only those services, JALIC had
previously rendered for the Company in the ordinary course immediately prior to
the date hereof with respect to the Policies; provided, however that, if JALIC
is not providing Services consistent with the current prevailing standards of
the life insurance industry, the Company shall have the discretion to require
JALIC to make such changes to such Services, at the Company's sole cost and
expense (in accordance with item II below), as the Company deems necessary to be
provided in a manner that is reasonable and consistent with the current
prevailing standards of the life insurance industry. Such services shall
include, but only to the extent such Services were previously provided to the
Company immediately prior to the date hereof:
(a) assistance with all Policyholder services relating to the Policies
including but not limited to the following:
1. Billing and collection of premiums;
2. Payment of claims;
3. Handling of Policyholder service requests, inquiries
and complaints under the Policies;
4. Upon reasonable request, preparation of quarterly
financial statement data (within ten business days
after the end of a calendar quarter) and annual
financial statement data (within thirty calendar days
after the end of the fiscal year), for inclusion in
the Company's applicable financial statements;
5. Administration of any agreements providing for the
payment of commissions relating to the Policies;
6. Provision of financial services pursuant to Section
1.4;
7. Payment of agent commissions due and payable;
8. Underwriting and issuing any Policies;
9. Preparation and mailing of quarterly and annual
statements to policyholders;
10. Relevant information to the Company regarding renewal
interest rates for Policies;
11. Provision of such other policyholder services on the
Policies as are reasonably required or requested by
the Company which have customarily been provided in
the past by JALIC; and
12. Implement any changes in the credited rates.
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(b) All services performed by JALIC's or its Affiliate's employees
providing legal, compliance, actuarial, accounting, treasury, human resources
and data processing, including the preparation of financial and other relevant
reports but excluding any Services which would require payments to Persons other
than JALIC's or its Affiliate's employees, unless such payments are made to
other Persons who presently and regularly provide such services in the ordinary
course to JALIC; and
(c) JALIC shall assist the Company in obtaining consents from third
party licensors, if any, of the software set forth on Schedule 3.14 of the Asset
Purchase Agreement which is necessary for the transitioning of the Policies (the
cost of which shall be at the Company's sole cost and expense).
II. EXTRAORDINARY SERVICES
Upon request of the Company and subject to the provisions of Section
1.2 of this Agreement, JALIC shall use commercially reasonable efforts to
provide to the extent readily available such additional services as the Company
may reasonably request. Such services to the extent readily available shall
consist of any services not covered by item I of this Schedule 1.1 including,
without limitation, (i) underwriting any annuity product which is not
substantially similar to a Policy and (ii) the enhancement of Services offered
pursuant to item I above.
III. TRANSITIONING SERVICES
JALIC shall cooperate with the Company and use commercially reasonable
efforts to effect an orderly transition to the Company and/or conversion onto
the Company's administrative system of the Policies as rapidly and as smoothly
as possible, and to do, or cause to be done, all things necessary, proper or
advisable in connection therewith. To the extent JALIC maintains the following
for the Company, JALIC shall provide the Company with copies of all databases,
files, programs, job streams, accounting and other records and information
regarding the Policies and the service and administration of the Policies when
requested by the Company in machine readable form reasonably acceptable to the
Company. Services to be provided in connection with such transition and/or
conversion shall include, but not be limited to the following: providing the
Company remote and on-site access to JALIC's computers, providing mainframe to
mainframe connections between JALIC and the Company, providing technical support
regarding the Policies and the computer hardware and software systems, to the
extent JALIC has previously provided such technical support to the Company
immediately prior to the date hereof in the ordinary course, and providing the
Company access to appropriate JALIC personnel.
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Schedule 2.1
COMPENSATION OF JALIC
For Administrative Services: $4 multiplied by the average number of
(Schedule 1.1 - Item I) Policies administered by JALIC in force
during such month, which average shall be
based upon the mean number of contracts in
force at the end and at the beginning of each
fiscal month of JALIC (a fiscal month being
the period beginning on the 22nd day of the
calendar month preceding the calendar month
with respect to which the calculation of
compensation is being made and ending on the
21st day of the calendar month with respect
to which the calculation of compensation is
being made), adjusted for significant
transfers occurring during such month.
For Extraordinary Services: Direct costs, being 150% of the daily or
(Schedule 1.1 - Item II) hourly salary or wages per day for the
persons performing services not covered
above, which services are provided during the
month with respect to which the calculation
of compensation is being made, plus any
actual out-of-pocket expenses incurred by
JALIC in performing such services.
For Transitioning Services: If JALIC incurs any reasonable direct,
(Schedule 1.1 - Item III) out-of- pocket or incremental costs or
expenses, including, but not limited to, the
payment of reasonable overtime for JALIC
employees, the hiring of temporary employees
or the retention of employees whose
employment would otherwise have been
terminated (and the Company has been
consulted with regard thereto prior to such
intended termination), in providing any of
the Transitioning Services, JALIC shall be
reimbursed for such costs and expenses. For
all Transitioning Services in which no such
costs or expenses are incurred by JALIC,
there will be a charge for such Transitioning
Services.
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