TERMINATION AGREEMENT
This Termination Agreement (this "Agreement") is dated as of
August 3, 1999 by and between GENERAL AMERICAN LIFE INSURANCE COMPANY, a
stock insurance company domiciled in Missouri ("General American"), and ARM
FINANCIAL GROUP, INC., a Delaware corporation ("ARM").
WHEREAS, the parties hereto (the "Parties") entered into an
Engagement Agreement dated as of March 12, 1993, as amended, (the "Engagement
Agreement") pursuant to which ARM provides services to General American
relating to certain guaranteed investment contracts and funding agreements
issued by General American (the "GICs"); and
WHEREAS, effective June 1, 1999, General American terminated the
Engagement Agreement, however, certain rights and obligations of the Parties
under the Engagement Agreement continue to remain following such termination;
and
WHEREAS, the Parties, along with Integrity Life Insurance Company,
an indirect wholly-owned subsidiary of ARM ("Integrity"), entered into the
Termination Master Agreement dated as of July 26, 1999 pursuant to which this
Agreement is being entered into by the Parties; and
WHEREAS, General American and Integrity entered into a Reinsurance
Agreement, dated as of March 28, 1996 (the "Reinsurance Agreement"), and
amended the Engagement Agreement ("Amendment #2") to provide for certain
coinsurance benefits to Integrity pursuant to the Reinsurance Agreement in
lieu of any corresponding fee otherwise due to ARM under the Engagement
Agreement; and
WHEREAS, General American desires to recapture the business
coinsured under the Reinsurance Agreement, and to terminate all of its
liabilities under either the Reinsurance Agreement or the Engagement
Agreement, and has agreed to payment of a Recapture Fee (defined below) to
ARM, in connection with such recapture from Integrity, pursuant to the terms
of the Engagement Agreement; and
WHEREAS, the Parties wish to settle and terminate all ongoing
rights and obligations of the Parties under the Engagement Agreement on the
terms and conditions set forth below;
NOW THEREFORE, in consideration of the above premises and other
good and valuable consideration, the Parties agree as follows:
1. TERMINATION. The Parties mutually agree that it is their
intent to settle and terminate all ongoing rights and obligations of the
Parties under the Engagement Agreement, and, subject to the payment by
General American to ARM of the Recapture Fee (defined below),
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all ongoing rights and obligations under the Engagement Agreement are hereby
settled and terminated, effective as of July 26, 1999.
2. RECAPTURE FEE. As consideration for the settlement and
termination of all obligations of General American under the Engagement
Agreement as set forth herein, General American hereby agrees to pay ARM the
sum of $51.5 million (the "Recapture Fee"). The Recapture Fee shall be
payable by wire transfer in immediately available funds to a bank account
designated by ARM.
3. MUTUAL RELEASE. Subject to the payment by General American to
ARM of the Recapture Fee in accordance with the terms and provisions of this
Agreement, each Party hereby releases the other Party from any and all
further liability and obligation under, and agrees to relinquish any and all
claims that such Party may have against the other Party in any way related
to, and in any way arising out of, the Engagement Agreement.
3. NOTICES. Any notice required or permitted hereunder shall be
in writing and shall be delivered personally (by courier or otherwise),
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, three days after the date of deposit in the
United States mails, as follows:
(1) If to ARM:
515 W. Market Street
Louisville, KY 40202
Attention: General Counsel
Telecopier No.: (502) 540-2830
(2) If to General American to:
700 Market Street
St. Louis, MO 63101
Attention: Matthew P. McCauley
Telecopier No.: (314) 444-0510
Any Party may, by notice given in accordance with this Agreement to
the other Parties, designate another address or person for receipt of notices
hereunder.
4. AMENDMENT. This Agreement may not be amended, modified, changed,
discharged or terminated, except by an instrument in writing signed by an
authorized officer of each of the Parties.
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5. COUNTERPARTS. This Agreement may be executed by the Parties in
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument.
6. NO THIRD PARTY BENEFICIARIES. Except as otherwise specifically
provided for herein, nothing in this Agreement is intended or shall be
construed to give any Person, other than the Parties, their successors and
permitted assigns, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
7. ASSIGNMENT. This Agreement shall be binding upon and insure to
the benefit of the Parties and their respective successors, permitted assigns
and legal representatives. Neither this Agreement, nor any right hereunder,
may be assigned by either Party (in whole or in part) without the prior
written consent of the other Parties hereto.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF KENTUCKY, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties relating to the matters set forth herein and there are no
other agreements between the Parties hereto, either existing or contemplated,
written or oral, with respect thereto.
10. WAIVERS AND AMENDMENTS: NON-CONTRACTUAL REMEDIES: PRESERVATION OF
REMEDIES. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by each of the Parties or, in the case of a waiver, by the Party
waiving compliance. No delay on the part of any Party on exercising any
right, power or privilege hereunder shall operate as a waiver thereof. Nor
shall any waiver on the part of any Party of any right, power or privilege,
nor any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such
right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any Party may
otherwise have at law or in equity.
11. HEADINGS. The headings in this Agreement are for reference only,
and shall not affect the interpretation of this Agreement.
12. SEVERABILITY. If any provisions hereof shall be held invalid
or unenforceable by any court of competent jurisdiction or as a result of
future legislative action, such holding or action shall be strictly construed
and shall not affect the validity or effect of any other provision hereof;
PROVIDED, HOWEVER, that the parties shall use reasonable efforts, including,
but not limited to, the amendment of this Agreement, to ensure that this
Agreement shall reflect as closely as practicable the intent of the parties
hereto.
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IN WITNESS WHEREOF, the Parties have caused this Termination
Agreement to be duly executed and effective as of the date first above written.
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ David L. Herzog
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Name: David L. Herzog
Title: Vice President
ARM FINANCIAL GROUP, INC.
By: /s/ John R. Lindholm
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Name: John R. Lindholm
Title: President, Retail Business Division
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