Exhibit 10.2
 
MASTER DISTRIBUTION AGREEMENT
among
MERRILL LYNCH & CO., INC.,
MERRILL LYNCH INSURANCE GROUP, INC.
and
AEGON USA, INC.
as of
[                      ], 2007
 

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TABLE OF CONTENTS                      

              Page  
ARTICLE I.
       
PURPOSES
       
 
       
Section 1.1. Purposes of this Agreement
    2  
 
       
ARTICLE II.
       
REPRESENTATIONS AND WARRANTIES
       
 
       
Section 2.1. Representations and Warranties of the Seller Parent and the Seller
    2  
Section 2.2. Representations and Warranties of the Buyer
    3  
 
       
ARTICLE III.
       
PRODUCT AND SALES COMMITTEE
       
 
       
Section 3.1. Establishment of a Product and Sales Committee
    4  
Section 3.2. Business Plans
    4  
Section 3.3. Meetings of the Product and Sales Committee
    5  
Section 3.4. Term of the Product and Sales Committee
    5  
 
       
ARTICLE IV.
       
DISTRIBUTION SUPPORT FOR INVESTOR CHOICE AND NEW PRODUCTS
       
 
       
Section 4.1. Investor Choice Distribution Support Services
    5  
Section 4.2. New Product Distribution Support Services
    7  
Section 4.3. Buyer Insurer Wholesalers Force
    7  
 
       
ARTICLE V.
       
DISTRIBUTION AGREEMENTS, COMMISSIONS AND PROCEDURES
       
 
       
Section 5.1. Distribution Agreements
    7  
Section 5.2. Commissions — Legacy Products
    8  
Section 5.3. Commissions — Investor Choice Annuity
    8  
Section 5.4. Policy Replacements
    9  
Section 5.5. New Product Development Proposals
    9  
Section 5.6. Level Playing Field
    12  

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              Page  
ARTICLE VI.
       
FUNDS
       
 
       
Section 6.1. Investment Management Services
    12  
Section 6.2. Investment Management Committee
    12  
Section 6.3. Fund Choices
    13  
 
       
ARTICLE VII.
       
ACCESS; BRANDING; CONFIDENTIAL INFORMATION; MATERIALS
       
 
       
Section 7.1. Access
    14  
Section 7.2. Branding; Use of Names
    15  
Section 7.3. Confidential Information
    15  
Section 7.4. Marketing, Training and Other Materials
    17  
Section 7.5. Publicity
    18  
 
       
ARTICLE VIII.
       
CERTAIN PRACTICES AND PROCEDURES
       
 
       
Section 8.1. Cooperation
    18  
Section 8.2. Maintenance of Certain Practices and Procedures
    19  
 
       
ARTICLE IX.
       
TERM OF THE AGREEMENT; CERTAIN CONDITIONS; ACQUISITIONS;
NO OTHER OBLIGATIONS
       
 
       
Section 9.1. Term
    19  
Section 9.2. Survival
    19  
Section 9.3. Certain Conditions
    19  
Section 9.4. Notice and Cure Opportunity
    21  
Section 9.5. Acquisitions
    21  
Section 9.6. No Other Obligations
    22  
 
       
ARTICLE X.
       
INDEMNIFICATION
       
 
       
Section 10.1. Indemnification by the Seller
    22  
Section 10.2. Indemnification by the Buyer
    23  
Section 10.3. Calculation of Losses
    23  
Section 10.4. Indemnification Notice Procedures
    24  
Section 10.5. Indemnification Procedures for Claims by an Indemnified Party
    25  
Section 10.6. Indemnification Procedures for Third Party Claims
    26  
Section 10.7. General
    27  

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              Page  
ARTICLE XI.
       
DEFINITIONS
       
 
       
Section 11.1. Defined Terms
    27  
 
       
ARTICLE XII.
       
MISCELLANEOUS
       
 
       
Section 12.1. Further Actions
    33  
Section 12.2. Expenses
    33  
Section 12.3. Notices
    33  
Section 12.4. Entire Agreement
    35  
Section 12.5. No Third Party Beneficiaries
    35  
Section 12.6. Assignability
    35  
Section 12.7. Amendment and Modification; Waiver
    35  
Section 12.8. Severability
    36  
Section 12.9. Section Headings
    36  
Section 12.10. Interpretation
    36  
Section 12.11. Counterparts
    36  
Section 12.12. Facsimile
    37  
Section 12.13. Enforcement
    37  
Section 12.14. Governing Law
    38  
Section 12.15. Fiduciary and Legal Obligations
    38  
 
       
Exhibit 1.1 Legacy Products
       

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MASTER DISTRIBUTION AGREEMENT
     THIS MASTER DISTRIBUTION AGREEMENT (this “Agreement”), dated as of [
     ], 2007, is among Merrill Lynch Insurance Group, Inc., a Delaware
corporation (the “Seller”), Merrill Lynch & Co., Inc., a Delaware corporation
(the “Seller Parent”) and AEGON USA, Inc., an Iowa corporation (the “Buyer”).
     WHEREAS, the Buyer, through certain of its life insurance Affiliates,
provides life insurance and annuity products;
     WHEREAS, the Seller Parent, through certain Seller Affiliates, has an
extensive proprietary distribution network (the “Merrill Lynch Global Private
Client Network”) that distributes, on behalf of both affiliated and unaffiliated
insurance companies, life insurance and annuity products;
     WHEREAS, the Seller, the Seller Parent and the Buyer have entered into a
Purchase Agreement, dated as of [      ], 2007 (the “Purchase Agreement”),
pursuant to which the Buyer will acquire (the “Acquisition”), on the terms and
subject to the conditions set forth therein, (i) all of the outstanding shares
of capital stock of Merrill Lynch Life Insurance Company, an Arkansas domiciled
stock life insurance company (“MLLIC”), and ML Life Insurance Company of New
York, a New York domiciled stock life insurance company (“MLLICNY”) (each
sometimes referred to herein as a “Company” and collectively as the “Companies”)
and (ii) certain assets and liabilities relating to the Companies but not held
by the Companies (capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Purchase Agreement);
     WHEREAS, the Companies are wholly-owned subsidiaries of the Seller Parent
that manufacture annuity products and maintain closed blocks of life insurance
and annuity products;
     WHEREAS, in connection with the transactions contemplated by the Purchase
Agreement, the parties hereto desire to enter into the distribution relationship
set forth in this Agreement; and
     WHEREAS, the execution and delivery of this Agreement is a condition to the
closing of the transactions contemplated by the Purchase Agreement (the
“Closing”).
     NOW, THEREFORE, in consideration of the mutual covenants, agreements and
promises herein contained, the parties do hereby agree as follows:

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ARTICLE I.
PURPOSES
Section 1.1. Purposes of this Agreement. This Agreement will govern the
distribution arrangements between the Buyer, the Buyer Insurers, and their
Affiliates on the one hand and the Seller and the Seller Affiliates on the other
with respect to (i) the life insurance and annuity products of the Companies
sold through the Merrill Lynch Global Private Client Network in the United
States prior to the Acquisition, excluding the Merrill Lynch Investor Choice
Annuity (“Legacy Products”) as set forth on Exhibit 1.1; (ii) the Merrill Lynch
Investor Choice Annuity, including any amendment or enhancement thereto during
the Term (the “Investor Choice Annuity”, and together with the Legacy Products,
“Products”) and (iii) new life insurance or annuity products and product
features, including insurance products providing income guarantees to be used
with mutual funds and similar investment products held outside an insurance
company (“Income Guarantee Products”) and any amendment or enhancement or
successor product to the Merrill Lynch Consults Annuity, that may be jointly
developed by the Seller and the Buyer Insurers for distribution either (A) in
the general marketplace either domestically, internationally, or both, or (B)
through the Merrill Lynch Global Private Client Network (“New Products”).
Without limiting the specific provisions of this Agreement, the purpose of this
Agreement is to establish, govern and foster a cooperative and mutually
supportive relationship between the parties and their respective Affiliates to
promote the distribution of the Investor Choice Annuity and New Products through
the Merrill Lynch Global Private Client Network by, among other things,
affording to the Buyer Insurers the level of support by the Seller and its
Affiliates and the access to the District Annuity Specialists (“DAS”) and the
Sales Force that is consistent with that afforded to the Companies prior to the
Acquisition, as is set forth more fully herein.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Seller Parent and the Seller.
The Seller Parent and the Seller, jointly and severally, hereby represent and
warrant to the Buyer as set forth below.
     (a) Each of the Seller Parent and the Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware and has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement, the performance of the Seller Parent’s and the Seller’s obligations
hereunder, and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by all requisite corporate action
of each of the Seller Parent and the Seller. Each of the Seller Parent and the
Seller has duly executed and delivered this Agreement. This Agreement
constitutes the legal, valid and binding obligation of the Seller Parent and the
Seller enforceable against the

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Seller Parent and the Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting or relating to the enforcement of
creditors’ rights generally or by general principles of equity (whether such
enforcement is sought in equity or at law).
     (b) Assuming compliance with the matters set forth in Section 2.5 of the
Purchase Agreement, the execution, delivery and performance by the Seller Parent
and the Seller of this Agreement and the performance and consummation of the
transactions contemplated hereby do not (i) conflict with or result in any
violation or breach of any provision of the Organizational Documents of the
Seller Parent or the Seller, (ii) conflict with or result in a violation or
breach of any provision of any Law applicable to the Seller Parent and/or the
Seller or (iii) require any consent of or other action by any Person under,
violate, conflict with or result in the breach of any of the terms of, result in
any modification of or loss of a benefit under, accelerate or permit the
acceleration of the performance required by, otherwise give any other
contracting party the right to modify, re-price, terminate or cancel, or
constitute a default or an event that, with or without notice or lapse of time
or both, would constitute a default under any provision of any material
contract, agreement, permit, obligation, license or other instrument or any
Applicable Contract to which the Seller Parent and/or the Seller is a party
except, in the case of clauses (ii) and (iii), for such violations, conflicts,
breaches or defaults (x) that may result from facts or circumstances solely
relating to the Buyer or its Affiliates, or (y) which would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse
Effect. The distribution of any Products distributed by a Seller Distributor on
the date hereof does not violate, breach, or constitute a default under any
contract to which the Seller Parent, the Seller or any Seller Distributor is a
party or by which any of them or any of their respective assets is bound.
     (c) None of the arrangements by which any Seller Distributor distributes
any Products in force on the date of this Agreement violated, or violates, in
any material respect any of the Seller Standards and Practices in effect on such
date.
Section 2.2. Representations and Warranties of the Buyer. The Buyer hereby
represents and warrants to the Seller Parent and the Seller as set forth below.
          (a) The Buyer has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement, the performance of the Buyer’s obligations hereunder and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action of the Buyer. The Buyer has duly executed and
delivered this Agreement. This Agreement constitutes the legal, valid and
binding obligation of the Buyer enforceable against the Buyer in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to the enforcement of creditors’ rights generally

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or by general principles of equity (whether such enforcement is sought in equity
or at law).
          (b) The execution, delivery and performance by the Buyer of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in any violation or breach of any
provision of the Organizational Documents of the Buyer, (ii) conflict with or
result in a violation or breach of any provision of any Law applicable to the
Buyer, or (iii) require any consent of or other action by any Person under, or
constitute a default or an event that, with or without notice or lapse of time
or both, would constitute a default under, any provision of any material
agreement or other instrument to which the Buyer is a party, except in the case
of clauses (ii) and (iii), for such violations, conflicts, breaches or defaults
(x) that may result from facts or circumstances solely relating to the Seller
Parent or the Seller Affiliates, or (y) which would not reasonably be expected,
individually or in the aggregate, to have a Buyer Material Adverse Effect.
ARTICLE III.
PRODUCT AND SALES COMMITTEE
Section 3.1. Establishment of a Product and Sales Committee. Promptly following
the execution of this Agreement, the parties will establish a committee (the
“Product and Sales Committee”) to consist of senior product and distribution
personnel (with decision making authority) of the parties. The Product and Sales
Committee shall be the only such committee used by the Seller and Merrill Lynch
Life Agency (“MLLA”) for Third Party Insurers. The initial members of the
Product and Sales Committee shall be set forth on the Deliverables Schedule. The
purpose of the Product and Sales Committee will be to coordinate the
implementation of the distribution, access and support provisions of this
Agreement, resolve issues and disputes arising hereunder, and develop means to
work together to enhance the business of both parties by fostering the ongoing
support and success of the Investor Choice Annuity and New Products. Among other
things, the Product and Sales Committee shall guide, assist and coordinate the
efforts of the Buyer Insurers and Buyer Distributors and the Merrill Lynch
Global Private Client Network, including assistance with (i) the design and
positioning of (A) amendments and enhancements to the Investor Choice Annuity
and (B) New Products, (ii) obtaining feedback from the DAS and the Sales Force
on product amendments and enhancements, and sales efforts, for both the Investor
Choice Annuity and New Products, (iii) appropriate marketing announcements for
the Investor Choice Annuity and for New Products and (iv) training and rollout
events for the Investor Choice Annuity and New Products.
Section 3.2. Business Plans. In addition, the Product and Sales Committee will
provide a forum for the Buyer Insurers, Buyer Distributors and the Seller to
discuss and cooperate in the joint development of annual business plans
(prepared in the first instance by the Seller and the Sellers Distributors) for
the sale of the Investor Choice Annuity and

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New Products, which will include appropriate topics, including plans for: (i)
growth of sales of the Investor Choice Annuity and New Products through the
Seller Distributors, including targeted levels of sales; (ii) the participation
of the Buyer Insurers and Buyer Distributors in national, regional or branch
level sales and recognition meetings and educational sessions, in each case only
with respect to such meetings or sessions in which the Seller determines
participation; and (iii) encouraging members of the Sales Force who do not
solicit or sell life insurance or annuity products to become licensed to do so
and/or to consider whether life insurance and/or annuity products are
appropriate for their clients’ financial needs. During each year that the
Product and Sales Committee is constituted, the Seller will cause the initial
draft annual business plan to be delivered to the Buyer Insurers by no later
than December 1 of the year preceding the year covered by the annual business
plan, and thereafter the parties will discuss the draft at a Product and Sales
Committee meeting and seek to complete a final business plan by December 31 of
the year preceding the year covered by the annual business plan.
Section 3.3. Meetings of the Product and Sales Committee. The Product and Sales
Committee shall meet at least quarterly, unless otherwise agreed by the members
of the Product and Sales Committee. The agenda of the Product and Sales
Committee meetings will include matters relating to the support of the Investor
Choice Annuity and New Products, and such other matters as the members of the
Product and Sales Committee may determine to be relevant. The parties will
cooperate to develop a protocol for the Product and Sales Committee meetings,
including any additional procedures (such as confidentiality procedures) that
may be deemed appropriate.
Section 3.4. Term of the Product and Sales Committee. The Product and Sales
Committee shall remain in place for the Term, unless the parties agree to
shorten or extend its duration.
ARTICLE IV.
DISTRIBUTION SUPPORT FOR INVESTOR CHOICE
AND NEW PRODUCTS
Section 4.1. Investor Choice Distribution Support Services.
          (a) The Seller shall cause MLLA to make available the services of the
DAS to provide distribution support for the Investor Choice Annuity in a manner
and to an extent that is, in the aggregate, consistent with the support provided
by the DAS to the Companies and the Products at the Reference Date. The DAS
activities will include: (i) rolling out new features and benefits to Merrill
Lynch branch offices and FAs, (ii) providing day-to-day support for FA
inquiries, (iii) involvement in problem-solving and (iv) continued positioning
of the Investor Choice Annuity in FA meetings to meet specific client needs. For
clarity, this provision will apply to all amendments and enhancements to the
Investor Choice Annuity.

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          (b) Additionally, with respect to the Investor Choice Annuity, the
Seller (or a Seller Affiliate) shall:
     (i) during the Transition Period, take such reasonable measures as the
Buyer Insurers or Buyer Distributors may request to provide product education
for the Buyer Insurers’ or Buyer Distributors’ relevant personnel (e.g.,
wholesalers, internal desks and other business areas’ other relevant personnel),
as may be reasonably designated by the Buyer Insurers or the Buyer Distributors,
including by making personnel available to attend training sessions conducted by
the Buyer Insurers or Buyer Distributors;
     (ii) during the Term, take such reasonable measures as the Buyer Insurers
may request to provide product education for the Seller Distributors’ relevant
personnel (e.g., the DAS, the Sales Force, and internal and customer help
desks), including by making personnel available to attend FA training sessions
conducted by the Buyer Insurers or Buyer Distributors and by providing
reasonable opportunities for the Buyer Insurers or Buyer Distributors to provide
content for broker-only publications distributed to the DAS and/or the Sales
Force. Such content shall be subject to the Seller’s approval (which shall not
be unreasonably withheld, conditioned or delayed);
     (iii) in accordance with the Seller Standards and Practices, but at no
additional cost than would be otherwise payable in accordance with
Section 7.1(c), during the Term, allow the Buyer Insurers’ or Buyer
Distributors’ representatives to participate in (A) national FA training events,
(B) DAS meetings, conferences and appropriate conference calls and (C)
representation specifically with respect to the Investor Choice Annuity in any
such regional events and meetings at which a Buyer Insurer or Buyer Distributor
may already be participating in another capacity;
     (iv) during the Term, provide space on the Seller’s website, on a basis
consistent with that provided to the Companies and the Products on the Reference
Date, for the Buyer Insurers or Buyer Distributors to provide content related to
the Investor Choice Annuity (such content shall be subject to the Seller’s
approval);
     (v) during the Term, permit the Buyer Insurers or Buyer Distributors to
provide the Seller Distributors with written and electronic communications that
may be used for distribution to customers of the Merrill Lynch Global Private
Client Network;
     (vi) during the Term, provide annuity sales desk support to the Sales Force
and the DAS with respect to sales of the Investor Choice Annuity on a basis
consistent with the level of such support provided on the Reference Date;

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     (vii) during the Term, continue to set and track sales goals for the DAS in
a manner consistent with the Seller Standards and Practices as in effect at the
Reference Date;
     (viii) during the Term, give first priority to the review of Investor
Choice Annuity product and marketing materials, and complete the review promptly
within a period consistent with the review period generally applicable to the
Companies’ product and marketing materials at the Reference Date, and in any
event at least as quickly as the review period applicable to the review of
comparable product and marketing materials for other issuers’ products in the
same category as the Product in question; and
     (ix) during the Term, support DAS participation in out-of-office events, in
accordance with the Seller Standards and Practices.
Section 4.2. New Product Distribution Support Services. With respect to New
Products, MLLA (or other Seller Affiliates designated by the Seller) will
provide the specific support services agreed to by the members of the Product
and Sales Committee and will provide a level of distribution support that is
consistent, as applicable, with the support and services provided under
Section 4.1 and with the overall purposes of this Agreement.
Section 4.3. Buyer Distributors Wholesaler Force. The Buyer Distributors will
develop a wholesaler force to be primarily dedicated to the Investor Choice
Annuity as well as any New Products under Section 4.2 within the Merrill Lynch
Global Private Client Network, and accordingly, following the end of the
Transition Period, the DAS will work closely with the Buyer Distributors’
wholesalers in providing the distribution support described in this Article IV.
ARTICLE V.
DISTRIBUTION AGREEMENTS, COMMISSIONS AND PROCEDURES
Section 5.1. Distribution Agreements. In order to effect the distribution
arrangements contemplated by this Agreement, the Seller shall cause the Seller
Distributors, and the Buyer shall cause the Buyer Insurers and Buyer
Distributors, to negotiate in good faith and enter into, on an as-needed basis,
written, non-exclusive distribution agreements with respect to the Products and
the New Products that are consistent with industry practice and with the
principles set forth in this Agreement (the “Distribution Agreements”). In
addition to effecting the terms of this Agreement with respect to compensation,
access and support, the Distribution Agreements shall contain terms and
conditions that, taken as a whole, are at least as favorable to the Buyer
Insurers and Buyer Distributors as the terms and conditions of the distribution
arrangements between the Seller Distributors and Third Party Insurers, subject
to such changes as would reflect current practice of the Seller Distributors for
such agreements.

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Section 5.2. Commissions — Legacy Products.
          (a) From and after the Closing, except (y) as may be required by
fiduciary duty, applicable Law or other legal obligations or (z) as set forth in
Section 5.2(b):
     (i) the Companies will continue to pay trail commissions, renewal
commissions and commissions with respect to additional premiums and
considerations (collectively, “Commissions”) to MLLA or other appropriate Seller
Distributors for the Legacy Products in-force at the time of the Acquisition;
and
     (ii) the Commissions shall remain fixed at the levels that shall be set
forth on the Deliverables Schedule, which are no greater than the commission
rates used in preparation of the Actuarial Appraisal of MLLIC and MLLICNY as of
December 31, 2006 (the “Actuarial Report”), as supplemented by the supplement
thereto dated June 29, 2007.
          (b) The Buyer Insurers may adjust rates of commissions paid to Seller
Distributors on additional premiums and considerations on the Legacy Products
resulting from decreases in payments to Buyer Insurers under other agreements
between the Buyer Insurers and Eligible Fund investment advisors who are Seller
Affiliates after the date of this Agreement.
Section 5.3. Commissions – Investor Choice Annuity. From and after the Closing,
while the Buyer Insurers are offering the Investor Choice Annuity, the
commission structure paid by the Companies to the Seller Distributors for the
Investor Choice Annuity shall be as set forth on the Deliverables Schedule,
which conforms in all material respects to the commission structure provided to
non-proprietary carriers as in effect on the date hereof and which is no greater
than the commission rates used in preparation of the Actuarial Report; provided,
that, solely for the purpose of maintaining parity with the commissions
generally to be charged in respect of non-proprietary variable annuity products
distributed through the Merrill Lynch Global Private Client Network, the
commissions set forth on the Deliverables Schedule shall be subject to
unilateral change by the Seller for new or prospective sales following the
effective date of any such commission change; provided, further, that, while any
such changes shall remain at the sole discretion of the Seller, either party at
any time may propose changes to the commission schedule set forth in such
schedule, and such proposal shall be considered by the Product and Sales
Committee as provided in Article III, and the other party shall consider such
proposal in good faith; and provided, further, that the Buyer Insurers may
adjust rates of commissions paid to Seller Distributors on additional premiums
and considerations on the Investor Choice Annuity resulting from decreases in
payments to Buyer Insurers under other agreements between the Buyer Insurers and
Eligible Fund investment advisers who are Seller Affiliates after the date of
this Agreement.

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Section 5.4. Policy Replacements.
          (a) Except for changes made in the ordinary course of business and in
a manner consistent with past practices, for the duration of the Term, the
Seller will not materially alter its Specialist compensation practices, as they
relate to Replacements, from those in effect on the Reference Date, as shall be
described in all material respects on the Deliverables Schedule. The term
“Specialist” shall mean both the DAS and also Wealth Planning and Business
Insurance Specialists.
          (b) The Seller shall not, and shall cause the Seller Distributors not
to, enter into any program to promote the Replacement of any Product with a
product issued by a third party, it being understood that an FA may recommend
the Replacement of a Product if the FA reasonably believes that the
recommendation is in the customer’s best interest and it is approved in
accordance with the Seller’s supervisory procedures. The Seller and the Seller
Distributors shall continue to maintain their respective compliance practices
and policies relating to Replacements.
Section 5.5. New Product Development Proposals.
          (a) Overview. In line with the parties’ intent to foster a strategic
business relationship consistent with the overall purposes of this Agreement,
(i) the parties intend that the discussion, review and implementation of any New
Product ideas pursuant to this Section 5.5 will be coordinated through the
Product and Sales Committee and (ii) the Seller intends, through the Product and
Sales Committee, to work with the Buyer Insurers and Buyer Distributors on
proposals for New Products in a manner consistent with the new product process
the Seller used as of the Reference Date with respect to the Seller’s
proprietary insurance products.
          (b) New Product Proposal Process. If, during the Term, either the
Seller or the Buyer Insurer submits a new product proposal to the Product and
Sales Committee, then the Product and Sales Committee shall evaluate the
proposal based upon criteria furnished by the Seller in its sole discretion. The
Product and Sales Committee may engage in competitive analysis to evaluate the
proposal. If the Buyer Insurer elects not to submit a response to the criteria,
the Buyer Insurer shall so inform the Product and Sales Committee. If the Buyer
Insurer elects to submit a proposal to the criteria, the Seller shall evaluate
such response in good faith and agree to move on to the development of the Buyer
Insurer’s proposal pursuant to Section 5.5(d) unless, in the Seller’s reasonable
judgment, the Buyer Insurer’s overall proposal does not meet the criteria (in
the aggregate) submitted by the Seller, in which case the Seller shall inform
the Product and Sales Committee of the Seller’s decision not to move forward
with the Buyer Insurer and the reasons therefor. The Seller shall provide the
Buyer Insurer with a reasonable period of time to resolve such issues before
proceeding with the RFP process set forth in Section 5.5(c). For the avoidance
of doubt, any decision to not move forward with the Buyer Insurer or to not move
forward with the new product proposal will take

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into consideration the overall purpose of this Agreement but remains at the sole
discretion of the Seller.
     (c) RFP Period for New Product Proposals.
     (i) If either (A) the Buyer Insurer elects not to submit a response to the
criteria or (B) the Seller determines not to move forward with the Buyer
Insurer, the Seller may provide requests for proposals (“RFPs”) to Third Party
Insurers for such new product proposal. If the Seller decides to provide such
RFPs to Third Party Insurers, the Seller will also provide the Buyer Insurer
with the opportunity to respond to such RFP as provided to the Third Party
Insurers.
     (ii) Following receipt of the RFP, if the Buyer Insurer elects to submit a
response in accordance with the requirements set forth therein, the Seller shall
evaluate such RFP response in good faith. The Seller shall: (A) have exclusive
discretion in determining the process for selection of, and the criteria for
evaluation of, potential providers of such new product, (B) make a good faith
determination of the extent to which proposals received from potential providers
satisfy the requirements of the RFP, and (C) select the Buyer Insurer’s proposal
unless, in the Seller’s reasonable judgment, a Third Party Insurer’s overall
proposal meets the requirements (in the aggregate) of the RFP better than the
Buyer Insurer’s overall proposal. For the avoidance of doubt, a Third Party
Insurer’s proposal would not be selected in preference to the Buyer Insurer’s
proposal solely on the basis that pricing proposed by the Third Party Insurer is
lower than the pricing proposed by the Buyer Insurer, provided that such pricing
differential would not, in the Seller’s reasonable judgment, be expected to
substantially and adversely impact sales.
          (d) New Product Development and Distribution. If the Seller selects
the Buyer Insurer to proceed in the development of the New Product, (A) the
Seller shall work exclusively with the Buyer Insurer to develop the New Product
for a period of time of up to twelve (12) months and (B) the Seller shall
provide the Buyer Insurer with an exclusivity period of up to twelve (12) months
for the introduction and initial distribution of the New Product in the Merrill
Lynch Global Private Client Network, after which the Seller may commence
distribution of products of Third Party Insurers in the Merrill Lynch Global
Private Client Network; provided, that the initial exclusive distribution period
described in (B) above shall not apply to Third Party Insurers’ products that
are distributed in the Merrill Lynch Global Private Client Network at the time
when the proposal was initially submitted to the Product and Sales Committee;
and provided further that, while continuing to take into account the cooperative
and mutually supportive relationship being fostered between the parties by this
Agreement, if the Seller concludes in the exercise of its reasonable judgment
that issues have arisen that render it impracticable to continue development of
the New Product with the Buyer Insurer (and such issues have not been resolved
by the Buyer Insurer), then the Seller may terminate

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such exclusive development period described in (A) above. If, after taking into
consideration the overall purpose of this Agreement, the Seller determines it is
impracticable to continue, the Seller will inform the Buyer Insurer of such
determination and provide the Buyer Insurer with a reasonable opportunity to
resolve any issues.
     (e) For the avoidance of doubt, this Agreement shall in no way limit the
Seller or any Seller Affiliate from engaging in discussions or entering into any
agreement with any Third Party Insurer or any other Person with respect to new
products that are initially proposed or brought to the Seller or any Seller
Affiliate by any such Third Party Insurer or other Person, and neither the
Seller nor any Seller Affiliate will have any obligation to notify the Buyer or
any of its Affiliates of its receipt of any such proposal or entry into any such
agreement.
     (f) If, during the Term, a Buyer Insurer proposes, in accordance with
Section 5.5(b), to develop a new product for distribution pursuant to this
Agreement and the Seller does not accept such proposal, then for a period of
30 days from its receipt of the proposal the Seller may not commence development
of a similar product with a Third Party Insurer; however, the Seller may
continue the development of similar products already under development at the
time that the Seller’s members of the Product and Sales Committee received the
proposal from the Buyer Insurer and the Seller may agree to distribute similar
products that are proposed by a Third Party Insurer and that are fully developed
in all material respects when first proposed to the Seller.
     (g) The Seller shall consult with the Product and Sales Committee on the
length of any exclusivity period specified in this Section 5.5, provided that
the Seller shall retain the sole discretion to determine the actual length of
any exclusivity period specified in this Section 5.5. Notwithstanding anything
to the contrary in the previous sentence, the Seller shall work exclusively with
the Buyer Insurers to develop an Income Guarantee Product for a period of time
of nine (9) months and the Seller shall provide the Buyer Insurers with an
exclusivity period of eighteen (18) months for the introduction and initial
distribution of the Income Guarantee Product in the Merrill Lynch Global Private
Client Network, after which the Seller may commence distribution of competitive
products of Third Party Insurers in the Merrill Lynch Global Private Client
Network.
     (h) With respect to any proposal submitted to the Product and Sales
Committee pursuant to Section 5.5(b), before permitting any Person to develop
the proposal (whether into a New Product or otherwise and whether pursuant to
Section 5.5(b) or pursuant to the RFP process in Section 5.5(c)), the Product
and Sales Committee shall determine and memorialize in writing the ownership of
Intellectual Property, if any, that will be created in the development of the
proposal (and any New Product developed therefrom). Such determination of
ownership shall reflect the relative contributions of the parties hereto and may
also include, for example, the granting of a license to use such Intellectual
Property to the party without ownership rights or royalties or other payment in
connection with the exploitation of such Intellectual Property.

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Section 5.6. Level Playing Field.
     (a) The Seller shall cause the Seller Distributors not to provide to the
Sales Force or the DAS 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 is more favorable
than the compensation or other economic inducement or benefit provided to such
Sales Force for the sale of such products offered by a Buyer Insurer.
     (b) The terms of this Section 5.6 shall not restrict deviations in Sales
Force compensation that are (i) based upon neutral criteria that do not
differentiate between product providers, such as achieving sales volume or
persistency objectives, or (ii) for products (including combined product and
service arrangements) for which distributor compensation is negotiated by the
provider on a sale-by-sale basis, such as group retirement products.
ARTICLE VI.
FUNDS
Section 6.1. Investment Management Services. Throughout the Term, the Seller,
through Roszel or a successor Seller Affiliate with substantially similar
capabilities and qualifications, will provide Investment Management Services for
the benefit of the Buyer Insurers with respect to the Products. Moreover, for a
period of 3 years after the date hereof, (i) the Seller will not provide asset
allocation model services for the benefit of insurance companies other than the
Buyer Insurers with respect to variable products distributed through the Merrill
Lynch Global Private Client Network in the United States and (ii) the Seller,
through Roszel or a successor Seller Affiliate with substantially similar
capabilities and qualifications, will be the sole provider to the Buyer Insurers
of asset allocation model services with respect to the Products. The
compensation to be paid by the Buyer Insurers to the Seller (or any Seller
Affiliate designated by the Seller) for providing these Investment Management
Services will be as set forth in the Investment Management Services Agreement.
As soon as reasonably practicable, consistent with applicable Law, the parties
will also meet to discuss, in good faith, the expansion of such Investment
Management Services, in whole or in part, to products offered by the Buyer
Insurers in addition to the Products.
Section 6.2. Investment Management Committee.
     (a) Structure. Promptly following the establishment of the Product and
Sales Committee, the members of the Product and Sales Committee will establish a
committee (the “Investment Management Committee”). The Investment Management
Committee will consist of an equal number of members from both the Buyer and the
Seller.

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     (b) Purpose. The Investment Management Committee will be responsible for
establishing criteria for evaluating the competitiveness of the funds, and
recommending changes in the menu of investment options available inside the
Products, including changes resulting from a Termination Event. The Investment
Management Committee will also be responsible for considering whether any
“material impairment”, as set forth in subsection (i) of the definition of
Termination Event, has occurred. For the avoidance of doubt, subject to
Section 6.3, the Buyer Insurers shall make the ultimate determination of the
fund lineup and of whether a Termination Event has occurred.
Section 6.3. Fund Choices.
     (a) During the Term, the Buyer Insurers will, unless the Seller shall
otherwise consent continue to offer the funds managed by each of Roszel and
BlackRock (or their respective Affiliates) that are available in the Investor
Choice Annuity and the Legacy Products on the Reference Date as available fund
choices in the Investor Choice Annuity (as it may be amended or supplemented
during the Term) and the Legacy Products.
     (b) During the Term, the Buyer Insurers will maintain the proportion of the
funds managed by each of Roszel and BlackRock (or their respective Affiliates)
to the total fund choices available in the Investor Choice Annuity (as it may be
amended or supplemented during the Term) and the Legacy Products at
substantially the same level as on the Reference Date. For illustrative
purposes, if the Roszel or BlackRock-managed funds constituted 20% of the fund
choices available to purchasers of a Product on the Reference Date, then they
must remain at least 20% of the fund choices so available throughout the Term,
unless the Seller consents to a diminution in the level of Roszel or
BlackRock-managed fund options.
     (c) Upon the occurrence of a Termination Event with respect to a Roszel or
BlackRock-managed fund, the Investment Management Committee will consider and
recommend how to maintain the percentage of Roszel and BlackRock-managed funds
in the Products. Nothing herein shall preclude the Investment Management
Committee from recommending, or the Buyer Insurers from increasing, the number
of Roszel or BlackRock fund choices in the Products.
     (d) If a Buyer Insurer believes that a Termination Event has occurred with
respect to a Roszel or BlackRock-managed fund, such Buyer Insurer will give
written notice of termination to the Seller through the Investment Management
Committee. For sixty (60) days after the termination notice is given, the Seller
may propose a replacement Roszel or BlackRock-managed fund for use in the
Products in which the terminated Roszel or BlackRock-managed fund is used. The
replacement fund shall be an Eligible Fund in the same Lipper asset class and
style category as the terminated Roszel or BlackRock-managed fund and shall meet
the competitiveness standards established by the Investment Management Committee
pursuant to Section

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6.2(b). The relevant Buyer Insurer will not unreasonably refuse to accept the
substitution of the replacement fund, except as may be required by fiduciary
duty or applicable Law. If the relevant Buyer Insurer accepts the replacement of
a Roszel or BlackRock-managed fund, the Seller shall bear the costs of the
replacement of such Roszel or BlackRock-managed fund, including the costs of any
substitution order required under the Investment Company Act to be obtained from
the SEC. If the Seller does not propose an acceptable replacement fund, then the
terminated fund no longer will be required to be included in the relevant
Products under this Section 6.3 and the required coverage percentage under
Section 6.3 will be reduced accordingly.
          (e) The Investment Management Committee may agree that the Buyer
Insurer should replace a Roszel or BlackRock-managed fund with another Eligible
Fund. The party proposing the replacement shall bear the reasonable costs of the
replacement, including the cost of any substitution order required under the
Investment Company Act to be obtained from the SEC.
ARTICLE VII.
ACCESS; BRANDING; CONFIDENTIAL INFORMATION; MATERIALS
Section 7.1. Access.
          (a) In addition to the access provided pursuant to Article IV, to the
extent that, as of the date of this Agreement, a Seller Distributor provides
access (including access to its Sales Force, sales offices or sales, education
or training meetings that involve the promotion of products) to a Buyer Insurer
and Buyer Distributor, such Seller Distributor shall continue to permit access
to such Buyer Insurer and Buyer Distributor during the Term, on substantially
the same terms and conditions as such Buyer Insurer and Buyer Distributor is
provided access as of the date of this Agreement and in a manner consistent with
applicable Law and the Seller’s Standards and Practices.
          (b) As a condition to the ongoing access described in the preceding
paragraph, the Buyer Insurers and Buyer Distributors to whom access is provided
shall maintain, in the aggregate, wholesaler coverage, training, and sales
support to the Seller Distributor on terms and conditions that are no less
favorable overall than those provided by the Buyer Insurers and Buyer
Distributors to such Seller Distributor on the Reference Date, and over a
mutually agreeable time following the date of this Agreement shall provide
additional wholesaler coverage, training and sales support at commensurate
levels devoted to support the marketing and sales of the Products that are then
being offered.
          (c) From and after the Closing, any support fees to be paid by the
Buyer Insurers to the Seller (or a Seller Affiliate) will be paid either by the
Buyer Insurer or a Buyer Distributor. For the avoidance of doubt, from and after
the Closing, the Buyer

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Insurers and Buyer Distributors shall be considered one group in connection with
the determination of support fees.
Section 7.2. Branding; Use of Names.
          (a) During the Term, in accordance with the terms and subject to the
conditions of the Transitional Trademark License Agreement:
          (i) If being distributed through the Merrill Lynch Global Private
Client Network, the Investor Choice Annuity may be offered and branded by the
Buyer Insurers utilizing the trademarks, service marks, brand names, domain
names or trade, corporate or business names that relate to it as of the date of
this Agreement (including any and all such Merrill Lynch marks and names);
provided that any such mark or name shall be appropriately altered to reflect
any change to the mark or name of the applicable Seller Distributor and to
reflect any change that is required by Law as a result of any change in the
issuer of the Investor Choice Annuity; and
          (ii) to the extent that a New Product (including the Income Guarantee
Product) is distributed by a Seller Distributor on behalf of a Buyer Insurer
after the date of this Agreement, such New Product may be offered and branded by
the Buyer Insurers making use of one or more Merrill Lynch marks or names.
          (b) During the Term, the Seller shall not grant a license to product
providers to use the Merrill Lynch marks or names with (i) any variable or fixed
annuity products or (ii) any product in the same product category as any New
Product, in each case that is distributed in the Merrill Lynch Global Private
Client Network; provided, that if the Buyer Insurers cannot meet the Seller’s
product needs after consultation in accordance with Section 5.5 or the Seller’s
product capacity needs for a New Product exceed the Buyer Insurers’ capacity,
then the Seller shall not be prohibited from granting a license to a Third Party
Insurer for such New Product.
Section 7.3. Confidential Information.
          (a) During the Term, each Party and its Affiliates may receive access
to confidential information and other proprietary information (“Confidential
Information”) of the other Party and its Affiliates. Each party shall take all
appropriate actions consistent with applicable Law to ensure the protection,
privacy, confidentiality and security of Confidential Information.
          (b) Confidential Information of the Seller and its Affiliates
includes, but is not limited to, the names, addresses, telephone numbers and
social security numbers of applicants for, the purchasers of and other customers
of the Products and

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New Products as well as other identity and private information in respect of the
Seller’s or a Seller Affiliate’s customers, employees, representatives and
agents. Confidential Information shall not include any customer information (i)
that was previously known by a Buyer Insurer from a source other than any Seller
Distributor without obligations of confidence; (ii) that was or is rightfully
received by a Buyer Insurer from a third party without obligations of confidence
to any Seller Distributor or from publicly available sources without obligations
of confidence to any Seller Distributor; or (iii) that was or is developed by
means independent of information obtained from any Seller Distributor. As a
condition to access to the Confidential Information of Seller and its
Affiliates, neither Buyer nor any of its Affiliates shall use Seller’s
Confidential Information for any purpose, except as may be necessary in
connection with the administration and servicing of the Products and New
Products sold through the Seller Distributors, without the prior written consent
of the Seller or its appropriate Affiliate. In no event shall the names and
addresses of the Seller Distributors’ customers and prospective customers be
furnished by the Buyer or its Affiliates to any other company or person, except
as may be necessary in connection with the administration or servicing of the
Products and the New Products. The Buyer agrees that neither it nor any of its
Affiliates shall solicit directly or indirectly any customers based on the use
of Confidential Information. Notwithstanding the foregoing, the Buyer and its
Affiliates may contact customers for purposes of conservation of existing
annuity or life insurance policies. Further, the parties understand that the
Buyer or its Affiliates may, from time to time, conduct general and untargeted
solicitations of investments, insurance or annuity products using its own
information or other publicly available information, but not the Confidential
Information relating to customers. Such general and untargeted solicitations may
incidentally include a Seller Distributor’s customers and shall not be
considered a breach of this Section 7.3, provided that the Buyer or its
Affiliates received the customer information from a third party or independently
and not in any way as a result of its relationship hereunder.
          (c) Confidential Information of the Buyer and its Affiliates includes
any information concerning the Products (including pricing, services, computer
or operational systems and marketing strategies of the Buyer and its
Affiliates), any information relating to the development or exploitation of
intellectual property rights of the Buyer and its Affiliates, and any other
information pertaining to the Buyer and its Affiliates that is proprietary in
nature. The Seller acknowledges and agrees that Confidential Information of the
Buyer and its Affiliates is and shall remain the property of the Buyer and its
Affiliates. Confidential Information of the Buyer and its Affiliates shall not
include any information (i) that was previously known by a Seller Distributor
from a source other than any Buyer Insurer (including a Company prior to its
acquisition by the Buyer) without obligations of confidence; (ii) that was or is
rightfully received by a Seller Distributor from a third party without
obligations of confidence to any Buyer Insurer or from publicly available
sources without obligations of confidence to any Buyer Insurer; or (iii) that
was or is developed by means independent of information obtained from any Buyer
Insurer.

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     (d) As a condition to access to the other party’s Confidential Information,
the receiving party and its Affiliates shall not use, copy or disclose such
Confidential Information in any manner (including to sell or cross-sell their
products), except as provided in this Agreement or as otherwise agreed.
Confidential Information may be used to service the Products and New Products,
including, as appropriate, to accept additional contributions and premium for
and to modify, add or exchange coverage to any Product or New Product purchased
by a policy owner who purchased such Product or New Product from a Seller
Distributor. The parties also understand that the Buyer Insurers may respond to
inquiries from holders of the Products or New Products concerning other Buyer
Insurer products and services, provided there shall be no solicitation of such
inquiry using Confidential Information.
     (e) The parties and their respective Affiliates shall take all necessary
action to ensure the protection, confidentiality and security of the other
party’s and its Affiliates’ Confidential Information in conformity with
applicable Law and the privacy policies of the other party and its Affiliates as
in force from time to time.
Section 7.4. Marketing, Training and Other Materials.
     (a) Any marketing, training or other materials to be made available by any
Buyer Insurer or Buyer Distributor to any Seller Distributor’s Sales Force or
customers in connection with the Products or New Products (other than ordinary
course communications to policyholders and contract holders) shall be made
available only with the prior written consent (which shall not be unreasonably
withheld, conditioned or delayed) of the applicable Seller Distributor;
provided, that all such materials that are used by the Buyer Insurers or Buyer
Distributor in connection with the distribution of the Products through the
Seller Distributors on the date of this Agreement shall not require any such
consent. In the event that the applicable Buyer Insurer or Buyer Distributor or
the applicable Seller Distributor determines to discontinue the use of any such
materials, the parties shall cooperate to ensure that such use is discontinued
by such Seller Distributor’s Sales Force. For clarity, this provision shall not
apply to any Product prospectus or periodic report required to be filed with the
SEC.
     (b) Any marketing, training or other materials prepared by a Seller
Distributor and to be made available by such Seller Distributor to its Sales
Force or customers that describes any Buyer Insurer or any of its Affiliates or
any insurance or annuity product offered by any of them may be made available
only with the prior consent of the applicable Buyer Insurer; provided that all
such materials that are used by the Seller Distributors in connection with the
distribution of the Products on the date of this Agreement shall not require any
such consent (except to the extent that descriptions of the Companies reflect
their ownership by the Buyer). In the event that the applicable Buyer Insurer or
the applicable Seller Distributor determines to discontinue the use of any such
materials, the parties shall cooperate to ensure that such use is discontinued
by such Seller Distributor’s Sales Force.

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Section 7.5. Publicity. Without limiting Section 7.4 above, and except as
required by applicable law, neither the Buyer nor the Seller shall, directly or
indirectly, make or cause to be made any public announcement or issue any
release or notice in respect of this Agreement, the transactions or services
contemplated hereby or the relationship between the parties without the prior
written consent of the other party. The Buyer and the Seller shall: (i) consult
with each other prior to (A) issuing, or, permitting their respective Affiliates
to issue, any press releases or otherwise making public statements with respect
to this Agreement, the transactions or services contemplated hereby or the
relationship between the parties and (B) making any filings with any
Governmental Entity or with any national securities exchange with respect
thereto; and (ii) be provided a reasonable opportunity to comment on any such
public announcement, release or notice. Within a reasonable period of time
following the Closing, the Product and Sales Committee will compile a series of
documents, including, but not limited to, talking points, question and answer
lists and company and business descriptions, which the parties will use to
provide guidance in responding to routine inquiries with respect to this
Agreement, the transactions or services contemplated hereby or the relationship
between the parties. Such series of documents will be reviewed and updated as
necessary by the Product and Sales Committee on a quarterly basis. Until such
time as such documents are updated by the Product and Sales Committee, the
parties may continue to use the then most recently approved series of documents.
ARTICLE VIII.
CERTAIN PRACTICES AND PROCEDURES
Section 8.1. Cooperation. The Buyer acknowledges that the Seller and the Seller
Affiliates may have certain obligations and liabilities from and after the
Closing arising out of or resulting from the manner in which Life Insurance and
Annuity Contracts were marketed or sold prior to the Closing through the Merrill
Lynch Global Private Client Network. Accordingly, from and after the Closing,
the Buyer shall cooperate in all reasonable respects with the Seller and the
Seller Affiliates with respect to the defense or settlement of, or other
response to, any complaint of any kind asserted against the Seller or any Seller
Affiliate with respect to the manner in which any such Life Insurance and
Annuity Contract was marketed or sold prior to the Closing, including, at the
reasonable written request of the Seller or any Seller Affiliate, by (i)
furnishing or causing to be furnished, records, information and testimony, and
attending conferences, discovery proceedings, trials or appeals in connection
therewith and (ii) maintaining, terminating or modifying any practices, policies
or procedures of the Companies with respect to the administration,
interpretation or enforcement of any such Life Insurance and Annuity Contract in
order to facilitate any such defense, settlement or response, as the case may
be; provided that, while Section 5.2(b)(iii) of the Purchase Agreement remains
in force, the Buyer or Buyer Insurer shall not be obligated to take any action
pursuant to this Section 8.1 if (a) such action, measured from the perspective
of the Buyer or Buyer Insurer and after giving effect to the impact of any
related indemnity of the Buyer or

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Buyer Insurer under Section 5.2(b)(iii) of the Purchase Agreement, is
commercially unreasonable or (b) the Buyer or Buyer Insurer has been advised in
writing by its counsel that there is a substantial likelihood that such action
would violate applicable Law.
Section 8.2. Maintenance of Certain Practices and Procedures. Without limiting
the generality of Section 8.1, the Buyer shall cause the Companies at all times
from and after the Closing to (i) maintain in all material respects the
practices and procedures that shall be set forth on Section 8.2(i) of the
Deliverables Schedule with respect to the closed block of life insurance
policies referred to thereon, (ii) ensure that the guaranteed interest rate for
the Company’s single premium whole life block of business (non-variable) will be
at least 4%, net of the cost of insurance, as shall be set forth with more
particularity on Section 8.2(ii) of the Deliverables Schedule, (iii) maintain in
all material respects the functionality of the Companies’ administrative systems
as in effect on the date hereof (or of any replacement system) so as to enable
the Companies and the Seller Affiliates to comply with the specific terms of the
open ended settlements entered into prior to the Closing with respect to certain
Life Insurance and Annuity Contracts, as shall be set forth with more
particularity on Section 8.2(iii) of the Deliverables Schedule, and (iv)
maintain the policy history of each Life Insurance and Annuity Contract marketed
and sold by the Companies prior to the Closing in substantially the same manner
in which such policy histories have been maintained by the Companies prior to
the Closing.
ARTICLE IX.
TERM OF THE AGREEMENT; CERTAIN CONDITIONS; ACQUISITIONS;
NO OTHER OBLIGATIONS
Section 9.1. Term. Except as otherwise stated herein, the term of this Agreement
(the “Term”) will commence on the date of this Agreement and shall continue
until the fifth anniversary of this Agreement; provided, that the expiration of
this Agreement shall not reduce nor curtail the term of any Distribution
Agreement that extends beyond the end of the Term.
Section 9.2. Survival. Upon expiration of this Agreement, the provisions of
Section 5.2, Section 5.3, Section 7.3, this Section 9.2, Article VIII, Article X
and Article XII shall survive without modification.
Section 9.3. Certain Conditions. Subject to Section 9.4, but notwithstanding
anything else to the contrary in this Agreement or in any Distribution
Agreement:
          (a) no Seller Distributor shall be required to enter into a
Distribution Agreement in respect of, or have any obligation to distribute (and
may immediately cease to distribute), any Product or New Product offered by a
Buyer Insurer, or undertake or continue with any New Product development
project, if:

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     (i) the Seller reasonably determines that such Product or New Product
offered by a Buyer Insurer is not Competitive;
     (ii) any change is made or any feature is added to such Product or New
Product (or a fund or investment option therein) without the Seller’s or the
applicable Seller Distributor’s prior written approval, which approval shall not
be unreasonably withheld, conditioned or delayed;
     (iii) the Seller determines, in its sole discretion, such Product or New
Product or the offering thereof conflicts in any material respect with:
     (x) applicable Law;
     (y) any provision of any subsisting agreement in effect on the Reference
Date by which the Seller or any Seller Affiliates or any of their respective
assets or properties are bound; or
     (z) the Seller Standards and Practices; or
     (iv) a federal, state or local domestic, foreign or supranational
governmental, regulatory or self-regulatory authority, agency, court, tribunal,
commission or other governmental, regulatory or self-regulatory entity, with
jurisdiction over the Seller or a Seller Distributor formally requests in
writing or mandates that such Seller Distributor cease offering or no longer
offer the Product; and
          (b) no Buyer Insurer shall be required to enter into a Distribution
Agreement in respect of, or have any obligation to issue (and may immediately
cease to issue), any Product or New Product, or undertake or continue with any
New Product development project, if:
     (i) the Buyer Insurer reasonably determines that such Product or New
Product is not competitive. For the purposes of this subsection (i), a Product
or New Product is not “competitive” if, among other things, the overall
profitability of such Product or New Product to the relevant Buyer Insurer does
not meet such Buyer Insurer’s profitability targets, which shall be consistent
with its profitability targets, in the aggregate, for similar products offered
through comparable distribution channels;
     (ii) Seller or the applicable Seller Distributor unreasonably withholds,
conditions or delays approval of any change or additional feature proposed by
the Buyer or the applicable Buyer Insurer;

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     (iii) the Buyer determines, in its sole discretion, such Product or New
Product or the offering thereof conflicts in any material respect with:
     (x) applicable Law; or
     (y) any provision of any subsisting agreement in effect on the Reference
Date by which the Buyer or any Buyer Affiliate or any of their respective assets
or properties are bound; or
     (iv) a federal, state or local domestic, foreign or supranational
governmental, regulatory or self-regulatory authority, agency, court, tribunal,
commission or other governmental, regulatory or self-regulatory entity with
jurisdiction over Buyer or a Buyer Affiliate formally requests in writing or
mandates that such Buyer Affiliate cease offering or no longer offer the
Product.
Section 9.4. Notice and Cure Opportunity. Prior to any Seller Distributor’s or
Buyer Affiliate’s exercising its right under Section 9.3 not to enter into a
Distribution Agreement with respect to any Product or New Product, to cease
offering any Product or New Product or to cease to undertake or continue with
any New Product development project, such person shall provide written notice to
the Buyer or Seller, as appropriate, containing a reasonably detailed statement
of the grounds for such exercise, and shall afford the recipient a period of
thirty (30) days in which to cure the deficiency, unless such deficiency is not
capable of being cured. No Seller Distributor or Buyer Affiliate, as
appropriate, shall be required to continue to distribute any Product or New
Product pending any cure period, if the offering of such Product or New Product
would reasonably be expected to (i) violate applicable Law or (ii) conflict with
the Seller Standards and Practices. It is the parties’ intention to bring
concerns regarding the Products or the distribution thereof to the Product and
Sales Committee before they rise to a level warranting a deficiency notice under
this provision, and the parties shall in good faith use that forum to seek to
resolve such concerns.
Section 9.5. Acquisitions.
          (a) Notwithstanding anything to the contrary in this Agreement,
neither the Seller nor any Seller Distributor shall be (i) deemed to be in
violation of this Agreement or any Distribution Agreement or (ii) obligated
hereunder or thereunder to take any action (including to make any adjustment to
commissions, economic inducements or other benefits for the Sales Force), if
such violation would arise, or such action would be required to be taken, solely
as a result of the Seller or any Seller Affiliate acquiring assets or a business
of any Person engaged in the distribution of financial services products
following the date of this Agreement.
          (b) If the Seller Parent sells or otherwise disposes of all or
substantially all of the Merrill Lynch Global Private Client Network (in one or
a series of

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related transactions) during the Term, the provisions of this Agreement shall
continue to apply to the transferred business, and the Seller shall enter into
appropriate agreements with the acquirer to effectuate the purpose of this
Agreement as to the transferred business.
          (c) In the case of a direct or indirect acquisition by the Seller of
the assets or business of another entity engaged in the distribution of
investment products that compete with the Products (if permitted under
Section 4.11 of the Purchase Agreement), (i) no such acquisition will limit or
restrict any obligation of the Seller or the Seller Distributors under this
Agreement or any Distribution Agreement and (ii) at the request of the Buyer,
the Seller will use reasonable efforts, subject to applicable Law and the
contractual obligations to which the acquired business is subject immediately
before its acquisition (except provisions entered into in preparation for the
acquisition), to cause the acquired business to provide the Buyer and its
Affiliates access and support for distribution of the Products on the same basis
as provided by the Seller and the Seller Distributors hereunder.
Section 9.6. No Other Obligations. Except as specifically set forth herein,
nothing in this Agreement shall (i) impose upon any Seller Distributor any
obligation to distribute any Products or New Products offered by a Buyer Insurer
through the Seller Distributors, (ii) impose upon the Seller or any Seller
Affiliate any obligation to provide to their respective employees any Product or
New Product issued by the Buyer or any Affiliate of the Buyer, (iii) impose upon
any Seller Distributor any obligation to refrain from distributing life
insurance or annuity products offered by Third Party Insurers, (iv) restrict the
Buyer or the Seller or any of their respective Affiliates from acquiring or
disposing of any assets of, or reorganizing or consolidating, any business, (v)
restrict the ability of any Buyer Insurer to distribute insurance or annuity
products through Persons other than Seller Distributors, (vi) impose upon any
Buyer Insurer any obligation to distribute through the Seller Distributors any
products or new products offered by a Buyer Insurer, or (vii) create any
obligation on the part of the Seller or any Seller Affiliate with respect to the
support of the Products or New Products. Except as set forth in Section 9.5(c),
nothing in this Agreement shall impose upon any Seller Affiliate that becomes a
Seller Affiliate after the date of this Agreement any obligation to distribute
any Product or New Product on behalf of a Buyer Insurer. For the avoidance of
doubt, in the event any Seller Distributor ceases to be a Seller Affiliate, the
Seller shall have no obligations under this Agreement with respect to such
Seller Distributor, except, if applicable, as set forth in Section 9.5(b).
ARTICLE X.
INDEMNIFICATION
Section 10.1. Indemnification by the Seller. Subject to the terms of this
Article X, the Seller and the Seller Parent shall, jointly and severally,
defend, indemnify and hold harmless the Buyer, each Company and their Affiliates
and their respective directors,

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officers and employees (the “Buyer Indemnified Parties”) from and against, and
pay or reimburse the Buyer Indemnified Parties for, any and all Losses resulting
from or arising out of (i) any inaccuracy in or breach of any representation or
warranty by the Seller Parent or the Seller in or pursuant to this Agreement or
any failure of the Seller Parent or the Seller to perform any covenant or
agreement under this Agreement and (ii) errors, omissions, negligence,
misrepresentation, fault or wrongful action of the Seller or its Affiliates, or
of any director, officer or employee of the Seller or sales persons associated
with the Seller (including failure to comply with any applicable federal law or
regulation, state law or regulation, administrative or exchange rule or
regulation, or rule of any applicable self-regulatory organization), in the
performance of the obligations hereunder.
Section 10.2. Indemnification by the Buyer. Subject to the terms of this
Article X, the Buyer shall defend, indemnify and hold harmless the Seller
Parent, the Seller and their respective Affiliates and their respective
directors, officers and employees (the “Seller Indemnified Parties”) from and
against, and pay or reimburse the Seller Indemnified Parties for, any and all
Losses resulting from or arising out of (i) any inaccuracy in or breach of any
representation or warranty by the Buyer in or pursuant to this Agreement or any
failure of the Buyer or its Affiliates to perform any covenant or agreement
under this Agreement and (ii) errors, omissions, negligence, misrepresentation,
fault or wrongful action of the Buyer or its Affiliates or of any director,
officer or employee of the Buyer or such Affiliates (including failure to
provide adequate disclosure concerning the Products or to properly administer
the Products and failure to comply with any applicable federal law or
regulation, state law or regulation, administrative or exchange rule or
regulation, or rule of any applicable self-regulatory organization), in the
performance of obligations hereunder.
     Section 10.3. Calculation of Losses.
     (a) Any indemnity payment made by an Indemnifying Party to an Indemnified
Party pursuant to Sections 10.1 or 10.2 shall be made net of (x) any amounts
actually recovered by the Indemnified Party under applicable insurance policies
or from any other Person alleged to be responsible for the matters underlying
such indemnity payment less (y) any related costs and expenses, including the
aggregate cost of pursuing any related insurance claims plus any related
increases in insurance premiums or other chargebacks; provided, however, that
notwithstanding anything in Section 10.3(c) to the contrary no party shall have
any obligation to seek to recover any insurance proceeds or to initiate a
lawsuit against any other Person in connection with making a claim under this
Article X. If the Indemnified Party receives any amounts under applicable
insurance policies or from any other Person alleged to be responsible for the
matters underlying such indemnity payment subsequent to an indemnification
payment by the Indemnifying Party, then the Indemnified Party shall promptly
reimburse the Indemnifying Party for any payment made or expense incurred by the
Indemnifying Party in connection with

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providing such indemnification payment up to the amount received by the
Indemnified Party.
     (b) Each Indemnified Party shall use commercially reasonable efforts to
mitigate any Loss that the Indemnified Party asserts or is reasonably likely to
assert under this Article X upon a responsible officer of any Indemnified Party
becoming aware of any event that would reasonably be expected to give rise to
such assertion. In the event that the Indemnified Party shall fail to make, or
cause to be made, any such commercially reasonable efforts to mitigate any such
claim or liability, then notwithstanding anything to the contrary contained in
this Agreement, the Indemnifying Party shall not be required to indemnify any
Indemnified Party for that portion of any Losses that would reasonably be
expected, individually or in the aggregate, to have been avoided if the
Indemnified Party had made such efforts.
     (c) Each Indemnified Party shall, use all commercially reasonable efforts
to collect any and all amounts available under insurance coverage or from any
other Person alleged to be responsible for any Losses payable under
Section 10.1, and shall take such actions in such respect as the Indemnifying
Party may reasonably request. If the Indemnified Party receives any payment from
the Indemnifying Party in respect of any Losses pursuant to Section 10.1 or 10.2
and the Indemnified Party could have recovered all or part of such Losses from a
third party based on the underlying claim asserted against the Indemnifying
Party, the Indemnified Party shall assign such of its rights to proceed against
such third party as are necessary to permit the Indemnifying Party to recover
from such third party the amount of such payment.
     (d) No Indemnifying Party shall be liable pursuant to Sections 10.1 and
10.2 in respect of any Loss if such Loss would not have arisen but for, or to
the extent any Loss is increased as a result of, (i) the passing of, or a change
in, a Law or a change to any written interpretation of the Law or administrative
practice of any Governmental Authority occurring on or after the Closing or (ii)
the change by statute or by any regulatory or other official auditing standards
body of any accounting policy applicable to the applicable Indemnified Party.
     (e) No Indemnifying Party shall be liable to any Indemnified Party in
respect of any Loss under this Article X to the extent such Loss is attributable
to, or to the extent any Loss is increased as a result of, any (i) act,
omission, transaction, or arrangement carried out at the written request of or
with the written approval of such Indemnified Party, (ii) act, transaction or
arrangement carried out by or on behalf of such Indemnified Party if such act,
transaction or arrangement was not commercially reasonable independent of such
Indemnified Party’s rights to indemnification under this Agreement, or (iii)
breach by such Indemnified Party of any of its obligations under this Agreement
or any obligations entered into pursuant hereto.
Section 10.4. Indemnification Notice Procedures.

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          (a) A party entitled to indemnification under this Agreement shall be
referred to as an “Indemnified Party.” A party obligated to indemnify an
Indemnified Party under this Agreement shall be referred to as an “Indemnifying
Party.”
          (b) Each Indemnified Party agrees to provide prompt written notice
(the “Indemnification Notice”) to the Indemnifying Party of the assertion of any
claim, or the commencement of any suit, action or proceeding in respect of which
indemnity may be sought under this Article X, which Indemnification Notice
shall: (i) specify in reasonable detail the basis on which indemnification is
being asserted, (ii) provide a reasonable estimate of the amount of the Losses
asserted therein, (iii) specify the provision or provisions of this Agreement
under which such Losses are asserted and (iv) in the case of a claim asserted by
any third party (“Third Party Claim”), include copies of all notices and
documents (including court papers), if any, served on or received by the
Indemnified Party by such third party. Notwithstanding the foregoing, the
failure to give an Indemnification Notice shall not affect the indemnification
sought hereunder except to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure (except that the Indemnifying
Party shall not be liable for any expenses incurred during the period in which
the Indemnifying Party failed to give such notice). Thereafter, the Indemnified
Party shall promptly deliver to the Indemnifying Party copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
any Third Party Claim as to which indemnity may be sought hereunder.
Notwithstanding anything to the contrary in this Section 10.4, unless the
Indemnifying Party assumes the defense of such Third Party Claim, the
Indemnified Party is not obligated to make available to the Indemnifying Party
documentation that is subject to attorney client privilege, work product
protection or any other applicable privilege or protection.
Section 10.5. Indemnification Procedures for Claims by an Indemnified Party.
     (a) In the event that the Indemnifying Party shall object to the
indemnification of an Indemnified Party in respect of any claim or claims
specified in any Indemnification Notice, the Indemnifying Party shall, within
thirty (30) days after receipt by the Indemnifying Party of such Indemnification
Notice, deliver to the Indemnified Party a notice to such effect and the
Indemnifying Party and the Indemnified Party shall, within the forty-five
(45) day period beginning on the date of receipt by the Indemnified Party of
such objection, attempt in good faith to agree upon the rights of the respective
parties with respect to each of such claims to which the Indemnifying Party
shall have so objected. If the Indemnified Party and the Indemnifying Party
succeed in reaching agreement on their respective rights with respect to any of
such claims, the Indemnified Party and the Indemnifying Party shall promptly
prepare and sign a memorandum setting forth such agreement. Should the
Indemnified Party and the Indemnifying Party be unable to agree as to any
particular item or items or amount or amounts within such time period or any
additional time period agreed to in writing by the parties, then either the

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Indemnified Party or the Indemnifying Party shall submit such dispute to a court
of competent jurisdiction as set forth in Section 12.13.
     (b) Claims for Losses specified in any Indemnification Notice to which an
Indemnifying Party shall not object in writing within forty-five (45) days of
receipt of such Indemnification Notice, claims for Losses covered by a
memorandum of agreement of the nature described in Section 10.5(a), and claims
for Losses the validity and amount of which have been the subject of judicial
determination as described in Section 10.5(a) or shall have been settled with
the consent of the Indemnifying Party, as described in Section 10.6, are
hereinafter referred to, collectively, as “Agreed Claims”. Within ten
(10) Business Days of the determination of the amount of any Agreed Claim, the
Indemnifying Party shall pay to the Indemnified Party an amount equal to the
Agreed Claim by wire transfer in immediately available funds to the bank account
or accounts designated by the Indemnified Party in a notice to the Indemnifying
Party not less than two (2) Business Days prior to such payment.
Section 10.6. Indemnification Procedures for Third Party Claims.
          (a) The Indemnifying Party shall be entitled to assume, conduct and
control, through counsel of its own choosing and at its own expense, the
settlement or defense of any Third Party Claim; provided, however, that if the
Indemnifying Party does not promptly assume the defense of such Third Party
Claim within fifteen (15) Business Days following the receipt of an
Indemnification Notice or does not elect to defend such Third Party Claim, 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 assume and
thereafter conduct such defense with counsel of its own choosing; provided, that
the Indemnified Party shall obtain the prior written consent of the Indemnifying
Party (which consent shall not be unreasonably withheld, delayed or
conditioned), without prejudice to the ability of the Indemnified Party to
enforce its claim for indemnification against the Indemnifying Party hereunder
before entering into any settlement or compromising, discharging or admitting
any liability with respect to any such Third Party Claim. If the Indemnifying
Party shall assume the control of the defense of any Third Party Claim in
accordance with the provisions of this Section 10.6(a), (i) the Indemnifying
Party shall obtain the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld, delayed or conditioned) before
entering into any settlement of such Third Party Claim, if the settlement does
not release the Indemnified Party from all liabilities and obligations with
respect to such Third Party Claim or the settlement imposes injunctive or other
equitable relief against the Indemnified Party or admits any liability in
connection therewith, (ii) the Indemnified Party shall be entitled to
participate in (but not conduct or control) the defense of such Third Party
Claim and to employ separate counsel of its choice for such purpose, and (iii)
the Indemnified Party shall promptly provide to the Indemnifying Party copies of
all notices and documents not supplied with the Indemnification Notice because
of any privilege. The fees and

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expenses of such separate counsel shall be paid by the Indemnified Party;
provided, however, that such Indemnified Party will be entitled to participate
in any such defense with separate counsel at the expense of the Indemnifying
Party if (x) authorized by the Indemnifying Party to participate or (y) in the
opinion of counsel to the Indemnified Party, a conflict or potential conflict
exists between the Indemnified Party and the Indemnifying Party that would make
such separate representation advisable; and provided further, that the
Indemnifying Party will not be required to pay for more than one such counsel
for all Indemnified Parties in connection with any Third Party Claim.
          (b) Each party shall cooperate, and cause their respective Affiliates
to cooperate, in the defense or prosecution of any Third Party Claim and shall
furnish or cause to be furnished such records, information and testimony, and
attend such conferences, discovery proceedings, hearings, trials or appeals, as
may be reasonably requested in connection therewith. All reasonable
out-of-pocket costs and expenses incurred in connection with the Indemnified
Party’s cooperation shall be borne by the Indemnifying Party.
Section 10.7. General. The rights and remedies provided herein shall be
cumulative and in addition to all other rights and remedies available to the
parties at law or equity, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such rights or remedies by such party. Notwithstanding the preceding
sentence, nothing in this Agreement shall restrict or prevent any party from
seeking indemnification under any applicable provision of the Purchase
Agreement, or any other Ancillary Transaction Agreements (as defined in the
Purchase Agreement), provided that no party shall obtain duplicative recoveries.
ARTICLE XI.
DEFINITIONS
Section 11.1. Defined Terms. For purposes of this Agreement, unless the context
requires otherwise, the following terms shall have the following meanings:
     “Acquisition” has the meaning set forth in the recitals.
     “Actuarial Report” has the meaning set forth in Section 5.2(a).
     “Affiliate” means, 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 Person. The term “control”
includes the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
     “Agreed Claims” has the meaning set forth in Section 10.5(b).

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     “Agreement” has the meaning set forth in the preamble.
     “BlackRock” means BlackRock, Inc.
     “Business Day” means any day that is not (i) a Saturday, (ii) a Sunday or
(iii) any other day on which commercial banks are authorized or required by Law
to be closed in the City of New York.
     “Buyer” has the meaning set forth in the preamble.
     “Buyer Distributors” means the Affiliates of the Buyer Insurers involved in
the underwriting and wholesale distribution activities of fixed and variable
annuities and life insurance.
     “Buyer Indemnified Parties” has the meaning set forth in Section 10.1.
     “Buyer Insurer” means any Affiliate of the Buyer that is an insurance
company, and such Affiliate’s successors and assigns. For clarity, the Buyer
Insurer includes the Companies as of and after the Closing.
     “Buyer Material Adverse Effect” has the meaning set forth in Article IX of
the Purchase Agreement.
     “Closing” has the meaning set forth in the recitals.
     “Commissions” has the meaning set forth in Section 5.2(a).
     “Company” has the meaning set forth in the recitals.
     “Company Material Adverse Effect” has the meaning set forth in Article IX
of the Purchase Agreement.
     “Competitive” means, with respect to any product, that (i) the terms, total
compensation, customer appeal, consumer pricing and value, wholesaler coverage,
training and support, features and service standards and metrics of such
product, taken as a whole, are at least equivalent to those of other comparable
products, considered as a group, then distributed by the applicable Seller
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 Seller Distributor.
     “Confidential Information” has the meaning set forth in Section 7.3.
     “DAS” has the meaning set forth in Section 1.1.

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     “Deliverables Schedule” means the information that has been previously
provided by the Seller to the Buyer relating to certain information requested by
the Buyer.
     “Distribution Agreements” has the meaning set forth in Section 5.1.
     “Eligible Funds” means funds managed by either Roszel or BlackRock (or
their respective Affiliates) as of the date hereof and future funds managed by
either Roszel or BlackRock (or their respective Affiliates).
     “FA” means Financial Advisor.
     “Governmental Authority” means any national government, any state or
province or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative authority of
government, including any governmental department, commission, board, bureau,
agency, court or instrumentality, whether domestic or foreign.
     “Income Guarantee Products” has the meaning set forth in Section 1.1.
     “Indemnification Notice” has the meaning set forth in Section 10.4(b).
     “Indemnified Party” has the meaning set forth in Section 10.4(a).
     “Indemnifying Party” has the meaning set forth in Section 10.4(a).
     “Intellectual Property” means all intellectual property rights arising from
or in respect of the following, whether protected, created or arising under the
laws of the United States or any foreign jurisdiction: trademarks, service
marks, designs, logos and other indicia of origin including all goodwill
associated with and common law rights related to the foregoing, domain names,
works of authorship, copyrights, and registrations and applications to register
(including intent-to-use applications) or renew the registration of any of the
foregoing, patents and patent applications, processes, methods, know-how,
confidential information and the tangible embodiments of any of the foregoing.
     “Investment Company Act” means the Investment Company Act of 1940, as
amended.
     “Investment Management Committee” has the meaning set forth in Section 6.2.
     “Investment Management Services” means (i) advisory services with respect
to the creation, evaluation, selection and monitoring of the investment options
available in the Products, and (ii) asset allocation model services, including
any asset allocation fund (fund of funds).

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     “Investor Choice Annuity” has the meaning set forth in Section 1.1.
     “Law” has the meaning set forth in Article IX of the Purchase Agreement.
     “Legacy Products” has the meaning set forth in Section 1.1.
     “Merrill Lynch Global Private Client Network” means the retail brokerage
and advisory business of Merrill Lynch & Co., Inc. conducted in the United
States and included within the Merrill Lynch Global Private Client Group (as
such term is used as of the date hereof). For the avoidance of doubt, the
Merrill Lynch Global Private Client Network shall not include (i) any private
equity, hedge fund, merchant banking, asset management, non-strategic principal
or investment business or similar business or activity of the Seller or any
Seller Affiliate, including BlackRock Inc. and its Affiliates or any entity
affiliated with the Merrill Lynch Global Private Equity or Merrill Lynch Global
Alternative Investment divisions or any successor thereto, or (ii) any trading,
brokerage, lending, investment banking or advisory business or activity of the
Seller or any Seller Affiliate.
     “MLLA” has the meaning set forth in Section 3.1.
     “MLLIC” has the meaning set forth in the recitals.
     “MLLICNY” has the meaning set forth in the recitals.
     “New Products” has the meaning set forth in Section 1.1.
     “Person” means any natural person, firm, limited liability company, general
partnership, limited partnership, joint venture, association, corporation,
trust, Governmental Authority or other entity.
     “Product and Sales Committee” has the meaning set forth in Section 3.1.
     “Products” has the meaning set forth in Section Section 1.1.
     “Purchase Agreement” has the meaning set forth in the recitals.
     “Reference Date” means the effective date of the Confidential Information
Memorandum dated April 9, 2007.
     “Replacement” (or the verb form, “Replace”) means a transaction in which a
new life insurance policy or annuity contract is to be purchased by a
prospective owner and, in connection with the transaction, one or more existing
life insurance policies or annuity contracts initially sold through the Seller
or MLLA owned by the owner are lapsed, forfeited, surrendered, partially
surrendered, assigned to the insurer replacing the life

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insurance policy or annuity contract through the Seller or MLLA or otherwise
terminated, or are reasonably likely to do so.
     “RFP” has the meaning set forth in Section 5.5(c).
     “Roszel” means Roszel Advisors, LLC.
     “Sales Force” means those point of sale representatives and their direct
supervisors utilized by the Seller, the Seller Distributors or one of their
respective Affiliates whose job responsibility includes the sale or promotion of
the Products or New Products offered by a Buyer Insurer.
     “SEC” means the U.S. Securities and Exchange Commission.
     “Seller” has the meaning set forth in the preamble.
     “Seller Affiliate” means any Affiliate of the Seller functioning or
otherwise operating in the Merrill Lynch Global Private Client Network in
connection with the sale or manufacturing of life insurance and annuity products
for distribution within the Merrill Lynch Global Private Client Network.
     “Seller Distributor” means any Seller Affiliate that, as of the date
hereof, distributes any Product that a Buyer Insurer (including the Companies),
offers, such Affiliate’s successors and assigns, and any other Seller Affiliate
that from time to time enters into a Distribution Agreement with respect to a
Product.
     “Seller Indemnified Parties” has the meaning set forth in Section 10.2.
     “Seller Parent” has the meaning set forth in the preamble.
     “Seller 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 the
Seller or any Seller Affiliates and disclosed to the Buyer, provided that
materially adverse changes in the Seller Standards and Practices after the
Reference Date shall not affect the parties’ respective rights and obligations
hereunder unless such materially adverse change is (i) mutually agreed in
writing (such consent not to be unreasonably withheld) or (ii) required by a
change in applicable Law.
     “Specialist” has the meaning set forth in Section 5.4(a).
     “Taxes” means all taxes, including any interest and penalties thereon or
other additions thereto, imposed by any Governmental Authority, including income
or profits taxes, payroll and employee withholding taxes, sales and use taxes,
ad valorem taxes,

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value added taxes, excise taxes, franchise taxes, gross receipts taxes, real and
personal property taxes, environmental taxes, and transfer taxes.
     “Term” has the meaning set forth in Section 9.1.
     “Termination Event” means:
     (i) Any material impairment in the competitiveness of the Roszel or
BlackRock-managed fund in comparison with comparable insurance products funds,
considered as a group, used by the Buyer Insurers in their variable life
insurance and annuity products;
     (ii) Any material increase in the advisory fee, without the consent of the
relevant Buyer Insurer;
     (iii) Any material change in the investment objective or primary investment
policies, without the prior consent of the relevant Buyer Insurer;
     (iv) The closure of the Roszel or BlackRock-managed fund to further
investment;
     (v) If the Roszel or BlackRock-managed fund for any reason no longer is
advised by an Affiliate of the Seller;
     (vi) A material reduction in the service or distribution fees paid to the
Buyer Insurers or their Affiliates by a Roszel or BlackRock-managed fund, its
adviser, or their respective Affiliates, except reductions required by fiduciary
duty or change in applicable Law;
     (vii) Termination of the participation agreement with respect to the
relevant Buyer Insurer’s investment in the Covered Fund, as a result of a breach
by the Covered Fund adviser or its Affiliates; or
     (viii) Approval by the fund board of a plan to liquidate, terminate or
merge the fund, or transfer all or substantially all of its assets to another
fund.
     “Third Party Claim” has the meaning set forth in Section 10.4(b).
     “Third Party Insurer” means an insurance company that is not an Affiliate
of the Buyer or the Seller.
     “Transition Period” means the period from the date of this Agreement to the
eighteen (18) month anniversary of such date.

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     “Transition Services Agreement” means that Transition Services Agreement,
dated as of [     ], 2007 by and among the Seller Parent, the Seller and the
Buyer.
     “Transitional Trademark License Agreement” means that Trademark License
Agreement, dated as of [     ], 2007 by and between the Seller Parent and the
Buyer.
ARTICLE XII.
MISCELLANEOUS
Section 12.1. Further Actions. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
Section 12.2. Expenses. Except as otherwise provided in this Agreement, each
party shall each bear its own costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby.
Section 12.3. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be given by personal delivery or sending by an overnight
courier service, proof of delivery requested, to the following addresses:

          (a)   if to the Seller, to it at:
 
            Merrill Lynch Insurance Group, Inc.     1700 Merrill Lynch Drive    
3rd Floor     Pennington, NJ 08534
 
  Attention:   Barry G. Skolnick, Esq.,
 
      Senior Vice President and General Counsel
 
            with copies to (which shall not constitute notice):
 
            Merrill Lynch & Co., Inc.     4 World Financial Center     New York,
New York 10080
 
  Attention:   Todd Myers, Head of Business Development,
 
      Global Private Client
 
            Merrill Lynch & Co., Inc.     4 World Financial Center     New York,
New York 10080

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  Attention:   Frank J. Marinaro, Esq., First Vice President,
 
      Strategic M&A and Global Private Equity Counsel
 
            Debevoise & Plimpton LLP     919 Third Avenue     New York, New York
10022
 
  Attention:   Stephen R. Hertz, Esq., and Nicholas F. Potter, Esq.
 
        (b)   if to the Seller Parent, to it at:     Merrill Lynch & Co., Inc.  
  4 World Financial Center     New York, New York 10080
 
  Attention:   Todd Myers, Head of Business Development,
 
      Global Private Client
 
            Merrill Lynch & Co., Inc.     4 World Financial Center     New York,
New York 10080
 
  Attention:   Frank J. Marinaro, Esq., First Vice President,
 
      Strategic M&A and Global Private Equity Counsel
 
            with copies to (which shall not constitute notice):
 
            Debevoise & Plimpton LLP     919 Third Avenue     New York, New York
10022
 
  Attention:   Stephen R. Hertz, Esq., and Nicholas F. Potter, Esq.
 
        (c)   if to the Buyer, to it at:
 
            AEGON USA, Inc.     4333 Edgewood Road NE     Cedar Rapids, Iowa
52499
 
  Attention:   Craig Vermie, Esq.
 
      Senior Vice President and General Counsel
 
            with copies to (which shall not constitute notice):
 
            AEGON USA, Inc.     4333 Edgewood Road, NE     Cedar Rapids, Iowa
52499
 
  Attention:   James Beardsworth

34

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      Senior Vice President – Business Development
 
            LeBoeuf, Lamb, Greene & MacRae LLP     125 West 55th Street     New
York, New York 10019
 
  Attention:   John M. Schwolsky, Esq. and Paul P. Chen, Esq.

or to such other Person or address as a party shall specify by notice in writing
to the other parties. All such notices, requests, demands, waivers and
communications shall be deemed to have been given on the date of personal
receipt or proven delivery.
Section 12.4. Entire Agreement. This Agreement (including the Exhibits hereto),
the Purchase Agreement, the Distribution Agreements, the Investment Management
Agreement, the Transition Services Agreement, the Transitional Trademark License
Agreement and the Confidentiality Agreement constitute the entire agreement
among the parties hereto and supersede all prior agreements and understandings,
oral and written, among the parties hereto with respect to the subject matter
hereof.
Section 12.5. No Third Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied, is
intended to confer on any Person other than the parties hereto, or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 12.6. Assignability. Neither this Agreement nor any of the rights,
interests or obligations of any party shall be assigned (except by operation of
law), in whole or in part, by any of the parties hereto without the prior
written consent of the other parties hereto, and any such assignment that is not
consented to shall be null and void; provided, however, that the Seller will not
unreasonably withhold its consent to any such assignment by the Buyer to any
direct or indirect wholly-owned Subsidiary of the Buyer or AEGON NV; provided,
that notwithstanding any such assignment, the Buyer shall remain liable to
perform all of its obligations hereunder; provided, further, that no such
assignment shall be permitted if it shall result in any amount payable to the
Seller pursuant to this Agreement being subject to withholding Tax.
Section 12.7. Amendment and Modification; Waiver. Subject to applicable Law,
this Agreement may be amended, modified or supplemented only by a written
instrument authorized and executed on behalf of each of the parties hereto. No
waiver by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other or subsequent breach.

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Section 12.8. Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision or portion of any
provision of this Agreement or the application thereof under certain
circumstances is held to be invalid, illegal or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable. Upon such determination that any term
or other provision is invalid, illegal or unenforceable, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
Section 12.9. Section Headings. The section headings contained in this Agreement
are inserted for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
Section 12.10. Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender shall extend to and include all genders. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation” whether or not they are in fact followed by such
words or words of like import. The words “in the ordinary course of business”
shall be deemed to be followed by the phrase “consistent with past practice”
whether or not they are in fact followed by such words or words of like import.
When a reference is made in this Agreement to an Article, Section, subsection or
Exhibit, such reference shall be to an Article of, a Section of, a subsection
of, or an Exhibit to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not modify, expand, define, or otherwise affect in any way the
meaning or interpretation of this Agreement. The phrases “the date of this
Agreement”, “the date hereof” and terms of similar import, shall be deemed to
refer to the date set forth in the first paragraph of this Agreement. The words
“hereof”, “herein”, “hereby” and other words of similar import refer to this
Agreement as a whole unless otherwise indicated. Whenever the last day for the
exercise of any right or the discharge of any duty under this Agreement falls on
other than a Business Day, the party having such right or duty shall have until
the next Business Day to exercise such right or discharge such duty. Unless
otherwise indicated, the word “day” shall be interpreted as a calendar day.
Section 12.11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument, it being understood
that the parties need not sign the same counterpart.

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Section 12.12. Facsimile. This Agreement, to the extent signed and delivered by
means of facsimile or other electronic transmission, shall be treated in all
manner and respects as an original agreement or instrument and shall be
considered to have the same binding effect as if it were the original signed
version thereof delivered in person. No party hereto shall claim that this
Agreement is invalid, not binding or unenforceable based upon the use of
facsimile or other electronic transmission to deliver a signature, or the fact
that any signature or agreement or instrument was transmitted or communicated
through the use of facsimile or other electronic transmission, and each such
party forever waives any such claim or defense.
Section 12.13. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached,
violated or unfulfilled. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent noncompliance with, or
breaches or violations of any provisions of this Agreement by any of the other
parties and to enforce specifically the terms and provisions of this Agreement
in any action instituted in any court of the United States or any state thereof
having subject matter jurisdiction, this being in addition to any other remedy
to which any of the parties may be entitled at law or in equity. In the event
that any action is brought in equity to enforce the provisions of this
Agreement, no party will allege, and each party hereby waives the defense or
counterclaim, that there is an adequate remedy at Law. In addition, each of the
parties hereto irrevocably and unconditionally submits itself to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York or, if such court does not have jurisdiction, the New York State
Supreme Court in the Borough of Manhattan, in the event any dispute arises out
of this Agreement or any of the transactions provided for by this Agreement and
agrees that all claims in respect of the action may be heard and determined in
any such court and agrees not to bring any action arising out of or relating to
this Agreement in any other court. In any action, 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 court, that such action is brought in any inconvenient
forum or that the venue of such action is improper. Each of the parties also
agrees that any final and nonappealable judgment against a party in connection
with any action 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. Without limiting the foregoing, each party agrees that
service of process on such party at the address provided in Section 12.3 shall
be deemed effective service of process on such party. THE PARTIES HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST ANY OTHER PARTY

37

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HERETO IN ANY MATTERS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT.
Section 12.14. Governing Law. This Agreement shall be governed by the laws of
the State of New York, without giving effect to its principles or rules of
conflict of laws to the extent such principles or rules are not mandatorily
applicable by statute and would require or permit the application of the laws of
another jurisdiction.
Section 12.15. Fiduciary and Legal Obligations. Notwithstanding any provision of
this Agreement to the contrary, the obligations of each party hereunder are
subject to such party’s fiduciary and regulatory obligations and applicable Law,
as may be in effect from time to time, including in the case of any party’s
obligations to seek to cause any other person to take any action hereunder, such
other person’s fiduciary and regulatory obligations and applicable Law.

38

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          IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.

                  AEGON USA, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                MERRILL LYNCH INSURANCE GROUP, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                MERRILL LYNCH & CO., INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

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EXHIBIT 1.1
LEGACY PRODUCT
Fixed Life Insurance Products

1.   Priority 1   2.   ML-7   3.   ML2R   4.   ML1R   5.   ML1E   6.   ML1

Fixed Annuities

1.   Tandem Alternatives MLLIC/MLLICNY   2.   Resource MLLIC/MLLICNY   3.  
Resource Select MLLIC/MLLICNY   4.   Flex Plus MLLIC/MLLICNY   5.   Leader
MLLIC/MLLICNY

Variable Annuities

1.   Investor Choice – Investor Series (MLLIC)   2.   Investor Choice – Investor
Series (MLNY)   3.   Investor Choice – IRA Series (MLLIC)   4.   Investor Choice
– IRA Series (MLNY)   5.   Retirement Plus (MLLIC)   6.   Retirement Plus (MLNY)
  7.   Consults (MLLIC)   8.   Consults (MLLICNY)   9.   IRA Annuity (MLLIC)  
10.   Portfolio Plus (Pre-’86) (MLLIC)   11.   Portfolio Plus (Post ’86) (MLLIC)
  12.   Portfolio Plus (Pre-’86) (MLNY)   13.   Portfolio Plus (Post ’86) (MLNY)
  14.   IRA Annuity (MLNY)   15.   Retirement Power (MLLIC)   16.   Retirement
Power (MLNY)   17.   Retirement Optimizer (MMLIC)   18.   Retirement Optimizer
(MLNY)

Modified Guaranteed Annuities

1.   Rate Max (MLLIC)   2.   Rate Max (MLLIC) (Texas version)   3.   Asset I
(MLLIC)   4.   Asset I (MLNY)

Variable Life

1.   Prime Plan V (MLLIC)   2.   Prime Plan V (MLNY)   3.   Investor Life
(MLLIC)   4.   Investor Life (MLNY)   5.   Investor Life Plus (MLLIC)   6.  
Investor Life Plus (MLNY)   7.   Estate Investor I (MLLIC)   8.   Estate
Investor I (MLNY)   9.   Estate Investor II (MLLIC)   10.   Estate Investor II
(MLNY)   11.   Legacy Power (MLLIC)   12.   Prime Plan I-IV (MLLIC)   13.  
Prime Plan I-IV (MLNY)   14.   Directed Life (MLLIC)   15.   Directed Life
(MLNY)   16.   Prime Plan VI (MLLIC)   17.   Prime Plan VI (MLNY)   18.   Prime
Plan 7 (MLLIC)   19.   Prime Plan 7 (MLNY)   20.   Prime Plan Investor (MLLIC)  
21.   Prime Plan Investor (MLNY)   22.   Directed Life 2 (MLLIC)   23.  
Directed Life 2 (MLNY)