-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VsY4FmaHFUkjb0QL0BvTwboS+ab4YMR5ZvifRktd85LUOVIw0LIbNx2VExlkG62O /ZP4A2jJaZMBfTF0oFOVkw== 0000950123-05-008291.txt : 20050708 0000950123-05-008291.hdr.sgml : 20050708 20050708160342 ACCESSION NUMBER: 0000950123-05-008291 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050701 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050708 DATE AS OF CHANGE: 20050708 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METLIFE INC CENTRAL INDEX KEY: 0001099219 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 134075851 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15787 FILM NUMBER: 05945927 BUSINESS ADDRESS: STREET 1: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2125782211 MAIL ADDRESS: STREET 1: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 8-K 1 y10546e8vk.txt FORM 8-K ` UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): July 1, 2005 METLIFE, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-15787 13-4075851 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 200 Park Avenue, New York, New York 10166-0188 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) 212-578-2211 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On July 1, 2005 (the "Closing Date"), MetLife, Inc., a Delaware corporation (the "Company"), acquired all of the outstanding shares of capital stock (the "Acquisition") of certain indirect subsidiaries held by Citigroup Inc. ("Citigroup"), including The Travelers Insurance Company and certain other domestic insurance companies of Citigroup and substantially all of Citigroup's international insurance businesses (collectively, the "Travelers Insurers"). In connection with the Acquisition, on the Closing Date, the Company and Citigroup entered into an International Distribution Agreement (the "IDA") and a Domestic Distribution Agreement (the "DDA," and collectively with the IDA, the "Distribution Agreements"), relating to the distribution of certain life and annuity products in Argentina, Australia, Belgium, Brazil, Guam, Hong Kong, Ireland, Hungary, Japan, Poland and the United Kingdom (each, a "Covered Country") and the United States. The following description of the Distribution Agreements is not complete and is qualified in its entirety by reference to the Distribution Agreements, which are filed hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference. Pursuant to the Distribution Agreements, a Travelers Insurer will continue to be the exclusive provider of a life insurance or annuity product to certain distributors affiliated with Citigroup that distribute Travelers Insurers' products ("Parent Distributor") in the United States or in a Covered Country if such Travelers Insurer was the exclusive provider on the Closing Date. This period of exclusivity will continue for five years after the Closing Date. During the subsequent five years, each Travelers Insurer will have the right to be a provider, on a non-exclusive basis, to each Parent Distributor of each exclusive product distributed by such Parent Distributor on the Closing Date. In addition, if any Travelers Insurer has a non-exclusive arrangement with a Parent Distributor for a life insurance or annuity product in the United States or a Covered Country on the Closing Date, the Travelers Insurer will, for ten years after the Closing Date, have a right to continue such non-exclusive arrangement. Further, if any Travelers Insurer provides a private label life insurance or annuity product to a Parent Distributor on the Closing Date, such Travelers Insurer will, for ten years after the Closing Date, have a right to continue to be the provider of such private label product. The Distribution Agreements provide, for a period of five years from the Closing Date, that the Travelers Insurers will have continued access rights to the Citigroup distribution network with respect to products distributed on an exclusive basis. Also, for a period of three years from the Closing Date, the Travelers Insurers will have continued access rights to the Citigroup distribution network with respect to products distributed on a non-exclusive basis on terms no worse than those afforded to other third-party insurance providers with respect to such products. In general, the Distribution Agreements only require Citigroup to distribute the Company's products through the existing Parent Distributors; after-acquired distributors are not subject to the Distribution Agreements. However, if, during the first seven years after the Closing Date, Citigroup acquires an in-house insurance company, the Company's affiliated insurance companies (the "Purchaser Insurers") will be given the opportunity during the remainder of such seven-year period to provide life insurance and annuity products, on a non-exclusive basis, to certain affiliated distribution channels of the in-house insurance company. If, during the first seven years after the Closing Date, Citigroup operates an open-architecture, multiple-provider distribution channel in Chile, China, India, Indonesia, South Korea, Taiwan or Uruguay, and a Purchaser Insurer offers a life insurance or annuity product in such country as of the Closing Date, such Purchaser Insurer will have a right to be part of the Citigroup distribution channel in such country for the remainder of such seven-year period if such product is substantially the same as, and competitive with, other products distributed by the Parent Distributor in that country. As required by the Distribution Agreements, the Company and Citigroup caused the Parent Distributors and Travelers Insurers, respectively, to enter into selling agreements to effectuate the arrangements contemplated by the Distribution Agreements. Citigroup has the right not to enter into a selling agreement or to terminate a distribution arrangement under certain circumstances. In connection with the issuance and delivery of 22,436,617 shares of the Company's common stock to Citigroup as part of the payment of the Acquisition purchase price (the "Shares"), the Company entered into an Investor Rights Agreement dated as of July 1, 2005 with Citigroup and Citigroup Insurance Holding Corporation. Under the Investor Rights Agreement, at Citigroup's request, the Company will use its best efforts to promptly file a shelf registration statement providing for the resale of such number of Shares as Citigroup requests on a delayed or continuous basis pursuant to Rule 415 under the Securities Act. Citigroup is entitled to effect two fully marketed underwritten takedowns under the shelf registration statement. Citigroup may also demand that the Company file registration statements with the SEC providing for "one-off" offerings of all or a portion of the Shares. The number of demand registrations that Citigroup will be entitled to require is two, less the number of underwritten takedowns previously completed off of the shelf registration statement described above. Citigroup may transfer all or a portion of its then-remaining demand registration rights to a third party who acquires at least 20% of the total amount of the Shares, provided that such third party agrees to be bound by the terms of the Investor Rights Agreement. Subject to customary exceptions, Citigroup may not transfer more than 5% of the Company's outstanding common stock to a competitor of the Company. These restrictions on transfer will not apply to any transfer pursuant to Rule 144 under the Securities Act or offerings made under a shelf registration statement, demand registrations or piggyback registrations. Citigroup may not sell any of the Shares for 12 months following the Closing Date. This restriction will not restrict sales of shares of the Company's common stock by Citigroup as nominee of customers in the ordinary course of business or sales of the Shares (i) in private offerings that do not require registration under the Securities Act at any time after six months following the Closing Date if the transferee agrees to be bound by the terms of the Investor Rights Agreement, or (ii) to the Company. The foregoing description of the Investor Rights Agreement is not complete and is qualified in its entirety by reference to the Investor Rights Agreement, which is filed hereto as Exhibit 10.3 and incorporated herein by reference. Citigroup and the Company also entered into a Transition Services Agreement, dated as of July 1, 2005, pursuant to which Citigroup agreed to provide, or cause to be provided, all services, support, facilities, and other resources ("Services") that Citigroup or its affiliates or subcontractors provided, or caused to be provided, to the Travelers Insurers during specified times prior to the Closing Date. In addition, the Company agreed to provide, or cause to be provided, all Services that the Travelers Insurers or their subcontractors provided, or caused to be provided, to Citigroup or its affiliates during specified times prior to the Closing Date. The respective Services are to be provided for up to two years within the United States and up to 30 months outside of the United States, although a recipient may discontinue any individual Service upon 30 days written notice to the provider. For the first 12 months of the Transition Services Agreement for Services within the United States, and for the first 18 months for Services outside of the United States, fees for such Services are to be comparable to the prices charged for similar services during 2005 prior to the Closing Date; thereafter the prices will increase by 2% each calendar quarter. The Transition Services Agreement also provides for a variety of indemnities, as well as dispute resolution mechanisms. The foregoing description of the Transition Services Agreement is not complete and is qualified in its entirety by reference to the Transition Services Agreement, which is filed hereto as Exhibit 10.4 and incorporated herein by reference. ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT. On July 1, 2005, the Company terminated the $7,000,000,000 senior bridge credit facility dated May 16, 2005 with Bank of America, N.A., as administrative agent, Goldman Sachs Credit Partners L.P., as syndication agent and Banc of America Securities LLC and Goldman Sachs Credit Partners L.P., as joint lead arrangers and book managers. The agents and arrangers (and their respective subsidiaries or affiliates) under the Bridge Facility have in the past provided, and may in the future provide, investment banking, underwriting, lending, commercial banking, trust and other advisory services to the Company, its subsidiaries or affiliates. These parties have received, and may in the future receive, customary compensation from the Company, its subsidiaries or affiliates, for such services. The Company terminated the Bridge Facility because it determined not to utilize the Bridge Facility to finance a portion of the purchase price of the Acquisition due to the successful completion of planned financings. The terms and conditions of the Bridge Facility which were material to the Company are set forth in the Company's Form 8-K filed with the U.S. Securities and Exchange Commission (the "Commission") on May 20, 2005 and incorporated herein by reference. ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS. On July 1, 2005, the Company consummated the Acquisition pursuant to an Acquisition Agreement dated as of January 31, 2005 between the Company and Citigroup. A copy of the Acquisition Agreement, which was filed as Exhibit 2.1 to the Company's Form 8-K filed with the Commission on February 4, 2005 (the "February 4 Form 8-K") is incorporated herein by reference. A copy of the press release announcing the completion of the Acquisition is attached hereto as Exhibit 99.1 and incorporated herein by reference. ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES. Pursuant to the Acquisition Agreement described in the February 4 Form 8-K, which disclosure is incorporated herein by reference, on July 1, 2005, the Company issued to Citigroup Insurance Holding Corporation, an affiliate of Citigroup, 22,436,617 shares of the Company's common stock, par value $.01 per share. The issuance of the common stock was made pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. ITEM 8.01. OTHER EVENTS. On July 1, 2005, the Company issued a press release announcing the completion of the Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial statements of businesses acquired. The financial statements required by Item 9.01(a) of Form 8-K were filed as Exhibit 99.2 to each of MetLife, Inc.'s Current Reports on Form 8-K filed on May 13, 2005 and May 27, 2005. (b) Pro forma financial information. The pro forma financial statements required by Item 9.01(b) of Form 8-K will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed. (c) Exhibits. 10.1 International Distribution Agreement dated as of July 1, 2005 between MetLife, Inc. and Citigroup Inc. 10.2 Domestic Distribution Agreement dated as of July 1, 2005 between MetLife, Inc. and Citigroup Inc. 10.3 Investor Rights Agreement dated as of July 1, 2005 by and among Citigroup Inc., MetLife, Inc. and Citigroup Insurance Holding Corporation. 10.4 Transition Services Agreement dated as of July 1, 2005 by and between Citigroup Inc. and MetLife, Inc. 99.1 Press release of MetLife, Inc. dated July 1, 2005 announcing the completion of the Acquisition. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. METLIFE, INC. By: /s/ Gwenn L. Carr ------------------------------------------- Name: Gwenn L. Carr Title: Senior Vice-President and Secretary Date: July 8, 2005 EXHIBIT INDEX EXHIBIT NUMBER EXHIBIT - -------- ------- 10.1 International Distribution Agreement dated as of July 1, 2005 between MetLife, Inc. and Citigroup Inc. 10.2 Domestic Distribution Agreement dated as of July 1, 2005 between MetLife, Inc. and Citigroup Inc. 10.3 Investor Rights Agreement dated as of July 1, 2005 by and among Citigroup Inc., MetLife, Inc. and Citigroup Insurance Holding Corporation. 10.4 Transition Services Agreement dated as of July 1, 2005 by and between Citigroup Inc. and MetLife, Inc. 99.1 Press release of MetLife, Inc. dated July 1, 2005 announcing the completion of the Acquisition. EX-10.1 2 y10546exv10w1.txt INTERNATIONAL DISTRIBUTION AGREEMENT [EXECUTION COPY] ================================================================================ INTERNATIONAL DISTRIBUTION AGREEMENT BY AND BETWEEN CITIGROUP INC. AND METLIFE, INC. AS OF JULY 1, 2005 ================================================================================ TABLE OF CONTENTS
Page ARTICLE I. DEFINITIONS................................................................................. 1 Section 1.1. Defined Terms....................................................................... 1 Section 1.2. Purposes of Agreement............................................................... 5 Section 1.3. Construction........................................................................ 6 Section 1.4. Headings............................................................................ 6 ARTICLE II. REPRESENTATIONS AND WARRANTIES............................................................. 6 Section 2.1. Representations and Warranties of Parent............................................ 6 Section 2.2. Representations and Warranties of Purchaser......................................... 7 ARTICLE III. INTERNATIONAL DISTRIBUTION................................................................ 7 Section 3.1. Selling Agreements.................................................................. 7 Section 3.2. Exclusive Distribution Arrangements................................................. 8 Section 3.3. Non-Exclusive Distribution Arrangements............................................. 8 Section 3.4. Private Label Products.............................................................. 9 Section 3.5. New Products; New Countries; Substitute Products.................................... 10 Section 3.6. Acquisitions........................................................................ 11 Section 3.7. Reinsurance of Products Distributed on Behalf of Third Party Insurers............... 11 Section 3.8. No Obligation....................................................................... 13 Section 3.9. Credicard........................................................................... 13 Section 3.10. Corretora........................................................................... 14 ARTICLE IV. ACCESS AND BRANDING........................................................................ 14 Section 4.1. Access.............................................................................. 14 Section 4.2. Branding; Use of Names; Confidential Information; Approval of Certain Materials..... 15 ARTICLE V. TERM OF THE AGREEMENT; CERTAIN CONDITIONS................................................... 16 Section 5.1. Term................................................................................ 16 Section 5.2. Survival............................................................................ 17 Section 5.3. Certain Conditions.................................................................. 17 ARTICLE VI. INDEMNIFICATION............................................................................ 19 Section 6.1. Indemnification of Parent........................................................... 19 Section 6.2. Indemnification of Purchaser........................................................ 19 Section 6.3. Indemnity Provisions in International Selling Agreements............................ 19 Section 6.4. Indemnification Procedures.......................................................... 19 Section 6.5. General............................................................................. 20 ARTICLE VII. MISCELLANEOUS............................................................................. 21 Section 7.1. Equitable Remedies.................................................................. 21 Section 7.2. Severability........................................................................ 21 Section 7.3. Further Assurance and Assistance.................................................... 21 Section 7.4. Notices............................................................................. 21 Section 7.5. Successors and Assigns.............................................................. 22 Section 7.6. Governing Law....................................................................... 22 Section 7.7. Jurisdiction; Venue; Consent to Service of Process.................................. 23 Section 7.8. Entire Agreement.................................................................... 23 Section 7.9. Amendment and Waiver................................................................ 23 Section 7.10. Access to Records................................................................... 23 Section 7.11. Counterparts........................................................................ 24 Section 7.12. WAIVER OF JURY TRIAL................................................................ 24
INTERNATIONAL DISTRIBUTION AGREEMENT THIS INTERNATIONAL DISTRIBUTION AGREEMENT (this "Agreement"), dated as of July 1, 2005, is made by and between Citigroup Inc., a Delaware corporation ("Parent"), and MetLife, Inc., a Delaware corporation ("Purchaser"). WHEREAS, Purchaser and certain of its Affiliates provide insurance and annuity products throughout the United States and in numerous countries around the world; WHEREAS, Parent, through its Affiliates, has an extensive proprietary distribution network that distributes, on behalf of insurance companies, insurance and annuity products throughout the United States and in numerous countries around the world; WHEREAS, Parent and Purchaser have entered into an Acquisition Agreement, dated as of January 31, 2005 (the "Acquisition Agreement"), pursuant to which Purchaser will acquire on the terms and subject to the conditions set forth therein, all of the outstanding shares of capital stock of certain subsidiaries of, and the equity interests owned by Parent in certain joint ventures of, Parent or its Affiliates, including the Travelers Insurers; WHEREAS, in connection with the transactions contemplated by the Acquisition Agreement, the parties hereto desire to enter into a distribution relationship inside the United States pursuant to a Domestic Distribution Agreement to be entered into on the date of this Agreement and the distribution relationship outside the United States contemplated by this Agreement; WHEREAS, this Agreement has been restated from the form hereof attached to the Acquisition Agreement; and WHEREAS, the execution and delivery of this Agreement is a condition to closing of the transactions contemplated by the Acquisition Agreement. NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises herein contained, the parties do hereby agree as follows: ARTICLE I DEFINITIONS Section 1.1 Defined Terms. For purposes of this Agreement, unless the context requires otherwise, the following terms shall have the following meanings: "Acquisition Agreement" has the meaning set forth in the recitals hereto. "Adequate Financial Strength" means with respect to the applicable Purchaser Insurer's distribution of a Product through an International Parent Distributor, the financial strength of such Purchaser Insurer as it relates to such Product reasonably determined in good faith by the applicable International Parent Distributor on the basis of criteria which such International Parent Distributor reasonably believes are utilized in the industry or by similarly situated distributors in evaluating other insurers (considered as a group) or any Purchaser Insurer, provided that to the extent other insurers provide products which are substantially similar to the Product sold by such Purchaser Insurer through the applicable International Parent Distributor such reasonable determination shall also be made on the basis of criteria which such International Parent Distributor has knowledge of and reasonably believes are utilized in evaluating such insurers as to such Product. Such criteria will take into account factors such as the availability of financial strength ratings in the country in which the products of such Purchaser Insurer are sold. For the avoidance of doubt, each International Parent Distributor acknowledges that immediately prior to the date hereof the Purchaser Insurer providing a Product to it had Adequate Financial Strength with respect to such Product on such date. "Affiliate" shall mean, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such first Person. The term "control" (including its correlative meanings "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). "Agreement" shall have the meaning set forth in the introductory paragraph hereof. "Asia-Pac RCA" shall have the meaning set forth in Section 3.7(e). "Comparable Distributor" shall mean a distributor using a substantially similar approach to the marketing, servicing, sales support and overall distribution of products. "Competitive" means (i) the terms, total compensation, customer appeal, consumer pricing and value, wholesaler coverage, training and support, features and service standards and metrics of the applicable product, taken as a whole, are at least equivalent to those of other comparable products, considered as a group, then distributed by the applicable Affiliate of Parent and (ii) the Purchaser Insurer shall have Adequate Financial Strength. "Confidential Information" shall have the meaning set forth in Section 4.2(b). "Covered Business" means all policies, certificates or coverages existing under, or in respect of, all Reinsured Products as of the date hereof, together with all new policies, certificates or coverages sold or effected under such Reinsured Products and any new product distributed by a Reinsured Product Distributor in any country that is substantially similar to a Reinsured Product distributed by such Reinsured Product Distributor in such country. "CSL Agreement" has the meaning ascribed to such term in Section 3.7(d). "Covered Country" means each of the following countries: Argentina, Australia, Belgium, Brazil, Guam, Hong Kong, Hungary, Ireland, Japan, Poland and the United Kingdom. "Exclusive Products" means the Products designated on Schedule 3.2(a) as being subject to an exclusive relationship. "Existing Product" has the meaning set forth in Section 3.5(c). 2 "First Term" means the five-year period commencing on the date of this Agreement and ending on the fifth anniversary of the date of this Agreement. "Indemnified Party" has the meaning set forth in Section 6.4. "Indemnifying Party" has the meaning set forth in Section 6.4. "International Exclusive Parent Distributor" means each International Parent Distributor to which a Travelers Insurer is the exclusive provider of any Product on the date of this Agreement and such Person's successors and assigns. "International Parent Distributor" means (i) any Person Affiliated with Parent that, as of the date of this Agreement, distributes any Product that a Travelers Insurer offers in any Covered Country and such Person's successors and assigns and (ii) any Person Affiliated with Parent that distributes any product offered by a Purchaser Insurer in any country other than a Covered Country pursuant to an arrangement contemplated by Sections 3.4(b), 3.5(b) and 3.6(b) (but in each case only from and after such time that such Person begins distributing such product for a Purchaser Insurer) and such Person's successors and assigns. "International Selling Agreements" has the meaning set forth in Section 3.1. "Law" shall have the meaning set forth in the Acquisition Agreement. "Level Playing Field" means, with respect to a product, Parent (i) shall, and shall cause any International Parent Distributor entering into an International Selling Agreement with respect to such product pursuant to Section 3.1 to, afford the same access to its distribution platforms for such product offered by a Travelers Insurer (or a Purchaser Insurer, as applicable) as the access it affords to comparable products offered by a Third Party Insurer and (ii) shall not, and shall cause its Affiliates (including the International Parent Distributors) not to, provide to its Sales Force any compensation or other economic inducement or benefit for the sale of comparable products sold in a comparable sales support and compensation framework offered by a Third Party Insurer that are more favorable than the compensation or other economic inducements or benefits provided to such Sales Force for the sale of such products offered by a Travelers Insurer (or a Purchaser Insurer, as applicable); provided, that a Level Playing Field may include variations in Sales Force compensation that are (x) based upon neutral criteria that do not differentiate between product providers, such as achieving sales volume or persistency objectives, or (y) for products (including combined product and service arrangements) for which distributor compensation is negotiated by the provider on a sale-by-sale basis, such as group retirement products. "Licensing Agreement" shall have the meaning set forth in the Acquisition Agreement. "Local Incumbent" has the meaning set forth in Section 3.7. "Losses" has the meaning set forth in Section 6.1. "Marks" shall mean the Parent Distributor Marks, as defined in the Licensing Agreement in respect of this Agreement. 3 "New Products" means (i), with respect to each Covered Country, any life insurance or annuity product that a Purchaser Insurer is authorized to offer but was not included among the types of insurance or annuity products distributed by an International Parent Distributor in such Covered Country on the date of this Agreement and (ii) products offered by a Purchaser Insurer pursuant to arrangements contemplated by Sections 3.5(b) and 3.6(b). For avoidance of doubt, the addition of new features to Products shall not constitute New Products in whole or in part, regardless of whether any insurance regulatory filing is required in connection therewith. "Non-Exclusive Products" has the meaning set forth in Section 3.3. "Parent" has the meaning set forth in the introductory paragraph hereof. "Parent Indemnified Parties" has the meaning set forth in Section 6.1. "Parent Standards and Practices" means the client service and relationship standards, business practices, ethical standards, customer privacy and protection policies and general service quality standards, reputational considerations and industry standards, as determined from time to time by Parent or any of its Affiliates, provided that such Parent Standards and Practices, to the extent they relate to a Product or New Product and/or International Parent Distributor, shall be applied, and changes thereto shall be made, without discriminating in any material manner against any Travelers Insurer or Purchaser Insurer, as applicable, relative to all other similarly situated providers of such Products or New Products distributed by such International Parent Distributor. "Person" shall have the meaning set forth in the Acquisition Agreement. "PLP Distributor" has the meaning set forth in Section 3.4(b). "Private Label Product" means a life insurance or annuity product customized for a PLP Distributor in a Covered Country or Supplemental Country that (i) is branded under the name of the PLP Distributor in such Covered Country or Supplemental Country or (ii) is a variable life insurance or variable annuity contract that offers as an option more than two investment choices or mutual funds that are advised or managed by Parent or a Parent Affiliate (or any successor to the Parent or a Parent Affiliate of substantially all of the business or assets of the Parent or such Parent Affiliate which relate primarily to the asset management business), including an PLP Distributor (in all cases in the capacity of either an advisor or sub-advisor). For the avoidance of doubt and without limitation, a Private Label Product (whether existing on the date of this Agreement or thereafter) shall be deemed a Product for all purposes under this Agreement. "Products" means the life insurance and annuity products issued by the Travelers Insurers and distributed through the International Parent Distributors on the date of this Agreement, and any Substitute Products distributed in replacement thereof pursuant to Section 3.5(c). "Purchaser" shall have the meaning set forth in the introductory paragraph hereof. "Purchaser Indemnified Parties" has the meaning set forth in Section 6.2. 4 "Purchaser Insurer" means any insurance company Affiliate of Purchaser, including the Travelers Insurers. "Reinsured Product Distributor" means each Affiliate of Parent who, on the date of this Agreement, distributes life insurance or annuity products on behalf of a Local Incumbent. "Reinsured Products" means all life insurance and annuity products being distributed by an Affiliate of Parent, written by a Local Incumbent and reinsured by a Reinsurer as of the date of this Agreement. "Reinsurer" has the meaning set forth in Section 3.7. "Sales Force" means those point of sale representatives and their direct supervisors utilized by Parent, International Parent Distributors or one of their respective Affiliates whose job responsibility includes the sale or promotion of Products or New Products offered by a Travelers Insurer (or a Purchaser Insurer, as applicable). "Second Term" means the five-year period commencing upon the expiration of the First Term and ending on the tenth anniversary of the date of this Agreement. "Substitute Product" has the meaning set forth in Section 3.5(c). "Supplemental Country" means each of the following countries: Chile, China, India, Indonesia, South Korea, Taiwan, and Uruguay. "Target Affiliated Distributor" means any Person Affiliated with Parent that (i) was an Affiliate of a Target Business (as defined in the Acquisition Agreement) immediately prior to the acquisition of such Target Business by Parent or an Affiliate of Parent and (ii) is engaged in the business of distributing financial services products. "Term" has the meaning set forth in Section 5.1. "Third Party Claim" has the meaning set forth in Section 6.4. "Third Party Insurer" means an insurance company that is not Affiliated with Purchaser. "Travelers Insurers" means the International Insurance Companies (as defined in the Acquisition Agreement) and the Joint Ventures (as defined in the Acquisition Agreement) to be acquired by Purchaser pursuant to the Acquisition Agreement and their successors and assigns, and with respect to a Substitute Product that is offered pursuant to Section 3.5(c), a Purchaser Insurer and its successors and assigns. Section 1.2 Purposes of Agreement. Notwithstanding anything in this Agreement to the contrary, Purchaser and Parent agree that this Agreement is intended to set forth certain principal business terms upon which they will enter into International Selling Agreements during the Term and that nothing herein creates an International Selling Agreement. 5 Section 1.3 Construction. For the purposes of this Agreement: (i) words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa, and words (including capitalized terms defined herein) of one gender shall be held to include the other gender as the context requires; (ii) the terms "hereof," "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules) and not to any particular provision of this Agreement, and Article, Section, paragraph and Schedule references are to the Articles, Sections, paragraphs and Schedules to this Agreement, unless otherwise specified; (iii) the word "including" and words of similar import when used in this Agreement shall mean "including, without limitation"; (iv) all references to any period of days shall be deemed to be to the relevant number of calendar days unless otherwise specified; and (v) "commercially reasonable efforts" shall not require a waiver by any party of any material rights or any action or omission that would be a breach of this Agreement. Section 1.4 Headings. The Article and Section headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement. ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1 Representations and Warranties of Parent. Parent hereby represents and warrants to Purchaser as set forth below. (a) Parent is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. (b) Parent has all necessary corporate power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it hereunder. The making, execution, delivery and performance by Parent of this Agreement and the consummation by Parent of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly and validly executed and delivered by Parent, and assuming the due authorization, execution and delivery by Purchaser, this Agreement will constitute the valid, legal and binding obligation of Parent, enforceable against it in accordance with its terms, except as may be subject to applicable bankruptcy, insolvency, moratorium or other similar Laws, now or hereafter in effect, relating to or affecting the rights of creditors generally and by legal and equitable limitations on the enforceability of specific remedies. (c) Neither the execution and delivery of this Agreement by Parent, nor the consummation of the transactions contemplated hereby, will (i) violate or conflict with any provision of the articles of incorporation or bylaws or other organizational documents of Parent or any International Parent Distributor, (ii) violate any of the terms, conditions, or provisions of any Law or license to which Parent or any International Parent Distributor is subject or by which it or any International Parent Distributor or any of its or their assets are bound, or (iii) violate, breach, or constitute a default under any contract to which Parent or any International Parent Distributor is a party or by which it or any International Parent Distributor or any of its or their 6 assets is bound. The distribution of any Products offered by a Travelers Insurer and distributed by an International Parent Distributor on the date of this Agreement does not violate, breach, or constitute a default under any contract to which Parent or any International Parent Distributor is a party or by which any of them or any of their respective assets is bound. (d) None of the arrangements by which any International Parent Distributor distributes any Products on behalf of a Travelers Insurer in force on the date of this Agreement violates any of the Parent Standards and Practices in effect on such date. Section 2.2. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Parent as set forth below. (a) Purchaser is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. (b) Purchaser has all necessary corporate power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it hereunder. The making, execution, delivery and performance by Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly and validly executed and delivered by Purchaser, and assuming the due authorization, execution and delivery by Parent, this Agreement will constitute the valid, legal and binding obligation of Purchaser, enforceable against it in accordance with its terms, except as may be subject to applicable bankruptcy, insolvency, moratorium or other similar Laws, now or hereafter in effect, relating to or affecting the rights of creditors generally and by legal and equitable limitations on the enforceability of specific remedies. (c) Neither the execution and delivery of this Agreement by Purchaser, nor the consummation of the transactions contemplated hereby, will (i) violate or conflict with any provision of the articles of incorporation or bylaws or other organizational documents of Purchaser or any Purchaser Insurer (other than the Travelers Insurers), (ii) violate any of the terms, conditions, or provisions of any Law or license to which Purchaser is subject or by which it or any of its assets is bound, or (iii) violate, breach, or constitute a default under any contract to which Purchaser is a party or by which it or any of its assets is bound. ARTICLE III. INTERNATIONAL DISTRIBUTION Section 3.1. Selling Agreements. In order to effectuate the distribution arrangements contemplated hereby among the Travelers Insurers (and Purchaser Insurers, as applicable) and the International Parent Distributors for distribution of the Products and New Products offered by the Travelers Insurers (and Purchaser Insurers, as applicable) in the Covered Countries and the Supplemental Countries, Parent shall cause the International Parent Distributors, and Purchaser shall cause the Travelers Insurers (and Purchaser Insurers, as applicable), to negotiate in good faith and enter into written selling agreements that are consistent with industry practice and with the principles set forth in this Agreement and that contain terms and conditions taken as a whole that are no less favorable to the Travelers Insurers (and Purchaser Insurers, as applicable) and the 7 International Parent Distributors than the terms and conditions of the selling and selling related arrangements existing on the date of this Agreement between the Travelers Insurers and the International Parent Distributors (the "International Selling Agreements"). For each International Parent Distributor that distributes a Product for a Travelers Insurer on the date of this Agreement, an International Selling Agreement for the distribution of such Product, to take effect on the date of this Agreement, shall be executed and delivered by such International Parent Distributor and the applicable Travelers Insurer on or prior to the date of this Agreement. The International Selling Agreements will contain provisions concerning the periodic readjustment of compensation as agreed by the parties thereto. Section 3.2. Exclusive Distribution Arrangements. (a) Parent represents and warrants that Schedule 3.2(a) sets forth a complete and accurate list of all life insurance and annuity products issued by a Travelers Insurer and distributed by an International Parent Distributor (whether pursuant to a written agreement or de facto) in a Covered Country on behalf of a Travelers Insurer on the date of this Agreement, the identity of each International Parent Distributor that distributes each such product and whether or not a Travelers Insurer is the exclusive provider (whether pursuant to a written agreement or de facto) of such product to such International Parent Distributor. For purposes of this Agreement (other than Section 3.7), life insurance and/or annuity products shall be deemed to include any product listed on Schedule 3.2(a). (b) If any Travelers Insurer is the exclusive provider (whether pursuant to a written agreement or de facto) of an Exclusive Product to any International Exclusive Parent Distributor in a Covered Country on the date of this Agreement, such Travelers Insurer shall have the right to be the exclusive provider of such Exclusive Product to such International Exclusive Parent Distributor in such Covered Country during the First Term. During the Second Term, each Travelers Insurer shall have the right to be a provider, on a non-exclusive, Level Playing Field basis, to each International Exclusive Parent Distributor of each Exclusive Product distributed by such International Exclusive Parent Distributor on the date of this Agreement. During the First Term, Parent shall not make any change in the Parent Standards and Practices (except changes that may be reasonably appropriate to comply with applicable Law) that would conflict with the rights granted to the Travelers Insurers under the first sentence of this Section 3.2(b). (c) Notwithstanding anything herein to the contrary (including, without limitation, Section 3.5(c)), prior to the earlier of (i) the end of the 60-day period beginning on the date of this Agreement and (ii) December 31, 2005, (x) Purchaser shall cause the Exclusive Products to be marketed under the brand name and with such trademarks or trade names (including the identity of the underwriter of such Exclusive Product) as used on the date of this Agreement and (y) no Purchaser Insurer shall be permitted to provide a Substitute Product in place of an Exclusive Product. Section 3.3. Non-Exclusive Distribution Arrangements. If any Travelers Insurer is a non-exclusive provider of a Product to any International Parent Distributor in any Covered Country on the date of this Agreement (the "Non-Exclusive Products"), such Travelers Insurer 8 shall have the right to be a provider of such Product, on a non-exclusive, Level Playing Field basis, to such International Parent Distributor in such country during the Term. Section 3.4. Private Label Products. (a) If any Travelers Insurer is the provider of a Private Label Product to an International Parent Distributor in any Covered Country on the date of this Agreement, such Travelers Insurer shall have the right to be the provider of such Private Label Product in such Covered Country during the Term. (b) Subject to the last sentence of this Section 3.4(b), if, prior to the seventh anniversary of the date of this Agreement, any International Parent Distributor or any other Affiliate of Parent that distributes life insurance or annuity products desires to distribute, as a Private Label Product in any Covered Country or Supplemental Country, a life insurance product (other than term life insurance) or annuity product that it does not distribute as a Private Label Product in such country on the date of this Agreement, Parent shall cause such International Parent Distributor or other Affiliate of Parent (a "PLP Distributor") to notify Purchaser no later than the time of notification of any Third Party Insurer. If the PLP Distributor does not select a Purchaser Insurer as the provider of the new Private Label Product and the PLP Distributor desires to continue to seek a Third Party Insurer, as provider, Parent shall cause the PLP Distributor to include the Purchaser Insurers in the process for selection of such provider (whether by formal request for proposals or otherwise) to provide such Private Label Product prior to selecting a Third Party Insurer. Parent shall cause the PLP Distributor to entertain in good faith, and on terms no less favorable than those extended to any other proposed provider, proposals from the Purchaser Insurers to provide such new Private Label Product. Such PLP Distributor (i) shall have exclusive discretion in determining the process for selection of, and the criteria for evaluation of, potential providers of any such Private Label Product and (ii) shall make a good faith determination of the relative suitability of proposals from potential providers for satisfying the requirements of such Private Label Product (it being understood that if such PLP Distributor determines that a proposal from a Purchaser Insurer satisfies such requirements, considered as a whole, at least as well as the most favorable proposal or proposals of the other potential providers, such Purchaser Insurer's proposal shall be selected); provided, however, that such PLP Distributor shall not be required to select any such proposal. In the event a proposal from a Purchaser Insurer is selected by a PLP Distributor, Parent shall cause such PLP Distributor, and Purchaser shall cause such Purchaser Insurer, to negotiate in good faith an appropriate written selling agreement with respect thereto upon terms and conditions to be mutually agreed by the parties thereto. The rights granted to the Purchaser Insurers under this Section 3.4(b) shall not apply with respect to any new Private Label Product if an insurance company not Affiliated with Parent or Purchaser contacts or approaches the International Parent Distributor, without solicitation by such International Parent Distributor relating to such Private Label Product, about developing or the possibility of developing such Private Label Product. Notwithstanding the foregoing, but subject to Section 3.5, nothing in this Section 3.4 shall be construed to limit such International Parent Distributor's ability to offer Products substantially the same as any Private Label Product on a non-private label basis. 9 Section 3.5. New Products; New Countries; Substitute Products. (a) At any time during the Term, (i) Purchaser may propose to an International Parent Distributor that such International Parent Distributor or one or more of its Affiliates distribute a New Product offered by a Purchaser Insurer and (ii) an International Parent Distributor may propose to Purchaser that such International Parent Distributor or one or more of its Affiliates distribute a New Product offered by a Purchaser Insurer. (b) Subject to Section 3.6(b), if, prior to the seventh anniversary of the date of this Agreement, (i) any Purchaser Insurer that, as of the date of this Agreement, offers a life insurance or annuity product for distribution in any Supplemental Country desires to offer such product for distribution through an Affiliate of Parent in such country, (ii) such Affiliate of Parent distributes a life insurance or annuity product that is substantially the same as such product through an open architecture distribution platform in such country at the time and has multiple providers of such product and (iii) the product proposed to be offered by the Purchaser Insurer is Competitive, then such Purchaser Insurer shall have the right to provide such product to such Affiliate of Parent in such country on a non-exclusive, Level Playing Field basis for the remainder of such seven-year period. In such event, Parent shall cause such Affiliate of Parent, and Purchaser shall cause such Purchaser Insurer, to negotiate in good faith and enter into a written selling agreement that is consistent with industry practice and with the principles set forth in this Agreement. (c) At any time during the Term, Purchaser may propose in writing that any Purchaser Insurer offer, in place of any Product then offered by a Travelers Insurer through an International Parent Distributor (an "Existing Product") in a Covered Country or a Supplemental Country, a substitute product and if (i) such Purchaser Insurer has Adequate Financial Strength and (ii) such substitute product is substantially the same as the Existing Product in the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics (a "Substitute Product"), then Parent shall cause such International Parent Distributor to distribute such Substitute Product in place of the Existing Product in such country. The Purchaser Insurer that offers such Substitute Product shall have the same rights under this Agreement with respect to the Substitute Product as the Travelers Insurer that offered the Existing Product possessed with respect to the Existing Product. By way of illustration and without limiting the generality of the foregoing, if the Travelers Insurer was entitled to provide the Existing Product on a non-exclusive, Level Playing Field basis through the International Parent Distributor, the Purchaser Insurer shall be entitled to provide the Substitute Product on a non-exclusive, Level Playing Field basis through such International Parent Distributor in place of such Existing Product. Parent shall cause the applicable International Parent Distributor and Purchaser shall cause the Purchaser Insurer to enter into an International Selling Agreement with respect to the Substitute Product that is substantially the same as the International Selling Agreement with respect to the Existing Product. The Purchaser Insurer providing the Substitute Product shall bear reasonable costs incurred by the applicable International Parent Distributor in connection with or arising out of the replacement of the Existing Product with the Substitute Product. 10 Section 3.6. Acquisitions. (a) Notwithstanding anything in this Agreement to the contrary, but subject to Section 3.6(b), neither Parent nor any International Parent Distributor shall be (i) deemed to be in violation of this Agreement or any International Selling Agreement or (ii) obligated hereunder or under any International Selling Agreement to take any action (including to make any adjustment to commissions, economic inducements or other benefits for the Sales Force), if such violation would arise, or such action would be required to be taken, solely as a result of Parent or one of its Affiliates acquiring assets or a business of any Person engaged in the distribution of financial services products following the date of this Agreement; provided, however, that nothing in this Section 3.6(a) shall limit or restrict any obligations that Parent or any International Parent Distributor has to distribute on an exclusive basis a Product or a New Product offered by a Purchaser Insurer if such Purchaser Insurer has the right under this Agreement or any International Selling Agreement to be the exclusive provider of such Product or New Product to such International Parent Distributor. (b) If, at any time prior to the seventh anniversary of the date of this Agreement, (i) Parent acquires a Target Business (as defined in the Acquisition Agreement), of which the net revenues and net earnings (in each case, calculated in a manner consistent with Section 6.17(a)(x) of the Acquisition Agreement, and, for the avoidance of doubt, excluding realized gains) derived from a Competitive Business (as defined in the Acquisition Agreement) are more than a de minimis amount, and (ii) Parent or its Affiliates are permitted to acquire such Target Business pursuant to Sections 6.17(a)(x) or 6.17(a)(xi) of the Acquisition Agreement, then Purchaser through the Purchaser Insurers shall have the right during the remainder of such seven-year period to be a provider to each Target Affiliated Distributor, if any, on a non-exclusive Level Playing Field basis, of any life insurance or annuity product that is distributed by such Target Affiliated Distributor on a non-exclusive basis either immediately before or following such acquisition; provided, that such right shall be subject to any applicable contractual or other restrictions by which such Target Affiliated Distributor is bound. Section 3.7. Reinsurance of Products Distributed on Behalf of Third Party Insurers. (a) During the Term, Parent shall, and shall cause each Reinsured Product Distributor who, on the date of this Agreement, distributes life insurance or annuity products on behalf of a Third Party Insurer ("Local Incumbent") where all or part of such business written by such Local Incumbent is reinsured by a Travelers Insurer (a "Reinsurer") to use its best efforts (x) to require the relevant Local Incumbent (which term shall include, for purposes of this Section 3.7, any successor or replacement Local Incumbent) to continue to reinsure the Covered Business to the Reinsurer on terms no less favorable, taken as a whole, to the Reinsurer than the terms on which such Covered Business is reinsured on the date of this Agreement (net of any payments made or deemed to be made by the Reinsurer to any Affiliate of Parent in respect of coordination or other services rendered in connection herewith) and (y) if any such Local Incumbent refuses to continue to reinsure such Covered Business in accordance with clause (x) (a "Refusing Insurer"), to find a replacement insurance company for such Refusing Insurer (which replacement insurer shall have comparable financial strength to the Refusing Insurer (if relevant to the product offered by the Refusing Insurer) and may be any insurance company Affiliate of Purchaser, if one is available to issue the relevant types of products issued by the 11 Refusing Insurer in the applicable country so long as such products are substantially the same as the products issued by the Refusing Insurer) that will agree to write such Covered Business and to reinsure it in accordance with clause (x) and, once such a replacement is found, to exercise any rights it has to terminate its distribution arrangement with the Refusing Insurer and to replace the Refusing Insurer with such replacement insurance company; provided that the Purchaser or Reinsurer shall be responsible for reasonable one time expenses incurred by the Reinsured Product Distributor solely as a result of such replacement; provided, further, that the Reinsured Product Distributor will not incur any such expenses without obtaining Purchaser's or Reinsurer's prior consent (which will not be unreasonably withheld or delayed); and provided, further, that the obligations of the applicable Reinsured Product Distributor under clauses (x) and (y) above shall be conditioned during the Second Term on the Reinsurer having Adequate Financial Strength. Parent shall cause each Reinsured Product Distributor not to change the terms of its relationship with any Local Incumbent that would significantly and adversely affect the profitability of the Covered Business reinsured by Reinsurer without obtaining the prior written consent of Purchaser, which consent shall not be unreasonably withheld or delayed. Nothing in this Section 3.7 shall be construed to limit the ability of a Reinsured Product Distributor to terminate a selling agreement with a relevant Insurer in accordance with its terms; provided that such termination shall not relieve Parent of its obligations under this Agreement. (b) Notwithstanding anything in Section 3.7(a) to the contrary, in the event that Parent or a Reinsured Product Distributor determines that it is advisable or desirable to modify or restructure the reinsurance arrangements described in Section 3.7(a) in any country with respect to all or any part of the Covered Business, including to eliminate the reinsurance arrangements and effect the distribution of all or a portion of such Covered Business directly from a Purchaser Insurer, then, as long as in the reasonable good faith judgment of Purchaser or the applicable Reinsurer, there shall be no adverse impact on the profitability of the Covered Business as a result of such modification or restructuring or replacement for the remainder of the Term, Purchaser shall cause the Reinsurer to reasonably cooperate with such modification or restructuring to the extent necessary and the Reinsured Product Distributor may take such actions as are necessary or appropriate to effect such modification or restructuring; provided, that the Reinsured Product Distributor shall be responsible for reasonable one time expenses incurred by the Reinsurer solely as a result of Parent's or Reinsured Product Distributor's decision to modify or restructure such arrangements; provided, further, that Reinsurer will not incur any such expenses without obtaining Parent's or Reinsured Product Distributor's prior consent (which will not be unreasonably withheld or delayed). (c) At any time during the Term, Purchaser or a Reinsurer may propose to a Reinsured Product Distributor that distributes a product included within the Covered Business in any country, and Parent shall cause such Reinsured Product Distributor to consider in good faith, that, in lieu of the product being issued by the Local Incumbent, such Reinsured Product Distributor distribute products being issued by a Purchaser Insurer licensed to conduct business in such country; provided, that nothing contained in this Section 3.7(c) shall create any obligation on the part of a Reinsured Product Distributor to distribute any product issued by a Purchaser Insurer. (d) Notwithstanding anything in Section 3.7(a) to the contrary, the parties hereto acknowledge that to the extent the performance by Citibank Singapore Limited ("CSL") 12 satisfies its obligations under the letter agreement dated July 1, 2005 (the "CSL Letter Agreement"), between CSL and Citicorp Life Insurance Limited, Parent shall be in full satisfaction of the obligations of Parent under Section 3.7(a) with respect to the CS Covered Business (as defined in the CSL Letter Agreement). (e) For purposes of Section 3.7(a), the Credit Shield Products (as such term is defined in the CSL Letter Agreement), together with all products distributed by a Reinsured Product Distributor, written by a Third Party Insurer and reinsured through a Travelers Insurer as of the date of this Agreement, and all products set forth on Schedule C of the Asia-Pacific Regional Reinsurance Coordination Agreement, dated as of the date of this Agreement, between Citicorp Life Insurance Limited and Citibank Singapore Limited (the "Asia-Pac RCA"), shall be deemed to be life insurance and annuity products. The parties will cooperate in good faith to develop a schedule of such products within 60 days of the date hereof. (f) The parties acknowledge that, subject to Section 5(c) of the Asia-Pac RCA, any termination pursuant to Sections 5(a)(ii), (iii), (iv) or (v) of the Asia-Pac RCA shall terminate the obligations of Parent pursuant to Section 3.7(a) hereof to the same extent that the obligations of the Coordinator (as defined in the Asia-Pac RCA) thereunder terminate. Section 3.8. No Obligation. For the avoidance of doubt, nothing in this Agreement or any International Selling Agreement shall (i) impose upon any Purchaser Insurer any obligation to distribute any Products or New Products offered by a Purchaser Insurer through the International Parent Distributors, (ii) impose upon Parent or its Affiliates any obligation to provide to its or their employees any Product or New Product issued by Purchaser or any Travelers Insurers, (iii) restrict the ability of Purchaser or Parent or any of their Affiliates from acquiring or disposing of any assets of, or reorganizing or consolidating, any business, subject to the proviso in Section 3.6(a) or (iv) restrict the ability of any Purchaser Insurer to distribute insurance or annuity products through Persons other than Affiliates of Parent. Subject to Section 3.6(b), nothing in this Agreement shall impose upon any Affiliate of Parent that becomes an Affiliate of Parent after the date of this Agreement any obligation to distribute any Product or New Product on behalf of a Purchaser Insurer. For the avoidance of doubt, in the event any International Parent Distributor ceases to be an Affiliate of Parent, Parent's obligations under this Agreement with respect to such International Parent Distributor shall no longer be applicable. Section 3.9. Credicard. (a) In the event Credicard Banco S.A. ("Credicard") (i) is reorganized or restructured on or before December 31, 2008 in such a manner that a surviving entity becomes an Affiliate of Citigroup and (ii) immediately prior to such reorganization or restructuring, distributes a life insurance or annuity product issued by a Purchaser Insurer in Brazil (a "Credicard Product"), then Citigroup shall cause such surviving entity to negotiate in good faith with such Purchaser Insurer and enter into an amendment to the Annex B (the "Brazil Annex") to the Latin America Selling Agreement, which is an International Selling Agreement hereunder, to include such entity as a Distributor thereunder and to include such Credicard Product as a "Product" under the Latin America Selling Agreement, provided that such amendment or the distribution of any such Credicard Product will not conflict with any agreement or arrangement by which Citigroup, Distributor or Credicard, any surviving entity or any of their respective 13 Affiliates or any of their respective assets or properties may be bound (including, without limitation, any agreements or arrangements among Credicard and any of its shareholders or their affiliates). (b) For purposes of any amendment to the Brazil Annex to the Latin America Selling Agreement in respect of a Credicard Product, the determination of (i) whether to classify such Credicard Product as an Exclusive Product, a Non-Exclusive Product or a Private Label Product, (ii) the scope of access rights as provided in Section 4.1 and (iii) compensation to be paid for sales of such Credicard Product shall, in each case, be determined as of the date of such amendment and not as of the date of this Agreement. (c) In furtherance of the foregoing, Citigroup agrees that prior to December 31, 2008, it and its Affiliates shall not take action to (i) finally terminate the distribution agreements in effect on the date of this Agreement between Credicard and a Travelers Insurer or (ii) amend any term of such agreements or enter into any new agreement or arrangement, in either case, in a manner that would significantly and adversely affect distribution arrangements thereunder in respect of the Credicard Products. Section 3.10. Corretora. In the event that Citibank Corretora de Seguros S.A., which is the "International Parent Distributor" in Brazil as of the date of this Agreement, ceases for any reason to distribute Products in Brazil during the Term, then, to the extent that Banco Citibank S.A., directly or indirectly through another distributor in Brazil Affiliated with Banco Citibank S.A., is authorized to distribute and distributes any life insurance or annuity products in Brazil, Parent shall cause Banco Citibank S.A. or such other distributor in Brazil Affiliated with Banco Citibank S.A., to enter into an International Selling Agreement to distribute the relevant Products in Brazil for the remainder of the Term in accordance with the terms and subject to the conditions set forth in this Agreement and the applicable International Selling Agreement. ARTICLE IV. ACCESS AND BRANDING Section 4.1. Access. (a) To the extent that as of the date of this Agreement, an International Exclusive Parent Distributor permits wholesalers, Product representatives or bank marketing representatives of the Travelers Insurers to have access to such International Exclusive Parent Distributor, including its Sales Force, bank branches, sales offices or sales, education or training meetings that involve the promotion of Products made available by a Travelers Insurer for distribution by such International Exclusive Parent Distributor in a Covered Country, Parent shall, during the First Term, cause such International Exclusive Parent Distributor to continue to permit such access on the same terms and conditions as on the date of this Agreement in a manner consistent with applicable Law and the Parent Standards and Practices. The applicable Purchaser Insurer providing the Exclusive Products shall continue during the First Term to maintain wholesaler coverage, training, and sales support to the International Exclusive Parent Distributor on terms and conditions that are no less favorable than those provided by the applicable Travelers Insurer to such International Exclusive Parent Distributor on the date of this Agreement. 14 (b) To the extent that as of the date of this Agreement, an International Parent Distributor (other than an International Exclusive Parent Distributor) permits wholesalers, Product representatives or bank marketing representatives of the Travelers Insurers to have access to such International Parent Distributor in a Covered Country, including its Sales Force, bank branches, sales offices or sales, education or training meetings that involve the promotion of Products made available by a Travelers Insurer for distribution by such International Parent Distributor, in a manner consistent with applicable Law and with the Parent Standards and Practices, Parent shall, until the third anniversary of the date of this Agreement, cause such International Parent Distributor to provide such access on terms and conditions that are no less favorable than those generally applicable to any Third Party Insurer. Section 4.2. Branding; Use of Names; Confidential Information; Approval of Certain Materials. (a) Unless otherwise provided in an International Selling Agreement and, in all cases in accordance with the terms and subject to the conditions of the Licensing Agreement, during the Term, Purchaser shall cause all Purchaser Insurers providing, and Parent shall cause all International Parent Distributors distributing, Products (including Private Label Products in respect of which any Purchaser Insurer is the provider on the date of this Agreement) to cause such Products distributed through an International Parent Distributor to be offered and branded utilizing the Marks that relate to each such Product as of the date of this Agreement; provided that Purchaser and the Purchaser Insurers shall have been granted adequate rights to use the Marks under the Licensing Agreement; and provided, further, that the parties hereto agree that any trademark or trade name on such product shall be appropriately altered to reflect any change to the trademark or trade name of the applicable International Parent Distributor and, subject to Section 3.2(c), in the case of a Substitute Product, to reflect any change that is required by Law as a result of the change in the issuer of such Substitute Product. To the extent that a Private Label Product is distributed by a PLP Distributor on behalf of a Purchaser Insurer after the date of this Agreement in accordance with Section 3.4, then Parent shall cause such PLP Distributor and Purchaser shall cause all Purchaser Insurers providing such Private Label Product to cause such Private Label Product to be offered and branded using such trademarks or trade names as may be applicable to such Private Label Product by such PLP Distributor, provided that Purchaser and the applicable Purchaser Insurers shall own or shall have been granted adequate rights to use such trademarks or trade names. (b) During the Term of this Agreement, the Travelers Insurers and, as applicable, the Purchaser Insurers will have access to confidential information and other proprietary information ("Confidential Information") of Parent and its Affiliates. Confidential Information includes, but is not limited to, the names, addresses, telephone numbers and social security numbers of applicants for, purchasers of and other customers of Products and New Products as well as other identity and private information in respect of Parent's or its Affiliates' customers, employees, representatives and agents. Confidential Information shall not include any customer information (i) that was previously known by a Purchaser Insurer from a source other than any International Parent Distributor without obligations of confidence; or (ii) that was or is rightfully received by a Purchaser Insurer from a third party without obligations of confidence to any International Parent Distributor or from publicly available sources without obligations of confidence to any International Parent Distributor; or (iii) that was or is developed 15 by means independent of information obtained from any International Parent Distributor. As a condition to such access, neither Purchaser nor any Purchaser Insurer shall use, copy or disclose such Confidential Information in any manner (including, without limitation, to sell or cross-sell their products). Confidential Information may be used to service Products and New Products, including, as appropriate, to accept additional contributions and premium for and to modify, add, or exchange coverage to any Product or New Product purchased by a policy owner who purchased from an International Parent Distributor. Purchaser and its Affiliates shall take all appropriate action to ensure the protection, confidentiality and security of such Confidential Information. The Purchaser and its Affiliates acknowledge and agree that this Confidential Information is the property of the International Parent Distributors. The parties also understand that the Purchaser Insurers may respond to inquiries from holders of Products or New Products concerning other Purchaser Insurer products and services provided there was no solicitation of such inquiry using Confidential Information. The parties also agree that this Section 4.2(b) shall not apply to individuals with whom Purchaser or the Purchaser Insurers have a pre-existing relationship other than through an International Parent Distributor. (c) (i) Any marketing, training or other materials to be made available by any Purchaser Insurer to any International Parent Distributor's Sales Force or customers in connection with Products and New Products (other than ordinary course communications to policyholders and contract holders) shall be made available only with the prior consent (which shall not be unreasonably withheld or delayed) of the applicable International Parent Distributor; provided that all such materials that are used by the Travelers Insurers in connection with the distribution of Products through the International Parent Distributors on the date of this Agreement shall not require any such consent. In the event that the applicable Purchaser Insurer or the applicable International Parent Distributor determines to discontinue the use of any such materials, the parties shall cooperate with the applicable Purchaser Insurer to ensure that such use is discontinued by such International Parent Distributor's Sales Force. (ii) Any marketing, training or other materials prepared by an International Parent Distributor and to be made available by such International Parent Distributor to its Sales Force or customers that describes any Purchaser Insurer or any of its Affiliates or any insurance or annuity product offered by any of them may be made available only with the prior consent (which shall not be unreasonably withheld or delayed) of the applicable Purchaser Insurer; provided that all such materials that are used by the International Parent Distributors in connection with the distribution of Products on the date of this Agreement shall not require any such consent. In the event that the applicable Purchaser Insurer or the applicable International Parent Distributor determines to discontinue the use of any such materials, the parties shall cooperate with the applicable International Parent Distributor to ensure that such use is discontinued by its Sales Force. ARTICLE V. TERM OF THE AGREEMENT; CERTAIN CONDITIONS Section 5.1. Term. The term of this Agreement (the "Term") will commence on the date of this Agreement and shall continue until the tenth anniversary of the date of this 16 Agreement; provided, however, the expiration of this Agreement shall not reduce or curtail the term of any International Selling Agreement that extends beyond the end of the Term. Section 5.2. Survival. Upon expiration of this Agreement, the provisions of Article I, Section 4.2(b), this Section 5.2, Article VI and Article VII shall survive without modification. Section 5.3. Certain Conditions. (a) Subject to Section 5.3(b), but notwithstanding anything else to the contrary in this Agreement or in any International Selling Agreement, no International Parent Distributor shall be required to enter into (and may refuse to enter into) an International Selling Agreement in respect of, or have any obligation to offer (and may immediately cease to offer), any Product or New Product offered by a Purchaser Insurer, if: (i) Parent reasonably determines that such Product or New Product offered by a Purchaser Insurer is not Competitive; (ii) any change is made or any feature is added to such Product or New Product (or a fund or investment option therein) without Parent's or the applicable International Parent Distributor's prior written approval, which approval shall not be unreasonably withheld or delayed; (iii) such Product or New Product or the offering thereof (including on an exclusive basis) conflicts with: (x) applicable Law, including any regulatory compliance procedures or restrictions in connection therewith; (y) any material provision of any existing agreement by which Parent or its Affiliates or any of their respective assets or properties are bound; provided that this clause (y) shall not apply to any Product offered by a Travelers Insurer and distributed by an International Parent Distributor pursuant to an arrangement in effect on the date of this Agreement or any Substitute Products distributed in replacement thereof pursuant to Section 3.5(c), unless the violation is caused by or relates to (1) any difference between the Substitute Product and the Existing Product it replaced, or (2) solely the fact of the replacement of the Existing Product with the Substitute Product; or (z) the Parent Standards and Practices, provided that in the case of the application of this clause (z) during the First Term to any Exclusive Product following a change in the Parent Standards and Practices, any such change in the Parent Standards and Practices shall be in accordance with the third sentence of Section 3.2(b); (iv) such Product is an Exclusive Product and (x) any Purchaser Insurer provides to any Comparable Distributor a product that is substantially similar to such Exclusive Product and (y) the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics of such 17 product, taken as a whole, are more favorable than the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics of such Exclusive Product, taken as a whole; provided, however, that this Section 5.3(a)(iv) shall not apply to any distribution arrangements of any Purchaser Insurer in effect on the date of this Agreement; or (v) with respect to any Exclusive Product, a federal, state or local domestic, foreign or supranational governmental, regulatory or self-regulatory authority, agency, court, tribunal, commission or other governmental, regulatory or self-regulatory entity, with jurisdiction over the International Exclusive Parent Distributor requests or mandates that the International Exclusive Parent Distributor cease offering or no longer offer the Exclusive Product on an exclusive basis; provided, however, in the case of such a request (but not a mandate), the International Exclusive Parent Distributor shall provide prompt notice of any such request to the Purchaser Insurer providing the Exclusive Product, and shall consult and cooperate with such Purchaser Insurer in its efforts to obtain from such regulatory agency an agreement that permits the International Exclusive Parent Distributor to continue to distribute such Exclusive Product on an exclusive basis. If such an agreement is reached, the International Exclusive Parent Distributor shall continue to distribute the Exclusive Product on an exclusive basis in accordance with the terms of Section 3.2. If such an agreement cannot be reached, the International Exclusive Parent Distributor shall distribute the Exclusive Product on a non-exclusive, Level Playing Field basis, for the remainder of the Term in accordance with the terms of this Agreement. (b) Prior to any International Parent Distributor's exercising its right under Section 5.3(a) not to enter into an International Selling Agreement with respect to any Product or New Product or to cease offering any Product or New Product, such International Parent Distributor shall provide written notice to Purchaser, containing a reasonably detailed statement of the grounds for such exercise, and shall afford Purchaser a period of 30 days in which to cure the deficiency unless the deficiency is not capable of being cured. Such International Parent Distributor shall consult and cooperate with Purchaser as reasonably requested during such period in identifying possible cures. If Purchaser is able to propose a cure that is reasonably satisfactory to such International Parent Distributor before the expiration of such period, such International Parent Distributor shall not be entitled to exercise its right to refuse to enter into an International Selling Agreement or to cease offering the applicable Product or New Product, provided that if any cure involves a change in such Product's or New Product's terms or features that requires filing with or approval (or non-disapproval) by any regulatory authority, such International Parent Distributor shall, prior to exercising such right, afford Purchaser such further period of time as may be reasonably necessary to accomplish such filing or obtain such approval or non-disapproval. Notwithstanding anything to the contrary in this Section 5.3(b), no International Parent Distributor shall be required to continue to distribute any Product or New Product pending any cure period, if the offering of such Product or New Product would reasonably be expected to (i) violate applicable Law, including any regulatory compliance procedures or restriction in connection therewith, (ii) conflict with the Parent Standards and Practices insofar as they relate to reputational considerations or industry standards in the applicable country or (iii) in the case of an Exclusive Product under Section 5.3(a)(v) above, conflict with a mandate from a federal, state or local domestic, foreign or supranational 18 governmental, regulatory or self-regulatory authority, agency, court, tribunal, commission or other governmental, regulatory or self-regulatory entity, with jurisdiction over the International Exclusive Parent Distributor that such International Exclusive Parent Distributor cease offering or no longer offer the Exclusive Product on an exclusive basis; provided, in the case of this clause (iii), such International Exclusive Parent Distributor shall distribute the Exclusive Product on a non-exclusive, Level Playing Field basis, for the remainder of the Term in accordance with the terms of this Agreement. ARTICLE VI. INDEMNIFICATION Section 6.1. Indemnification of Parent. Purchaser will defend and hold harmless Parent and its Affiliates and their respective officers, directors, employees and agents (the "Parent Indemnified Parties") from and against any losses, liabilities, damages (including consequential damages), actions, claims, demands, regulatory investigations, settlements, judgments and other expenses including, but not limited to, reasonable attorneys fees and expenses ("Losses") which are asserted against, incurred or suffered by any Parent Indemnified Party and which arise from or are related to Purchaser's breach of any representation or warranty (except to the extent indemnification therefor is available under the Acquisition Agreement) or any covenant, condition or duty contained in this Agreement. Section 6.2. Indemnification of Purchaser. Parent will defend and hold harmless Purchaser and its Affiliates and their respective officers, directors, employees and agents (the "Purchaser Indemnified Parties") from and against any Losses which are asserted against, incurred or suffered by any Purchaser Indemnified Party and which arise from or are related to Parent's breach of any representation or warranty (except to the extent indemnification therefor is available under the Acquisition Agreement) or any covenant, condition or duty contained in this Agreement. Section 6.3. Indemnity Provisions in International Selling Agreements. Each International Selling Agreement shall provide indemnification for Losses asserted against each of the parties thereto in respect of a failure of the other party to comply with applicable Law and a breach by such other party of any representation, warranty, covenant, condition or duty contained in such International Selling Agreement. Section 6.4. Indemnification Procedures. Upon receipt by a Parent Indemnified Party or a Purchaser Indemnified Party (each, an "Indemnified Party"), as the case may be, of notice of any action, suit, proceedings, claim, demand or assessment made or brought by an unaffiliated third party (a "Third Party Claim") with respect to a matter for which such Indemnified Party is indemnified under this Article VI which has or is expected to give rise to a claim for Losses, the Indemnified Party shall promptly, in the case of a Purchaser Indemnified Party, notify Parent and in the case of a Parent Indemnified Party, notify Purchaser (Purchaser or Parent, as the case may be, the "Indemnifying Party"), in writing, indicating the nature of such Third Party Claim and the basis therefor; provided, however, that any delay or failure by the Indemnified Party to give notice to the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is prejudiced by reason of such delay or failure. Such written notice shall (i) describe such Third Party Claim in reasonable detail as is practicable including 19 the sections of this Agreement, which form the basis for such claim; provided that the failure to identify a particular section in such notice shall not preclude the Indemnified Party from subsequently identifying such section as a basis for such claim, (ii) attach copies of all material written evidence thereof and (iii) set forth the estimated amount of the Losses that have been or may be sustained by an Indemnified Party. The Indemnifying Party shall have 30 days after receipt of notice to elect, at its option, to assume and control the defense of, at its own expense and by its own counsel, any such Third Party Claim and shall be entitled to assert any and all defenses available to the Indemnified Party to the fullest extent permitted by applicable Law. If the Indemnifying Party shall undertake to compromise or defend any such Third Party Claim, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise of, or defense against, any such Third Party Claim; provided, however, that the Indemnifying Party shall not settle, compromise or discharge, or admit any liability with respect to, any such Third Party Claim without the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed), unless the relief consists solely of money Losses to be paid by the Indemnifying Party and includes a provision whereby the plaintiff or claimant in the matter releases the Purchaser Indemnified Parties or the Parent Indemnified Parties, as applicable, from all liability with respect thereto. Notwithstanding an election to assume the defense of such action or proceeding, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action or proceeding, and the Indemnifying Party shall bear the reasonable fees, costs and expenses of such separate counsel if the (A) Indemnified Party shall have determined in good faith that an actual or potential conflict of interest makes representation by the same counsel or the counsel selected by the Indemnifying Party inappropriate or (B) Indemnifying Party shall have authorized the Indemnified Party to employ separate counsel at the Indemnifying Party's expense. In any event, the Indemnified Party and Indemnifying Party and their counsel shall cooperate in the defense of any Third Party Claim subject to this Article VI and keep such Persons informed of all developments relating to any such Third Party Claims, and provide copies of all relevant correspondence and documentation relating thereto. All costs and expenses incurred in connection with the Indemnified Party's cooperation shall be borne by the Indemnifying Party. In any event, the Indemnified Party shall have the right at its own expense to participate in the defense of such asserted liability. If the Indemnifying Party receiving such notice of a Third Party Claim does not elect to defend such Third Party Claim or does not defend such Third Party Claim in good faith, the Indemnified Party shall have the right, in addition to any other right or remedy it may have hereunder, at the Indemnifying Party's expense, to defend such Third Party Claim; provided, however, that the Indemnified Party shall not settle, compromise or discharge, or admit any liability with respect to, any such Third Party Claim without the written consent of the Indemnifying Party (which consent will not be unreasonably withheld or delayed). Section 6.5. General. (a) The provisions of this Article VI will survive the expiration of this Agreement. (b) The rights and remedies provided herein shall be cumulative and in addition to all other rights and remedies available to the parties at law or equity, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or 20 later exercise of any other such rights or remedies by such party. Notwithstanding the preceding sentence, nothing in this Agreement shall restrict or prevent any party from seeking indemnification under any applicable provision of the Acquisition Agreement, or any of the other Related Agreements (as defined in the Acquisition Agreement), provided that no party shall obtain duplicative recoveries. ARTICLE VII. MISCELLANEOUS Section 7.1. Equitable Remedies. The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable Law, each party waives any objection to the imposition of such relief. Section 7.2. Severability. If any provision of this Agreement or the application of any such provision is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable Law, the parties waive any provision of Law that renders any provision of this Agreement invalid, illegal or unenforceable in any respect. The parties shall, to the extent lawful and practicable, use their commercially reasonable efforts to enter into arrangements to reinstate the intended benefits, net of the intended burdens, of any such provision held invalid, illegal or unenforceable. Section 7.3. Further Assurance and Assistance. Parent and Purchaser agree that each will, and will cause their respective Affiliates to, execute and deliver any and all documents, and take such further acts, in addition to those expressly provided for herein, that may be necessary or appropriate to effectuate the provisions of this Agreement. Section 7.4. Notices. All notices, demands and other communications required or permitted to be given to any party under this Agreement shall be in writing and any such notice, demand or other communication shall be deemed to have been duly given when delivered by hand, courier or overnight delivery service or, if mailed, two (2) Business Days (as defined in the Acquisition Agreement) after deposit in the mail and sent certified or registered mail, return receipt requested and with first-class postage prepaid, or in the case of facsimile notice, when sent and transmission is confirmed, and, regardless of method, addressed to the party at its address or facsimile number set forth below (or at such other address or facsimile number as the party shall furnish the other parties in accordance with this Section 7.4): 21 (a) If to Parent: Citigroup Inc. 399 Park Avenue New York, New York 10043 Attn: Andrew M. Felner Deputy General Counsel Facsimile: (212) 559-7057 e-mail: felnera@citigroup.com With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036-6522 Attn: Eric J. Friedman, Esq. Facsimile: (212) 735-2000 (b) If to Purchaser: MetLife, Inc. 2701 Queens Plaza North Long Island City, New York 11101 Attn: James L. Lipscomb Executive Vice President and General Counsel Facsimile: (212) 252-7288 With a copy to: LeBoeuf, Lamb, Greene & MacRae L.L.P. 125 West 55th Street New York, New York 10019 Attn: Alexander M. Dye, Esq. Facsimile: 212-424-8500 Section 7.5. Successors and Assigns. Subject to the terms of this Section 7.5, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that the Parent Indemnified Parties and the Purchaser Indemnified Parties shall be intended third-party beneficiaries of Article VI. No party hereto may assign its rights or obligations under this Agreement without the prior written consent of the other party (which consent may not be unreasonably withheld) and any purported assignment without such consent shall be void. Section 7.6. Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws principles of such State. 22 Section 7.7. Jurisdiction; Venue; Consent to Service of Process. (a) Each of the parties hereto irrevocably and unconditionally submits to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York or, if such court will not accept jurisdiction, the Supreme Court of the State of New York or any court of competent civil jurisdiction sitting in New York County, New York. In any action, suit or other proceeding, each of the parties hereto irrevocably and unconditionally waives and agrees not to assert by way of motion, as a defense or otherwise any claims that it is not subject to the jurisdiction of the above courts, that such action or suit is brought in an inconvenient forum or that the venue of such action, suit or other proceeding is improper. Each of the parties hereto also hereby agrees that any final and unappealable judgment against a party hereto in connection with any action, suit or other proceeding shall be conclusive and binding on such party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United States. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. (b) Each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 7.4 of this Agreement. Nothing in this Section 7.7 shall affect the right of any party hereto to serve process in any other manner permitted by Law. Section 7.8. Entire Agreement. This Agreement, together with all schedules hereto, embodies the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements with respect thereto. The parties intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Agreement. Section 7.9. Amendment and Waiver. No amendment to this Agreement shall be effective unless it shall be in writing and signed by each party. Any failure of a party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the party entitled to the benefits thereof only by a written instrument duly executed and delivered by the party granting such waiver, 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 subsequent or other failure of compliance. In the event that the terms of an International Selling Agreement shall conflict with the terms of this Agreement, the terms of such International Selling Agreement shall control for purposes of such International Selling Agreement. Section 7.10. Access to Records. Parent shall cause the International Parent Distributors to maintain adequate books and records related to the activities of the International Parent Distributors under the International Selling Agreements with respect to the Products and New Products distributed thereunder. Upon written request, but no more frequently than annually, (i) Parent shall certify to Purchaser its material compliance with the terms of Sections 3.2(b), 3.3 and 3.4(a) of this Agreement during the period covered by such certificate and (ii) Purchaser shall certify to Parent that no Purchaser Insurer has, during the period covered by such certification, provided to any Comparable Distributor any product that is substantially similar to 23 an Exclusive Product provided by a Travelers Insurer on an exclusive basis to an International Exclusive Parent Distributor under an International Selling Agreement with terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics, taken as a whole, that are materially more favorable to such Comparable Distributor than the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics of such Exclusive Product, taken as a whole. Section 7.11. Counterparts. This Agreement may be executed by the parties in multiple counterparts which may be delivered by facsimile transmission. Each counterpart when so executed and delivered shall be deemed an original, and all such counterparts taken together shall constitute one and the same instrument. Section 7.12. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. [Remainder of Page Intentionally Left Blank.] 24 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective authorized representatives. CITIGROUP INC. By: /s/ Anthony A. Lazzara --------------------------------------- Name: Anthony A. Lazzara Title: Managing Director M&A Execution METLIFE, INC. By: /s/ William J. Wheeler --------------------------------------- Name: William J. Wheeler Title: Executive Vice President and Chief Financial Officer [SIGNATURE PAGE TO INTERNATIONAL DISTRIBUTION AGREEMENT] EX-10.2 3 y10546exv10w2.txt DOMESTIC DISTRIBUTION AGREEMENT [EXECUTION COPY] ================================================================================ DOMESTIC DISTRIBUTION AGREEMENT BY AND BETWEEN CITIGROUP INC. AND METLIFE, INC. AS OF JULY 1, 2005 ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS.................................................................................. 1 Section 1.1. Defined Terms.......................................................................... 1 Section 1.2. Purposes of Agreement.................................................................. 4 Section 1.3. Construction........................................................................... 4 Section 1.4. Headings............................................................................... 5 ARTICLE II. REPRESENTATIONS AND WARRANTIES.............................................................. 5 Section 2.1. Representations and Warranties of Parent............................................... 5 Section 2.2. Representations and Warranties of Purchaser............................................ 5 ARTICLE III. DOMESTIC DISTRIBUTION...................................................................... 6 Section 3.1. Selling Agreements..................................................................... 6 Section 3.2. Exclusive Distribution Arrangements.................................................... 7 Section 3.3. Non-Exclusive Distribution Arrangements................................................ 7 Section 3.4. Private Label Products................................................................. 7 Section 3.5. New Products; Additional Products; Substitute Products................................. 8 Section 3.6. Acquisitions........................................................................... 9 Section 3.7. No Obligation.......................................................................... 10 ARTICLE IV. ACCESS AND BRANDING......................................................................... 10 Section 4.1. Access................................................................................. 10 Section 4.2. Branding; Use of Names; Confidential Information; Approval of Certain Materials........ 11 ARTICLE V. TERM OF THE AGREEMENT; CERTAIN CONDITIONS.................................................... 13 Section 5.1. Term................................................................................... 13 Section 5.2. Surviva................................................................................ 13 Section 5.3. Certain Conditions..................................................................... 13 ARTICLE VI. INDEMNIFICATION............................................................................. 15 Section 6.1. Indemnification of Parent.............................................................. 15 Section 6.2. Indemnification of Purchaser........................................................... 15 Section 6.3. Indemnity Provisions in Domestic Selling Agreements.................................... 15 Section 6.4. Indemnification Procedures............................................................. 15 Section 6.5. General................................................................................ 17 ARTICLE VII. Miscellaneous.............................................................................. 17 Section 7.1. Equitable Remedies..................................................................... 17 Section 7.2. Severability........................................................................... 17 Section 7.3. Further Assurance and Assistance....................................................... 17 Section 7.4. Notices................................................................................ 17 Section 7.5. Successors and Assigns................................................................. 18 Section 7.6. Governing Law.......................................................................... 19 Section 7.7. Jurisdiction; Venue; Consent to Service of Process..................................... 19 Section 7.8. Entire Agreement....................................................................... 19 Section 7.9. Amendment and Waiver................................................................... 19 Section 7.10. Access to Records...................................................................... 19 Section 7.11. Counterparts........................................................................... 20 Section 7.12. WAIVER OF JURY TRIAL................................................................... 20
DOMESTIC DISTRIBUTION AGREEMENT THIS DOMESTIC DISTRIBUTION AGREEMENT (this "Agreement"), dated as of July 1, 2005, is made by and between Citigroup Inc., a Delaware corporation ("Parent"), and MetLife, Inc., a Delaware corporation ("Purchaser"). WHEREAS, Purchaser and certain of its Affiliates provide insurance and annuity products throughout the United States and in numerous countries around the world; WHEREAS, Parent, through its Affiliates, has an extensive proprietary distribution network that distributes, on behalf of insurance companies, insurance and annuity products throughout the United States and in numerous countries around the world; WHEREAS, Parent and Purchaser have entered into an Acquisition Agreement, dated as of January 31, 2005 (the "Acquisition Agreement"), pursuant to which Purchaser will acquire on the terms and subject to the conditions set forth therein, all of the outstanding shares of capital stock of certain subsidiaries of, and the equity interests owned by Parent in certain joint ventures of, Parent or its Affiliates, including the Travelers Insurers; WHEREAS, in connection with the transactions contemplated by the Acquisition Agreement, the parties hereto desire to enter into a distribution relationship outside the United States pursuant to an International Distribution Agreement to be entered into on the date hereof and the distribution relationship inside the United States contemplated by this Agreement; WHEREAS, this Agreement has been restated from the form hereof attached to the Acquisition Agreement; and WHEREAS, the execution and delivery of this Agreement is a condition to closing of the transactions contemplated by the Acquisition Agreement. NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises herein contained, the parties do hereby agree as follows: ARTICLE I. DEFINITIONS Section 1.1. Defined Terms. For purposes of this Agreement, unless the context requires otherwise, the following terms shall have the following meanings: "Acquisition Agreement" has the meaning set forth in the recitals hereto. "Affiliate" shall mean, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such first Person. The term "control" (including its correlative meanings "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). "Agreement" shall have the meaning set forth in the introductory paragraph hereof. "Comparable Distributor" shall mean a distributor using a substantially similar approach to the marketing, servicing, sales support and overall distribution of products. "Competitive" means (i) the terms, total compensation, customer appeal, consumer pricing and value, wholesaler coverage, training and support, features and service standards and metrics of the applicable product, taken as a whole, are at least equivalent to those of other comparable products, considered as a group, then distributed by the applicable Domestic Parent Distributor and (ii) the financial strength rating of the applicable provider is substantially similar to the other providers (considered as a group) then providing such comparable products to such Domestic Parent Distributor. "Confidential Information" shall have the meaning set forth in Section 4.2(b). "Domestic Exclusive Parent Distributor" means each Domestic Parent Distributor to which a Travelers Insurer is the exclusive provider of any Product on the date of this Agreement and such Person's successors and assigns. "Domestic Parent Distributor" means (i) any Person Affiliated with Parent that, as of the date hereof, distributes any Product that a Travelers Insurer offers in the United States and such Person's successors and assigns and (ii) from and after the time of its acquisition by Parent or an Affiliate of Parent, a Target Affiliated Distributor that distributes any life insurance or annuity products for any Purchaser Insurer pursuant to Section 3.6(b), and such Target Affiliated Distributor's successors and assigns. "Domestic Selling Agreements" has the meaning set forth in Section 3.1. "Exclusive Products" means the Products designated on Schedule 3.2(a) as being subject to an exclusive relationship. "Existing Product" has the meaning set forth in Section 3.5(d). "First Term" means the five-year period commencing on the date of this Agreement and ending on the fifth anniversary of the date of this Agreement. "Indemnified Party" has the meaning set forth in Section 6.4. "Indemnifying Party" has the meaning set forth in Section 6.4. "Law" shall have the meaning set forth in the Acquisition Agreement. "Level Playing Field" means, with respect to a product, Parent (i) shall, and shall cause any Domestic Parent Distributor entering into a Domestic Selling Agreement with respect to such product pursuant to Section 3.1 to, afford the same access to its distribution platforms for such product offered by a Travelers Insurer (or a Purchaser Insurer, as applicable) as the access it affords to comparable products offered by a Third Party Insurer and (ii) shall not, and shall cause its Affiliates (including the Domestic Parent Distributors) not to, provide to its Sales Force any compensation or other economic inducement or benefit for the sale of comparable products sold in a comparable sales support and compensation framework offered by a Third Party Insurer that are more favorable than the compensation or other economic inducements or benefits provided to such Sales Force for the sale of such products offered by a Travelers Insurer (or a Purchaser Insurer, as applicable); provided, that a Level Playing Field may include variations in Sales Force compensation that are (x) based upon neutral criteria that do not differentiate between product providers, such as achieving sales volume or persistency objectives, or (y) for products 2 (including combined product and service arrangements) for which distributor compensation is negotiated by the provider on a sale-by-sale basis, such as group retirement products. "Licensing Agreement" shall have the meaning set forth in the Acquisition Agreement. "Losses" has the meaning set forth in Section 6.1. "Marks" shall mean the Parent Distributor Marks, as defined in the Licensing Agreement in respect of this Agreement, including "PrimElite", "Blueprint", "Vintage" and "Marquis." "New Products" means, (i) with respect to each Domestic Parent Distributor, any life insurance or annuity product that a Purchaser Insurer is authorized to offer but was not included among the types of insurance or annuity products distributed by such Domestic Parent Distributor on the date of this Agreement and (ii) any products offered by a Purchaser Insurer pursuant to arrangements contemplated by Section 3.6(b). For avoidance of doubt, (i) the addition of new features to Products shall not constitute New Products in whole or in part, regardless of whether any insurance regulatory filing is required in connection therewith and (ii) the following products shall not be deemed to be New Products with respect to PFSI: long-term care insurance, prepaid legal services and individual term life insurance the primary purpose of which is protection rather than investment. "Non-Exclusive Products" has the meaning set forth in Section 3.3. "Parent" has the meaning set forth in the introductory paragraph hereof. "Parent Indemnified Parties" has the meaning set forth in Section 6.1. "Parent Standards and Practices" means the client service and relationship standards, business practices, ethical standards, customer privacy and protection policies and general service quality standards, reputational considerations and industry standards, as determined from time to time by Parent or any of its Affiliates, provided that such Parent Standards and Practices, to the extent they relate to a Product or New Product and/or Domestic Parent Distributor, shall be applied, and changes thereto shall be made, without discriminating in any material manner against any Travelers Insurer or Purchaser Insurer, as applicable, relative to all other similarly situated providers of such Products or New Products distributed by such Domestic Parent Distributor. "Person" shall have the meaning set forth in the Acquisition Agreement. "PFSI" has the meaning set forth in Section 3.5(b). "PLP Distributor" has the meaning set forth in Section 3.4(b). "Private Label Product" means a life insurance or annuity product customized for a Domestic Parent Distributor that (i) is branded under the name of a Domestic Parent Distributor or (ii) is a variable life insurance or variable annuity contract that offers as an option more than two investment choices or mutual funds that are advised or managed by Parent or a Parent Affiliate (or any successor to the Parent or a Parent Affiliate of substantially all of the business or assets of the Parent or such Parent Affiliate which relate primarily to the asset management business), including a Domestic Parent Distributor (in all cases in the capacity of either an advisor or sub-advisor). For the avoidance of doubt and without limitation, a Private Label Product (whether existing on the date of this Agreement or thereafter) shall be deemed a Product for all purposes under this Agreement. 3 "Products" means the life insurance and annuity products issued by the Travelers Insurers and distributed through the Domestic Parent Distributors on the date of this Agreement which are listed on Schedule 3.2(a), and any Substitute Products distributed in replacement thereof pursuant to Section 3.5(d). "Purchaser" shall have the meaning set forth in the introductory paragraph hereof. "Purchaser Indemnified Parties" has the meaning set forth in Section 6.2. "Purchaser Insurer" means any insurance company Affiliate of Purchaser, including the Travelers Insurers. "Sales Force" means those point of sale representatives and their direct supervisors utilized by Parent, Domestic Parent Distributors or one of their respective Affiliates whose job responsibility includes the sale or promotion of Products or New Products offered by a Travelers Insurer (or a Purchaser Insurer, as applicable). "Second Term" means the five-year period commencing upon the expiration of the First Term and ending on the tenth anniversary of the date of this Agreement. "Substitute Product" has the meaning set forth in Section 3.5(d). "Target Affiliated Distributor" means any Person Affiliated with Parent that (i) was an Affiliate of a Target Business (as defined in the Acquisition Agreement) immediately prior to the acquisition of such Target Business by Parent or an Affiliate of Parent and (ii) is engaged in the business of distributing financial services products. "Term" has the meaning set forth in Section 5.1. "Third Party Claim" has the meaning set forth in Section 6.4. "Third Party Insurer" means an insurance company that is not Affiliated with Purchaser. "Travelers Insurers" means the Domestic Insurance Companies (as defined in the Acquisition Agreement) to be acquired by Purchaser pursuant to the Acquisition Agreement and their successors and assigns, and with respect to a Substitute Product that is offered pursuant to Section 3.5(d), a Purchaser Insurer and its successors and assigns. Section 1.2. Purposes of Agreement. Notwithstanding anything in this Agreement to the contrary, Purchaser and Parent agree that this Agreement is intended to set forth certain principal business terms upon which they will enter into Domestic Selling Agreements during the Term and that nothing herein creates a Domestic Selling Agreement. Section 1.3. Construction. For the purposes of this Agreement: (i) words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa, and words (including capitalized terms defined herein) of one gender shall be held to include the other gender as the context requires; (ii) the terms "hereof," "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules) and not to any particular provision of this Agreement, and Article, Section, paragraph and Schedule references are to the Articles, Sections, paragraphs and Schedules to this Agreement, unless otherwise specified; (iii) the word "including" and words of similar import when used in this Agreement shall mean "including, without limitation"; (iv) all references to any period of days shall be deemed to be to the relevant number of calendar days 4 unless otherwise specified; and (v) "commercially reasonable efforts" shall not require a waiver by any party of any material rights or any action or omission that would be a breach of this Agreement. Section 1.4. Headings. The Article and Section headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement. ARTICLE II. REPRESENTATIONS AND WARRANTIES Section 2.1. Representations and Warranties of Parent. Parent hereby represents and warrants to Purchaser as set forth below. (a) Parent is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. (b) Parent has all necessary corporate power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it hereunder. The making, execution, delivery and performance by Parent of this Agreement and the consummation by Parent of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly and validly executed and delivered by Parent, and assuming the due authorization, execution and delivery by Purchaser, this Agreement will constitute the valid, legal and binding obligation of Parent, enforceable against it in accordance with its terms, except as may be subject to applicable bankruptcy, insolvency, moratorium or other similar Laws, now or hereafter in effect, relating to or affecting the rights of creditors generally and by legal and equitable limitations on the enforceability of specific remedies. (c) Neither the execution and delivery of this Agreement by Parent, nor the consummation of the transactions contemplated hereby, will (i) violate or conflict with any provision of the articles of incorporation or bylaws or other organizational documents of Parent or any Domestic Parent Distributor, (ii) violate any of the terms, conditions, or provisions of any Law or license to which Parent or any Domestic Parent Distributor is subject or by which it or any Domestic Parent Distributor or any of its or their assets are bound, or (iii) violate, breach, or constitute a default under any contract to which Parent or any Domestic Parent Distributor is a party or by which it or any Domestic Parent Distributor or any of its or their assets is bound. The distribution of any Products offered by a Travelers Insurer and distributed by a Domestic Parent Distributor on the date hereof does not violate, breach, or constitute a default under any contract to which Parent or any Domestic Parent Distributor is a party or by which any of them or any of their respective assets is bound. (d) None of the arrangements by which any Domestic Parent Distributor distributes any Products on behalf of a Travelers Insurer in force on the date of this Agreement violates any of the Parent Standards and Practices in effect on such date. Section 2.2. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Parent as set forth below. 5 (a) Purchaser is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation. (b) Purchaser has all necessary corporate power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it hereunder. The making, execution, delivery and performance by Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly and validly executed and delivered by Purchaser, and assuming the due authorization, execution and delivery by Parent, this Agreement will constitute the valid, legal and binding obligation of Purchaser, enforceable against it in accordance with its terms, except as may be subject to applicable bankruptcy, insolvency, moratorium or other similar Laws, now or hereafter in effect, relating to or affecting the rights of creditors generally and by legal and equitable limitations on the enforceability of specific remedies. (c) Neither the execution and delivery of this Agreement by Purchaser, nor the consummation of the transactions contemplated hereby, will (i) violate or conflict with any provision of the articles of incorporation or bylaws or other organizational documents of Purchaser or any Purchaser Insurer (other than the Travelers Insurers), (ii) violate any of the terms, conditions, or provisions of any Law or license to which Purchaser is subject or by which it or any of its assets is bound, or (iii) violate, breach, or constitute a default under any contract to which Purchaser is a party or by which it or any of its assets is bound. ARTICLE III. DOMESTIC DISTRIBUTION Section 3.1. Selling Agreements. In order to effectuate the distribution arrangements contemplated hereby among the Travelers Insurers (and Purchaser Insurers, as applicable) and the Domestic Parent Distributors for distribution of the Products and New Products offered by the Travelers Insurers (and Purchaser Insurers, as applicable) within the United States, Parent shall cause the Domestic Parent Distributors, and Purchaser shall cause the Travelers Insurers (and Purchaser Insurers, as applicable), to negotiate in good faith and enter into written selling agreements that are consistent with industry practice and with the principles set forth in this Agreement and that contain terms and conditions taken as a whole that are no less favorable to the Travelers Insurers (and Purchaser Insurers, as applicable) and the Domestic Parent Distributors than the terms and conditions of the selling and selling-related arrangements existing on the date of this Agreement between the Travelers Insurers and the Domestic Parent Distributors (the "Domestic Selling Agreements"). For each Domestic Parent Distributor that distributes a Product for a Travelers Insurer on the date of this Agreement, a Domestic Selling Agreement for the distribution of such Product, to take effect on the date of this Agreement, shall be executed and delivered by such Domestic Parent Distributor and the applicable Travelers Insurer on or prior to the date of this Agreement. The Domestic Selling Agreements will contain provisions concerning the periodic readjustment of compensation as agreed by the parties thereto. 6 Section 3.2. Exclusive Distribution Arrangements. (a) Parent represents and warrants that Schedule 3.2(a) sets forth a complete and accurate list of all life insurance and annuity products issued by a Travelers Insurer and distributed by a Domestic Parent Distributor in the United States on behalf of a Travelers Insurer on the date of this Agreement, the identity of each Domestic Parent Distributor that distributes each such product and whether or not a Travelers Insurer is the exclusive provider of such product to such Domestic Parent Distributor. (b) During the First Term, each Travelers Insurer shall have the right to be the exclusive provider in the United States of any Exclusive Product to any Domestic Exclusive Parent Distributor. During the Second Term, each Travelers Insurer shall have the right to be a provider, on a non-exclusive, Level Playing Field basis, to each Domestic Exclusive Parent Distributor of each Exclusive Product distributed by such Domestic Exclusive Parent Distributor on the date of this Agreement. During the First Term, Parent shall not make any change in the Parent Standards and Practices (except changes that may be reasonably appropriate to comply with applicable Law) that would conflict with the rights granted to the Travelers Insurers under the first sentence of this Section 3.2(b). (c) Notwithstanding anything herein to the contrary (including, without limitation, Section 3.5(d)), prior to the earlier of (i) the end of the 60-day period beginning on the date of this Agreement and (ii) December 31, 2005, (x) Purchaser shall cause the Exclusive Products to be marketed under the brand name and with such trademarks or trade names (including the identity of the underwriter of such Exclusive Product) as used on the date of this Agreement and (y) no Purchaser Insurer shall be permitted to provide a Substitute Product in place of an Exclusive Product. Section 3.3. Non-Exclusive Distribution Arrangements. If any Travelers Insurer is a non-exclusive provider of a Product to any Domestic Parent Distributor on the date of this Agreement (the "Non-Exclusive Products"), such Travelers Insurer shall have the right to be a provider of such Product, on a non-exclusive, Level Playing Field basis, to such Domestic Parent Distributor during the Term. Section 3.4. Private Label Products. (a) If any Travelers Insurer is the provider of a Private Label Product to a Domestic Parent Distributor on the date of this Agreement, such Travelers Insurer shall have the right to be the provider of such Private Label Product during the Term. (b) Subject to the last sentence of this Section 3.4(b), if, prior to the seventh anniversary of the date of this Agreement, any Domestic Parent Distributor desires to distribute, as a Private Label Product, a life insurance product (other than term life insurance) or annuity product that it does not distribute as a Private Label Product on the date of this Agreement, Parent shall cause such Domestic Parent Distributor (a "PLP Distributor") to notify Purchaser no later than the time of notification of any Third Party Insurer. If the PLP Distributor does not select a Purchaser Insurer as the provider of the new Private Label Product and the PLP Distributor desires to continue to seek a Third Party Insurer, as the provider, Parent shall cause 7 the PLP Distributor to include the Purchaser Insurers in the process for selection of such provider (whether by formal request for proposals or otherwise) to provide such Private Label Product prior to selecting a Third Party Insurer. Parent shall cause the PLP Distributor to entertain in good faith, and on terms no less favorable than those extended to any other proposed provider, proposals from the Purchaser Insurers to provide such new Private Label Product. Such PLP Distributor (i) shall have exclusive discretion in determining the process for selection of, and the criteria for evaluation of, potential providers of any such Private Label Product and (ii) shall make a good faith determination of the relative suitability of proposals from potential providers for satisfying the requirements of such Private Label Product (it being understood that if such PLP Distributor determines that a proposal from a Purchaser Insurer satisfies such requirements, considered as a whole, at least as well as the most favorable proposal or proposals of the other potential providers, such Purchaser Insurer's proposal shall be selected); provided, however, that such PLP Distributor shall not be required to select any such proposal. The rights granted to the Purchaser Insurers under this Section 3.4(b) shall not apply with respect to any new Private Label Product if an insurance company not Affiliated with Parent or Purchaser contacts or approaches the Domestic Parent Distributor, without solicitation by such Domestic Parent Distributor relating to such Private Label Product, about developing or the possibility of developing such Private Label Product. Notwithstanding the foregoing, but subject to Section 3.5, nothing in this Section 3.4 shall be construed to limit such Domestic Parent Distributor's ability to offer Products substantially the same as any Private Label Product on a non-private label basis. Section 3.5. New Products; Additional Products; Substitute Products. (a) At any time during the Term, (i) Purchaser may propose to a Domestic Parent Distributor that such Domestic Parent Distributor or one or more of its Affiliates distribute a New Product offered by a Purchaser Insurer and (ii) a Domestic Parent Distributor may propose to Purchaser that such Domestic Parent Distributor or one or more of its Affiliates distribute a New Product offered by a Purchaser Insurer. (b) If, prior to the seventh anniversary of the date of this Agreement, PFS Financial Services Inc. ("PFSI") desires to offer a New Product on an exclusive basis, Parent shall cause PFSI to notify Purchaser no later than the time of any notification of any Third Party Insurer. If PFSI does not select a Purchaser Insurer as the provider of such New Product and PFSI desires to continue to seek a Third Party Insurer, as the provider, Parent shall cause PFSI to include the Purchaser Insurers in the process for selection of such provider (whether by formal request for proposals or otherwise). Parent shall cause PFSI to entertain in good faith, and on terms no less favorable than those extended to any other proposed provider, proposals from the Purchaser Insurers to provide such New Product. PFSI (i) shall have exclusive discretion in determining the process for selection of, and the criteria for evaluation of, potential providers of any such New Product and (ii) shall make a good faith determination of the relative suitability of proposals from potential providers for satisfying the requirements of such New Product (it being understood that if PFSI determines that a proposal from a Purchaser Insurer satisfies such requirements, considered as a whole, at least as well as the most favorable proposal or proposals of the other potential providers, such Purchaser Insurer's proposal shall be selected); provided, however, that PFSI shall not be required to select any such proposal. The rights granted to the Purchaser Insurers under this Section 3.5(b) shall not apply with respect to a New Product if an 8 insurance company not Affiliated with Purchaser or Parent contacts or approaches PFSI, without solicitation by PFSI relating to such New Product, about providing or the possibility of providing such New Product to be provided on an exclusive basis. (c) If, during the Term, any Domestic Parent Distributor proposes to issue a formal written request for proposals to any Third Party Insurer that involves any life insurance or annuity product that a Purchaser Insurer is authorized to offer, Parent shall, and shall cause such Domestic Parent Distributor to, give notice thereof to Purchaser and entertain proposals from the Purchaser Insurers to be a provider to such Domestic Parent Distributor of such product. Parent shall cause such Domestic Parent Distributors to consider such proposals in good faith and on terms no less favorable than the terms extended to any other proposed provider. (d) At any time during the Term, Purchaser may propose in writing that any Purchaser Insurer offer, in place of any Product then offered by a Travelers Insurer through a Domestic Parent Distributor (an "Existing Product"), a substitute product and if (i) such Purchaser Insurer has been assigned a financial strength rating of at least Aa3 by Moody's Investors Service, Inc. (or any successor thereto) or at least AA- by Standard and Poor's (or any successor thereto) and (ii) such substitute product is substantially the same as the Existing Product in the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics (a "Substitute Product"), then Parent shall cause such Domestic Parent Distributor to distribute such Substitute Product in place of the Existing Product. The Purchaser Insurer that offers such Substitute Product shall have the same rights under this Agreement with respect to the Substitute Product as the Travelers Insurer that offered the Existing Product possessed with respect to the Existing Product. By way of illustration and without limiting the generality of the foregoing, if the Travelers Insurer was entitled to provide the Existing Product on a non-exclusive, Level Playing Field basis through the Domestic Parent Distributor, the Purchaser Insurer shall be entitled to provide the Substitute Product on a non-exclusive, Level Playing Field basis through such Domestic Parent Distributor in place of such Existing Product. Parent shall cause the applicable Domestic Parent Distributor and Purchaser shall cause the Purchaser Insurer to enter into a Domestic Selling Agreement with respect to the Substitute Product that is substantially the same as the Domestic Selling Agreement with respect to the Existing Product. The Purchaser Insurer providing the Substitute Product shall bear reasonable costs incurred by the applicable Domestic Parent Distributor in connection with or arising out of the replacement of the Existing Product with the Substitute Product. Section 3.6. Acquisitions. (a) Notwithstanding anything in this Agreement to the contrary, but subject to Section 3.6(b), neither Parent nor any Domestic Parent Distributor shall be (i) deemed to be in violation of this Agreement or any Domestic Selling Agreement or (ii) obligated hereunder or under any Domestic Selling Agreement to take any action (including to make any adjustment to commissions, economic inducements or other benefits for the Sales Force), if such violation would arise, or such action would be required to be taken, solely as a result of Parent or one of its Affiliates acquiring assets or a business of any Person engaged in the distribution of financial services products following the date of this Agreement; provided, however, that nothing in this Section 3.6 (a) shall limit or restrict any obligations that Parent or any Domestic Parent 9 Distributor has to distribute on an exclusive basis a Product or a New Product offered by a Purchaser Insurer if such Purchaser Insurer has the right under this Agreement or any Domestic Selling Agreement to be the exclusive provider of such Product or New Product to such Domestic Parent Distributor. (b) If, at any time prior to the seventh anniversary of the date of this Agreement, (i) Parent acquires a Target Business (as defined in the Acquisition Agreement), of which the net revenues and net earnings (in each case, calculated in a manner consistent with Section 6.17(a)(x) of the Acquisition Agreement, and, for the avoidance of doubt, excluding realized gains) derived from a Competitive Business (as defined in the Acquisition Agreement) are more than a de minimis amount, and (ii) Parent or its Affiliates are permitted to acquire such Target Business pursuant to Sections 6.17(a)(x) or 6.17(a)(xi) of the Acquisition Agreement, then Purchaser through the Purchaser Insurers shall have the right during the remainder of such seven-year period to be a provider to each Target Affiliated Distributor, if any, on a non-exclusive Level Playing Field basis, of any life insurance or annuity product that is distributed by such Target Affiliated Distributor on a non-exclusive basis either immediately before or following such acquisition; provided, that such right shall be subject to any applicable contractual or other restrictions by which such Target Affiliated Distributor is bound. Section 3.7. No Obligation. For the avoidance of doubt, nothing in this Agreement or any Domestic Selling Agreement shall (i) impose upon any Purchaser Insurer any obligation to distribute any Products or New Products offered by a Purchaser Insurer through the Domestic Parent Distributors, (ii) impose upon Parent or its Affiliates any obligation to provide to its or their employees any Product or New Product issued by Purchaser or any Travelers Insurers, (iii) restrict the ability of Purchaser or Parent or any of their Affiliates from acquiring or disposing of any assets of, or reorganizing or consolidating, any business, subject to the proviso in Section 3.6(a) or (iv) restrict the ability of any Purchaser Insurer to distribute insurance or annuity products through Persons other than Domestic Parent Distributors. Subject to Section 3.6(b), nothing in this Agreement shall impose upon any Affiliate of Parent that becomes an Affiliate of Parent after the date of this Agreement any obligation to distribute any Product or New Product on behalf of a Purchaser Insurer. For the avoidance of doubt, in the event any Domestic Parent Distributor ceases to be an Affiliate of Parent, Parent's obligations under this Agreement with respect to such Domestic Parent Distributor shall no longer be applicable. ARTICLE IV. ACCESS AND BRANDING Section 4.1. Access. (a) To the extent that as of the date of this Agreement, a Domestic Exclusive Parent Distributor permits wholesalers or Product representatives of the Travelers Insurers to have access to such Domestic Exclusive Parent Distributor, including its Sales Force, sales offices or sales, education or training meetings that involve the promotion of Products made available by a Travelers Insurer for distribution by such Domestic Exclusive Parent Distributor, Parent shall, during the First Term, cause such Domestic Exclusive Parent Distributor to continue to permit such access on the same terms and conditions as on the date hereof in a manner consistent with applicable Law and the Parent Standards and Practices. The applicable 10 Purchaser Insurer providing the Exclusive Products shall continue during the First Term to maintain wholesaler coverage, training, and sales support to the Domestic Exclusive Parent Distributor on terms and conditions that are no less favorable than those provided by the applicable Travelers Insurer to such Domestic Exclusive Parent Distributor on the date of this Agreement. (b) To the extent that as of the date of this Agreement, a Domestic Parent Distributor (other than a Domestic Exclusive Parent Distributor) permits wholesalers, Product representatives or bank marketing representatives of the Travelers Insurers to have access to such Domestic Parent Distributor, including its Sales Force, bank branches, sales offices or sales, education or training meetings that involve the promotion of Products made available by a Travelers Insurer for distribution by such Domestic Parent Distributor, in a manner consistent with applicable Law and with the Parent Standards and Practices, Parent shall, until the third anniversary of the date hereof, cause such Domestic Parent Distributor to provide such access on terms and conditions that are no less favorable than those generally applicable to any Third Party Insurer. Section 4.2. Branding; Use of Names; Confidential Information; Approval of Certain Materials. (a) Unless otherwise provided in a Domestic Selling Agreement and, in all cases in accordance with the terms and subject to the conditions of the Licensing Agreement, during the Term, Purchaser shall cause all Purchaser Insurers providing, and Parent shall cause all Domestic Parent Distributors distributing, Products (including Private Label Products in respect of which any Purchaser Insurer is the provider on the date of this Agreement) to cause such Products distributed through a Domestic Parent Distributor to be offered and branded utilizing the Marks that relate to each such Product as of the date of this Agreement; provided that Purchaser and the Purchaser Insurers shall have been granted adequate rights to use the Marks under the Licensing Agreement; and provided, further, that the parties hereto agree that any trademark or trade name on such product shall be appropriately altered to reflect any change to the trademark or trade name of the applicable Domestic Parent Distributor and, subject to Section 3.2(c), in the case of a Substitute Product, to reflect any change that is required by Law as a result of the change in the issuer of such Substitute Product. To the extent that a Private Label Product is distributed by a PLP Distributor on behalf of a Purchaser Insurer after the date of this Agreement in accordance with Section 3.4, then Parent shall cause such PLP Distributor and Purchaser shall cause all Purchaser Insurers providing such Private Label Product to cause such Private Label Product to be offered and branded using such trademarks or trade names as may be applicable to such Private Label Product by such PLP Distributor, provided that Purchaser and the applicable Purchaser Insurers shall own or shall have been granted adequate rights to use such trademarks or trade names. (b) During the Term of this Agreement, the Travelers Insurers and, as applicable, the Purchaser Insurers will have access to confidential information and other proprietary information ("Confidential Information") of Parent and its Affiliates. Confidential Information includes, but is not limited to, the names, addresses, telephone numbers and social security numbers of applicants for, purchasers of and other customers of Products and New Products as well as other identity and private information in respect of Parent's or its Affiliates' 11 customers, employees, representatives, and agents. Confidential Information shall not include any customer information (i) that was previously known by a Purchaser Insurer from a source other than any Domestic Parent Distributor without obligations of confidence; or (ii) that was or is rightfully received by a Purchaser Insurer from a third party without obligations of confidence to any Domestic Parent Distributor or from publicly available sources without obligations of confidence to any Domestic Parent Distributor; or (iii) that was or is developed by means independent of information obtained from any Domestic Parent Distributor. As a condition to such access, neither Purchaser nor any Purchaser Insurer shall use, copy or disclose such Confidential Information in any manner (including without limitation, to sell or cross-sell their products). Confidential Information may be used to service Products and New Products, including, as appropriate, to accept additional contributions and premium for and to modify, add, or exchange coverage to any Product or New Product purchased by a policy owner who purchased from a Domestic Parent Distributor. Purchaser and its Affiliates shall take all appropriate action to ensure the protection, confidentiality and security of such Confidential Information. The Purchaser and its Affiliates acknowledge and agree that this Confidential Information is the property of the Domestic Parent Distributors. The parties also understand that the Purchaser Insurers may respond to inquiries from holders of Products or New Products concerning other Purchaser Insurer products and services, provided there was no solicitation of such inquiry using Confidential Information. The parties also agree that this Section 4.2(b) shall not apply to individuals with whom Purchaser or the Purchaser Insurers have a pre-existing relationship other than through a Domestic Parent Distributor. (c) (i) Any marketing, training or other materials to be made available by any Purchaser Insurer to any Domestic Parent Distributor's Sales Force or customers in connection with Products and New Products (other than ordinary course communications to policyholders and contract holders) shall be made available only with the prior consent (which shall not be unreasonably withheld or delayed) of the applicable Domestic Parent Distributor; provided that all such materials that are used by the Travelers Insurers in connection with the distribution of Products through the Domestic Parent Distributors on the date of this Agreement shall not require any such consent. In the event that the applicable Purchaser Insurer or the applicable Domestic Parent Distributor determines to discontinue the use of any such materials, the parties shall cooperate with the applicable Purchaser Insurer to ensure that such use is discontinued by such Domestic Parent Distributor's Sales Force. (ii) Any marketing, training or other materials prepared by a Domestic Parent Distributor and to be made available by such Domestic Parent Distributor to its Sales Force or customers that describes any Purchaser Insurer or any of its Affiliates or any insurance or annuity product offered by any of them may be made available only with the prior consent (which shall not be unreasonably withheld or delayed) of the applicable Purchaser Insurer; provided that all such materials that are used by the Domestic Parent Distributors in connection with the distribution of Products on the date of this Agreement shall not require any such consent. In the event that the applicable Purchaser Insurer or the applicable Domestic Parent Distributor determines to discontinue the use of any such materials, the parties shall cooperate with the applicable Domestic Parent Distributor to ensure that such use is discontinued by its Sales Force. 12 ARTICLE V. TERM OF THE AGREEMENT; CERTAIN CONDITIONS Section 5.1. Term. The term of this Agreement (the "Term") will commence on the date of this Agreement and shall continue until the tenth anniversary of the date of this Agreement; provided, however, the expiration of this Agreement shall not reduce or curtail the term of any Domestic Selling Agreement that extends beyond the end of the Term. Section 5.2. Survival. Upon expiration of this Agreement, the provisions of this Section 5.2 and Article VI and Article VII shall survive without modification. Section 5.3. Certain Conditions. (a) Subject to Section 5.3(b), but notwithstanding anything else to the contrary in this Agreement or in any Domestic Selling Agreement, no Domestic Parent Distributor shall be required to enter into (and may refuse to enter into) a Domestic Selling Agreement in respect of, or have any obligation to offer (and may immediately cease to offer), any Product or New Product offered by a Purchaser Insurer, if: (i) Parent reasonably determines that such Product or New Product offered by a Purchaser Insurer is not Competitive; provided, however, that this clause (i) shall not apply to any Exclusive Product during the First Term; (ii) any change is made or any feature is added to such Product or New Product (or a fund or investment option therein) without Parent's or the applicable Domestic Parent Distributor's prior written approval, which approval shall not be unreasonably withheld or delayed; (iii) such Product or New Product or the offering thereof (including on an exclusive basis) conflicts with: (x) applicable Law, including any regulatory compliance procedures or restrictions in connection therewith; (y) any material provision of any existing agreement by which Parent or its Affiliates or any of their respective assets or properties are bound; provided that this clause (y) shall not apply to any Product offered by a Travelers Insurer and distributed by a Domestic Parent Distributor pursuant to an arrangement in effect on the date hereof or any Substitute Products distributed in replacement thereof pursuant to Section 3.5(d), unless the violation is caused by or relates to (1) any difference between the Substitute Product and the Existing Product it replaced, or (2) solely the fact of the replacement of the Existing Product with the Substitute Product; or (z) the Parent Standards and Practices, provided that in the case of the application of this clause (z) during the First Term to any Exclusive Product following a change in the Parent Standards and Practices, any such 13 change in the Parent Standards and Practices shall be in accordance with the third sentence of Section 3.2(b); (iv) such Product is an Exclusive Product and (x) any Purchaser Insurer provides to any Comparable Distributor a product that is substantially similar to such Exclusive Product and (y) the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics of such product, taken as a whole, are more favorable than the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics of such Exclusive Product, taken as a whole; provided, however, that this Section 5.3(a)(iv) shall not apply to any distribution arrangements of any Purchaser Insurer in effect on the date of this Agreement; (v) with respect to any Exclusive Product, the financial strength rating assigned to the provider of such Exclusive Product falls below both (x) A1 by Moody's Investors Service, Inc. (or any successor thereto) and (y) A+ by Standard & Poor's (or any successor thereto); or (vi) with respect to any Exclusive Product, a federal, state or local domestic, foreign or supranational governmental, regulatory or self-regulatory authority, agency, court, tribunal, commission or other governmental, regulatory or self-regulatory entity, with jurisdiction over the Domestic Exclusive Parent Distributor requests or mandates that the Domestic Exclusive Parent Distributor cease offering or no longer offer the Exclusive Product on an exclusive basis; provided, however, in the case of such a request (but not a mandate), the Domestic Exclusive Parent Distributor shall provide prompt notice of any such request to the Purchaser Insurer providing the Exclusive Product, and shall consult and cooperate with such Purchaser Insurer in its efforts to obtain from such regulatory agency an agreement that permits the Domestic Exclusive Parent Distributor to continue to distribute such Exclusive Product on an exclusive basis. If such an agreement is reached, the Domestic Exclusive Parent Distributor shall continue to distribute the Exclusive Product on an exclusive basis in accordance with the terms of Section 3.2. If such an agreement cannot be reached, the Domestic Exclusive Parent Distributor shall distribute the Exclusive Product on a non-exclusive, Level Playing Field basis, for the remainder of the Term in accordance with the terms of this Agreement. (b) Prior to any Domestic Parent Distributor's exercising its right under Section 5.3(a) not to enter into a Domestic Selling Agreement with respect to any Product or New Product or to cease offering any Product or New Product, such Domestic Parent Distributor shall provide written notice to Purchaser, containing a reasonably detailed statement of the grounds for such exercise, and shall afford Purchaser a period of 30 days in which to cure the deficiency unless the deficiency is not capable of being cured. Such Domestic Parent Distributor shall consult and cooperate with Purchaser as reasonably requested during such period in identifying possible cures. If Purchaser is able to propose a cure that is reasonably satisfactory to such Domestic Parent Distributor before the expiration of such period, such Domestic Parent Distributor shall not be entitled to exercise its right to refuse to enter into a Domestic Selling Agreement or to cease offering the applicable Product or New Product, provided that if any cure involves a change in such Product's or New Product's terms or features that requires filing with 14 or approval (or non-disapproval) by any regulatory authority, such Domestic Parent Distributor shall, prior to exercising such right, afford Purchaser such further period of time as may be reasonably necessary to accomplish such filing or obtain such approval or non-disapproval. Notwithstanding anything to the contrary in this Section 5.3(b), no Domestic Parent Distributor shall be required to continue to distribute any Product or New Product pending any cure period, if the offering of such Product or New Product would reasonably be expected to (i) violate applicable Law, including any regulatory compliance procedures or restriction in connection therewith, (ii) conflict with the Parent Standards and Practices insofar as they relate to reputational considerations or industry standards or (iii) in the case of an Exclusive Product under Section 5.3(a)(vi) above, conflict with a mandate from a federal, state or local domestic, foreign or supranational governmental, regulatory or self-regulatory authority, agency, court, tribunal, commission or other governmental, regulatory or self-regulatory entity, with jurisdiction over the Domestic Exclusive Parent Distributor that such Domestic Exclusive Parent Distributor cease offering or no longer offer the Exclusive Product on an exclusive basis; provided, in the case of this clause (iii), such Domestic Exclusive Parent Distributor shall distribute the Exclusive Product on a non-exclusive, Level Playing Field basis, for the remainder of the Term in accordance with the terms of this Agreement. ARTICLE VI. INDEMNIFICATION Section 6.1. Indemnification of Parent. Purchaser will defend and hold harmless Parent and its Affiliates and their respective officers, directors, employees and agents (the "Parent Indemnified Parties") from and against any losses, liabilities, damages (including consequential damages), actions, claims, demands, regulatory investigations, settlements, judgments and other expenses including, but not limited to, reasonable attorneys fees and expenses ("Losses") which are asserted against, incurred or suffered by any Parent Indemnified Party and which arise from or are related to Purchaser's breach of any representation or warranty (except to the extent indemnification therefor is available under the Acquisition Agreement) or any covenant, condition or duty contained in this Agreement. Section 6.2. Indemnification of Purchaser. Parent will defend and hold harmless Purchaser and its Affiliates and their respective officers, directors, employees and agents (the "Purchaser Indemnified Parties") from and against any Losses which are asserted against, incurred or suffered by any Purchaser Indemnified Party and which arise from or are related to Parent's breach of any representation or warranty (except to the extent indemnification therefor is available under the Acquisition Agreement) or any covenant, condition or duty contained in this Agreement. Section 6.3. Indemnity Provisions in Domestic Selling Agreements. Each Domestic Selling Agreement shall provide indemnification for Losses asserted against each of the parties thereto in respect of a failure of the other party to comply with applicable Law and a breach by such other party of any representation, warranty, covenant, condition or duty contained in such Domestic Selling Agreement. Section 6.4. Indemnification Procedures. Upon receipt by a Parent Indemnified Party or a Purchaser Indemnified Party (each, an "Indemnified Party"), as the case may be, of notice of 15 any action, suit, proceedings, claim, demand or assessment made or brought by an unaffiliated third party (a "Third Party Claim") with respect to a matter for which such Indemnified Party is indemnified under this Article VI which has or is expected to give rise to a claim for Losses, the Indemnified Party shall promptly, in the case of a Purchaser Indemnified Party, notify Parent and in the case of a Parent Indemnified Party, notify Purchaser (Purchaser or Parent, as the case may be, the "Indemnifying Party"), in writing, indicating the nature of such Third Party Claim and the basis therefor; provided, however, that any delay or failure by the Indemnified Party to give notice to the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is prejudiced by reason of such delay or failure. Such written notice shall (i) describe such Third Party Claim in reasonable detail as is practicable including the sections of this Agreement, which form the basis for such claim; provided that the failure to identify a particular section in such notice shall not preclude the Indemnified Party from subsequently identifying such section as a basis for such claim, (ii) attach copies of all material written evidence thereof and (iii) set forth the estimated amount of the Losses that have been or may be sustained by an Indemnified Party. The Indemnifying Party shall have 30 days after receipt of notice to elect, at its option, to assume and control the defense of, at its own expense and by its own counsel, any such Third Party Claim and shall be entitled to assert any and all defenses available to the Indemnified Party to the fullest extent permitted by applicable Law. If the Indemnifying Party shall undertake to compromise or defend any such Third Party Claim, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its counsel in the compromise of, or defense against, any such Third Party Claim; provided, however, that the Indemnifying Party shall not settle, compromise or discharge, or admit any liability with respect to, any such Third Party Claim without the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed), unless the relief consists solely of money Losses to be paid by the Indemnifying Party and includes a provision whereby the plaintiff or claimant in the matter releases the Purchaser Indemnified Parties or the Parent Indemnified Parties, as applicable, from all liability with respect thereto. Notwithstanding an election to assume the defense of such action or proceeding, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action or proceeding, and the Indemnifying Party shall bear the reasonable fees, costs and expenses of such separate counsel if the (A) Indemnified Party shall have determined in good faith that an actual or potential conflict of interest makes representation by the same counsel or the counsel selected by the Indemnifying Party inappropriate or (B) Indemnifying Party shall have authorized the Indemnified Party to employ separate counsel at the Indemnifying Party's expense. In any event, the Indemnified Party and Indemnifying Party and their counsel shall cooperate in the defense of any Third Party Claim subject to this Article VI and keep such Persons informed of all developments relating to any such Third Party Claims, and provide copies of all relevant correspondence and documentation relating thereto. All costs and expenses incurred in connection with the Indemnified Party's cooperation shall be borne by the Indemnifying Party. In any event, the Indemnified Party shall have the right at its own expense to participate in the defense of such asserted liability. If the Indemnifying Party receiving such notice of a Third Party Claim does not elect to defend such Third Party Claim or does not defend such Third Party Claim in good faith, the Indemnified Party shall have the right, in addition to any other right or remedy it may have hereunder, at the Indemnifying Party's expense, to defend such Third Party Claim; provided, however, that the Indemnified Party shall not settle, compromise or discharge, or admit 16 any liability with respect to, any such Third Party Claim without the written consent of the Indemnifying Party (which consent will not be unreasonably withheld or delayed). Section 6.5. General. (a) The provisions of this Article VI will survive the expiration of this Agreement. (b) The rights and remedies provided herein shall be cumulative and in addition to all other rights and remedies available to the parties at law or equity, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such rights or remedies by such party. Notwithstanding the preceding sentence, nothing in this Agreement shall restrict or prevent any party from seeking indemnification under any applicable provision of the Acquisition Agreement, or any of the other Related Agreements (as defined in the Acquisition Agreement), provided that no party shall obtain duplicative recoveries. ARTICLE VII. MISCELLANEOUS Section 7.1. Equitable Remedies. The parties hereto acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party, in addition to any other rights and remedies which the parties may have hereunder or at law or in equity, may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunction or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable Law, each party waives any objection to the imposition of such relief. Section 7.2. Severability. If any provision of this Agreement or the application of any such provision is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable Law, the parties waive any provision of Law that renders any provision of this Agreement invalid, illegal or unenforceable in any respect. The parties shall, to the extent lawful and practicable, use their commercially reasonable efforts to enter into arrangements to reinstate the intended benefits, net of the intended burdens, of any such provision held invalid, illegal or unenforceable. Section 7.3. Further Assurance and Assistance. Parent and Purchaser agree that each will, and will cause their respective Affiliates to, execute and deliver any and all documents, and take such further acts, in addition to those expressly provided for herein, that may be necessary or appropriate to effectuate the provisions of this Agreement. Section 7.4. Notices. All notices, demands and other communications required or permitted to be given to any party under this Agreement shall be in writing and any such notice, demand or other communication shall be deemed to have been duly given when delivered by hand, courier or overnight delivery service or, if mailed, two (2) Business Days (as defined in the Acquisition Agreement) after deposit in the mail and sent certified or registered mail, return 17 receipt requested and with first-class postage prepaid, or in the case of facsimile notice, when sent and transmission is confirmed, and, regardless of method, addressed to the party at its address or facsimile number set forth below (or at such other address or facsimile number as the party shall furnish the other parties in accordance with this Section 7.4): (a) If to Parent: Citigroup Inc. 399 Park Avenue New York, New York Attn: Andrew M. Felner Deputy General Counsel Facsimile: (212) 559-7057 e-mail: felnera@citigroup.com With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036-6522 Attn: Eric J. Friedman, Esq. Facsimile: (212) 735-2000 (b) If to Purchaser: MetLife, Inc. 2701 Queens Plaza North Long Island City, New York 11101 Attn: James L. Lipscomb Executive Vice President and General Counsel Facsimile: (212) 252-7288 With a copy to: LeBoeuf, Lamb, Greene & MacRae L.L.P. 125 West 55th Street New York, New York 10019 Attn: Alexander M. Dye, Esq. Facsimile: 212-424-8500 Section 7.5. Successors and Assigns. Subject to the terms of this Section 7.5, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that the Parent Indemnified Parties and the Purchaser Indemnified Parties shall be intended third-party beneficiaries of Article VI. No party hereto may assign its rights or obligations under this Agreement without the prior written consent of the other party (which consent may not be unreasonably withheld) and any purported assignment without such consent shall be void. 18 Section 7.6. Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws principles of such State. Section 7.7. Jurisdiction; Venue; Consent to Service of Process. (a) Each of the parties hereto irrevocably and unconditionally submits to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York or, if such court will not accept jurisdiction, the Supreme Court of the State of New York or any court of competent civil jurisdiction sitting in New York County, New York. In any action, suit or other proceeding, each of the parties hereto irrevocably and unconditionally waives and agrees not to assert by way of motion, as a defense or otherwise any claims that it is not subject to the jurisdiction of the above courts, that such action or suit is brought in an inconvenient forum or that the venue of such action, suit or other proceeding is improper. Each of the parties hereto also hereby agrees that any final and unappealable judgment against a party hereto in connection with any action, suit or other proceeding shall be conclusive and binding on such party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United States. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. (b) Each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 7.4 of this Agreement. Nothing in this Section 7.7 shall affect the right of any party hereto to serve process in any other manner permitted by Law. Section 7.8. Entire Agreement. This Agreement, together with all schedules hereto, embodies the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements with respect thereto. The parties intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Agreement. Section 7.9. Amendment and Waiver. No amendment to this Agreement shall be effective unless it shall be in writing and signed by each party. Any failure of a party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the party entitled to the benefits thereof only by a written instrument duly executed and delivered by the party granting such waiver, 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 subsequent or other failure of compliance. In the event that the terms of a Domestic Selling Agreement shall conflict with the terms of this Agreement, the terms of such Domestic Selling Agreement shall control for purposes of such Domestic Selling Agreement. Section 7.10. Access to Records. Parent shall cause the Domestic Parent Distributors to maintain adequate books and records related to the activities of the Domestic Parent Distributors under the Domestic Selling Agreements with respect to the Products and New Products 19 distributed thereunder. Upon written request, but no more frequently than annually, (i) Parent shall certify to Purchaser its material compliance with the terms of Sections 3.2(b), 3.3 and 3.4(a) of this Agreement during the period covered by such certificate and (ii) Purchaser shall certify to Parent that no Purchaser Insurer has, during the period covered by such certification, provided to any Comparable Distributor any product that is substantially similar to an Exclusive Product provided by a Travelers Insurer on an exclusive basis to a Domestic Exclusive Parent Distributor under a Domestic Selling Agreement with terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics, taken as a whole, that are materially more favorable to such Comparable Distributor than the terms, total compensation, consumer pricing, wholesaler coverage, training and support, features and service standards and metrics of such Exclusive Product, taken as a whole. Section 7.11. Counterparts. This Agreement may be executed by the parties in multiple counterparts which may be delivered by facsimile transmission. Each counterpart when so executed and delivered shall be deemed an original, and all such counterparts taken together shall constitute one and the same instrument. Section 7.12. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. [Remainder of Page Intentionally Left Blank.] 20 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective authorized representatives. CITIGROUP INC. By: /s/ Anthony A. Lazzara -------------------------------- Name: Anthony A. Lazzara Title: Managing Director M&A Execution METLIFE, INC. By: /s/ William J. Wheeler -------------------------------- Name: William J. Wheeler Title: Exectuive Vice President and Chief Financial Officer [SIGNATURE PAGE TO DOMESTIC DISTRIBUTION AGREEMENT] EX-10.3 4 y10546exv10w3.txt INVESTOR RIGHTS AGREEMENT ================================================================================ INVESTOR RIGHTS AGREEMENT by and among Citigroup Inc., MetLife, Inc. and Citigroup Insurance Holding Corporation ------------------- Dated as of July 1, 2005 ================================================================================ Table of Contents 1. Certain Definitions............................................. 1 2. Shelf Registration Statements................................... 4 3. Additional Demand Registrations................................. 5 4. Piggyback Registrations......................................... 7 5. Selection of Underwriters....................................... 8 6. Holdback Agreements............................................. 8 7. Procedures...................................................... 8 8. Registration Expenses........................................... 13 9. Indemnification................................................. 14 10. Rule 144........................................................ 15 11. Transfer of Registration Rights................................. 16 12. Conversion of Other Securities.................................. 16 13. Transfer of Common Stock........................................ 16 14. Lock-Up of the Stockholder...................................... 17 15. Standstill...................................................... 17 16. Miscellaneous................................................... 18
INVESTOR RIGHTS AGREEMENT dated as of July 1, 2005, by and among MetLife, Inc., a Delaware corporation (the "Company"), and Citigroup Inc., a Delaware corporation (the "Stockholder") and Citigroup Insurance Holding Corporation, a Delaware corporation. In consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows: 1. CERTAIN DEFINITIONS. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings: "Affiliate" of any Person means any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term "control" (including the terms "controlling," "controlled by" and "under common control with") as used with respect to any Person means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "Acquisition Agreement" means the Acquisition Agreement, dated January 31, 2005, between the Company and the Stockholder, as may be amended from time to time. "Agreed Cooperation" means, in connection with any underwritten offering, where, in addition to the cooperation otherwise required by this Agreement, members of senior management of the Company (which members of management shall include the Company's chief executive officer and chief financial officer in the case of the Selected Offering) cooperate with the underwriter(s) in connection therewith and make themselves available to participate on a reasonable basis in "road-show" and other customary marketing activities in such locations (domestic and foreign) as recommended by the underwriter(s) (including one-on-one meetings with prospective purchasers of the Registrable Common Stock). "Agreement" means this Investor Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Investor Rights Agreement as the same may be in effect at the time such reference becomes operative. "Blackout Period" has the meaning set forth in Section 7(e) hereof. "Board of Directors" means the board of directors of the Company. "Business Day" means any day, except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated by law or executive order to close. "Closing Date" has the meaning set forth in the Acquisition Agreement. "Common Stock" means common stock, par value $.01 per share, of the Company. "Company" has the meaning set forth in the introductory paragraph. "Competitor of the Company" means a company primarily engaged in providing life insurance and annuities in the United States. "Delay Period" has the meaning set forth in Section 3(d) hereof. "Demand Registration" has the meaning set forth in Section 3(a) hereof. "Demand Registration Statement" has the meaning set forth in Section 3(a) hereof. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Fully Marketed Underwritten Offering" means an underwritten offering in which there is Agreed Cooperation. "Governmental Entity" means any national, federal, state, municipal, local, territorial, foreign or other government or any department, commission, board, bureau, agency, regulatory authority or instrumentality thereof, or any court, judicial, administrative or arbitral body or public or private tribunal. "Nasdaq" means the Nasdaq quotation system, or any successor reporting system. "Nominal Stock Consideration Amount" has the meaning set forth in the Acquisition Agreement. "NYSE" means the New York Stock Exchange, Inc. "Person" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, Governmental Entity or any other entity. "Piggyback Registration" has the meaning set forth in Section 4(a) hereof. "Piggyback Registration Statement" has the meaning set forth in Section 4(a) hereof. 2 "Prospectus" means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Common Stock covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses. "Purchaser Convertible Preferred Stock" has the meaning set forth in the Acquisition Agreement. "Registrable Common Stock" means (i) any shares of Common Stock issued as Stock Consideration, (ii) all shares of Common Stock issued or issuable upon conversion of the Purchaser Convertible Preferred Stock and (iii) any other security into or for which the Common Stock referred to in clause (i) or (ii) has been converted, substituted or exchanged, and any security issued or issuable with respect thereto upon any stock dividend or stock split or in connection with a combination of shares, reclassification, recapitalization, merger, consolidation or other reorganization or otherwise. "Registration Expenses" has the meaning set forth in Section 8(a) hereof. "Registration Statement" means any registration statement of the Company that covers any of the Registrable Common Stock pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement. "Rule 144" means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such rule. "Rule 415" means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such rule. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. "Selected Offering" means one underwritten offering where, reasonably in advance of the commencement of the road show for such offering, the Stockholder provides a written notice to the Company to the effect that the Stockholder requests that the Company's chief executive officer and chief financial officer participate in such road show. 3 "Shelf Registration Statement" has the meaning set forth in Section 2(a) hereof. "Stock Consideration" means the shares of Common Stock issued to the Stockholder pursuant to the Acquisition Agreement. "Stockholder" has the meaning set forth in the introductory paragraph. "Suspension Notice" has the meaning set forth in Section 7(e) hereof. "underwritten registration or underwritten offering" means a registration in which securities of the Company are sold to one or more underwriters (as defined in Section 2(a)(ii) of the Securities Act) for resale to the public. 2. SHELF REGISTRATION STATEMENTS. (a) Right to Request Registration. At the request of the Stockholder, the Company shall use its best efforts to promptly file a registration statement on Form S-3 or such other form under the Securities Act then available to the Company providing for the resale pursuant to Rule 415 from time to time by the Stockholder of such number of shares of Registrable Common Stock requested by the Stockholder to be registered thereby (including the Prospectus, amendments and supplements to the shelf registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such shelf registration statement, the "Shelf Registration Statement"). The Company shall use its best efforts to cause the Shelf Registration Statement to be declared effective by the SEC as promptly as practicable following such filing. The Company shall not be required to maintain the effectiveness of the Shelf Registration Statement for a period of more than 18 months in the aggregate plus the duration of any Blackout Period. The plan of distribution in the Shelf Registration Statement shall be determined by the Stockholder and shall contemplate the possibility of underwritten offerings. (b) Number of Fully Marketed Underwritten Offerings. The Stockholder shall be entitled to request an aggregate of two (2) Fully Marketed Underwritten Offerings pursuant to the Shelf Registration Statement if the Nominal Stock Consideration Amount is $1 billion or less, three (3) Fully Marketed Underwritten Offerings pursuant to the Shelf Registration Statement if the Nominal Stock Consideration Amount is more than $1 billion but less than $2 billion and four (4) Fully Marketed Underwritten Offerings pursuant to the Shelf Registration Statement if the Nominal Stock Consideration Amount is $2 billion or more; provided, however, that the Stockholder shall be entitled to request no more than two (2) underwritten offerings pursuant to the Shelf Registration Statement in any 12 month period that require involvement by management of the Company in road-show or similar marketing activities. If the Stockholder requests a Fully Marketed Underwritten Offering, the Company shall (a) cause there to occur Agreed Cooperation in connection therewith and (b) if requested by the underwriter(s), prepare preliminary and 4 final prospectus supplements for use in connection therewith containing such additional information as reasonably requested by the underwriter(s) (in addition to the minimum amount of information required by law, rule or regulation). An underwritten offering shall not count as one of the permitted Fully Marketed Underwritten Offerings if there is not Agreed Cooperation in connection therewith. Except as provided in this Section 2(b), there shall be no limitation on the number of takedowns off the Shelf Registration Statement. 3. ADDITIONAL DEMAND REGISTRATIONS. (a) Right to Request Registration. Any time after the date hereof, the Stockholder may request registration for resale under the Securities Act of all or part of the Registrable Common Stock pursuant to a Registration Statement separate from the Shelf Registration Statement (a "Demand Registration"). As promptly as practicable after such request, but in any event within 30 days of such request by the Stockholder, the Company shall file a registration statement registering for resale such number of shares of Registrable Common Stock held by the Stockholder as requested to be so registered (including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement, a "Demand Registration Statement"). In connection with each such Demand Registration, the Company shall cause there to occur Agreed Cooperation. (b) Number of Demand Registrations. The Stockholder will be entitled to request a number of Demand Registrations pursuant to Section 3(a) equal to two (2) if the Nominal Stock Consideration Amount is $1 billion or less, three (3) if the Nominal Stock Consideration Amount is more than $1 billion but less than $2 billion and four (4) if the Nominal Stock Consideration Amount is $2 billion or more, in each case, minus the number of Fully Marketed Underwritten Offerings completed off of the Shelf Registration Statement. A registration shall not count as one of the permitted Demand Registrations pursuant to Section 3(a) (i) until the related Demand Registration Statement has become effective, (ii) if the Stockholder is not able to register at least 50% of the Registrable Common Stock requested to be included in such registration, (iii) if there was not Agreed Cooperation in connection therewith or (iv) in the case of a Demand Registration that would be the last permitted Demand Registration requested pursuant to Section 3(a), if the Stockholder is not able to register all of the Registrable Common Stock requested to be included in such registration. (c) Priority on Demand Registrations. If a Demand Registration pursuant to this Section 3 involves an underwritten offering and the managing underwriter shall advise the Company that in its opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company shall include in such registration the maximum number of shares that 5 such underwriter advises can be so sold without having such effect, allocated (i) first, to Registrable Common Stock requested by the Stockholder to be included in such registration and (ii) second, among all shares of Common Stock requested to be included in such registration by any other Persons (including securities to be sold for the account of the Company) allocated among such Persons in such manner as they may agree. The Company shall not grant to any Person the right to request the Company to register any securities of the Company except such rights that do not adversely affect the priorities of the Stockholder set forth in this Section 3(c). (d) Restrictions on Demand Registrations. The Company may postpone the filing or the effectiveness of a Demand Registration Statement if, based on the good faith judgment of the Company's Board of Directors, such postponement is necessary in order to avoid premature disclosure of a matter the Board of Directors has determined would not be in the best interest of the Company to be disclosed at such time; provided, however, that the Stockholder requesting such Demand Registration Statement shall be entitled at any time after receipt of any notice of postponement and before such Demand Registration Statement becomes effective, to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the permitted Demand Registrations. The Company shall promptly provide written notice to the Stockholder of (x) any postponement of the filing or effectiveness of a Demand Registration Statement pursuant to this Section 3(d), (y) the Company's decision to file or seek effectiveness of such Demand Registration Statement following such postponement and (z) the effectiveness of such Demand Registration Statement. The Company may defer the filing or effectiveness of a particular Demand Registration Statement pursuant to this Section 3(d) only once during any 12-month period. Notwithstanding the provisions of this Section 3(d), the Company may not postpone the filing or effectiveness of a Demand Registration Statement past the date that, if such postponement continued, would result in there being more than sixty (60) days in the aggregate in any 12 month period during which the filing or effectiveness of one or more Registration Statements has been so postponed; provided, however, that if the filing or effectiveness of a Demand Registration Statement has been postponed due to a determination by the Board of Directors that the Company is in possession of material non-public information that would not be in the best interest of the Company to be disclosed, such period of postponement will not extend beyond the second Business Day following the day on which such matter is disclosed to the public or ceases to be material. The period during which filing or effectiveness is so postponed hereunder is referred to as a "Delay Period." (e) Effective Period of Demand Registrations. After any Demand Registration filed pursuant to this Agreement has become effective, the Company shall use its best efforts to keep such Demand Registration Statement effective for a period of at least 180 days from the date on which the SEC declares such Demand Registration Statement effective plus the duration of any Delay Period and any Blackout Period, or such shorter period that shall terminate when all of the Registrable Common Stock covered by such 6 Demand Registration Statement has been sold pursuant to such Demand Registration Statement in accordance with the plan of distribution set forth therein. 4. PIGGYBACK REGISTRATIONS. (a) Right to Piggyback. Whenever the Company proposes to publicly sell or register for sale any of its common equity securities pursuant to a registration statement (a "Piggyback Registration Statement") under the Securities Act (other than a registration statement on Form S-8 or on Form S-4 or any similar successor forms thereto), whether for its own account or for the account of one or more stockholders of the Company (a "Piggyback Registration"), the Company shall give prompt written notice to the Stockholder of its intention to effect such sale or registration and, subject to Sections 4(b) and 4(c), shall include in such transaction all Registrable Common Stock with respect to which the Company has received a written request from the Stockholder for inclusion therein within 15 days after the receipt of the Company's notice. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion, without prejudice to the Stockholder's right to immediately request a Demand Registration hereunder. A Piggyback Registration shall not be considered a Demand Registration for purposes of Section 3 of this Agreement. (b) Priority on Primary Registrations. If a Piggyback Registration is initiated as an underwritten primary registration on behalf of the Company, and the managing underwriter advises the Company in writing that in its opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company shall include in such registration the maximum number of shares that such underwriter advises can be so sold without having such effect, allocated (i) first, to the securities the Company proposes to sell, (ii) second, to the Registrable Common Stock requested to be included therein by the Stockholder, and (iii) third, among other securities requested to be included in such registration by other security holders of the Company on such basis as such holders may agree among themselves and the Company. (c) Priority on Secondary Registrations. If a Piggyback Registration is initiated as an underwritten registration on behalf of a holder of the Company's securities other than Registrable Common Stock, and the managing underwriter advises the Company in writing that in its opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company shall include in such registration the maximum number of shares that such underwriter advises can be so sold without having such effect, allocated (i) first, to the securities requested to be included therein by the holder(s) requesting such registration and (ii) second, to other securities (including Registrable Common Stock) requested to be included in such registration by other security holders, the Company and the Stock- 7 holder, pro rata among such holder(s), the Company and the Stockholder on the basis of the number of shares requested to be registered by them. 5. SELECTION OF UNDERWRITERS. If any of the Registrable Common Stock covered by a Demand Registration Statement or a Shelf Registration Statement is to be sold in an underwritten offering, the Stockholder shall have the right to select the managing underwriter(s) to administer the offering subject to the prior approval of the Company, which approval shall not be unreasonably withheld. 6. HOLDBACK AGREEMENTS. Neither the Company nor the Stockholder shall effect any sale or distribution of any of equity securities of the Company during the 60 days beginning on the effective date of any underwritten Demand Registration Statement or any underwritten Piggyback Registration Statement or the pricing date of any underwritten offering pursuant to a Shelf Registration Statement (except as part of such underwritten registration or offering or pursuant to registrations on Form S-8 or S-4 or any successor forms thereto) unless the underwriter managing the offering otherwise agrees to a shorter period. Nothing in this Section 6 will restrict sales of Common Stock by any subsidiary or Affiliate of the Stockholder as nominee of customers or in connection with banking, brokerage or asset management activities in the ordinary course of business. 7. PROCEDURES. (a) Whenever the Stockholder requests that any Registrable Common Stock be registered or sold pursuant to this Agreement, the Company shall use its best efforts to effect the registration and the sale of such Registrable Common Stock in accordance with the intended methods of disposition thereof, and pursuant thereto the Company shall as expeditiously as reasonably possible: (i) prepare and file with the SEC a Registration Statement with respect to such Registrable Common Stock and use its best efforts to cause such Registration Statement to become effective as soon as practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including any prospectus supplement for a shelf takedown), furnish to the Stockholder and the underwriter or underwriters, if any, copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus and, if requested by the Stockholder, the exhibits incorporated by reference, and the Stockholder (and the underwriter(s), if any) shall have the opportunity to review and comment thereon, and the Company will make such changes and additions thereto as reasonably requested by the Stockholder (and the 8 underwriter(s), if any) prior to filing any Registration Statement or amendment thereto or any Prospectus or any supplement thereto; (ii) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than 180 days, in the case of a Demand Registration Statement or an aggregate of 18 months, in the case of a Shelf Registration Statement (plus, in each case, the duration of any Delay Period and any Blackout Period), or such shorter period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the Stockholder thereof set forth in such Registration Statement and, in the case of the Shelf Registration Statement, prepare such prospectus supplements containing such disclosures as may be reasonably requested by the Stockholder or any underwriter(s) in connection with each shelf takedown; (iii) furnish to the Stockholder such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus) and such other documents as the Stockholder and any underwriter(s) may reasonably request in order to facilitate the disposition of the Registrable Common Stock; (iv) use its best efforts to register or qualify such Registrable Common Stock under such other securities or blue sky laws of such jurisdictions as the Stockholder and any underwriter(s) reasonably requests and do any and all other acts and things that may be reasonably necessary or advisable to enable the Stockholder and any underwriter(s) to consummate the disposition in such jurisdictions of the Registrable Common Stock (provided, that the Company will not be required to (1) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (iv), (2) subject itself to taxation in any such jurisdiction or (3) consent to general service of process in any such jurisdiction); (v) notify the Stockholder and any underwriter(s), at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements 9 therein not misleading, and, at the request of the Stockholder and any underwriter(s), the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Common Stock, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; (vi) in the case of an underwritten offering, enter into such agreements (including underwriting agreements in customary form) and take all such other actions as the Stockholder or the underwriter(s) reasonably request in order to expedite or facilitate the disposition of such Registrable Common Stock (including, without limitation, causing management and other Company personnel to cooperate with the Stockholder and the underwriter(s) in connection with performing due diligence) and cause its counsel to issue opinions of counsel in form, substance and scope as are customary in primary underwritten offerings, addressed and delivered to the underwriter(s) and the Stockholder; (vii) in connection with each Demand Registration pursuant to Section 3 and each Fully Marketed Underwritten Offering requested by the Stockholder under Section 2, cause there to occur Agreed Cooperation and, in all other cases, cause members of management of the Company to be available to participate in, and to cooperate with the underwriter(s) in connection with, customary marketing activities on a reasonable basis (including select conference calls and one-on-one meetings with prospective purchasers); (viii) make available for inspection by the Stockholder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Stockholder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by the Stockholder, underwriter, attorney, accountant or agent in connection with such Registration Statement; (ix) use its best efforts to cause all such Registrable Common Stock to be listed on each securities exchange on which securities of the same class issued by the Company are then listed or, if no such similar securities are then listed, on Nasdaq or a national securities exchange selected by the Company; 10 (x) provide a transfer agent and registrar for all such Registrable Common Stock not later than the effective date of such Registration Statement; (xi) if requested, cause to be delivered, immediately prior to the pricing of any underwritten offering, immediately prior to effectiveness of each Registration Statement (and, in the case of an underwritten offering, at the time of closing of the sale of Registrable Common Stock pursuant thereto), letters from the Company's independent registered public accountants addressed to the Stockholder and each underwriter, if any, stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent registered public accountants delivered in connection with primary underwritten public offerings; (xii) make generally available to its stockholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of a Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act; and (xiii) promptly notify the Stockholder and the underwriter or underwriters, if any: (1) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (2) of any written request by the SEC for amendments or supplements to the Registration Statement or Prospectus; (3) of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and (4) of the receipt by the Company of any notification with respect to the suspension of the qualification of any 11 Registrable Common Stock for sale under the applicable securities or blue sky laws of any jurisdiction. (b) The Company represents and warrants that no Registration Statement (including any amendments or supplements thereto and Prospectuses contained therein) shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading (except that the Company makes no representation or warranty with respect to information relating to the Stockholder furnished to the Company by or on behalf of the Stockholder specifically for use therein). (c) The Company shall make available to the Stockholder (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of each Registration Statement and any amendment thereto, each preliminary Prospectus and Prospectus and each amendment or supplement thereto, each letter written by or on behalf of the Company to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), and each item of correspondence from the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), in each case relating to such Registration Statement, and (ii) such number of copies of a Prospectus, including a preliminary Prospectus, and all amendments and supplements thereto and such other documents as the Stockholder or any underwriter may reasonably request in order to facilitate the disposition of the Registrable Common Stock. The Company will promptly notify the Stockholder of the effectiveness of each Registration Statement or any post-effective amendment. The Company will promptly respond to any and all comments received from the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as practicable and shall file an acceleration request as soon as practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review. (d) The Company may require the Stockholder to furnish to the Company any other information regarding the Stockholder and the distribution of such securities as the Company may from time to time reasonably request in writing. (e) The Stockholder agrees that, upon notice from the Company of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading (a "Suspension Notice"), the Stockholder will forthwith discontinue disposition of Registrable Common Stock pursuant to such Registration Statement for a reasonable length of time until the Stockholder is advised in writing by the Company that the use of the Prospectus may be resumed and is 12 furnished with a supplemented or amended Prospectus as contemplated by Section 7(a) hereof; provided, however, that such postponement of sales of Registrable Common Stock by the Stockholder shall not exceed sixty (60) days in the aggregate in any 12 month period; provided, further, that if a Suspension Notice has been delivered due to a determination by the Board of Directors that the Company is in possession of material non-public information that would not be in the best interest of the Company to be disclosed, the Blackout Period (as defined below) will not extend beyond the second Business Day following the day on which such matter is disclosed to the public or ceases to be material. If the Company shall give the Stockholder any Suspension Notice, the Company shall extend the period of time during which the Company is required to maintain the Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such Suspension Notice to and including the date the Stockholder either is advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus contemplated by Section 7(a) (a "Blackout Period"). 8. REGISTRATION EXPENSES. (a) All expenses incident to the Company's performance of or compliance with this Agreement, including, without limitation, all registration and filing fees (including SEC registration fees and NASD filing fees), fees and expenses of compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent's and registrar's fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all accountants and other Persons retained by the Company (all such expenses being herein called "Registration Expenses") (but not including any underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of Registrable Common Stock), shall be borne by the Company. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review by the Company's auditors, the expense of any liability insurance for the benefit of the Company or its directors and officers and the expenses and fees for listing the securities to be registered on each securities exchange on which they are to be listed. (b) In connection with each registration initiated hereunder (whether a Demand Registration, Shelf Registration Statement or a Piggyback Registration), the Company shall pay, or shall reimburse the Stockholder for, the reasonable fees and disbursements of one law firm chosen by the Stockholder as its counsel. (c) The obligation of the Company to bear the expenses described in Section 8(a) and to pay or reimburse the Stockholder for the expenses described in Section 8(b) shall apply irrespective of whether a registration, once properly demanded, if applicable, becomes effective, is withdrawn or suspended, is converted to another form of registration and irrespective of when any of the foregoing shall occur. 13 9. INDEMNIFICATION. (a) The Company shall indemnify, to the fullest extent permitted by law, the Stockholder and its officers, directors, employees and Affiliates and each Person who controls the Stockholder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or any violation or alleged violation by the Company of the Securities Act, the Exchange Act or applicable "blue sky" laws, except insofar as the same are made in reliance and in conformity with information relating to the Stockholder furnished in writing to the Company by the Stockholder expressly for use therein. In connection with an underwritten offering, the Company shall indemnify such underwriter(s), their officers, employees and directors and each Person who controls such underwriter(s) (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Stockholder. (b) In connection with any Registration Statement in which the Stockholder is participating, the Stockholder shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, shall indemnify, to the fullest extent permitted by law, the Company, its officers, employees, directors, Affiliates, and each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that the same are made in reliance and in conformity with information relating to the Stockholder furnished in writing to the Company by the Stockholder expressly for use therein. (c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to any local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party 14 there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder. (d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities. (e) If the indemnification provided for in or pursuant to this Section 9 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of the Stockholder be greater in amount than the amount of net proceeds received by the Stockholder upon such sale. 10. RULE 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it will take such further action as the Stockholder may reasonably request to make available adequate current public information with respect to the Company meeting the current public information requirements of Rule 144(c) under the Securities Act, to the extent required to enable the Stockholder to sell Registrable Common Stock without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Stockholder, the Company will deliver to the Stockholder a written statement as to whether it has complied with such information and requirements. 15 11. TRANSFER OF REGISTRATION RIGHTS. (a) The Stockholder may transfer all or any portion of its then-remaining rights under Sections 3, 5, 6, 7, 8, 9, 10, 11, 12 and 16 of this Agreement to any transferee who acquires at least 20% of the Stock Consideration (each, a "transferee"). Any transfer of registration rights pursuant to this Section 11 shall be effective upon receipt by the Company of (x) written notice from the Stockholder stating the name and address of any transferee and identifying the amount of Registrable Common Stock with respect to which the rights under this Agreement are being transferred and the nature of the rights so transferred and (y) a written agreement from the transferee to be bound by all of the terms of this Agreement. In connection with any such transfer, the term "Stockholder" as used in this Agreement shall, where appropriate to assign such rights to such transferee, be deemed to refer to the transferee holder of such Registrable Common Stock. The Stockholder and such transferees may exercise the registration rights hereunder in such proportion (not to exceed the then-remaining rights hereunder) as they shall agree among themselves. (b) After such transfer, the Stockholder shall retain its rights under this Agreement with respect to all other Registrable Common Stock owned by the Stockholder. Upon the request of the Stockholder, the Company shall execute an Investor Rights Agreement with such transferee or a proposed transferee substantially similar to the applicable sections of this Agreement. 12. CONVERSION OF OTHER SECURITIES. If the Stockholder offers Registrable Common Stock by forward sale, or any options, rights, warrants or other securities issued by it or any other person that are offered with, convertible into or exercisable or exchangeable for any Registrable Common Stock, the Registrable Common Stock subject to such forward sale or underlying such options, rights, warrants or other securities shall be eligible for registration pursuant to Sections 2, 3 and 4 of this Agreement. 13. TRANSFER OF COMMON STOCK The Stockholder may not (i) transfer more than 5% of the total number of shares of outstanding Common Stock to a Competitor of the Company or (ii) transfer more than $1 billion of Stock Consideration (based on the average closing price of the Common Stock on the NYSE over the 10 trading day period ending the last trading day of the month immediately preceding the date of transfer) in the aggregate to any one Person, other than to an Affiliate of the Stockholder; provided, however, that this Section 13 will not apply to any transfer (i) pursuant to Rule 144 or offerings made under the Shelf Registration Statement or (ii) pursuant to a Demand Registration Statement or a Piggyback Registration Statement. 16 14. LOCK-UP OF THE STOCKHOLDER Notwithstanding any other right under any other provision of this Agreement, the Stockholder agrees that it will not sell any shares of Common Stock comprising the Stock Consideration for a period from the Closing Date until and including the date that is one year after the Closing Date, provided, however, that if the Nominal Stock Consideration Amount is greater than $1 billion, the Stockholder may sell the amount of shares of Common Stock comprising the Stock Consideration (including Common Stock underlying the Purchaser Convertible Preferred Stock) that exceeds $1 billion of the Nominal Stock Consideration Amount beginning on the 181st day after the Closing Date; provided, further, that nothing in this Section 14 will restrict sales of Common Stock by the Stockholder (i) as nominee of customers in the ordinary course of business, (ii) pursuant to a private offering not requiring registration under the Securities Act of 1933 if the transferee agrees to the transfer and other restrictions set forth in this Agreement to which the Stockholder was subject with respect to the transferred shares of Common Stock and such private offering is made on or after the 181st day after the Closing Date or (iii) to an Affiliate of the Stockholder if such Affiliate agrees to the transfer and other restrictions set forth in this Agreement to which the Stockholder was subject with respect to the transferred shares of Common Stock or (iv) to the Company. Nothing in this provision will limit the ability of the Stockholder to request the Company to file the Shelf Registration Statement or Demand Registration Statement or permit the Company to delay the effectiveness of the Shelf Registration Statement or Demand Registration Statement during the period described in this Section 14, provided that no sales may be made pursuant to the Shelf Registration Statement or Demand Registration Statement until the period described in this Section 14 has expired. Nothing in this Section 14 will restrict sales of Common Stock by any Affiliate or subsidiary of the Stockholder as nominee of customers or in connection with banking, brokerage or asset management activities in the ordinary course of business. 15. STANDSTILL Until such time as the amount of Common Stock held by the Stockholder is less than 5% of the total number of shares of outstanding Common Stock, the Stockholder shall not (i) propose to acquire, or acquire, any securities or other property of the Company or make any statement about any merger or other corporate transaction of the Company; (ii) seek representation on the Board of Directors of the Company or the removal of any director of the Company from such Board of Directors; (iii) make any solicitation of proxies to vote securities of the Company; (iv) form or join a "group" with respect to any voting securities of the Company; (v) seek to control or influence the management or Board of Directors of the Company; (vi) deposit any securities of the Company in a voting trust; and (vii) make a public request, or advise or otherwise assist others, to do any of the foregoing. Nothing in this Section 15 will restrict sales of Common Stock by any Affiliate or subsidiary of the Stockholder as nominee of customers or in connection with banking, brokerage or asset management activities in the ordinary course of business. 17 16. MISCELLANEOUS. (a) Notices. All notices, requests, consents and other communications required or permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by registered or certified mail or by facsimile transmission (with immediate telephone confirmation thereafter) and, in the case of the Stockholder, shall also be sent via e-mail, If to the Company: MetLife, Inc. 1 MetLife Plaza 27-01 Queens Plaza North Long Island City, New York 11101 Facsimile No.: (212) 578-0266 Attn: Anthony J. Williamson, Senior Vice President and Treasurer with a copy to MetLife, Inc. 1 MetLife Plaza 27-01 Queens Plaza North Long Island City, New York 11101 Facsimile No.: (212) 252-7288 Attn: James L. Lipscomb, Executive Vice President and General Counsel with a copy to (which shall not constitute notice): LeBoeuf, Lamb, Greene & MacRae, L.L.P. 125 West 55th Street New York, New York 10019 Attn: Joseph L. Seiler III, Esq. Facsimile No.: (212) 424-8500 If to the Stockholder: Citigroup Inc. 399 Park Avenue New York, New York 10022 Attn: Andrew M. Felner, Esq. Deputy General Counsel Facsimile No.: (212) 559-7057 Email: felnera@citigroup.com 18 With a copy to: Citigroup Inc. 425 Park Avenue New York, New York 10022 Attn: John R. Dye, Esq. General Counsel -- Capital Markets Facsimile No.: (212) 793-7600 Email: dyej@citigroup.com If to a transferee Stockholder, to the address of such transferee Stockholder set forth in the transfer documentation provided to the Company; in each case with copies to (which shall not constitute notice): Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036-6522 Attention: Gregory A. Fernicola, Esq. Facsimile No.: (212) 735-2000 or at such other address as such party each may specify by written notice to the others, and each such notice, request, consent and other communication shall for all purposes of the Agreement be treated as being effective or having been given when delivered personally, upon one Business Day after being deposited with a courier if delivered by courier, upon receipt of facsimile confirmation if transmitted by facsimile, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid. (b) No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. (c) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. If the outstanding Common Stock is converted into or exchanged or substituted for other securities issued by any other Person, as a condition to the effectiveness of the merger, consolidation, reclassification, share exchange or other transaction pursuant to which such conversion, exchange, substitution or other transaction takes place, such other Person shall become bound hereby with respect to such other securities constituting Registrable Securities and, if requested by the Stockholder or a permitted transferee, shall further evidence such obligation by executing and delivering to the Stockholder and such 19 transferee a written agreement to such effect in form and substance satisfactory to the Stockholder. (d) Governing Law. The internal laws, and not the laws of conflicts (other than Section 5-1401 of the General Obligations Law of the State of New York), of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties. (e) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the County and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 16(a) shall be deemed effective service of process on such party. (f) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. (g) Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. (h) Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof. (i) Captions. The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing or enforcing any provision of this Agreement. 20 (j) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. (k) Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given, without the written consent of the Company and the Stockholder. (l) Aggregation of Stock. All Registrable Common Stock held by or acquired by any Affiliated Persons will be aggregated together for the purpose of determining the availability of any rights under this Agreement. (m) Equitable Relief. The parties hereto agree that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement. [Execution Page Follows] 21 IN WITNESS WHEREOF, this Investor Rights Agreement has been duly executed by each of the parties hereto as of the date first written above. METLIFE, INC. By: /s/ William J. Wheeler ------------------------------------ Name: William J. Wheeler Title: Executive Vice President and Chief Financial Officer CITIGROUP INC. By: /s/ Anthony A. Lazzara ------------------------------------ Name: Anthony A. Lazzara Title: Managing Director M&A Execution [SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT] 22 CITIGROUP INSURANCE HOLDINGS COMPANY By: /s/ Martin A. Waters ----------------------------- Name: Martin A. Waters Title: Assistant Treasurer 23 EX-10.4 5 y10546exv10w4.txt TRANSITION SERVICES AGREEMENT - -------------------------------------------------------------------------------- TRANSITION SERVICES AGREEMENT BY AND BETWEEN CITIGROUP, INC. AND METLIFE, INC. DATED AS OF JULY 1, 2005 - -------------------------------------------------------------------------------- TABLE OF CONTENTS Section 1. Definitions..................................................... 1 Section 2. Services and Activities......................................... 4 (a) TSA Services.............................................. 4 (b) Additional Services....................................... 6 (c) Lease of Real Property, Hardware, Infrastructure and Networks.................................................. 7 (d) Resumed Services.......................................... 7 (e) No Obligation to Provide Other Services................... 7 (f) Non-Exclusivity........................................... 8 (g) Cooperation............................................... 8 (h) Access, Resources and Decisions........................... 8 (i) Acquisition Agreement Matters............................. 8 (j) Certain Activities........................................ 8 Section 3. Limitations on TSA Services..................................... 9 (a) Scope of Required TSA Services by Parent.................. 9 (b) Scope of Required TSA Services by Purchaser............... 10 (c) No Performance Required Under Certain Circumstances....... 10 (d) No Obligation to Hire..................................... 10 (e) Restrictions on Work Product.............................. 10 (f) Consents.................................................. 10 (g) No Obligation of Parent to Provide Certain Services....... 11 Section 4. Standards of TSA Services, Review Procedures and Penalties...... 11 (a) Standards of TSA Services................................. 11 (b) Improvements in TSA Services.............................. 11 (c) Reports................................................... 12 (d) Failure to Meet Standards for Services, Inability to Perform, Errors........................................... 12 (e) Failure to Provide TSA Services........................... 12 Section 5. Subcontractors.................................................. 13 (a) Right to Subcontract...................................... 13 (b) Affiliate Subcontractors.................................. 13 Section 6. Consideration for Services; Fee Dispute Resolution.............. 13 (a) Consideration............................................. 13 (b) Limitations on Consideration.............................. 15 (c) Payment................................................... 15 (d) Fee Dispute Resolution.................................... 16 (e) Sales Taxes............................................... 16 (f) No Offset................................................. 16 (g) TSA Records............................................... 17 (h) Audit..................................................... 17 Section 7. Term and Termination............................................ 19 (a) Period of Services........................................ 19 (b) Termination of Individual Transition Services............. 20 (c) Termination of Agreement.................................. 20 (d) Effect of Termination; Return of Materials................ 21 Section 8. Transition Project Management................................... 21 (a) Service Coordinator....................................... 21
- i - (b) TSA Contacts.............................................. 21 Section 9. Relationship Between the Parties................................ 21 Section 10. Changes......................................................... 22 (a) Changes in Services....................................... 22 (b) Changes in Security....................................... 23 (c) Changes in Fees........................................... 23 Section 11. Dispute Resolution.............................................. 23 (a) Resolution by the Service Coordinators.................... 23 (b) Dispute Escalation........................................ 23 (c) Specific Performance and Other Equitable Relief........... 24 (d) Ground for Dismissal...................................... 24 Section 12. Indemnification................................................. 24 (a) Indemnification by Service Provider....................... 25 (b) Indemnification by Service Recipient...................... 25 (c) Limitation on Liability................................... 26 (d) Exclusions................................................ 26 (e) Third Party Claims; Procedures............................ 26 (f) Consequential Damages..................................... 27 (g) Other Losses.............................................. 27 (h) Exclusive Remedy.......................................... 27 (i) Disclaimer of Warranties.................................. 27 Section 13. Ownership, Lost Data and Security............................... 28 (a) Ownership................................................. 28 (b) Ongoing Data Separation................................... 28 (c) Service Provider Licensed Materials....................... 28 (d) Third Party Materials..................................... 29 (e) Confidentiality; Delivery................................. 29 (f) Lost or Destroyed Data.................................... 29 (g) Security.................................................. 29 Section 14. Force Majeure................................................... 31 (a) General................................................... 31 (b) Definition................................................ 31 (c) Excuse of Performance..................................... 31 (d) Disaster Recovery Plan.................................... 31 (e) Disaster Recovery Tests................................... 32 (f) Termination Upon Force Majeure............................ 32 Section 15. Survival........................................................ 32 Section 16. Notices......................................................... 32 Section 17. Successors and Assigns; No Third-Party Beneficiaries............ 33 Section 18. Counterparts.................................................... 34 Section 19. Entire Agreement................................................ 34 (a) Agreement................................................. 34 (b) Captions.................................................. 34 Section 20. Amendment, Modification and Waiver.............................. 34 Section 21. Severability.................................................... 34 Section 22. Governing Law................................................... 35
- ii - Section 23. Jurisdiction; Venue; Consent to Service of Process.............. 35 (a) Exclusive Jurisdiction; Final Judgments................... 35 (b) Service of Process........................................ 35 Section 24. Waiver Of Jury Trial............................................ 35 Section 25. Confidentiality................................................. 35 (a) Definition of Confidential Information.................... 35 (b) Protection of Confidential Information.................... 36 (c) Exclusions................................................ 36 (d) Compulsory Disclosure..................................... 36 (e) Unauthorized Acts......................................... 37 (f) Data Protection........................................... 37 Section 26. Construction.................................................... 37 Section 27. Precedence...................................................... 37
Schedules Schedule 2(a) TSA Services Schedule 2(a)(ii)(A) Non-Transferable Acquired Subsidiary Services Schedule 2(b) Additional Services Schedule 2(c) Leased Real Property Schedule 6(a)(i) 2005 Price Lists Schedule 8(a) Service Coordinators Schedule 8(b) TSA Contacts Schedule 11(b)(i) Senior Executives and Executive Committee Schedule 11(b)(ii) Significant Service Shortfall Dispute Resolution - iii - This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of July 1, 2005 (the "Effective Date"), is entered into by and between Citigroup, Inc., a Delaware corporation ("Parent") and MetLife, Inc., a Delaware corporation ("Purchaser"). W I T N E S S E T H: WHEREAS, Parent and Purchaser have entered into that certain Acquisition Agreement, dated January 31, 2005 (as may be amended from time to time, the "Acquisition Agreement") pursuant to which Purchaser agreed to acquire on the terms and subject to the conditions set forth therein, all of the outstanding shares of capital stock of certain subsidiaries of, and the equity interests owned by Parent in certain joint ventures of, Parent or its Affiliates; and WHEREAS, the execution and delivery of this Agreement is a condition to Closing of the transactions contemplated by the Acquisition Agreement. NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: SECTION 1. DEFINITIONS. All capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Acquisition Agreement. With respect to all defined terms, whenever the singular term is used, the same shall include the plural, and whenever the plural is used, the same shall include the singular, where appropriate. "Acquired Subsidiary Services" has the meaning set forth in Section 2(a)(ii). "Acquisition Agreement" has the meaning set forth in the Recitals. "Additional Services" means, to the extent provided by the Service Provider pursuant to Section 2(b) hereof, (a) any additional services, support, facilities or other resources not otherwise provided as a TSA Service or (b) an expansion of the scope or term of any TSA Service (it being agreed that an increase in volume of a TSA Service by reason of organic growth of the Business is not an Additional Service). Additional Services include Required Additional Services. Any activities performed pursuant to Section 2(j) hereof are not Additional Services. "Administration Notice" has the meaning set forth in Section 16. "Affiliate Subcontractor" has the meaning set forth in Section 5(b). "Change" has the meaning set forth in Section 10. "Confidential Information" has the meaning set forth in Section 25(a). "Date of Determination" has the meaning set forth in Section 2(b)(i). "Disclosing Party" has the meaning set forth in Section 25(b). "Effective Date" has the meaning set forth in the Recitals. "Excluded Works" means (a) work product created by Subcontractors that are not Affiliate Subcontractors retained by a Service Provider or any of its Affiliates where the terms of such retention allocate title in such work product to such Subcontractor or to another third party, and (b) Confidential Information, trademarks, service marks or logos of the Service Provider or its Affiliates. "Excusable Circumstance" has the meaning set forth in Section 3(c). "Executive Committee" has the meaning set forth in Section 11(b). "Fees" has the meaning set forth in Section 6(a)(i). "Force Majeure Events" has the meaning set forth in Section 14(b). "Indemnified Party" means the Service Provider Indemnified Party or the Service Recipient Indemnifying Party, as the situation warrants. "Indemnifying Party" means the Service Provider Indemnifying Party or the Service Recipient Indemnifying Party, as the situation warrants. "International Term" has the meaning set forth in Section 7(a). "Non-Terminating Party" has the meaning set forth in Section 7(c)(i). "Omitted Services" has the meaning set forth in Section 2(a)(iii). "Operations Notice" has the meaning set forth in Section 16. "Parent" has the meaning set forth in the Recitals. "Parent Services" has the meaning set forth in Section 2(a)(i). "Policies" means Service Provider's written policies. "Pre-Closing Period" means (a) with respect to any service, support, facilities and other resources, as applicable, provided by or on behalf of a Service Provider to a Service Recipient, the period of time during the six (6) months prior to the Effective Date or (b) with respect to such services, support, facilities and other resources, as applicable, provided on only a periodic basis, the period of time during the twelve (12) months prior to the Effective Date (in each case, unless such service, support, facility or other resource was terminated in the normal course of business prior to the Effective Date). "Purchaser" has the meaning set forth in the Recitals. "Reports" has the meaning set forth in Section 4(c). "Receiving Party" has the meaning set forth in Section 25(b). - 2 - "Required Additional Services" means an Additional Service that the Service Provider must perform. An Additional Service is a Required Additional Service if the Service Provider (a) is the only reasonably available source of knowledge or expertise relating to the Additional Service, (b) can provide such Additional Service using commercially reasonable efforts, without adversely impacting the level or quality of any TSA Services provided by, or the businesses of, such Service Provider and its Affiliates, taking into account the Service Provider's resource limitations and capacity, and (c) in providing such Additional Service, does not violate Law, a then-existing executed written agreement between the Service Provider and a non-affiliated third party or the Service Provider's then-current Policies and procedures. "Sales Taxes" has the meaning set forth in Section 6(e). "Senior Executive" has the meaning set forth in Section 11(b). "Service Coordinator" has the meaning set forth in Section 8(a). "Service Provider" means, as applicable, Parent or Purchaser, respectively, to the extent providing, or causing to be provided by a Subcontractor, any TSA Service. "Service Provider Indemnified Party" has the meaning set forth in Section 12(b). "Service Provider Indemnifying Party" has the meaning set forth in Section 12(b). "Service Provider Licensed Materials" has the meaning set forth in Section 13(c). "Service Recipient" means, as applicable, Parent on behalf of itself or its Affiliates, or Purchaser on behalf of itself, the Acquired Subsidiaries, any of its Affiliates or the Joint Ventures, to the extent any such of the foregoing is a recipient of TSA Services. "Service Recipient Indemnified Party" has the meaning set forth in Section 12(a). "Service Recipient Indemnifying Party" has the meaning set forth in Section 12(b). "Service Recipient Materials" has the meaning set forth in Section 13(a)(i). "Service Shortfall" has the meaning set forth in Section 4(d). "Subcontractor" has the meaning set forth in Section 5. "Systems" has the meaning set forth in Section 13(g)(ii). "Term" has the meaning set forth in Section 7(a). "Terminating Party" has the meaning set forth in Section 7(c)(i). "Third Party Claim" has the meaning set forth in Section 12(e). "TPC Services" has the meaning set forth in Section 2(a)(ii)(C). - 3 - "TPC TSA" has the meaning set forth in Section 2(a)(ii)(C). "TSA Audit" has the meaning set forth in Section 6(h). "TSA Contacts" has the meaning set forth in Section 8(b). "TSA Monthly Invoice" means an invoice setting forth the amounts payable by or on behalf of the Service Recipient, for all applicable TSA Services and any applicable activities performed pursuant to Section 2(j)(i) hereof provided to it or its Affiliates or Joint Ventures hereunder, accompanied by reasonable documentation supporting the charges sufficient to allow the Service Recipient (or its Affiliate or Joint Venture, as the case may be) to confirm the accuracy of such charges and to permit attribution of such charges to the country in which such Service Recipient, Affiliate or Joint Venture is located, which invoice shall be delivered pursuant to Section 6(c) of this Agreement. "TSA Records" has the meaning set forth in Section 6(g). "TSA Services" means the Parent Services, the Acquired Subsidiaries Services and the Omitted Services or any of them, as the context requires, together with any Additional Services. The TSA Services shall include all components, subtasks and subservices necessary for the provision and receipt thereof. "Unauthorized Access" has the meaning set forth in Section 25(e). "U.S. Term" has the meaning set forth in Section 7(a). SECTION 2. SERVICES AND ACTIVITIES. (a) TSA SERVICES. (i) PARENT SERVICES. Parent will continue to provide, or cause to be provided by its Affiliates or Subcontractors, to the Acquired Subsidiaries or, at Purchaser's direction, the Acquired Subsidiaries' Affiliates, Purchaser or the Joint Ventures all services, support, facilities, and other resources that Parent or Sellers, or their respective Affiliates or Subcontractors, provided, or caused to be provided, to the Acquired Subsidiaries or the Joint Ventures during the Pre-Closing Period, including as set forth on Schedule 2(a) hereto (designated as "Forward"), except as otherwise mutually agreed in writing by Purchaser and Parent prior to the Effective Date (the "Parent Services"). (A) In the event that Purchaser internally restructures, reorganizes or transfers the Business to a Purchaser Affiliate, Parent shall be obligated to continue to provide, or cause to be provided, the Parent Services to the Purchaser Affiliate insofar as it conducts the Business. Parent shall at all times assist and cooperate with any Purchaser Affiliate that supports the Business, only insofar as it supports the Business. - 4 - (B) Parent has no obligation to provide, or cause to be provided, TSA Services to Purchaser for itself or on behalf of any Affiliate of Purchaser or Joint Venture that was not part of the Business prior to the Effective Date, except as set forth in Section 2(a)(i)(A) hereof. (ii) ACQUIRED SUBSIDIARIES SERVICES. Purchaser shall cause the Acquired Subsidiaries to continue to provide, or cause to be provided by its Affiliates or Subcontractors, to Parent or its Affiliates, all services, support, facilities, and other resources hereto that they provided, or caused to be provided, to Parent or such Affiliates during the Pre-Closing Period, as set forth on Schedule 2(a) hereto (designated as "Reverse"), except as otherwise mutually agreed by Purchaser and Parent prior to the Effective Date (the "Acquired Subsidiaries Services"). (A) In the event that Parent internally restructures, reorganizes or transfers the business to which the Acquired Subsidiaries Services relate to another Parent Affiliate, Purchaser shall be obligated to continue to provide, or cause to be provided, the Acquired Subsidiaries Services to the Parent Affiliate, insofar as it conducts the business to which the Acquired Subsidiaries Services relate, except with regard to the Acquired Subsidiary Services set forth on Schedule 2(a)(ii)(A). (B) Purchaser has no obligation to provide, or cause to be provided, TSA Services or Additional Services to Parent on behalf of any Parent Affiliate that was not a Parent Affiliate prior to the Effective Date, except as set forth above in Section 3(b)(ii)(A) hereof. (C) The Acquired Subsidiaries Services shall include all services and related support, if any, provided by the Acquired Subsidiaries to Travelers Property Casualty Corp. as of the Effective Date under the Transition Services Agreement (the "TPC TSA") between Citigroup, Inc. and Travelers Property Casualty Corp., dated August 19, 2002 (the "TPC Services"). (iii) OMITTED SERVICES. If, at any time within one hundred twenty (120) days following the Effective Date, either party becomes aware of any other service, support, facility or other resource that had been provided during the Pre-Closing Period but which was omitted from Schedule 2(a) (collectively, the "Omitted Services"), then upon providing an Operations Notice to the other party, such service, support, facility or other resource will be added to the relevant schedule and become a TSA Service and the relevant Service Provider will use commercially reasonable efforts to resume provision of such TSA Service as soon as practicable. (iv) KNOWLEDGE TRANSFER. Parent will use commercially reasonable efforts to maintain in place employees with adequate knowledge (A) to provide each Parent Service for such portion of the Term during which such Parent Service is being provided hereunder, and (B) to provide knowledge transfer to assist Purchaser in the migration and integration of (y) each Parent Service including, with respect to any particular Parent Service, for sixty (60) days following the migration and integration of - 5 - such Parent Service (even if such sixty (60) day period extends beyond the Term) and (z) each other service that Parent or its Affiliates or Subcontractors had provided, or caused to be provided, to the Acquired Subsidiaries or the Joint Ventures during the Pre-Closing Period, for sixty (60) days following the Effective Date; provided, that knowledge transfer under this Section 2(a)(iv)(B) shall only include normal customer service activities. Parent shall provide the knowledge transfer activities described in this Section 2(a)(iv) at no charge. (v) INADVERTENT INCLUSIONS. In the event that Service Provider discovers that Schedule 2(a) includes a description of services, support, facilities, or other resources that were not provided to Service Recipient during the Pre-Closing Period, then, after reasonable consultation with Service Recipient, Service Provider may remove such description of services, support, facilities, or other resources from Schedule 2(a). If Service Recipient disputes such removal, the dispute shall be resolved in accordance with Section 11(b); otherwise, such description shall be deemed a request for Additional Services pursuant to Section 2(b). (b) ADDITIONAL SERVICES. Service Recipient may request in writing that the Service Provider provide a service that would be an Additional Service if provided under this Section 2(b), which request shall include a description of the service(s) requested to be performed and the associated business specifications. (i) If the requested service is a Required Additional Service, then within ten (10) Business Days after the Date of Determination (as defined below), Service Provider shall provide the Service Recipient with a written proposal for such Required Additional Service. Each such written proposal for a Required Additional Service submitted by the Service Provider shall refer to the description provided by the Service Recipient and shall include the estimated time and price (such price to be calculated using the same methodology used to calculate prices for Service Provider's Affiliates) of performing the Required Additional Service (including any third-party consents necessary to perform the Required Additional Service) and any potential impact on the then-existing TSA Services. Service Provider shall have two (2) Business Days from the date of receipt of Service Recipient's request to notify Service Recipient if Service Provider does not agree that the requested service is a Required Additional Service. If there is a dispute as to whether the requested service is a Required Additional Service, it shall be resolved in accordance with Section 11(b) on an expedited basis. The "Date of Determination" shall be (i) the day Service Provider received Service Recipient's request, if the Service Provider does not notify Service Recipient in accordance with this Section 2(b)(i) that Service Provider does not agree that the requested service is a Required Additional Service or (ii) the date on which Service Provider and Service Recipient agree on whether the requested service is a Required Additional Service (whether as a result of the dispute resolution procedures in Section 11(b) or otherwise), if the Service Provider notifies Service Recipient in accordance with this Section 2(b)(i) that Service Provider does not agree that the requested service is a Required Additional Service. If the parties agree on Service Provider's written proposal or a written variation thereof, the Service Provider shall perform such Required Additional Service in accordance with the terms of this Agreement and such agreed upon - 6 - proposal. If the parties do not agree on such proposal or a written variation thereof within ten (10) Business Days after the date such written proposal is delivered to the Service Recipient, then the dispute as to the proposal will be resolved in accordance with Section 11 hereof; provided, that where the dispute is solely as to pricing, the Service Provider will begin providing the Required Additional Service as soon as practicable, regardless of whether the dispute has been resolved, and the price paid shall be adjusted retroactively in the manner and amount as determined by the dispute resolution process or as the parties may agree. (ii) If the requested Additional Service is not a Required Additional Service, Service Provider may, at its option, participate in the process by which the provider of such Additional Service that is not a Required Additional Service is selected, but the Service Recipient shall have no obligation to select the Service Provider with respect to such Additional Service. If the parties agree on a written proposal from Service Provider to provide such requested Additional Service or a written variation thereof, the Service Provider shall perform such Additional Service in accordance with the terms of this Agreement and such agreed upon proposal, and the price of performing such Additional Service will be as agreed between the parties in such agreed upon proposal. (iii) The agreed upon terms of each Additional Service shall be annexed hereto as part of Schedule 2(b). (c) LEASE OF REAL PROPERTY, HARDWARE, INFRASTRUCTURE AND NETWORKS. Each Service Provider shall continue to lease or sublease, as applicable, to any Service Recipient the real property, premises, and facilities set forth on Schedule 2(c), and any furniture, equipment, hardware, infrastructure and networks currently leased to or in use by such Service Recipient, consistent with such Service Provider's practices in effect immediately prior to the Effective Date. In the event that the parties or their Affiliates (or in the case of Purchaser, the Joint Ventures) enter into a written lease or sublease after the Effective Date and during the Term for any real property, premises, or facilities set forth on Schedule 2(c), such written lease or sublease shall supersede this Agreement with regard to such real property, premises, or facilities, and such real property, premises, or facilities shall be deemed removed from Schedule 2(c). (d) RESUMED SERVICES. If, after a TSA Service has been terminated by the Service Recipient in accordance with Section 7(b) hereof, the Service Recipient concludes that such TSA Service is still needed, the Service Recipient will so notify the Service Provider, and the Service Provider will resume providing such TSA Service, if commercially and technologically feasible. The Service Recipient shall be responsible for all costs of Service Provider associated with resuming such TSA Service, and to the extent practicable, Service Provider shall have provided Service Recipient with an Operations Notice of such expenses in advance. (e) NO OBLIGATION TO PROVIDE OTHER SERVICES. Except for the TSA Services, Additional Services, knowledge transfer activities to be provided pursuant to Section 2(a)(iv) hereof and any activities to be performed pursuant to Section 2(j) hereof, the parties shall have no obligation to provide any other services to pursuant to this Agreement. - 7 - (f) NON-EXCLUSIVITY. Nothing herein shall (i) prevent the Service Recipient during the term of this Agreement from obtaining any of the TSA Services from any other Person or from providing any TSA Service to itself using its own services, support, facilities and other resources or (ii) compel the Service Recipient to use or pay for a minimum volume of any TSA Service. (g) COOPERATION. Each party agrees to perform all obligations under this Agreement in good faith and to use commercially reasonable efforts to cooperate with the other party in all matters relating to the provision and receipt of the TSA Services, in order to facilitate the provision and receipt of the TSA Services, to perform the activities pursuant to Section 2(j) hereof and to minimize the expense, distraction and disturbance to the Service Providers. Such cooperation shall include (i) each party timely notifying the other in advance of any material changes to such party's operating environment or personnel that could have an adverse effect on any TSA Services or security and working with the other party to minimize the effect of such changes, it being understood that no change shall (A) materially disrupt or interfere with the provision or receipt of the TSA Services, (B) free the Service Provider from its obligations under this Agreement, or (C) diminish the service, security, or quality levels; (ii) facilitation of re-branding of external e-mail addresses; and (iii) cooperating with investigations by Governmental Authorities. (h) ACCESS, RESOURCES AND DECISIONS. The Service Recipient will use its commercially reasonable efforts to timely provide, as reasonably and timely requested by Service Provider, information and documentation sufficient for the Service Provider to perform the TSA Services in the manner that they were provided prior to the Effective Date, and will use its commercially reasonable efforts to make available, as reasonably and timely requested by the Service Provider, sufficient resources and timely decisions, approvals and acceptances so that the Service Provider may perform its obligations under this Agreement in a timely and efficient manner. Service Provider shall furnish Service Recipient with access to the Service Provider's books and records under this Agreement in a manner consistent with Section 6.4 of the Acquisition Agreement. To the extent that the parties continue to lease or sublease to any Service Recipient any real property, premises, facilities, furniture, equipment, hardware, infrastructure and networks in accordance with Section 2(c) hereof, the lessee or sublessee, as the case may be, shall have reasonable access to such leased or subleased property as is necessary to conduct its business or perform its obligations under this Agreement or the Related Agreements. (i) ACQUISITION AGREEMENT MATTERS. Notwithstanding anything to the contrary contained herein or in the Acquisition Agreement, each party's obligations under Sections 1.1, 1.3 and 1.5 of Section 6.22 of the Sellers Disclosure Letter to the Acquisition Agreement shall cease upon the Closing. (j) CERTAIN ACTIVITIES. (i) SEPARATION AND SEGREGATION. (A) To the extent that, prior to the Effective Date, Parent has not completed separation and/or segregation of the operations of the Acquired Subsidiaries from the operations of Sellers and Affiliates of Sellers or separation - 8 - and/or segregation of all personal, private, health or financial information about individual policyholders, customers, consumers or benefits recipients related to the Business carried on by the Acquired Subsidiaries from any other information of Sellers or Affiliates of Sellers, whether by physical or logical separation of such data and information and/or by the use of contractual, administrative, technical and/or physical oversights, mechanisms and processes: (1) Parent shall make the completion of such separation and/or segregation its highest priority under this Agreement, (2) Parent's performance of such separation and/or segregation activities shall be of high quality and shall be conducted in the same manner as if Parent were performing such activities for a Parent Affiliate, (3) such lack of completion shall not affect the level or quality or cost of performance of the Parent Services or Additional Services or Parent's obligations pursuant to the Related Agreements, and (4) such separation and segregation shall be completed in such a manner so that the Business carried on by the Acquired Subsidiaries will, at and immediately after such separation and segregation has been completed, comply with (a) all applicable Law with respect to privacy of such data and information and (b) any applicable policies of, or promises made to policyholders, customers, consumers or benefit recipients of, any of the Acquired Subsidiaries, Parent or Sellers with respect to privacy of such data and information. (B) To the extent that any Losses arise out of or are caused by a claim that relates to a failure to complete, prior to the Effective Date, separation and/or segregation of the Acquired Subsidiaries' operations and data from the operations and data of Parent and its Affiliates that arises out of the transactions contemplated by the Acquisition Agreement, the parties shall equally share such Losses. For the avoidance of doubt, to the extent any Losses arise out of a failure by Parent or Purchaser to properly separate and segregate such operations and data in accordance with the standards set forth in Section 2(j)(i)(A)(4) hereof (whether done prior to or following the Effective Date), such Losses shall be subject to indemnification under Sections 12(a)(ix) and 12(b)(vii) hereof. (C) To the extent that any ambiguity arises with respect to whether a particular activity constitutes a TSA Service or a separation and/or segregation activity, such dispute shall be resolved in accordance with Section 11(b) hereof on an expedited basis. (ii) TRANSITION PLANNING. To the extent not completed prior to the Effective Date, Parent and Purchaser shall cooperate with Purchaser with regard to planning the transition and migration of the Business (including the data, systems, operations, and administration) to Purchaser. SECTION 3. LIMITATIONS ON TSA SERVICES. (a) SCOPE OF REQUIRED TSA SERVICES BY PARENT. Except as otherwise provided herein, Parent shall only be required to provide (or cause to be provided) the Parent Services to the extent that the Acquired Subsidiaries' business is conducted in substantially the - 9 - same manner (inclusive of any organic growth to such business) it was conducted immediately prior to the Effective Date. (b) SCOPE OF REQUIRED TSA SERVICES BY PURCHASER. Purchaser shall only be required to provide, or cause to be provided, the Acquired Subsidiaries Services to the extent that the applicable business of Parent and its Affiliates is conducted in substantially the same manner (inclusive of any organic growth) it was conducted immediately prior to the Effective Date. (c) NO PERFORMANCE REQUIRED UNDER CERTAIN CIRCUMSTANCES. No Service Provider shall be required to provide any TSA Service (or portion thereof) to the extent performance of such TSA Service (or portion thereof) would require it to violate (i) any applicable Law, (ii) any executed written agreement in effect as of the Effective Date between such Service Provider and a non-affiliated third party or (iii) changes in such Service Provider's Policies and procedures to the extent changes are made (A) after the Effective Date and (B) to comply with Law, to respond to a new legal or regulatory issue or to respond to a security threat (each an "Excusable Circumstance"). Each Service Provider shall notify the Service Recipient of any Excusable Circumstance and shall cooperate in providing alternative services that provide the same benefits and same level and quality of performance as the TSA Service (or any portion thereof) that could not be performed because of the Excusable Circumstance. Payment obligations for any increases in cost resulting from the provision of such alternative services shall be subject to the provisions of Section 10 hereof. Notwithstanding the foregoing, the provision of all TSA Services (except for Additional Services) by each Service Provider is deemed to comply with such Service Provider's Policies and procedures in effect as of the Effective Date. (d) NO OBLIGATION TO HIRE. No Service Provider shall be obligated to hire any additional employees, maintain the employment of any specific employee or acquire additional equipment or software to provide the TSA Services, perform knowledge transfer activity pursuant to Section 2(a)(iv) hereof, or perform any activities pursuant to Section 2(j) hereof; provided, that it maintains the level, quality and costs of the TSA Services and/or such knowledge transfer and other activities. (e) RESTRICTIONS ON WORK PRODUCT. Each party, as Service Provider, will promptly provide an Operations Notice to the other party, as Service Recipient, of any material restrictions, terms and conditions on Service Recipient's rights in work product, services and deliverables provided as any part of the TSA Services by a Subcontractor that is not an Affiliate Subcontractor which would be otherwise be enjoyed by the Service Recipient if such service were provided hereunder directly by Parent or Purchaser. (f) CONSENTS. To the extent not completed prior to the Effective Date, Parent shall use commercially reasonable efforts to negotiate and obtain all consents with respect to the Certain IP Agreements, with Purchaser's participation, cooperation and approval and at Purchaser's expense. To the extent that Purchaser does not approve of any consent arrangement and pricing proposed by Parent for approval by Purchaser, Purchaser shall take over the negotiation from Parent and shall complete same at Purchaser's expense (except with respect to consents required solely to provide the Acquired Subsidiaries Services, which shall be at Parent's expense). To the extent that Purchaser is unable to obtain a proposal for a consent arrangement - 10 - with respect to any Certain IP Agreement, Parent shall obtain acceptable alternative arrangements, with Purchaser's participation, cooperation and approval and at Purchaser's expense (except with respect to consents required solely to provide the Acquired Subsidiaries Services, which shall be at Parent's expense). To the extent that Purchaser does not approve of any such alternative arrangement, including pricing therefor, Purchaser shall take over the negotiation from Parent and shall complete same, at Purchaser's expense. Parent shall bear all costs in connection with obtaining such consents or providing such acceptable alternative arrangements with respect to Acquired Subsidiaries Services. Purchaser shall bear all costs in connection with obtaining such consents or providing such acceptable alternative arrangements with respect to Parent Services, provided that Parent has, within ninety (90) days of the execution of the Acquisition Agreement, identified the applicable necessary consent to Purchaser. With respect to consents required to provide the Parent Services, which consents relate to agreements that Parent did not provide to Purchaser within ninety (90) days of the date of the Acquisition Agreement or with respect to any consents required solely to provide the Acquired Subsidiaries Services, Parent shall bear all responsibility, liability and expense related thereto. (g) NO OBLIGATION OF PARENT TO PROVIDE CERTAIN SERVICES. Notwithstanding anything to the contrary set forth herein, Parent shall have no obligation to provide investment management services to the Acquired Subsidiaries under this Agreement. SECTION 4. STANDARDS OF TSA SERVICES, REVIEW PROCEDURES AND PENALTIES. (a) STANDARDS OF TSA SERVICES. The TSA Services shall be provided in accordance with applicable Law and the Service Provider's Policies and procedures in a good and workerlike manner and, at a minimum, at the level and quality at which the TSA Services were provided prior to the Effective Date. In instances where TSA Services were provided in accordance with service level agreements or targets in effect immediately prior to the Effective Date, such service level agreements or targets shall continue to apply to the TSA Services provided hereunder, including any such service level agreements or targets set forth in agreements between Parent or a Parent Affiliate and an Acquired Subsidiary that are terminated as part of the transaction contemplated by the Acquisition Agreement and the Related Agreements. (b) IMPROVEMENTS IN TSA SERVICES. (i) If, due to a change in Law or a change in the Service Provider's Policies and procedures in accordance with Section 10 hereof, a Service Provider improves the level and/or quality at which any service that is provided to any Affiliate of Service Provider hereunder, then each Affiliate of Service Recipient that receives the same TSA Services hereunder shall receive at least the same increased level and/or quality of service as the Service Provider's Affiliates receiving the service that is the same as a TSA Service, and Service Recipient shall pay the share of its Affiliates receiving the TSA Service of any costs associated with such increase, calculated using the same methodology used to determine the costs paid by the Service Provider's other Affiliates that are recipients of such service. If Purchaser, the Acquired Subsidiaries, their Affiliates, or the Joint Ventures are the recipients of such TSA Service, the costs - 11 - associated with such increase shall be at the same discounted rates as were applied to charges payable by the Acquired Subsidiaries as of the date of execution of the Acquisition Agreement. (ii) The Service Recipient may request that the Service Provider improve the level and/or quality at which the Services are provided, and the Service Provider shall reasonably consider providing such Service level and/or quality, on mutually agreed terms and pricing; provided, that the Service Provider must provide any such increased level and/or quality that the Service Recipient requires due to a change in Law that is only applicable to the Service Recipient (or its Affiliates), so long as the Service Recipient agrees to bear all costs of such increase, which cost shall be calculated on a "time and materials" basis. (c) REPORTS. Each Service Provider shall provide or cause its applicable Subcontractors to provide to the Service Recipient or the Affiliates designated by such Service Recipient the same reports that it provided immediately prior to the Effective Date (the "Reports"), in the same form as provided immediately prior to the Effective Date. (d) FAILURE TO MEET STANDARDS FOR SERVICES, INABILITY TO PERFORM, ERRORS. If a Service Recipient provides its corresponding Service Provider with an Operations Notice of any failure to meet any standard of TSA Services required by this Agreement ("Service Shortfall"), as determined by such Service Recipient in good faith, the Service Provider shall promptly rectify such failure at its own expense, using commercially reasonable efforts. All significant Service Shortfalls shall be rapidly and timely escalated pursuant to Section 11(b) hereof. If a Service Provider is unable to provide the TSA Services (other than as otherwise expressly allowed under this Agreement) even if such inability is due to a Force Majeure Event, such Service Provider will cooperate in obtaining an alternative source of services as promptly as practicable. If such inability is due to a Force Majeure Event, the parties shall share equally any incremental costs of such alternative source of services; in all other cases, the Service Provider shall be responsible for such incremental costs. Each Service Provider will promptly correct any errors in the TSA Services, in such manner and time frame as if the TSA Services were being provided to itself, at no additional cost to the Service Recipient. (e) FAILURE TO PROVIDE TSA SERVICES. To the extent that Service Provider or its Subcontractor fails to provide, or fails to timely provide, any TSA Service as required under this Agreement or fails to meet the applicable standard of service for any TSA Service as set forth herein, unless such failure resulted primarily from the act or omission of Service Recipient (even if such failure to provide TSA Services is excused by Force Majeure Events pursuant to Section 14 hereof), then Service Recipient shall have no obligations or liability hereunder or under the Related Agreements for failure to meet its obligations hereunder or under the Related Agreements to the extent such failure is attributable to Service Provider's failure to meet the applicable standard of service until such time as Service Provider cures such failure to the extent required to enable Service Recipient to resume fulfilling such obligations hereunder or under the Related Agreements. - 12 - SECTION 5. SUBCONTRACTORS. (a) RIGHT TO SUBCONTRACT. Each Service Provider reserves the right to subcontract the performance of any of the TSA Services to another provider, including third parties and the Service Provider's Affiliates, (each, a "Subcontractor"), provided that such Service Provider shall always remain responsible for (i) the performance of all TSA Services in accordance with the service levels, quality and costs set forth herein and (ii) compliance by any Subcontractor with the terms and conditions of this Agreement and for any acts or omissions of such Subcontractor. Any TSA Service provided by a Subcontractor will be provided on the same terms and conditions under which such Subcontractor provides any similar service, support, facility or other resource to Service Provider or its Affiliates generally. Each Subcontractor acting on behalf of a Service Provider shall perform in all respects in accordance with the terms hereof applicable to the Service Provider. (b) AFFILIATE SUBCONTRACTORS. Unless prohibited by Law or a new legal or regulatory issue, each Service Provider shall cause any Subcontractor that is also an Affiliate of such Service Provider to waive any existing, restriction or constraint on its work product, any requirement for consent, and any other term of service or performance (and shall not impose any other new term) that is more onerous than that which is currently in place for services substantially like the TSA Services or that are agreed by Parent or Purchaser hereunder for services, support, facilities, and other resources provided directly by either to the other (each such unprohibited Subcontractor, an "Affiliate Subcontractor"). SECTION 6. CONSIDERATION FOR SERVICES; FEE DISPUTE RESOLUTION. (a) CONSIDERATION. In full consideration for the Service Provider providing, or causing to be provided, the TSA Services, performing, or causing to be performed, any activities pursuant to Section 2(j) hereof, and any and all rights granted or obligations undertaken hereunder, the Service Recipient shall pay to the Service Provider, and reimburse the Service Provider for, each of the following: (i) the Fees for the first twelve (12) months following the Effective Date for TSA Services being provided in the United States and the first eighteen (18) months after the Effective Date for TSA Services being provided outside of the United States, with respect to any TSA Service that (A) is not an Additional Service and (B) was provided during the Pre-Closing Period. "Fees" means collectively: (I) the price, if applicable, for the equivalent of such TSA Service set forth on the 2005 Price Lists set forth as part of Schedule 6(a)(i) hereto, multiplied by the applicable number of units used during the month, if applicable; (II) if subsection (I) does not apply, the price, if applicable, for the equivalent of such TSA Service that was charged during 2005 prior to the Effective Date by Parent or its Affiliates that are not Acquired Subsidiaries to the Acquired Subsidiary or Joint Venture receiving the TSA Service; or (III), if neither subsection (I) nor subsection (II) applies, the price (including fixed costs and variable costs) for such TSA Service or activity to be fairly inferred from the budgets set forth as part of Schedule 6(a)(i) hereto. At the end of each three (3) calendar month period during the Term following the Effective Date (or more frequently, upon mutual agreement), the parties shall determine what reductions, if any, in the Fees are appropriate (including any - 13 - mutually agreed upon retroactive adjustments), given the TSA Services terminated during the preceding three (3) calendar month period or during the three (3) calendar month period since reductions were last determined in accordance with this Section 6(a)(i), in each case subject to the limitations of Section 6(b). (ii) at the end of each three (3) calendar month period following the end of the first twelve (12) months after the Effective Date for TSA Services being provided in the United States (which shall additionally include the stub period of the remainder of the month in which this Agreement is executed if the Effective Date is other than the first day of the month), and at the end of each three (3) calendar month period following the end of the first eighteen (18) months after the Effective Date for TSA Services being provided outside of the United States (which shall additionally include the stub period of the remainder of the month in which this Agreement is executed if the Effective Date is other than the first day of the month), the then-existing Fees shall increase by two percent (2%). In the event that the term for TSA Services being provided to a location outside the United States is extended for an additional twelve (12) months from thirty (30) to forty-two (42) months pursuant to Section 7(a)(i)(A) hereof, the then-existing Fees shall increase by three percent (3%) at the end of each three (3) month period during such twelve (12) month extension; provided further that any increase in Fees in accordance with this Section 6(a)(ii) hereof shall not apply with respect to any TSA Service for which Service Recipient's continued requirement of such TSA Service is materially caused by Service Provider's failure to meet any existing service levels applicable pursuant to Section 4(a) or timely perform such TSA Service as contemplated in Section 7(a)(i)(B) hereof for the then-current three (3) month Fee escalation period. The foregoing increase in Fees shall continue without effect for each successive three (3) month Fee escalation period during which such failure or causation is continuing at the commencement thereof and upon cure of such failure or causation, the increase in Fees shall not be cumulative for periods when such failure or causation was continuing; (iii) all charges for any TSA Services provided by a Subcontractor that is not an Affiliate Subcontractor; provided, that such charges shall be on a pass-through basis without any additional charge by each Service Provider. All charges for TSA Services provided hereunder by an Affiliate Subcontractor will be calculated in accordance with Section 6(a)(i)hereof; (iv) one-half of all costs relating to physical and technological separation and/or segregation of operations and data, including all charges for any Subcontractor; provided, that such Subcontractor charges and any other third party costs shall be on a pass-through basis without any additional charge by each Service Provider; (v) any incremental costs incurred by the Service Provider to (A) take steps to maintain its current level of security that are required as a result of its provision of any TSA Services that were not provided to Service Recipient during the Pre-Closing Period and (B) provide security for Additional Services. The Service Provider shall pay any incremental costs required to maintain its current level of security with respect to the provision of any service that was provided during the Pre-Closing Period and is provided hereunder as a TSA Service; - 14 - (vi) compensation for any Additional Service that is not a Required Additional Service shall be in accordance with Section 2(b)(ii), and the compensation for any Required Additional Service shall be in accordance with Section 2(b)(i); and (vii) all of the Service Provider's reasonable out of pocket expenses in connection with the provision of TSA Services by Service Provider or receipt of TSA Services by Service Recipient (e.g., travel expenses); provided, that all such out of pocket expenses shall be in accordance with the Service Recipient's travel policies (to the extent that the applicable Policies were made known to Service Provider prior to incurring the applicable expense), and, provided, further, that out of pocket expenses in excess of (A) fifteen thousand dollars ($15,000) for a single expense or (B) one hundred thousand dollars ($100,000) for aggregate expenses in a given month will not be incurred without the prior written approval of the Service Recipient. (b) LIMITATIONS ON CONSIDERATION. Notwithstanding any provision to the contrary in Section 6(a) hereof: (i) Parent shall bear any costs incurred due to termination penalties (including "kill fees") or penalties resulting from decreases in volume incurred during the Term of this Agreement under any agreements that Parent or any of its Affiliates has with any non-Affiliate third party; (ii) To the extent that Parent's cost to provide any TSA Service increases due to hiring new personnel for procurement (also known as "P-2-P"), travel and entertainment expenses, human resources, e-mail, and job postings, Parent shall bear such increase in cost during the first and third full six (6) calendar-month periods of this Agreement, and Purchaser shall bear such increase in cost during the second and fourth full six (6) calendar-month periods of this Agreement; provided that the first full six (6) month period shall additionally include the stub period of the remainder of the month in which this Agreement is executed if the Effective Date is other than the first day of the month. In the event that the term for such services continues past twenty four (24) months, the party obligated to bear such increase in cost will alternate every three (3) calendar months. (c) PAYMENT. For each country in which a Subcontractor that is an Affiliate of Service Provider directly or indirectly provides TSA Services to a recipient (either an Affiliate of Service Recipient or a Joint Venture) located in the same country: (i) such Subcontractor shall provide such recipient and Service Recipient with an accurate TSA Monthly Invoice for such TSA Services denominated in the local currency of such country, and (ii) such recipient shall remit payment to such Subcontractor in the local currency of such country. For each country in which a Subcontractor that is an Affiliate of Service Provider directly or indirectly performs activities pursuant to Section 2(j)(i) hereof for a recipient (either an Affiliate of Service Recipient or a Joint Venture) located in the same country: (i) the Service Provider shall provide such recipient and Service Recipient with an accurate TSA Monthly Invoice for such activities performed pursuant to Section 2(j)(i) hereof by such Subcontractor denominated in the local currency of such country, and (ii) such recipient shall remit payment to such Subcontractor in the local currency of such country; provided that conversion of currency, if any, shall be in - 15 - accordance with a methodology mutually agreed upon by the parties, which methodology, at a minimum, shall allow for modification as necessary of the applicable currency exchange rates on at least a monthly basis. For all other TSA Services and activities performed pursuant to Section 2(j)(i) hereof, Service Provider shall provide Service Recipient with an accurate TSA Monthly Invoice denominated in U.S. Dollars, and Service Recipient shall remit payment to Service Provider in U.S. Dollars. All TSA Monthly Invoices shall be provided by the fifteenth (15th) day of the month following the end of each calendar month (other than the calendar month that immediately follows the Effective Date) for all applicable TSA Services rendered by the Service Provider during such month and any applicable activities performed pursuant to Section 2(j)(i) hereof by the Service Provider during such month. The parties acknowledge that there may be a lag in the submission of charges from third parties relating to the provision of TSA Services and performance of any activities pursuant to Section 2(j)(i) hereof and that the Service Provider shall use its commercially reasonable efforts to obtain such Subcontractor or third party invoices, and to provide same to Service Recipient in a timely fashion. Payment of all undisputed amounts in each TSA Monthly Invoice shall be due and payable within sixty (60) days of receipt of such TSA Monthly Invoice. (d) FEE DISPUTE RESOLUTION. If a dispute arises as to any TSA Monthly Invoice, the Service Coordinators shall use their commercially reasonable efforts to reach an agreement with respect to such disputed amount. If the Service Coordinators are unable to agree upon a resolution of the dispute within ten (10) Business Days after the Service Coordinators have conferred, then the dispute shall be settled in accordance with Section 11(a) hereof. (e) SALES TAXES. All consideration under this Agreement, is exclusive of any sales, transfer, value-added, goods or services tax or similar gross receipts based tax (including any such taxes that are required to be withheld, but excluding all other taxes including taxes based upon or calculated by reference to income, receipts or capital) imposed against or on services provided ("Sales Taxes") by the Service Provider hereunder and such Sales Taxes will be added to the consideration where applicable. Such Sales Taxes shall be separately stated on the relevant invoice to the Service Recipient. All taxable goods and services for which Service Recipient is compensating, or reimbursing, Service Provider shall be set out separately from non-taxable goods and services, if practicable. The Service Recipient shall be responsible for any such Sales Taxes and shall either (i) remit such Sales Taxes to the Service Provider (and the Service Provider shall remit the such amounts to the applicable taxing authority) or (ii) provide the Service Provider with a certificate or other acceptable proof evidencing an exemption from liability for such Sales Taxes. In the event Service Provider fails timely to invoice Sales Taxes on taxable goods or services covered by this Agreement, Service Provider shall notify Service Recipient in a timely manner and Service Recipient shall remit such Sales Taxes to Service Provider, provided, however, that Service Recipient shall not be responsible for the payment of any additions to such Sales Taxes, including penalties and interest imposed due to a failure by Service Provider to remit or cause to be remitted such Sales Taxes in a timely manner to the appropriate taxing authority, unless such failure relates to the failure of the Service Recipient to pay to Service Provider the amount of the Sales Taxes properly invoice in accordance with the terms herein. (f) NO OFFSET. In no event shall a Service Recipient offset any amounts due hereunder by amounts owed to it hereunder as a Service Provider. - 16 - (g) TSA RECORDS. The Service Provider (i) shall maintain, and cause its Subcontractors to maintain, true and correct records of all receipts, invoices, reports and other documents relating to the TSA Services rendered hereunder (the "TSA Records") in accordance with its standard accounting and document retention practices and procedures, which practices and procedures are employed by the Service Provider in its provision of TSA Services or in its provision of the same services to Affiliates of Service Provider and (ii) on an annual basis timely provide any documentation reasonably required by auditors or required by Law to the extent applicable to the TSA Services provided. The Service Provider shall also provide on an annual basis any additional documentation reasonably requested by Service Recipient to the extent applicable to the TSA Services and any activities performed pursuant to Section 2(j) hereof; provided, however, that Service Recipient shall pay any third party costs incurred by Service Provider in connection with the provision of such additional documentation; provided further, that Service Recipient shall only pay a pro rata share of such third party costs if Service Provider or any Affiliate of Service Provider also requested or uses such additional documentation at the same time as Service Recipient. Service Provider shall provide, or cause to be provided, to the Service Recipient reasonable access to the Service Provider's TSA Records, consistent with Section 6.4(e) and Section 6.4(f) of the Acquisition Agreement. (h) AUDIT. (i) Audit of Parent by Purchaser. (A) Subject to any applicable Law, Parent shall permit Purchaser and its representatives to have reasonable access and support, subject to all terms and conditions of this Agreement (including confidentiality) during regular business hours and upon reasonable advance notice, to Parent's facilities, relevant personnel and records (or the relevant facilities, personnel and records of its Affiliates) concerning the TSA Services, solely to verify the existence, adequacy, testing and performance of Parent's controls for the processes relating to the TSA Services; such verification shall be conducted utilizing as a base the Parent Self-Assessment and Operational Risk framework in existence as of the Effective Date. (B) Within thirty (30) days of the Effective Date, Parent shall provide to Purchaser copies of the Self Assessment Control Sheets or other equivalent documentation for the processes that relate to each Parent Service ("SACS") as of March 31, 2005, and Parent shall identify to Purchaser each Parent Service(s) to which the applicable SACS relate. Within fifteen (15) days following Purchaser's receipt of the foregoing SACS, Purchaser shall provide to Parent a list of those SACS for which Purchaser requires further testing in order to attest to the adequacy of its internal controls (the "Additional Audit List"). (C) Within sixty (60) days of the Effective Date, Parent shall deliver to Purchaser copies of the SACS as of June 30, 2005. Within thirty (30) days following the end of each subsequent quarter, Parent shall deliver to Purchaser copies of the SACS prepared as of the end of such quarter. In each case, Parent shall identify to Purchaser each Parent Service(s) to which the - 17 - applicable SACS relate. Within fifteen (15) days following receipt of each such SACS, Purchaser shall provide Parent with an Additional Audit List detailing: (I) tests performed by Parent during the immediately prior quarter that were not conducted in accordance with the relevant SACS, and (II) changes in Parent's testing standards enacted during the prior quarter, in each case, for which Purchaser requires further testing in order to attest to the adequacy of its internal controls. (D) Within fifteen (15) days following the delivery of an Additional Audit List, Parent shall: (I) identify for Purchaser those requirements of the Additional Audit List that Parent will perform that do not require discussion between the parties before such tests can be performed or enacted; (II) inform Purchaser of those requirements of the Additional Audit List that will require additional discussion between the parties before such tests can be performed or enacted; and (III) inform Purchaser of the requirements of the applicable Additional Audit List for which Parent requires validation from Purchaser's external auditors. Purchaser shall promptly provide relevant documentation, if any. (E) Promptly following the receipt of any applicable documentation from Purchaser's external auditors pursuant to subsection (D), above, Parent and Purchaser (including any relevant external advisors) shall meet to review and discuss the Additional Audit List, and to reasonably negotiate a plan to address the Additional Audit List. All steps necessary to implement such plan will be at Purchaser's cost. With respect to cases where Parent and Purchaser cannot (using commercially reasonable efforts) agree whether a requirement of the Additional Audit List, or a proposed solution to a requirement, is reasonable then, upon Purchaser's request and at Purchaser's cost, Parent shall provide Purchaser with a SAS-70 Type II report that addresses the relevant requirements of the Additional Audit List. Each time period set forth in subsections (B), (C) and (D), above, may be extended upon mutual agreement of the Service Coordinators. (ii) Audit of Purchaser by Parent. Subject to any applicable Law, Purchaser shall permit the Parent and its representatives to have reasonable access, subject to all terms and conditions of this Agreement (including confidentiality) during regular business hours and upon reasonable advance notice, to Purchaser's facilities, relevant personnel and records (or the relevant facilities, personnel and records of its Affiliates) concerning the TSA Services, solely to verify the existence, adequacy, testing and performance of Purchaser's internal controls for the processes relating to the preparation of financial results. (each of (i) and (ii) above, a "TSA Audit") (iii) If a TSA Audit reveals a deficiency that is material as applied to Service Recipient, its Affiliates or joint ventures in a given country, but is not material as - 18 - applied to Service Provider, the parties shall promptly meet to develop a mutually-agreeable commercially reasonable plan to correct such deficiency. Once such plan is agreed, its implementation shall be a Required Additional Service, and shall receive Service Provider's highest priority under this Agreement. All costs of the foregoing activities shall be paid by the Service Recipient. (iv) If a TSA Audit reveals a deficiency that is material as applied to Service Provider and Service Recipient, Service Recipient shall pay its share of any costs associated with such the correction of such deficiency, calculated using the same methodology used to determine the costs paid by the Service Provider's other Affiliates to which such deficiency applies. The development and implementation of the plan to correct such deficiency will be addressed by Service Provider as a matter of high priority. SECTION 7. TERM AND TERMINATION. (a) PERIOD OF SERVICES. (i) Except with regard to TPC Services and Additional Services, the Service Provider hereby agrees to provide or cause to be provided the TSA Services for the period of time beginning on the Effective Date and ending, in the case of TSA Services being provided to a location within the United States, twenty-four (24) months thereafter (the "U.S. Term"), and, in the case of TSA Services being provided to a location outside of the United States, thirty (30) months thereafter (the "International Term" and, together with the U.S. Term, the "Term"), unless such service is earlier terminated as provided herein. Unless Purchaser and Parent mutually agree otherwise, the Service Provider shall have no obligation to provide, and the Service Recipient shall have no right to receive, the TSA Services beyond the expiration of the Term, except or to the extent that (A) Purchaser or Parent becomes aware, at any time during transition planning prior to the Effective Date of any material issues not known to Purchaser prior to the execution of the Acquisition Agreement that would materially delay the transition, integration or migration of the TSA Services outside the United States (and in Parent's case, Parent shall promptly disclose such material issues to Purchaser), in which case the term for TSA Services outside the United States shall be extended from thirty (30) months to forty-two (42) months or (B) Parent's failure to meet the standards of Section 4 hereof or to timely perform any TSA Service or any activities pursuant to Section 2(j) hereof materially delays the migration, integration or transition in which case the relevant Term shall be extended to account for such delay. (ii) The Term of any Additional Services shall be determined on a case-by-case basis as mutually agreed by Parent and Purchaser. (iii) Each TPC Service shall continue until the earliest of the following dates to occur: (A) the time period required under the TPC TSA for the provision of such TPC Services, (B) termination of such service in accordance with the TPC TSA, (C) termination of the TPC TSA in accordance its terms, or (D) termination of this Agreement. - 19 - (b) TERMINATION OF INDIVIDUAL TRANSITION SERVICES. Any individual TSA Service (including any TSA Service that is part of a consolidated description on Schedule 2(a) hereof) may be terminated by Service Recipient in accordance with this Section 7(b) or by either party in accordance with Section 7(c) hereof. The termination of any individual TSA Service in accordance with this Section 7(b) shall not terminate any other TSA Service or terminate this Agreement with respect to any other TSA Service or any other service or activity provided hereunder. Service Recipient may terminate a TSA Service, for any reason or no reason, and shall terminate a TSA Service for which it has completed the transition or replacement thereof, by providing to Service Provider an Operations Notice describing the TSA Service to be terminated and setting forth the termination date, not fewer than thirty (30) days prior to the proposed termination date (unless such TSA Service is an Additional Service and the parties have explicitly provided for an alternate means of termination, in which case such alternate means shall be followed). Upon such termination date, charges for such terminated TSA Service shall cease to accrue, but the Service Recipient shall continue to be responsible for the costs of any other TSA Services being provided hereunder. It is expressly understood that (i) so long as the required Operations Notice is given in accordance with this Section 7(b), Purchaser shall have no obligation to pay for any "early-termination" or "kill fee" costs, or penalties for volume decreases or other expenses payable to third parties (including Subcontractors) or incurred internally by Parent as a result of the termination of any TSA Service in accordance with the terms of this Section 7(b), and (ii) the termination of an individual TSA Service for which Schedule 6(a)(i) sets forth a fixed cost shall not relieve the Service Recipient of its responsibility for any remaining fixed costs calculated in accordance with Schedule 6(a)(i). (c) TERMINATION OF AGREEMENT. (i) Either party (in this context, a "Terminating Party") may terminate this Agreement (or with respect to Section 7(c)(i)(A) hereof, an individual TSA Service(s)) with immediate effect by providing an Administration Notice and an Operations Notice to the other party (in this context, the "Non-Terminating Party") upon or at any time after the occurrence of any of the following events: (A) The Non-Terminating Party is in default of any of its material obligations under this Agreement or of any of its material obligations with respect to an individual TSA Service; (B) The Non-Terminating Party shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; and -20- (C) An involuntary case or other proceeding shall be commenced against the Non-Terminating Party seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) days, or an order for relief shall be entered against the Non-Terminating Party. (d) EFFECT OF TERMINATION; RETURN OF MATERIALS. As promptly as practicable upon termination of this Agreement, or, if applicable, upon earlier termination of any particular TSA Service or completion of any particular activity pursuant to Section 2(j) hereof (i) each party will return to the other party all materials and property in its possession or control (or the possession or control of an Affiliate) which is owned by or licensed to such other party or its Affiliates, and (ii) Service Provider shall promptly archive and/or purge from its Systems in accordance with its then-current Policies and procedures (and shall purge or cause to be purged from the systems of Service Provider's Subcontractors, as the case may be) all Service Recipient Materials that are no longer needed for the performance of other TSA Services under this Agreement or activities pursuant to Section 2(j) hereof and shall deliver such Service Recipient Materials and a true, complete and current copy of the applicable Service Provider Licensed Materials to Service Recipient in accordance with Section 13(e) hereof. SECTION 8. TRANSITION PROJECT MANAGEMENT. (a) SERVICE COORDINATOR. Each of the Parent and the Purchaser shall appoint a representative to act as the primary contact person with respect to the performance of the TSA Services (each, a "Service Coordinator"). The initial Service Coordinators, including relevant contact information (including business addresses, email addresses, telephone numbers and facsimile numbers), are set forth on Schedule 8(a). Schedule 8(a) shall also include the name and relevant contact information for each Service Coordinator's backup, who shall perform the Service Coordinator's duties if the Service Coordinator is not available. Each party may replace its Service Coordinator (or the backup Service Coordinator) with an employee or officer with comparable knowledge, expertise and decision-making authority after reasonable consultation with the other party as to the proposed replacement by providing an Operations Notice, and such change shall be effective upon the other party's receipt of such Operations Notice. (b) TSA CONTACTS. Each of the Parent and the Purchaser shall designate one financial and one legal contact who have knowledge of this Agreement to assist the applicable Service Coordinator. Contact information for each party's initial TSA Contacts (including business addresses, email addresses, telephone numbers and facsimile numbers), are set forth on Schedule 8(b). Each party may replace its TSA Contacts with an employee or officer with comparable knowledge, expertise and decision-making authority after reasonable consultation with the other party as to the proposed replacement by providing an Operations Notice, and such change shall be effective upon the other party's receipt of such Operations Notice. SECTION 9. RELATIONSHIP BETWEEN THE PARTIES. The relationship established between the parties under this Agreement shall be that of independent contractors, and nothing in this -21- Agreement shall cause the relationship between the Service Provider and the Service Recipient to be deemed to constitute an agency, partnership or joint venture. The terms of this Agreement are not intended to constitute a joint employer for any purpose between any of the parties and their Affiliates. Each of the parties agrees that the provisions of this Agreement as a whole are not intended to, and do not, constitute control of the other party (or any Affiliates thereof) or provide it with the ability to control such other party (or any Affiliates thereof), and each party hereto expressly disclaims any right or power under this Agreement to exercise any power whatsoever over the management or policies of the other (or any Affiliates thereof). Except as otherwise expressly set forth herein, neither the Service Provider nor the Service Recipient shall incur any liability with respect to the financial obligations of the other party under this Agreement. Each party shall be solely responsible under this Agreement for staffing, instructing and compensating its personnel who perform such TSA Services. SECTION 10. CHANGES. (a) CHANGES IN SERVICES. Each Service Provider may change (x) its Policies and procedures or the Policies and procedures of those of its Affiliates that are providing TSA Services hereunder, (y) Subcontractors, or (z) the location from which any TSA Service is provided at any time (each, a "Change") subject to the following conditions: (i) No Change shall affect the level or quality or, except as expressly provided herein, the cost to Service Recipient of performance of the TSA Services provided by such Service Provider. (ii) To the extent that a Change was required in order to comply with a change in Law, a new legal or regulatory issue or to respond to a security threat, Service Recipient shall pay its share of any costs associated with such Change, calculated using the same methodology used to determine the costs paid by the Service Provider's other Affiliates that are recipients of such service. If the Acquired Subsidiaries, their Affiliates or the Joint Ventures are the Service Recipients of such TSA Services, the costs associated with such increase shall be at the same discounted rates as were applied to charges payable by the Acquired Subsidiaries as of the date of the Effective Date. Notwithstanding the foregoing, at Service Recipient's request the parties will use commercially reasonable efforts to find ways to isolate the Service Recipient, at Service Recipient's expense, from any such Change and allow the Service Recipient to opt out from such Change; provided, that the Service Provider does not incur any costs in connection therewith. (iii) To the extent that a Change in Subcontractor or a Change in the location from which any TSA Service is provided will affect the Service Recipient solely or primarily, the Service Provider shall provide the Service Recipient with a reasonable prior Operations Notice of such Change. (iv) Service Provider shall provide notice of changes to its Policies and procedures to Service Recipient in the same manner as Service Provider provides notice of such changes to applicable Affiliates. -22- (b) CHANGES IN SECURITY. Other than a Change under Section 10(a)(ii), any Service Provider may take physical or information security measures that affect the manner in which TSA Services are provided, so long as (i) the substance, service, security and quality levels of any affected TSA Services are not reduced below the levels in effect prior to the Effective Date, and (ii) the costs payable by the Service Recipient remain the same or less, and (III) the Service Recipient is promptly notified in writing of such measures and the anticipated affect on the TSA Services. (c) CHANGES IN FEES. The parties acknowledge that the Fees for the TSA Services are based on current volumes plus organic growth. In the event a Service Recipient expands its business through acquisition or other similar means (e.g., excluding organic growth), the Service Provider shall give good faith consideration to providing the TSA Services to the acquired business, except that any TSA Service that increases in volume as a result of the Copeland Acquisition shall be provided by Service Provider at such increased volume and the Fees for such increased volume shall be calculated in accordance with the methodology for accounting for organic growth of such TSA Service. SECTION 11. DISPUTE RESOLUTION. (a) RESOLUTION BY THE SERVICE COORDINATORS. If any dispute shall arise between the parties under this Agreement (excluding any dispute regarding the amount of any TSA Monthly Invoice, as to which the provisions of Section 6(d) hereof shall apply), whether such dispute arises before or after the termination of this Agreement, such dispute shall be submitted for resolution by the Service Coordinators in accordance with this Section 11. In the event of such a dispute, the party raising the problem shall submit an Operations Notice thereof in writing to the Service Coordinators. (b) DISPUTE ESCALATION. (i) If the Service Coordinators are unable to resolve a dispute within five (5) Business Days after the dispute has been referred to them pursuant to Section 11(a) (or such other time period as the Service Coordinators may agree upon or if the terms of this Agreement otherwise provide), the dispute shall be referred to referred to a senior executive of each of Parent and the Purchaser (each, a "Senior Executive"); each party's initial Senior Executives, including relevant contact information, are set forth on Schedule 11(b)(i). Each party may replace its Senior Executive with an employee or officer with comparable knowledge, expertise and decision-making authority by providing an Administration Notice and an Operations Notice, and such change shall be effective upon the other party's receipt of such Administration Notice and Operations Notice. (ii) If the Senior Executives are unable to resolve a dispute within ten (10) Business Days after the dispute has been referred to them pursuant to Section 11(b)(i) (or such other time period as the Senior Executives may agree upon), the dispute shall be referred to a committee (the "Executive Committee"), which shall include at least one member of the senior management of each of Parent and Purchaser; each party's initial members of the Executive Committee, including relevant contact information, are -23- set forth on Schedule 11(b)(i). Each party may replace one or more of its Executive Committee members with an employee or officer with comparable knowledge, expertise and decision-making authority by providing an Administration Notice and an Operations Notice, and such change shall be effective upon the other party's receipt of such Administration Notice and Operations Notice. (iii) If the Executive Committee is unable to resolve the dispute within ten (10) Business Days after the dispute has been referred to it pursuant to Section 11(b)(ii) (or such other time period as the Executive Committee may agree upon) using good faith commercially reasonable efforts to resolve such disputes, either party shall be free to pursue its rights and remedies hereunder in any competent court permitted herein. Notwithstanding the foregoing, in the event of a dispute concerning significant Service Shortfalls, such dispute will be resolved pursuant to the escalation schedule set forth in Schedule 11(b)(ii) hereto. (c) SPECIFIC PERFORMANCE AND OTHER EQUITABLE RELIEF. The parties hereby expressly recognize and acknowledge that immediate, extensive and irreparable damage would result, no adequate remedy at law would exist and damages would be difficult to determine if any TSA Service, any knowledge transfer activity to be provided pursuant to Section 2(a)(iv) hereof, or any activity to be performed pursuant to Section 2(j) hereof is not performed for which Service Provider is the only reasonably available source of knowledge or expertise relating to such TSA Service, knowledge transfer activity to be provided pursuant to Section 2(a)(iv) hereof, or any activity to be performed pursuant to Section 2(j) hereof; provided that the term "reasonably available" in this Section 11(c) shall not apply to the costs associated with an alternate service provider, but shall otherwise apply including as to timing, quality of services and scope of services. Therefore, in addition to, and not in limitation of, any other remedy available to either party, Service Recipient shall be entitled to specific performance of only such TSA Services, knowledge transfer activities, or separation or segregation activities that meet the foregoing criteria and immediate injunctive relief, without the necessity of (i) proving the inadequacy of money damages as a remedy or (ii) posting a bond. Such remedies, and any and all other remedies provided for in this Agreement, shall, however, be cumulative in nature and not exclusive and shall be in addition to any other remedies whatsoever which either party may otherwise have. Notwithstanding anything to the contrary in this Agreement, without first complying with Section 11(a) hereof or Section 11(b) hereof, either party may seek immediate equitable relief in any competent court permitted under this Agreement for purposes of limiting or otherwise resolving a suspected (A) breach of a duty of confidentiality hereunder, (B) breach of security or (C) infringement of intellectual property rights by or through the other party (and may simultaneously bring any non-equitable but pendent claims that may otherwise be lost for failure to plead them at such time). (d) GROUND FOR DISMISSAL. Except as set forth in the final sentence of Section 11(c) hereof, a party's failure to comply with the requirements of Section 11(a) or Section 11(b) hereof applicable under the circumstances before commencing a legal proceeding shall constitute cause for the dismissal without prejudice of such proceeding. SECTION 12. INDEMNIFICATION. -24- (a) INDEMNIFICATION BY SERVICE PROVIDER. Each party, as a Service Provider (in this context, an "Service Provider Indemnifying Party" and such party being an Indemnifying Party) agrees to indemnify and hold harmless the other party, each of its Affiliates, each of its Joint Ventures (where Purchaser is the party being indemnified and held harmless), and its and their respective officers, directors, employees, agents and representatives (each, a "Service Recipient Indemnified Party" and such party being an Indemnified Party), from any and all Losses to the extent arising out of or caused by any of the following: (i) any material breach by the Service Provider Indemnifying Party of any obligation set forth in this Agreement or in any certificate or other document delivered pursuant hereto; (ii) so long as the applicable TSA Service has not been modified or altered by Service Recipient (unless Service Provider (A) directed Service Recipient to perform the modification or alteration or (B) was aware that Service Recipient's modification or alteration would infringe any Intellectual Property right of any third party at or prior to the time such modification or alteration was made and did not inform Service Recipient of such infringement at or prior to the time such modification or alteration was made) infringement of any Intellectual Property right of any third party claimed or threatened against Service Recipient or Service Provider during the first eighteen (18) months of the Term; (iii) the Service Provider Indemnifying Party's failure to cooperate to obtain a consent from a third party after the Effective Date; (iv) with respect to Parent, Parent's failure to obtain a consent from a third party whose consent was needed in order for Service Provider to provide, or Service Recipient to receive, a TSA Service pursuant hereto and which Parent failed to identify within ninety (90) days of the execution of the Acquisition Agreement as a third party from which a consent was needed; (v) failure to obtain consents and approvals from any Governmental Authority; (vi) the Service Provider Indemnifying Party's material failure to comply with its privacy and security Policies or Law; (vii) the Service Provider Indemnifying Party's breach of its confidentiality obligations hereunder; (viii) the Service Provider Indemnifying Party's gross negligence or willful misconduct; and (ix) a failure on or after the Effective Date to separate and segregate the Acquired Subsidiaries' operations and data from the operations and data of Parent and its Affiliates that is such party's fault, unless otherwise addressed under Section 2(j)(i)(B) hereof. (b) INDEMNIFICATION BY SERVICE RECIPIENT. Each party, as a Service Recipient (in this context, a "Service Recipient Indemnifying Party" and such party being an Indemnifying Party) agrees to indemnify and hold harmless the Service Provider and its and their the respective officers, directors, employees, agents and representatives (each, a "Service Provider Indemnified Party," and such party being an Indemnified Party), from any and all Losses to the extent arising out of or caused by any of the following: (i) the Service Recipient Indemnifying Party's willful misconduct or gross negligence; (ii) the acts or omissions of the Service Recipient Indemnifying Party except for such acts or omissions (A) required hereunder or (B) taken at the direction of the Service Provider Indemnified Party; (iii) the Service Recipient Indemnifying Party's material failure to comply with Law; (iv) acts taken by the Service Provider Indemnified Party at the Service Recipient Indemnifying Party's direction; (v) if the applicable TSA Service has been modified or altered by the Service Recipient Indemnifying Party (unless Service Provider (A) directed Service Recipient to perform the modification or alteration or (B) was aware that Service Recipient's modification or alteration would infringe any Intellectual Property right of -25- any third party at or prior to the time such modification or alteration was made and did not inform Service Recipient of such infringement at or prior to the time such modification or alteration was made), infringement of any Intellectual Property right of any third party during the first eighteen (18) months of the Term; (vi) the Service Recipient Indemnifying Party's failure to cooperate to obtain a consent from a third party; and (vii) a failure on or after the Effective Date to separate and segregate the Acquired Subsidiaries' operations and data from the operations and data of Parent and its Affiliates that is such party's fault, unless otherwise addressed under Section 2(j)(i)(B) hereof. (c) LIMITATION ON LIABILITY. Each party's liability (and any liability of a party's Affiliates) under this Agreement shall be limited to the greater of: (i) the aggregate value of Fees received by such party as Service Provider from Service Recipient or (ii) seven million five hundred thousand dollars ($7,500,000), but no such limitation shall apply to the indemnities set forth in Section 12(a) hereof or to consequential damages permitted pursuant to Section 12(f) hereof. (d) EXCLUSIONS. Notwithstanding anything contained in this Agreement to the contrary, in no event shall any Indemnifying Party be obligated under this Section 12 to indemnify an Indemnified Party otherwise entitled to indemnity hereunder in respect of any Losses to the extent that such Losses result from (i) the Indemnified Party's willful misconduct or gross negligence, (ii) the acts or omissions of the Indemnified Party except for such acts or omissions (A) required hereunder or (B) taken at the direction of the Indemnifying Party, (iii) violation of Law by the Indemnified Party, or (iv) acts taken by the Indemnifying Party at the Indemnified Party's direction that could not have been refused or performed in a manner that avoided the injury which is the subject of the indemnification claim and where the Indemnified Party knew or should have known such act would cause the injury that is the subject of the indemnification claim. (e) THIRD PARTY CLAIMS; PROCEDURES. Upon receipt by an Indemnified Party of a notice of any action, suit, proceedings, claim, demand or assessment made or brought by an unaffiliated third party (a "Third Party Claim") with respect to a matter for which such Indemnified Party is indemnified under this Section 12 which has or is expected to give rise to a claim for Losses, the Indemnified Party shall timely provide the Indemnifying Party with an Administration Notice, indicating the nature of such Third Party Claim and the basis therefor; provided, however, that any delay or failure by the Indemnified Party to provide an Administration Notice to the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is prejudiced by reason of such delay or failure. Upon receipt of an Administration Notice of a Third Party Claim from an Indemnified Party, the Indemnifying Party shall timely elect, by providing an Administration Notice to the Indemnified Party, at the Indemnifying Party's option, to assume and control the defense thereof, at its own expense and by its own counsel. If the Indemnifying Party shall undertake to compromise or settle any such Third Party Claim, it shall promptly so notify the Indemnified Party, and the Indemnified Party shall cooperate fully with the Indemnifying Party and its counsel in the compromise or settlement of such Third Party Claim. Notwithstanding the foregoing, the Indemnifying Party shall not compromise or settle, or admit any liability with respect to, any such Third Party Claim, without the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld or delayed), unless the relief consists solely of money Losses to be paid by the Indemnifying Party and includes a provision whereby the plaintiff or claimant in the matter releases each relevant Indemnified Party from all liability with respect thereto. Notwithstanding an election to assume the defense of such action or proceeding, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action or -26- proceeding, and the Indemnifying Party shall bear the reasonable fees, costs and expenses of such separate counsel if the (A) Indemnified Party shall have determined in good faith that an actual or potential conflict of interest makes representation by the same counsel or the counsel selected by the Indemnifying Party inappropriate or (B) Indemnifying Party shall have authorized the Indemnified Party to employ separate counsel at the Indemnifying Party's expense. In any event, the Indemnified Party and Indemnifying Party and their counsel shall cooperate in the defense of any Third Party Claim subject to this Section 12, including by providing the other with (i) information regarding all developments relating to any such Third Party Claims, and (ii) provide copies of all relevant correspondence and documentation relating thereto. All costs and expenses incurred in connection with the Indemnified Party's cooperation shall be borne by the Indemnifying Party. In any event, the Indemnified Party shall have the right at its own expense to participate in the defense of such asserted liability. If the Indemnifying Party receiving such Administration Notice of a Third Party Claim does not elect to defend such Third Party Claim or does not defend such Third Party Claim in good faith, the Indemnified Party shall have the right, in addition to any other right or remedy it may have hereunder, at the Indemnifying Party's expense, to defend such Third Party Claim; provided, however, that the Indemnified Party shall not settle, compromise or discharge, or admit any liability with respect to, any such Third Party Claim without the written consent of the Indemnifying Party (which consent will not be unreasonably withheld or delayed). (f) CONSEQUENTIAL DAMAGES. Neither party, as Service Provider, shall be liable or responsible to the other party as Service Recipient or, through Service Recipient, to any Service Recipient Indemnified Party, for indirect, special, punitive, incidental, consequential or multiplied damages; provided, that a Service Provider shall be liable for consequential damages solely to the extent arising out of such Service Provider's willful misconduct. (g) OTHER LOSSES. For all claims other than Third Party Claims for which an Indemnified Party is indemnified under this Section 12, the parties shall resolve the claim in accordance with Section 11 hereof. (h) EXCLUSIVE REMEDY. Each party hereto expressly acknowledges that, other than as set forth herein, the provisions of this Section 12 shall be the sole and exclusive remedy for all monetary claims resulting from any breach by the other party of any covenant set forth in this Agreement, except that the remedies of injunction and specific performance shall remain available to the parties hereto. (i) DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THE ACQUISITION AGREEMENT OR THE RELATED AGREEMENTS, NEITHER PARTY MAKES, AND EACH PARTY EXPRESSLY DISCLAIMS, ANY AND ALL REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE SERVICES OR OTHER ACTIVITIES TO BE PROVIDED OR PERFORMED UNDER THIS AGREEMENT, INCLUDING WARRANTIES WITH RESPECT TO MERCHANTABILITY, OR SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT OF ANY SOFTWARE OR HARDWARE PROVIDED HEREUNDER, AND ANY WARRANTIES ARISING FROM COURSE OF DEALING, COURSE OF -27- PERFORMANCE OR TRADE USAGE. NOTHING IN THIS AGREEMENT IS INTENDED TO LIMIT ANY RIGHTS OR REMEDIES OF EITHER PARTY UNDER THE ACQUISITION AGREEMENT OR THE RELATED AGREEMENTS OR LIMIT ANY INDEMNITY HEREUNDER. SECTION 13. OWNERSHIP, LOST DATA AND SECURITY. (a) OWNERSHIP. Each Service Recipient shall be the sole and exclusive owner of all data that relates solely to, and all source code and other results and proceeds of TSA Services and Additional Services created solely for, such Service Recipient by Service Provider, and any third party materials created solely for such Service Recipient and to which Service Provider has ownership rights, excluding only Excluded Works (the "Service Recipient Materials"). The parties agree that the Service Recipient Materials shall be considered "works made for hire" (within the meaning of the United States Copyright Law) of Service Recipient and that Service Recipient shall solely and exclusively own the Service Recipient Materials in whatever stage of completion in which they may exist from time to time. In the event such Service Recipient Materials are for any reason or in any jurisdiction determined not to be "works made for hire," then the Service Provider hereby irrevocably and exclusively transfers, sells, and assigns (or shall cause its Affiliates and Subcontractors to transfer, sell and assign) to Service Recipient, its successors and assigns forever and throughout the world, all right, title and interest in the Service Recipient Materials, including all copyrights and all rights generally known as the "moral rights of authors" and Service Recipient shall solely and exclusively own the Service Recipient Materials in whatever stage of completion in which they may exist from time to time. Upon request of Service Recipient from time to time, at Service Recipient's expense, Service Provider shall promptly take such actions and execute and deliver such documents as may reasonably be necessary or appropriate to record, register, perfect or memorialize the foregoing disposition of right, title and interest in the Service Recipient Materials. (b) ONGOING DATA SEPARATION. Service Provider shall use commercially reasonable efforts to include in the Service Recipient Materials all data, source code and other results and proceeds of TSA Services and Additional Services that are necessary to the conduct of the business of the Service Recipient. (c) SERVICE PROVIDER LICENSED MATERIALS. Except as set forth in Section 13(a) hereof, Service Provider shall own all other data that relates to, and all other results and proceeds of TSA Services and Additional Services created for, such Service Recipient by or for Service Provider that relate to the business of the Service Recipient (which, together with any material produced pursuant to Section 13(d) to which Service Provider has the right to grant Service Recipient a license hereunder, are collectively the "Service Provider Licensed Materials") and hereby grants to Service Recipient a non-exclusive, worldwide, royalty-free, fully paid up, perpetual transferable license to use such Service Provider Licensed Materials, subject to any limitations on confidentiality hereunder. Except as set forth in Section 13(a) hereof, any source code created for such Service Recipient by or for Service Provider hereunder that relates to the business of the Service Recipient shall be licensed pursuant to the terms of the Licensing Agreement. -28- (d) THIRD PARTY MATERIALS. If, following the Effective Date, Service Provider enters into a new agreement with a Subcontractor that is not an Affiliate Subcontractor solely or primarily for the purpose of having such Subcontractor provide TSA Services, Service Provider shall request inclusion in such agreement of a world-wide, royalty-free, paid up, transferable and irrevocable license for Service Recipient to reproduce, prepare derivative works of, distribute, display and otherwise use work product created by such Subcontractor in Service Recipient's business and that of Service Recipient's Affiliates and Joint Ventures. (e) CONFIDENTIALITY; DELIVERY. The Service Recipient Materials shall be deemed to be Confidential Information of the Service Recipient and are not to be used by Service Provider for any purposes other than providing relevant TSA Services. During the term of this Agreement, Service Provider will timely provide Service Recipient with access to the Service Recipient Materials and the Service Provider Licensed Materials, as reasonably requested by the Service Recipient. Upon termination of any individual TSA Service hereunder, Service Provider shall promptly archive and/or purge from its (and shall cause its Affiliate Subcontractors to archive and/or purge from their) Systems in accordance with its then-current Policies and procedures (and shall use commercially reasonably efforts to purge or cause to be purged from the systems of Service Provider's Subcontractors that are not Affiliate Subcontractors, as the case may be) all Service Recipient Materials that are no longer needed for the performance of other TSA Services under this Agreement and shall deliver such Service Recipient Materials and a true, complete and current copy of the applicable Service Provider Licensed Materials to Service Recipient. Upon termination of this Agreement, Service Provider shall promptly archive and/or purge from its Systems in accordance with its then-current Policies and procedures (and shall purge or cause to be purged from the systems of Service Provider's Subcontractors, as the case may be) all remaining Service Recipient Materials in its possession and shall deliver such Service Recipient Materials and a true, complete and current copy of the remaining Service Provider Licensed Materials to Service Recipient. (f) LOST OR DESTROYED DATA. The Service Provider shall use commercially reasonable efforts to recover or recreate any data lost or destroyed in performing any TSA Services, using at least the same level of effort and services as used or caused to be used to recover or recreate lost data prior to the Effective Date, at the Service Provider's cost. (g) SECURITY. (i) The Service Recipients and Service Providers shall work together to ensure that the Service Providers are able to maintain their current level of security during the Term, and to address any new security-related issues, including compliance with Laws related to security and issues related to new technologies or threats. The Service Recipient may request additional security safeguards, which shall be provided by the Service Provider on mutually agreed upon terms, conditions and rates. The Service Provider shall promptly notify the Service Recipient of, shall communicate with Service Recipient as to progress on and actions taken in response to and shall cooperate with the Service Recipient with respect to, any security breaches and investigations. In the event of a security breach that relates solely to the TSA Services, any activities performed pursuant to Section 2(j) hereof or Service Recipient's data, Service Recipient shall, in its sole discretion, determine whether to provide notification to customers, potential -29- customers, employees and/or agents concerning a breach or potential breach of security, and Service Recipient shall determine the need for and have sole authority to initiate disclosure to appropriate Governmental Authorities in the event of a security breach unless disclosure by Service Provider is mandated by applicable Law. Prior to any such notification or disclosure, Service Recipient shall notify Service Provider of the notification or disclosure, and shall cooperate with Service Provider to consider any concerns that Service Provider may have regarding the form or content of the proposed notice or disclosures, including whether such notice or disclosure is accurate and in agreement with any permissible notices or disclosures concerning the same security breach by Service Provider or an Affiliate. In the event of a security breach that relates to both Service Provider's data, on the one hand, and to the TSA Services, any activities performed pursuant to Section 2(j) hereof or Service Recipient's data, on the other hand, Service Provider and Service Recipient shall cooperate with each other regarding the timing and manner of (i) notification to their respective customers, potential customers, employees and/or agents concerning a breach or potential breach of security, and (ii) disclosures to appropriate Governmental Authorities, in the case of both clauses (i) and (ii), subject to applicable Law. (ii) If either party, or its personnel, will be given access to the other party's computer systems or software ("Systems") in connection with the performance of the TSA Services or the separation and any activities pursuant to Section 2(j) hereof, the accessing party or its personnel, as the case may be, shall comply with all of such other party's system security Policies and procedures of which it is made aware, and will not tamper with, compromise or circumvent any security or audit measures employed by such other party. (iii) Each party shall use its commercially reasonable efforts to ensure that only those of its personnel who are specifically authorized to have access to the other party's Systems gain such access, and to prevent unauthorized access, use, destruction, alteration or loss of information contained therein, including notifying its personnel regarding the restrictions set forth in this Agreement and establishing appropriate Policies designed to effectively enforce such restrictions. If, at any time, either party determines that the other party or its personnel has sought to circumvent, or has circumvented, its system security Policies and procedures, that any unauthorized personnel of the other party has accessed its Systems or that the other party or any of its personnel has engaged in activities that may lead to the unauthorized access, use, destruction, alteration or loss of data, information or software, such party shall immediately terminate any such personnel's access to the Systems and immediately notify the other party. (iv) Each party shall access and use only those Systems, and within such Systems, only such data and information, to which it has been granted the right to access and use. Notwithstanding the foregoing, either party shall have the right to deny the personnel of the other party access to such party's Systems, after prior written notice, in the event the party reasonably believes that such personnel pose a security concern. (v) All user identification numbers and passwords of a party disclosed to the other party and any information obtained from the use of the disclosing party's -30- Systems shall be deemed Confidential Information of the disclosing party without the need for the disclosing party to specifically identify such information as such. (vi) Each party will (A) immediately notify the other party if such party has revoked access to its own Systems to any of its personnel if such personnel also has access to the other party's Systems and (B) will immediately revoke any access to the other party's Systems once such personnel no longer has a need to access the other party's Systems. SECTION 14. FORCE MAJEURE. (a) GENERAL. Subject to Section 14(b) hereof, neither party shall be liable for any failure or delay in the performance of its obligations under this Agreement to the extent such failure or delay both: (i) is caused by any of the following: acts of war, terrorism, civil riots or rebellions; quarantines, embargoes and other similar unusual governmental action; labor strikes (that are not applicable solely to such party or an Affiliate); extraordinary elements of nature or acts of God; and (ii) could not have been prevented by the non-performing party's reasonable precautions or commercially accepted processes, or could not reasonably be circumvented by the non-performing party through the use of substitute services, alternate sources, work around plans or other means by which the requirements of the Service Recipient for services substantially similar to the TSA Services hereunder would be satisfied. (b) DEFINITION. Events meeting both of the criteria set forth in Sections 14(a)(i) and 14(a)(ii) hereof are referred to individually and collectively as "Force Majeure Events." The parties expressly acknowledge that Force Majeure Events do not include vandalism, the regulatory acts of Governmental Authorities, labor strikes (that are applicable solely to such party or an Affiliate), or the non-performance by third parties or Subcontractors relied on for the delivery of the TSA Services, unless such failure or non-performance by a third party or Subcontractor is itself caused by a Force Majeure Event. (c) EXCUSE OF PERFORMANCE. Upon the occurrence of a Force Majeure Event, the non-performing party shall be excused from any further performance of the affected obligation(s) (other than payment obligations) for so long as such circumstances prevail, provided that such party continues to attempt to recommence performance to the greatest extent possible without delay. (d) DISASTER RECOVERY PLAN. Notwithstanding any other provision of this Section 14, a Force Majeure Event that results in failure or substantial delay of the performance by the Service Provider of its obligations under this Agreement shall obligate the Service Provider, if appropriate, to implement its disaster recovery plan within the time periods described therein. -31- (e) DISASTER RECOVERY TESTS. The Service Recipient may participate in the Service Provider's tests of the disaster recovery services applicable to the TSA Services provided by or on behalf of the Service Provider (which disaster recovery services are understood to include the separation and segregation activities performed pursuant to Section 2(j) hereof); provided, that the Service Provider shall have sole control of all such tests. If the Service Recipient's method of doing business requires additional or different disaster recovery services, the Service Provider shall provide such additional or different disaster recovery services if commercially and technologically feasible, and the parties shall determine in good faith the applicable pricing. (f) TERMINATION UPON FORCE MAJEURE. If a Force Majeure Event causes a material failure or delay in the performance of any TSA Services or separation and segregation activities to be performed pursuant to Section 2(j) hereof for more than three (3) consecutive Business Days, the Service Recipient may, at its option, immediately terminate this Agreement without liability to Service Provider, other than liability for payment of unpaid invoices or for services previously rendered. SECTION 15. SURVIVAL. The provisions of Section 2(a)(iv) (Knowledge Transfer), Section 6(b)(i) (Limitations on Consideration), Section 6(d) (Fee Dispute Resolution), Section 6(e) (Taxes), Section 6(g) (TSA Records), Section 7(b) (Termination of Individual Transition Services), Section 7(c) (Termination of Agreement), Section 7(d) (Effect of Termination; Return of Materials), Section 9 (Relationship between the Parties), Section 11 (Dispute Resolution), Section 12 (Indemnification), Section 13(a) (Ownership), 13(c) (Service Provider Licensed Materials), this Section 15 (Survival), Section 16 (Notices), Section 17 (Successors and Assigns; No Third Party Beneficiaries), Section 19 (Entire Agreement), Section 20 (Amendment, Modification and Waiver), Section 21 (Severability), Section 22 (Governing Law), Section 23 (Jurisdiction; Venue; Consent to Service of Process), Section 24 (Waiver of Jury Trial) and Section 25 (Confidentiality) hereof shall survive the termination or expiration of this Agreement. SECTION 16. NOTICES. All notices, demands and other communications required or permitted to be given to either party under this Agreement are characterized herein as "Operations Notice" or "Administration Notice" and are defined by and differ only in the persons designated to receive them. In each case, such notice, demand or other communication shall be in writing, and shall be deemed to have been duly given when delivered by hand, courier or overnight delivery service or, if mailed, two (2) Business Days after deposit in the mail and sent certified or registered mail, return receipt requested and with first-class postage prepaid, or in the case of facsimile notice, when sent and transmission is confirmed, and, regardless of method, addressed to the party at its address or facsimile number set forth below (or at such other address or facsimile number as the party shall furnish the other parties in accordance with this Section) and, in the case of Parent, also included in an email transmission:
FOR ADMINISTRATION NOTICE FOR OPERATIONS NOTICE If to Parent: Citigroup Inc. 909 Third Avenue, 8th Floor New York, New York 10022 Parent's Service Coordinator
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FOR ADMINISTRATION NOTICE FOR OPERATIONS NOTICE Attn: Bradley Tessler (and backup Service Coordinator) at Facsimile: 212-793-0090 the addresses therefor set forth in Email: tesslerb@citigroup.com Schedule 8(a), as may be amended from time to time. With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036-6522 Attn: Stuart D. Levi, Esq. Facsimile: (212) 735-2000 If to Purchaser: MetLife, Inc. To Purchaser's Service Coordinator 2701 Queens Blvd. North (and backup Service Coordinator) at Long Island City, New York 11101 the addresses therefor set forth in Attn: James L. Lipscomb, Esq. Schedule 8(a), as may be amended General Counsel from time to time. Facsimile: (212) 252-7288 With a copy to: LeBoeuf, Lamb, Greene & MacRae, L.L.P. 125 West 55th Street New York, New York 10019 Attn: Alexander M. Dye, Esq. Facsimile: (212) 424-8500
SECTION 17. SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES. Subject to the terms of this Section 17, this Agreement and all its provisions shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. Nothing in this Agreement, whether expressed or implied, will confer on any Person, other than the parties or their respective permitted successors and assigns, any rights, remedies or liabilities; provided that the provisions of Section 12(a) hereof will inure to the benefit of each Service Recipient Indemnified Party and the provisions of Section 12(b) hereof will inure to the benefit of each Service Provider Indemnified Party. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party (which consent may not be - 33 - unreasonably withheld) and any purported assignment without such consent shall be void; provided that upon prior Administration Notice to Service Provider, Service Recipient may, without the consent of Service Provider, assign any or all of its rights, but not its obligations hereunder, to any of its Affiliates (or in the case of Purchaser, to any of its Joint Ventures); provided further, that notwithstanding any provision of this Agreement, in the event a party shall merge or consolidate with another Person or enter into a business combination with a third party: (x) if such merger, consolidation or business combination affects this Agreement, such merger, consolidation or business combination shall be deemed to be an assignment and, accordingly, the consent of the other party shall be required hereunder (such consent not to be unreasonably withheld), and (y) if such merger, consolidation or business combination does not affect this Agreement, such merger, consolidation or business combination shall not be deemed to be an assignment and, accordingly, no consent of the other party shall be required hereunder. SECTION 18. COUNTERPARTS. This Agreement may be executed by the parties in multiple counterparts which may be delivered by facsimile transmission. Each counterpart when so executed and delivered shall be deemed an original, and all such counterparts taken together shall constitute one and the same instrument. SECTION 19. ENTIRE AGREEMENT. (a) AGREEMENT. This Agreement, together with the Acquisition Agreement, the Related Agreements and the Confidentiality Agreement and all annexes, schedules and exhibits hereto and thereto, embody the entire agreement of the parties with respect to the subject matter hereof and supersede all prior agreements with respect thereto. All annexes, schedules and exhibits referenced in this Agreement (or in any annex, schedule or exhibit hereto) shall be deemed incorporated into and shall become part of this Agreement. The parties intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Agreement. (b) CAPTIONS. The captions of this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. SECTION 20. AMENDMENT, MODIFICATION AND WAIVER. No amendment to this Agreement shall be effective unless it shall be in writing and signed by each party. Any failure of a party to comply with any obligation, covenant, agreement or condition contained in this Agreement may be waived by the party entitled to the benefits thereof only by a written instrument duly executed and delivered by the party granting such waiver, 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 subsequent or other failure of compliance. SECTION 21. SEVERABILITY. If any provision of this Agreement or the application of any such provision is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or invalidate or render unenforceable such - 34 - provision in any other jurisdiction. To the extent permitted by applicable Law, the parties waive any provision of Law that renders any provision of this Agreement invalid, illegal or unenforceable in any respect. The parties shall, to the extent lawful and practicable, use their commercially reasonable efforts to enter into arrangements to reinstate the intended benefits, net of the intended burdens, of any such provision held invalid, illegal or unenforceable. SECTION 22. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws principles of such State. SECTION 23. JURISDICTION; VENUE; CONSENT TO SERVICE OF PROCESS. (a) EXCLUSIVE JURISDICTION; FINAL JUDGMENTS. Each party irrevocably and unconditionally submits to the non exclusive jurisdiction of the United States District Court for the Southern District of New York or, if such court will not accept jurisdiction, the Supreme Court of the State of New York or any court of competent civil jurisdiction sitting in New York County, New York. In any action, suit or other proceeding, each of the parties irrevocably and unconditionally waives and agrees not to assert by way of motion, as a defense or otherwise any claims that it is not subject to the jurisdiction of the above courts, that such action or suit is brought in an inconvenient forum or that the venue of such action, suit or other proceeding is improper. Each of the parties also hereby agrees that any final and unappealable judgment against a party in connection with any action, suit or other proceeding shall be conclusive and binding on such party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United States. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. (b) SERVICE OF PROCESS. Each party irrevocably consents to service of process in the manner provided for the providing of Administration Notices pursuant to Section 16 hereof. Nothing in this Section 23 shall affect the right of either party to serve process in any other manner permitted by Law. SECTION 24. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. SECTION 25. CONFIDENTIALITY. (a) DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this Agreement, "Confidential Information" includes all confidential or proprietary information and documentation of either party hereto or any of their respective Affiliates or Joint Ventures, including the terms of this Agreement (unless the terms of this Agreement are required by Law to be disclosed or are requested by a regulator in connection with obtaining approval of the - 35 - transaction contemplated under the Acquisition Agreement), including with respect to each party or any of their respective Affiliates or Joint Ventures, all of its software (including source code and object code), documentation, data, its customer, policy holder, claimant data and data related to potential customers and policy holders, software and confidential information of third parties as to which such party or any of their respective Affiliates or Joint Ventures owes a duty of confidentiality, financial information, information relating to the other party's planned or existing computer systems, systems architecture, computer hardware, methods of processing and operational methods, sales, profits, organizational restructuring, new business initiatives, proprietary and confidential information that describes the other party's (or the other party's Affiliates' or Joint Ventures') insurance and financial products (including actuarial calculations, product designs, and how such products are administered and managed), proprietary and confidential information that describes the other party's (or the other party's Affiliates' or Joint Ventures') product strategies or tax interpretations or tax positions or the treatment of any item, all reports, exhibits and other documentation prepared by any of its Affiliates or Joint Ventures, and any other information disclosed by a party to the other party (or its Affiliates or Joint Ventures) that is not generally known in the financial services or insurance industries. (b) PROTECTION OF CONFIDENTIAL INFORMATION. Each party hereto shall protect the Confidential Information of the other party hereto in accordance with applicable Law and using at least the same standard of care in the protection of Confidential Information of the other party hereto as it uses to protect its own confidential or proprietary information; provided that such Confidential Information shall be protected in at least a reasonable manner in accordance with industry standards. Each party hereto shall use the Confidential Information of the other party only in connection with the purposes of this Agreement, shall make such Confidential Information available only to its employees, permitted Subcontractors or agents having a "need to know" with respect to such purpose, and shall not disclose any Confidential Information to any other Person (except as expressly set forth in Section 25(d) hereof). Each party hereto shall advise its respective employees, permitted Subcontractors and agents with access to any Confidential Information of such party's obligations under this Agreement, and shall cause or have caused the foregoing to be bound by restrictions on use and disclosure of Confidential Information at least as stringent as those that bind such party hereunder in advance of the disclosure of any such Confidential Information to them. (c) EXCLUSIONS. Confidential Information of a party shall not include information that was (i) developed by the other party independently, (ii) disclosed to the other party by a third party not known to be bound by any confidentiality agreement with such party; provided, that: (A) under the circumstances of disclosure, the other party does not owe a duty of non-disclosure to such third party; (B) to the knowledge of the other party, the third party's disclosure does not violate a duty of non-disclosure owed to another Person, including such party; and (C) the disclosure by the third party is not otherwise unlawful, (iii) publicly available other than through the fault or negligence of the other party or (iv) rightfully in the possession of the other party and not subject to any duty of confidentiality as of the Effective Date. (d) COMPULSORY DISCLOSURE. If either party (the "Receiving Party") is requested or required to disclose Confidential Information of another party (the "Disclosing Party") pursuant to any judicial or administrative process, then such Receiving Party shall promptly notify the Disclosing Party in writing of such request or requirement. The Disclosing - 36 - Party shall either (i) promptly seek protective relief from such disclosure obligation, or (ii) direct the Receiving Party to comply with such request or requirement. The Receiving Party shall cooperate with efforts of the Disclosing Party to maintain the confidentiality of such information or to resist compulsory disclosure thereof, but any costs incurred by the Receiving Party shall be reimbursed by the Disclosing Party, except for costs of the Receiving Party's employees. If, after a reasonable opportunity to seek protective relief, such relief is not obtained by the Disclosing Party, or if the Disclosing Party fails to obtain such relief, the Receiving Party may disclose such portion of such Confidential Information that the Receiving Party reasonably believes, on the basis of advice of the Receiving Party's counsel, the Receiving Party is legally obligated to disclose. (e) UNAUTHORIZED ACTS. Each party hereto shall (i) notify the Disclosing Party promptly of any unauthorized possession, use, or knowledge of any Confidential Information by any Person which shall become known to it, any attempt by any Person to gain possession of Confidential Information without authorization or any attempt to use or acquire knowledge of any Confidential Information without authorization (collectively, "Unauthorized Access"), (ii) promptly furnish to the Disclosing Party full details of the Unauthorized Access and use commercially reasonable efforts to assist the other party in investigating or preventing the reoccurrence of any Unauthorized Access, (iii) cooperate with the Disclosing Party in any litigation and investigation against third parties deemed necessary by such party to protect its proprietary rights, and (iv) promptly take all steps necessary to prevent a reoccurrence of any such Unauthorized Access. (f) DATA PROTECTION. To the extent reasonably required by the Service Provider, each party shall cause its Affiliates and/or Joint Ventures, as applicable that are Service Recipients hereunder to execute a written agreement with the applicable Service Provider sufficient to comply with any applicable Laws relating to data protection. SECTION 26. CONSTRUCTION As used in this Agreement, neutral pronouns and any variations thereof shall be deemed to include the feminine and masculine and all terms used in the singular shall be deemed to include the plural, and vice versa, as the context may require. The words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole, including the Schedules hereto, as the same may from time to time be amended or supplemented and not to any particular subdivision contained in this Agreement. The word "including" when used herein is not intended to be exclusive, or to limit the generality of the preceding words, and means "including, without limitation." References herein to an Article, Section, subsection, clause, or Schedule shall refer to the appropriate Article, Section, subsection, clause, or Schedule of this Agreement, unless expressly stated otherwise. SECTION 27. PRECEDENCE. In case of ambiguity between the terms and conditions of this Agreement and any annex, schedule or exhibit hereto, this Agreement shall control; provided, that if the parties expressly and unambiguously provide in an annex, schedule or exhibit hereto that a provision of such - 37 - annex, schedule or exhibit supersedes the terms and conditions of this Agreement, then such provision shall have precedence over the relevant terms and conditions of this Agreement. - 38 - IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. Citigroup, Inc. By: /s/ Anthony A. Lazzara ---------------------- Name: Anthony A. Lazzara Title: Managing Director M&A Execution MetLife, Inc. By: /s/ William J. Wheeler ---------------------- Name: William J. Wheeler Title: Executive Vice President and Chief Financial Officer [SIGNATURE PAGE TO TRANSITION SERVICES AGREEMENT] EX-99.1 6 y10546exv99w1.txt EX-99.1: PRESS RELEASE [METLIFE LETTERHEAD] For Immediate Release News Contacts: For Media: John Calagna (212) 578-6252 For Investors: Tracey Dedrick (212) 578-5140 METLIFE COMPLETES ACQUISITION OF TRAVELERS LIFE & ANNUITY NEW YORK, July 1, 2005 - MetLife, Inc. (NYSE: MET) announced today it has completed the acquisition of Citigroup's Travelers Life & Annuity and substantially all of Citigroup's international insurance businesses for $11.8 billion. "This transaction significantly increases our size and scale in our core insurance and annuity products and expands our presence in the retirement and savings and international markets," said Robert H. Benmosche, chairman and chief executive officer of MetLife. "The distribution agreements with Citigroup, complementing our existing channels, provide us with one of the broadest distribution networks in the industry. Altogether, the transaction solidifies our leadership position in the industry and provides a platform for growth beginning with modest earnings accretion in the second half of 2005." "In the past few months leading up to the closing, we have made major strides and look forward to integrating the Travelers operations swiftly and smoothly into MetLife," said C. Robert Henrikson, president and chief operating officer of MetLife. "Operationally and in terms of our business focus, this is a great fit. We look forward to maximizing the opportunity." As part of the transaction, MetLife products will be available through certain Citigroup distribution channels, including Smith Barney, Citibank branches, and Primerica in the U.S., as well as a number of international businesses, under ten-year agreements. Consideration paid by MetLife to Citigroup for the purchase consisted of $10.8 billion in cash and approximately 22.4 million shares of MetLife common stock with a value of approximately $1 billion. MetLife also announced that, in a transaction related to the acquisition of Citigroup insurance businesses, it signed an agreement today with Citigroup to acquire CitiStreet Associates, a division of CitiStreet LLC, which is primarily involved in the distribution of 403(b) and 457 annuity products to the healthcare, education and not-for-profit markets. This transaction is 1 expected to close on September 1, 2005. CitiStreet LLC is a joint venture owned equally by affiliates of Citigroup and State Street Corporation. CitiStreet LLC is not being acquired by MetLife. MetLife, Inc. is a leading provider of insurance and other financial services to millions of individual and institutional customers throughout the United States. Through its subsidiaries and affiliates, MetLife, Inc. offers life insurance, annuities, automobile and homeowner's insurance and retail banking services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions. Outside the U.S., the MetLife companies have direct insurance operations in Asia Pacific, Latin America and Europe. For more information, please visit www.metlife.com. This release contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in the company's operations and financial results and the business and the products of the company and its subsidiaries, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on the company. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those included in the forward-looking statements as a result of risks and uncertainties including, but not limited to the following: (i) changes in general economic conditions, including the performance of financial markets and interest rates; (ii) heightened competition, including with respect to pricing, entry of new competitors and the development of new products by new and existing competitors; (iii) unanticipated changes in industry trends; (iv) the company's primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (v) deterioration in the experience of the "closed block" established in connection with the reorganization of Metropolitan Life Insurance Company; (vi) catastrophe losses; (vii) adverse results or other consequences from litigation, arbitration or regulatory investigations; (viii) regulatory, accounting or tax changes that may affect the cost of, or demand for, the company's products or services; (ix) downgrades in the company's and its affiliates' claims paying ability, financial strength or credit ratings; (x) changes in rating agency policies or practices; (xi) discrepancies between actual claims experience and assumptions used in setting prices for the company's products and establishing the liabilities for the company's obligations for future policy benefits and claims; (xii) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (xiii) the effects of business disruption or economic contraction due to terrorism or other hostilities; (xiv) the company's ability to identify and consummate on successful terms any future acquisitions, and to successfully integrate acquired businesses with minimal disruption; and (xv) other risks and uncertainties described from time to time in the company's filings with the Securities and Exchange Commission, including its S-1 and S-3 registration statements. The company specifically disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. # # # 2 -----END PRIVACY-ENHANCED MESSAGE-----