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TRANSITION SERVICES AGREEMENT
BY AND BETWEEN
CITIGROUP, INC.
AND
METLIFE, INC.
DATED AS OF JULY 1, 2005
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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
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(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
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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
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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).
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"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).
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"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.
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(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
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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
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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.
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(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
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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
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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
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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
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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.
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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
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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;
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(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
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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.
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(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
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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
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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.
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(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
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(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
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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.
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(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 ▇▇▇▇▇▇▇▇
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
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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.
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(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
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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
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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
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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.
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(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.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Parent's Service Coordinator
- 32 -
FOR ADMINISTRATION NOTICE FOR OPERATIONS NOTICE
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (and backup Service Coordinator) at
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ the addresses therefor set forth in
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ Schedule 8(a), as may be amended
from time to time.
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser: MetLife, Inc. To Purchaser's Service Coordinator
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. North (and backup Service Coordinator) at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ the addresses therefor set forth in
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. Schedule 8(a), as may be amended
General Counsel from time to time.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
M&A Execution
MetLife, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
[SIGNATURE PAGE TO TRANSITION SERVICES AGREEMENT]
