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Term Loan Agreement

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TERM LOAN AGREEMENT


THIS TERM LOAN AGREEMENT (hereafter "Agreement") dated as of August 3, 1999 between ARM Financial Group, Inc., a Delaware corporation, headquartered at 515 West Market Street, Louisville, Kentucky 40202 (hereinafter the "Company"), and GenAmerica Corporation, a Missouri corporation, headquartered at 700 Market Street, St. Louis, MO 63101 (hereinafter the "Lender").


The Company and the Lender agree as follows:


Article I


Amount and Terms of Loan


1. Subject to the terms and conditions herein set forth, the Lender shall
lend to the Company and the Company shall borrow the sum of thirty-eight
million dollars ($38,000,000).


2. The borrowing shall be evidenced by a promissory note to the order of the
Lender in the form of "Exhibit 1" (the "Note") attached hereto, which
shall be dated the closing date of this Agreement, duly executed by the
Company with blanks suitably filled in conformity herewith and in the
principal amount of $38,000,000. The Note shall mature on the later of
(a) the 90th day after the date of this Agreement or (b) if a definitive
agreement prior to said 90th day, involving any merger, consolidation or
sale transferring control of the stock or substantially all of the assets
of the Company, Integrity Life Insurance Company, or National Integrity
Life Insurance Company, is executed on or before said 90th day, then the
closing date of such transaction (the Maturity Date), at which time the
unpaid principal together with all accrued interest thereon shall be due
and payable, unless the parties agree in writing to extend such date.


3. The Note shall bear interest before the Maturity Date, including any
extensions thereof, at a rate equivalent to 200 basis points in excess
of the Interest Reference Rate, which interest rate will change when and
as such Interest Reference Rate shall change on the last day of each
calendar month. Interest on the unpaid principal balance shall be
payable to the Lender in full on the Maturity Date.


Article II


Right to Prepay Note


The Company shall have the right, at any time and from time to time, to prepay without penalty all or any part of the Note.


Article III


Representations and Warranties


TL 1


The Company represents and warrants that as of the date hereof:


1. There are no suits or proceedings pending against or affecting the
Company or any subsidiary which, in the opinion of counsel for the
Company, will have a material adverse effect on the financial
condition or business of the Company and its subsidiaries;


2. The Company's risk based capital ratio on June 30, 1999 was and as of
the date hereof is not less than 150.


3. The Company has full power and authority to execute and perform the terms
and provisions of this Agreement and to borrow hereunder.


Article IV


Affirmative Covenants


1. The Company covenants and agrees that until all indebtedness incurred
hereunder has been paid in full, it will:


(a) Furnish to the Lender, not later than 90 days after the end of each
fiscal year, a consolidated profit and loss statement and statement
of surplus of the Company and its subsidiaries for such year and a
consolidated balance sheet of the Company and its subsidiaries as of
the last day of such fiscal year, all in reasonable detail and
satisfactory in scope to the Lender and all certified by independent
public accountants satisfactory to the Lender;


(b) Furnish to the Lender, not later than 45 days after the close of each
quarter-annual period (except the last quarter-annual period of each
year), a consolidated profit and loss and surplus statement of the
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