[EXECUTION COPY]
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DOMESTIC DISTRIBUTION AGREEMENT
BY AND BETWEEN
CITIGROUP INC.
AND
METLIFE, INC.
AS OF JULY 1, 2005
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TABLE OF CONTENTS
Page
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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
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(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.
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"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
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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.
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(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.
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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
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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
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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 Xxxxx'x 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
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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'
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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.
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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
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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 Xxxxx'x 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.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxxx X. Xxxxxx
Deputy General Counsel
Facsimile: (000) 000-0000
e-mail: xxxxxxx@xxxxxxxxx.xxx
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to Purchaser:
MetLife, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Executive Vice President and General Counsel
Facsimile: (000) 000-0000
With a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxx, Esq.
Facsimile: 000-000-0000
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.
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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.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective authorized representatives.
CITIGROUP INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
M&A Execution
METLIFE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Exectuive Vice President and
Chief Financial Officer
[SIGNATURE PAGE TO DOMESTIC DISTRIBUTION AGREEMENT]
