Domestic Distribution Agreement

EXECUTION COPY]


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DOMESTIC DISTRIBUTION AGREEMENT


BY AND BETWEEN


CITIGROUP INC.


AND


METLIFE, INC.


AS OF JULY 1, 2005


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TABLE OF CONTENTS


Page
---- ARTICLE I. DEFINITIONS.................................................................................. 1
Section 1.1. Defined Terms.......................................................................... 1
Section 1.2. Purposes of Agreement.................................................................. 4
Section 1.3. Construction........................................................................... 4
Section 1.4. Headings............................................................................... 5


ARTICLE II. REPRESENTATIONS AND WARRANTIES.............................................................. 5
Section 2.1. Representations and Warranties of Parent............................................... 5
Section 2.2. Representations and Warranties of Purchaser............................................ 5


ARTICLE III. DOMESTIC DISTRIBUTION...................................................................... 6
Section 3.1. Selling Agreements..................................................................... 6
Section 3.2. Exclusive Distribution Arrangements.................................................... 7
Section 3.3. Non-Exclusive Distribution Arrangements................................................ 7
Section 3.4. Private Label Products................................................................. 7
Section 3.5. New Products; Additional Products; Substitute Products................................. 8
Section 3.6. Acquisitions........................................................................... 9
Section 3.7. No Obligation.......................................................................... 10


ARTICLE IV. ACCESS AND BRANDING......................................................................... 10
Section 4.1. Access................................................................................. 10
Section 4.2. Branding; Use of Names; Confidential Information; Approval of Certain Materials........ 11


ARTICLE V. TERM OF THE AGREEMENT; CERTAIN CONDITIONS.................................................... 13
Section 5.1. Term................................................................................... 13
Section 5.2. Surviva................................................................................ 13
Section 5.3. Certain Conditions..................................................................... 13


ARTICLE VI. INDEMNIFICATION............................................................................. 15
Section 6.1. Indemnification of Parent.............................................................. 15
Section 6.2. Indemnification of Purchaser........................................................... 15
Section 6.3. Indemnity Provisions in Domestic Selling Agreements.................................... 15
Section 6.4. Indemnification Procedures............................................................. 15
Section 6.5. General................................................................................ 17


ARTICLE VII. Miscellaneous.............................................................................. 17
Section 7.1. Equitable Remedies..................................................................... 17
Section 7.2. Severability........................................................................... 17
Section 7.3. Further Assurance and Assistance....................................................... 17
Section 7.4. Notices................................................................................ 17
Section 7.5. Successors and Assigns................................................................. 18
Section 7.6. Governing Law.......................................................................... 19
Section 7.7. Jurisdiction; Venue; Consent to Service of Process..................................... 19
Section 7.8. Entire Agreement....................................................................... 19
Section 7.9. Amendment and Waiver................................................................... 19
Section 7.10. Access to Records...................................................................... 19
Section 7.11. Counterparts........................................................................... 20
Section 7.12. WAIVER OF JURY TRIAL................................................................... 20


DOMESTIC DISTRIBUTION AGREEMENT


THIS DOMESTIC DISTRIBUTION AGREEMENT (this "Agreement"), dated as of July 1, 2005, is made by and between Citigroup Inc., a Delaware corporation ("Parent"), and MetLife, Inc., a Delaware corporation ("Purchaser").


WHEREAS, Purchaser and certain of its Affiliates provide insurance and annuity products throughout the United States and in numerous countries around the world;


WHEREAS, Parent, through its Affiliates, has an extensive proprietary distribution network that distributes, on behalf of insurance companies, insurance and annuity products throughout the United States and in numerous countries around the world;


WHEREAS, Parent and Purchaser have entered into an Acquisition Agreement, dated as of January 31, 2005 (the "Acquisition Agreement"), pursuant to which Purchaser will acquire on the terms and subject to the conditions set forth therein, all of the outstanding shares of capital stock of certain subsidiaries of, and the equity interests owned by Parent in certain joint ventures of, Parent or its Affiliates, including the Travelers Insurers;


WHEREAS, in connection with the transactions contemplated by the Acquisition Agreement, the parties hereto desire to enter into a distribution relationship outside the United States pursuant to an International Distribution Agreement to be entered into on the date hereof and the distribution relationship inside the United States contemplated by this Agreement;


WHEREAS, this Agreement has been restated from the form hereof attached to the Acquisition Agreement; and


WHEREAS, the execution and delivery of this Agreement is a condition to closing of the transactions contemplated by the Acquisition Agreement.


NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises herein contained, the parties do hereby agree as follows:


ARTICLE I.
DEFINITIONS


Section 1.1. Defined Terms. For purposes of this Agreement, unless the context requires otherwise, the following terms shall have the following meanings:


"Acquisition Agreement" has the meaning set forth in the recitals hereto.


"Affiliate" shall mean, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such first Person. The term "control" (including its correlative meanings "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).


"Agreement" shall have the meaning set forth in the introductory paragraph hereof.


"Comparable Distributor" shall mean a distributor using a substantially similar approach to the marketing, servicing, sales support and overall distribution of products.


"Competitive" means (i) the terms, total compensation, customer appeal, consumer pricing and value, wholesaler coverage, training and support, features and service standards and metrics of the applicable product, taken as a whole, are at least equivalent to those of other comparable products, considered as a group, then distributed by the applicable Domestic Parent Distributor and (ii) the financial strength rating of the applicable provider is substantially similar to the other providers (considered as a group) then providing such comparable products to such Domestic Parent Distributor.


"Confidential Information" shall have the meaning set forth in Section 4.2(b).


"Domestic Exclusive Parent Distributor" means each Domestic Parent Distributor to which a Travelers Insurer is the exclusive provider of any Product on the date of this Agreement and such Person's successors and assigns.


"Domestic Parent Distributor" means (i) any Person Affiliated with Parent that, as of the date hereof, distributes any Product that a Travelers Insurer offers in the United States and such Person's successors and assigns and (ii) from and after the time of its acquisition by Parent or an Affiliate of Parent, a Target Affiliated Distributor that distributes any life insurance or annuity products for any Purchaser Insurer pursuant to Section 3.6(b), and such Target Affiliated Distributor's successors and assigns.


"Domestic Selling Agreements" has the meaning set forth in Section 3.1.


"Exclusive Products" means the Products designated on Schedule 3.2(a) as being subject to an exclusive relationship.


"Existing Product" has the meaning set forth in Section 3.5(d).


"First Term" means the five-year period commencing on the date of this Agreement and ending on the fifth anniversary of the date of this Agreement.


"Indemnified Party" has the meaning set forth in Section 6.4.


"Indemnifying Party" has the meaning set forth in Section 6.4.


"Law" shall have the meaning set forth in the Acquisition Agreement.


"Level Playing Field" means, with respect to a product, Parent (i) shall, and shall cause any Domestic Parent Distributor entering into a Domestic Selling Agreement with respect to such product pursuant to Section 3.1 to, afford the same access to its distribution platforms for such product offered by a Travelers Insurer (or a Purchaser Insurer, as applicable) as the access it affords to comparable products offered by a Third Party Insurer and (ii) shall not, and shall cause its Affiliates (including the Domestic Parent Distributors) not to, provide to its Sales Force any compensation or other economic inducement or benefit for the sale of comparable products sold in a comparable sales support and compensation framework offered by a Third Party Insurer that are more favorable than the compensation or other economic inducements or benefits provided to such Sales Force for the sale of such products offered by a Travelers Insurer (or a Purchaser Insurer, as applicable); provided, that a Level Playing Field may include variations in Sales Force compensation that are (x) based upon neutral criteria that do not differentiate between product providers, such as achieving sales volume or persistency objectives, or (y) for products


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(including combined product and service arrangements) for which distributor compensation is negotiated by the provider on a sale-by-sale basis, such as group retirement products.


"Licensing Agreement" shall have the meaning set forth in the Acquisition Agreement.


"Losses" has the meaning set forth in Section 6.1.


"Marks" shall mean the Parent Distributor Marks, as defined in the Licensing Agreement in respect of this Agreement, including "PrimElite", "Blueprint", "Vintage" and "Marquis."


"New Products" means, (i) with respect to each Domestic Parent Distributor, any life insurance or annuity product that a Purchaser Insurer is authorized to offer but was not included among the types of insurance or annuity products distributed by such Domestic Parent Distributor on the date of this Agreement and (ii) any products offered by a Purchaser Insurer pursuant to arrangements contemplated by Section 3.6(b). For avoidance of doubt, (i) the addition of new features to Products shall not constitute New Products in whole or in part, regardless of whether any insurance regulatory filing is required in connection therewith and (ii) the following products shall not be deemed to be New Products with respect to PFSI: long-term care insurance, prepaid legal services and individual term life insurance the primary purpose of which is protection rather than investment.


"Non-Exclusive Products" has the meaning set forth in Section 3.3.


"Parent" has the meaning set forth in the introductory paragraph hereof.


"Parent Indemnified Parties" has the meaning set forth in Section 6.1.


"Parent Standards and Practices" means the client service and relationship standards, business practices, ethical standards, customer privacy and protection policies and general service quality standards, reputational considerations and industry standards, as determined from time to time by Parent or any of its Affiliates, provided that such Parent Standards and Practices, to the extent they relate to a Product or New Product and/or Domestic Parent Distributor, shall be applied, and changes thereto shall be made, without discriminating in any material manner against any Travelers Insurer or Purchaser Insurer, as applicable, relative to all other similarly situated providers of such Products or New Products distributed by such Domestic Parent Distributor.


"Person" shall have the meaning set forth in the Acquisition Agreement.


"PFSI" has the meaning set forth in Section 3.5(b).


"PLP Distributor" has the meaning set forth in Section 3.4(b).


"Private Label Product" means a life insurance or annuity product customized for a Domestic Parent Distributor that (i) is branded under the name of a Domestic Parent Distributor or (ii) is a variable life insurance or variable annuity contract that offers as an option more than two investment choices or mutual funds that are advised or managed by Parent or a Parent Affiliate (or any successor to the Parent or a Parent Affiliate of substantially all of the business or assets of the Parent or such Parent Affiliate which relate primarily to the asset management business), including a Domestic Parent Distributor (in all cases in the capacity of either an advisor or sub-advisor). For the avoidance of doubt and without limitation, a Private Label Product (whether existing on the date of this Agreement or thereafter) shall be deemed a Product for all purposes under this Agreement.


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"Products" means the life insurance and annuity products issued by the Travelers Insurers and distributed through the Domestic Parent Distributors on the date of this Agreement which are listed on Schedule 3.2(a), and any Substitute Products distributed in replacement thereof pursuant to Section 3.5(d).


"Purchaser" shall have the meaning set forth in the introductory paragraph hereof.


"Purchaser Indemnified Parties" has the meaning set forth in Section 6.2.


"Purchaser Insurer" means any insurance company Affiliate of Purchaser, including the Travelers Insurers.


"Sales Force" means those point of sale representatives and their direct supervisors utilized by Parent, Domestic Parent Distributors or one of their respective Affiliates whose job responsibility includes the sale or promotion of Products or New Products offered by a Travelers Insurer (or a Purchaser Insurer, as applicable).


"Second Term" means the five-year period commencing upon the expiration of the First Term and ending on the tenth anniversary of the date of this Agreement.


"Substitute Product" has the meaning set forth in Section 3.5(d).


"Target Affiliated Distributor" means any Person Affiliated with Parent that (i) was an Affiliate of a Target Business (as defined in the Acquisition Agreement) immediately prior to the acquisition of such Target Business by Parent or an Affiliate of Parent and (ii) is engaged in the business of distributing financial services products.


"Term" has the meaning set forth in Section 5.1.


"Third Party Claim" has the meaning set forth in Section 6.4.


"Third Party Insurer" means an insurance company that is not Affiliated with Purchaser.


"Travelers Insurers" means the Domestic Insurance Companies (as defined in the Acquisition Agreement) to be acquired by Purchaser pursuant to the Acquisition Agreement and their successors and assigns, and with respect to a Substitute Product that is offered pursuant to Section 3.5(d), a Purchaser Insurer and its successors and assigns.


Section 1.2. Purposes of Agreement. Notwithstanding anything in this Agreement to the contrary, Purchaser and Parent agree that this Agreement is intended to set forth certain principal business terms upon which they will enter into Domestic Selling Agreements during the Term and that nothing herein creates a Domestic Selling Agreement.


Section 1.3. Construction. For the purposes of this Agreement: (i) words (including capitalized terms defined herein) in the singular shall be held to include the plural and vice versa, and words (including capitalized terms defined herein) of one gender shall be held to include the other gender as the context requires; (ii) the terms "hereof," "herein" and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules) and not to any particular provision of this Agreement, and Article, Section, paragraph and Schedule references are to the Articles, Sections, paragraphs and Schedules to this Agreement, unless otherwise specified; (iii) the word "including" and words of similar import when used in this Agreement shall mean "including, without limitation"; (iv) all references to any period of days shall be deemed to be to the relevant number of calendar days


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unless otherwise specified; and (v) "commercially reasonable efforts" shall not require a waiver by any party of any material rights or any action or omission that would be a breach of this Agreement.


Section 1.4. Headings. The Article and Section headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.


ARTICLE II.
REPRESENTATIONS AND WARRANTIES


Section 2.1. Representations and Warranties of Parent. Parent hereby represents and warrants to Purchaser as set forth below.


(a) Parent is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation.


(b) Parent has all necessary corporate power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it hereunder. The making, execution, delivery and performance by Parent of this Agreement and the consummation by Parent of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Parent. This Agreement has been duly and validly executed and delivered by Parent, and assuming the due authorization, execution and delivery by Purchaser, this Agreement will constitute the valid, legal and binding obligation of Parent, enforceable against it in accordance with its terms, except as may be subject to applicable bankruptcy, insolvency, moratorium or other similar Laws, now or hereafter in effect, relating to or affecting the rights of creditors generally and by legal and equitable limitations on the enforceability of specific remedies.


(c) Neither the execution and delivery of this Agreement by Parent, nor the consummation of the transactions contemplated hereby, will (i) violate or conflict with any provision of the articles of incorporation or bylaws or other organizational documents of Parent or any Domestic Parent Distributor, (ii) violate any of the terms, conditions, or provisions of any Law or license to which Parent or any Domestic Parent Distributor is subject or by which it or any Domestic Parent Distributor or any of its or their assets are bound, or (iii) violate, breach, or constitute a default under any contract to which Parent or any Domestic Parent Distributor is a party or by which it or any Domestic Parent Distributor or any of its or their assets is bound. The distribution of any Products offered by a Travelers Insurer and distributed by a Domestic Parent Distributor on the date hereof does not violate, breach, or constitute a default under any contract to which Parent or any Domestic Parent Distributor is a party or by which any of them or any of their respective assets is bound.


(d) None of the arrangements by which any Domestic Parent Distributor distributes any Products on behalf of a Travelers Insurer in force on the date of this Agreement violates any of the Parent Standards and Practices in effect on such date.


Section 2.2. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Parent as set forth below.


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(a) Purchaser is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation.


(b) Purchaser has all necessary corporate power and authority to make, execute and deliver this Agreement and to perform all of the obligations to be performed by it hereunder. The making, execution, delivery and performance by Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly and validly executed and delivered by Purchaser, and assuming the due authorization, execution and delivery by Parent, this Agreement will constitute the valid, legal and binding obligation of Purchaser, enforceable against it in accordance with its terms, except as may be subject to applicable bankruptcy, insolvency, moratorium or other similar Laws, now or hereafter in effect, relating to or affecting the rights of creditors generally and by legal and equitable limitations on the enforceability of specific remedies.


(c) Neither the execution and delivery of this Agreement by Purchaser, nor the consummation of the transactions contemplated hereby, will (i) violate or conflict with any provision of the articles of incorporation or bylaws or other organizational documents of Purchaser or any Purchaser Insurer (other than the Travelers Insurers), (ii) violate any of the terms, conditions, or provisions of any Law or license to which Purchaser is subject or by which it or any of its assets is bound, or (iii) violate, breach, or constitute a default under any contract to which Purchaser is a party or by which it or any of its assets is bound.


ARTICLE III.
DOMESTIC DISTRIBUTION


Section 3.1. Selling Agreements. In order to effectuate the distribution arrangements contemplated hereby among the Travelers Insurers (and Purchaser Insurers, as applicable) and the Domestic Parent Distributors for distribution of the Products and New Products offered by the Travelers Insurers (and Purchaser Insurers, as applicable) within the United States, Parent shall cause the Domestic Parent Distributors, and Purchaser shall cause the Travelers Insurers (and Purchaser Insurers, as applicable), to negotiate in good faith and enter into written selling agreements that are consistent with industry practice and with the principles set forth in this Agreement and that contain terms and conditions taken as a whole that are no less favorable to the Travelers Insurers (and Purchaser Insurers, as appli ...