Exhibit 10.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

dated as of September 30, 2010

between

AMERICAN INTERNATIONAL GROUP, INC.

and

PRUDENTIAL FINANCIAL, INC.

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TABLE OF CONTENTS

 

          Page ARTICLE I DEFINITIONS    3 Section 1.01.   

Certain Defined Terms

   3 ARTICLE II PURCHASE AND SALE OF THE SHARES AND BRIDGE LOAN    3
Section 2.01.   

Purchase and Sale of the Shares and Bridge Loan

   3 Section 2.02.   

Closing

   3 Section 2.03.   

Purchase Price

   3 Section 2.04.   

Payment at Closing

   4 Section 2.05.   

Adjustment to Payment at Closing

   5 Section 2.06.   

Transactions; Closing Deliveries

   9 Section 2.07.   

Payments and Computations

   10 Section 2.08.   

Interest

   10 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PARENT    11
Section 3.01.   

Incorporation, Qualification and Authority of the Parent

   11 Section 3.02.   

Incorporation, Qualification and Authority of the Companies and the Transferred
Subsidiaries

   12 Section 3.03.   

Capital Structure of the Companies and the Transferred Subsidiaries; Ownership
and Transfer of the Shares

   12 Section 3.04.   

No Conflict

   14 Section 3.05.   

Consents and Approvals

   15 Section 3.06.   

Financial Information; Absence of Undisclosed Liabilities

   15 Section 3.07.   

Absence of Certain Changes

   18 Section 3.08.   

Absence of Litigation

   18 Section 3.09.   

Compliance with Laws

   18 Section 3.10.   

Governmental Permits

   19 Section 3.11.   

Intellectual Property and Information Technology

   20 Section 3.12.   

Material Contracts

   22 Section 3.13.   

Employee Benefits; Employees

   23 Section 3.14.   

Insurance Issued by Insurance Companies

   26 Section 3.15.   

Reinsurance

   27 Section 3.16.   

Client Companies and Brokers; Sales Practices

   28 Section 3.17.   

Investment Assets

   30 Section 3.18.   

Insurance

   31 Section 3.19.   

Real Property

   32 Section 3.20.   

Taxes

   33 Section 3.21.   

Reserves

   37 Section 3.22.   

Solvency Margin Ratio

   38 Section 3.23.   

Regulatory Filings

   38 Section 3.24.   

Affiliate Transactions

   38

 

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Section 3.25.   

Sufficiency of Assets

   39 Section 3.26.   

Title to Tangible Property

   39 Section 3.27.   

Creditors

   39 Section 3.28.   

Environmental Matters

   40 Section 3.29.   

Foreign Corrupt Practices, Economic Sanctions, Anti-Money Laundering and
Enforcement Proceedings

   40 Section 3.30.   

Risk Management Instruments

   41 Section 3.31.   

Brokers

   41 Section 3.32.   

Books and Records

   41 Section 3.33.   

Fairness Opinion

   42

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR

   42 Section 4.01.   

Incorporation, Qualification and Authority of the Acquiror

   42 Section 4.02.   

No Conflict

   43 Section 4.03.   

Consents and Approvals

   43 Section 4.04.   

Absence of Litigation

   44 Section 4.05.   

Securities Matters

   44 Section 4.06.   

Financial Ability

   44 Section 4.07.   

Brokers

   44

ARTICLE V ADDITIONAL AGREEMENTS

   44 Section 5.01.   

Conduct of Business Prior to the Closing

   44 Section 5.02.   

Access to Information

   50 Section 5.03.   

Books and Records

   54 Section 5.04.   

Confidentiality

   55 Section 5.05.   

Regulatory and Other Authorizations; Reasonable Best Efforts

   57 Section 5.06.   

Insurance

   61 Section 5.07.   

Intercompany Obligations and Arrangements

   62 Section 5.08.   

Guarantees

   63 Section 5.09.   

Non Competition; Non Solicitation; No Hire

   63 Section 5.10.   

D&O Liabilities

   67 Section 5.11.   

Mutual Release

   68 Section 5.12.   

Certain Waivers

   70 Section 5.13.   

SMBC Loan

   70 Section 5.14.   

Parent Cash Pool

   71 Section 5.15.   

Further Action

   71 Section 5.16.   

Investment Assets

   73 Section 5.17.   

Transitional Matters

   75 Section 5.18.   

Notification of Certain Matters

   78 Section 5.19.   

Acquiror Financing Activities and Exchange Act Reporting

   78 Section 5.20.   

Release of Liens

   79 Section 5.21.   

Troubled Asset Relief Program

   80

 

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ARTICLE VI EMPLOYEE MATTERS    80 Section 6.01.   

Employee Matters

   80 ARTICLE VII TAX MATTERS    84 Section 7.01.   

Liability for Taxes

   84 Section 7.02.   

Tax Returns

   86 Section 7.03.   

Contest Provisions

   87 Section 7.04.   

Tax Refunds

   89 Section 7.05.   

Assistance and Cooperation

   89 Section 7.06.   

Other Tax Matters

   90 ARTICLE VIII CONDITIONS TO CLOSING AND RELATED MATTERS    91 Section 8.01.
  

Conditions to Obligations of Each Party

   91 Section 8.02.   

Conditions to Obligations of the Parent

   91 Section 8.03.   

Conditions to Obligations of the Acquiror

   92 ARTICLE IX TERMINATION AND WAIVER    93 Section 9.01.   

Termination

   93 Section 9.02.   

Notice of Termination

   93 Section 9.03.   

Effect of Termination

   93 ARTICLE X INDEMNIFICATION    94 Section 10.01.   

Survival

   94 Section 10.02.   

Indemnification by the Parent

   94 Section 10.03.   

Indemnification by the Acquiror

   96 Section 10.04.   

Notification of Claims

   96 Section 10.05.   

Payment

   99 Section 10.06.   

Exclusive Remedies

   99 Section 10.07.   

Additional Indemnification Provisions

   99 Section 10.08.   

Mitigation

   100 ARTICLE XI GENERAL PROVISIONS    100 Section 11.01.   

Expenses

   100 Section 11.02.   

Notices

   101 Section 11.03.   

Public Announcements

   102 Section 11.04.   

Severability

   102 Section 11.05.   

Entire Agreement

   103 Section 11.06.   

Assignment

   103 Section 11.07.   

No Third-Party Beneficiaries

   103 Section 11.08.   

Amendment; Waiver

   104 Section 11.09.   

Disclosure Schedules

   104 Section 11.10.   

Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

   104

 

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Section 11.11.   

Rules of Construction

   105 Section 11.12.   

Specific Performance

   105 Section 11.13.   

Counterparts

   106 Exhibits       Exhibit A   

Definitions

   A-1 Exhibit B   

Form of Transition Services Agreement

   B-1 Exhibit C   

Form of Transitional Trademark License Agreement

   C-1 Exhibit D   

Form of Intellectual Property Agreement

   D-1 Exhibit E   

Form of Bridge Loan Assignment Agreement

   E-1 Exhibit F   

Form of Hold Harmless Agreement

   F-1 Exhibit G   

Form of Provider Letter Agreement

   G-1 Exhibit H   

Director and Officer Indemnification Standard

   H-1 Exhibit I   

AIGFAJ Articles of Incorporation

   I-1 Exhibit J   

Edison Articles of Incorporation

   J-1

Schedules

 

Schedule I    List of Transferred Subsidiaries

Seller Disclosure Letter

Acquiror Disclosure Letter

 

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This STOCK PURCHASE AGREEMENT, dated as of September 30, 2010, is made between
AMERICAN INTERNATIONAL GROUP, INC., a Delaware corporation (the “Parent”) and
PRUDENTIAL FINANCIAL, INC., a New Jersey corporation (the “Acquiror”).

RECITALS

A. AIG Life Holdings (International), LLC, a Delaware limited liability company
and direct wholly-owned Subsidiary of the Parent (“Holdings”), (i) owns 600,000
shares of common stock (the “Star Shares”) of AIG Star Life Insurance Co., Ltd.,
a Japanese corporation (“Star”), which constitute all of the issued and
outstanding shares of common stock of Star, and (ii) owns 60,000 preferred
shares A of Star (the “Preferred Shares A”), which constitute all of the issued
and outstanding preferred shares A of Star;

B. American International Reinsurance Company, Ltd., a Bermuda corporation and
direct wholly-owned Subsidiary of Holdings (“AIRCO”), owns (i) 89,220 shares of
common stock (the “Edison Shares”) of AIG Edison Life Insurance Company, a
Japanese corporation (“Edison”), (ii) 5,217 preferred shares C of Edison (the
“Preferred Shares C”), which constitute all of the issued and outstanding
preferred shares C of Edison, (iii) 1,409 preferred shares E of Edison (the
“Preferred Shares E”), which constitute all of the issued and outstanding
preferred shares E of Edison, and (iv) 40,000 shares of common stock (the
“Edison Service Shares”) of AIG Edison Service Co., Ltd., a Japanese corporation
(“Edison Service”), which constitute all of the issued and outstanding shares of
common stock of Edison Service;

C. Parent owns (i) 15,211 shares of common stock of AIG Financial Assurance
Japan K.K., a Japanese corporation (“AIGFAJ”, together with Star, Edison and
Edison Service, the “Companies”), which constitute all of the issued and
outstanding shares of common stock of AIGFAJ (the “AIGFAJ Shares”, together with
the Star Shares, the Edison Shares and the Edison Service Shares, the “Common
Shares”), and (ii) 10 preferred shares D of AIGFAJ (the “Preferred Shares D”),
which constitute all of the issued and outstanding preferred shares D of AIGFAJ;

D. AIGFAJ owns and will continue to own at the Closing (i) 9,914 shares of
common stock of Edison, which together with the Edison Shares constitute all of
the issued and outstanding shares of common stock of Edison, (ii) 35,250
preferred shares B (the “Preferred Shares B”) of Edison, which constitute all of
the issued and outstanding preferred shares B of Edison, and (iii) 5,300
preferred shares G of Edison, which together with the Preferred Shares G (as
defined below) constitute all of the issued and outstanding preferred shares G
of Edison;

E. Edison owns and will continue to own at the Closing 984 preferred shares A of
AIGFAJ, which together with the Preferred Shares D constitute all of the issued
and outstanding preferred shares of AIGFAJ;

F. AIG Funding, Inc., a Delaware corporation and direct wholly-owned Subsidiary
of the Parent (“AIG Funding”, together with Holdings and AIRCO, the “Sellers”),
holds ¥31,937,996,556 principal amount of debt of AIGFAJ (the “Bridge Loan”)
pursuant to the Second Amended and Restated Promissory Note, dated March 31,
2009, between AIG Funding and AIGFAJ;

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G. The Parent owns 5,681 preferred shares G of Edison (the “Preferred Shares G”,
together with the Preferred Shares A, Preferred Shares C, Preferred Shares D and
Preferred Shares E, the “Preferred Shares”, and the Preferred Shares together
with the Common Shares, the “Shares” (which definition excludes, for the
avoidance of doubt, the common stock and preferred shares G of Edison held by
AIGFAJ)), which together with the Preferred Shares B, Preferred Shares C,
Preferred Shares E and the preferred shares G of Edison held by AIGFAJ
constitute all of the issued and outstanding preferred shares of Edison;

H. The Companies own, directly or indirectly, the Capital Stock of each of the
entities named in Schedule I (collectively, the “Transferred Subsidiaries”) in
such amounts as set forth in Schedule I;

I. In connection with this Agreement, at the Closing: (i) the Parent and the
Acquiror (or a Designated Acquiror designated by the Acquiror) shall enter into
a transition services agreement in substantially the form attached hereto as
Exhibit B (the “Transition Services Agreement”); (ii) the Parent, the Companies,
the Transferred Subsidiaries and the Acquiror (or a Designated Acquiror
designated by the Acquiror) shall enter into a transitional trademark license
agreement in substantially the form attached hereto as Exhibit C (the
“Transitional Trademark License Agreement”); (iii) the Parent, AIGFAJ, the
Insurance Companies, Edison Service and the Acquiror (or a Designated Acquiror
designated by the Acquiror) shall enter into an intellectual property agreement
in substantially the form attached hereto as Exhibit D (the “Intellectual
Property Agreement”); (iv) AIG Funding and the Acquiror (or a Designated
Acquiror designated by the Acquiror) shall enter into an assignment and
assumption agreement with respect to the Bridge Loan in substantially the form
attached hereto as Exhibit E (the “Bridge Loan Assignment Agreement”); (v) in
accordance with and pursuant to the provisions of Section 5.08(b), the Acquiror
(or with the Parent’s consent, an Affiliate of the Acquiror) and the Parent (or
an Affiliate of the Parent, as the case may be) shall enter into one or more
hold harmless agreements in substantially the form attached hereto as Exhibit F
(each, a “Hold Harmless Agreement”); and (vi) each of the Providers (as such
term is defined in the Transition Services Agreement) and the Acquiror (or a
Designated Acquiror designated by the Acquiror) shall enter into a letter
agreement in substantially the form attached hereto as Exhibit G (each, a
“Provider Letter Agreement”);

J. Simultaneously with the execution of this Agreement, each of the Sellers and
the Acquiror will enter into a letter agreement pursuant to which each Seller
will undertake to perform the covenants and agreements set forth in any
Transaction Agreement to the extent those covenants and agreements relate to
such Seller (each, a “Seller Letter Agreement”); and

K. The Parent desires to sell and cause the Sellers to sell to the Acquiror (one
or more Designated Acquirors designated by the Acquiror in accordance with the
terms hereof), and the Acquiror desires to purchase (or cause one or more
Designated Acquirors to purchase) from the Sellers and the Parent, the Shares
and the Bridge Loan, upon the terms and subject to the conditions set forth
herein.

 

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NOW, THEREFORE, the parties to this Agreement agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Certain Defined Terms. Capitalized terms used in this Agreement
shall have the meanings specified in Exhibit A to, or elsewhere in, this
Agreement.

ARTICLE II

PURCHASE AND SALE OF THE SHARES AND BRIDGE LOAN

Section 2.01. Purchase and Sale of the Shares and Bridge Loan. On the terms and
subject to the conditions set forth in this Agreement, at the Closing:

(a) the Parent shall, and shall cause the applicable Sellers to, sell, convey,
assign, transfer and deliver to the Acquiror or to one or more Designated
Acquirors designated by the Acquiror no more than thirty (30) Business Days
after the date hereof, free and clear of all Liens, and the Acquiror (directly
or through one or more Designated Acquirors) shall purchase, acquire and accept
from the Parent and applicable Sellers, all of the Parent’s and such applicable
Sellers’ right, title and interest in and to the Shares;

(b) the Parent shall cause AIG Funding to sell, convey, assign, transfer and
deliver to the Acquiror or to one or more Designated Acquirors designated by the
Acquiror no more than thirty (30) Business Days after the date hereof, free and
clear of all Liens, and the Acquiror (directly or through one or more Designated
Acquirors) shall purchase, acquire and accept from AIG Funding, all of AIG
Funding’s right, title and interest in and to the Bridge Loan.

Section 2.02. Closing. On the first Business Day of the first month immediately
succeeding the month during which all the conditions set forth in Article VIII
are satisfied or waived (other than those conditions that by their nature are to
be satisfied at the Closing, but subject to the satisfaction or waiver of those
conditions at the Closing), or on such other date as the Parent and the Acquiror
may mutually agree in writing, the transactions contemplated by this Agreement
shall take place at a closing (the “Closing”) that shall be held not later than
10:00 a.m. Tokyo time, at the offices of Simpson Thacher & Bartlett LLP, 12-32
Akasaka 1-chome, Minato-ku, Tokyo 107-6037, or such other place or time as the
Parent and the Acquiror may agree in writing (the date on which the Closing
takes place being the “Closing Date”).

Section 2.03. Purchase Price. The total purchase price (the “Purchase Price”)
for the transactions contemplated by this Agreement shall be an amount in cash
equal to $4,800,000,000, which amount consists of (a) an amount equal to the
Bridge Loan Purchase Price for the Bridge Loan, plus (b) an amount equal to the
Purchase Price minus the Bridge Loan Purchase Price for the Shares (the “Share
Purchase Price”), which amount shall be adjusted pursuant to and in accordance
with this Section 2.03 and Sections 2.04 and 2.05. The Purchase Price shall be
reduced by an amount equal to the sum of (x) the Credit Saison Debt Amount plus
(y) the Syndicated Loan Debt Amount plus (z) any Indebtedness for Borrowed Money
of the Companies and the Transferred Subsidiaries outstanding immediately prior
to the Closing other

 

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than the Credit Saison Debt, the Bridge Loan, the Syndicated Loan and the AIGFAJ
Subordinated Debt. For the avoidance of doubt, any such reduction to the
Purchase Price shall be treated as an adjustment to the Share Purchase Price.
The Parent shall notify the Acquiror of the principal amount of Indebtedness for
Borrowed Money outstanding as of the Closing Date and the amount of interest (or
original issue discount, as applicable) that will be accrued and unpaid on the
Bridge Loan, the Credit Saison Debt, the Syndicated Loan and any other
Indebtedness for Borrowed Money to but excluding the Closing Date no later than
ten (10) Business Days prior to the Closing Date. For purposes of this ARTICLE
II, any accrued and unpaid interest (or original issue discount, as applicable)
on the Bridge Loan, the Credit Saison Debt, and the Syndicated Loan and any
principal or accrued and unpaid interest on any other Indebtedness for Borrowed
Money shall be expressed in U.S. dollars based on the Applicable Exchange Rate
as in effect as of the date hereof.

Section 2.04. Payment at Closing.

(a) At the Closing, the Acquiror shall, or shall cause one or more Designated
Acquirors to, pay to the Parent (on behalf of itself and the Sellers) an
aggregate amount equal to the Purchase Price (as adjusted pursuant to
Section 2.03) minus the Closing Date Solvency Capital True-Up Amount. This
payment shall be further subject to a post-closing adjustment pursuant to the
provisions of Section 2.05. The Purchase Price, and any adjustment pursuant to
this Section 2.04 and Sections 2.03 and 2.05, shall be allocated amongst the
Parent and each of the Sellers and the assets purchased hereunder as set forth
on Section 2.04(a) of the Seller Disclosure Letter. In the event that the
Closing Date is after April 1, 2011 as a result of a failure by the Acquiror or
one or more Designated Acquirors, to obtain any approval from the FSA necessary
to consummate the transactions contemplated hereby, at the Closing, the Acquiror
shall, or shall cause a Designated Acquiror to, pay to the Parent in cash
interest on the Purchase Price for the period commencing on April 1, 2011 and
ending on the Closing Date, at a rate of 5% per annum (such amount, if any, the
“Purchase Price Interest Amount”). Notwithstanding anything to the contrary in
this Section 2.04(a), neither the Acquiror nor any Designated Acquiror shall be
required to pay such Purchase Price Interest Amount if the failure of the Parent
or the Sellers to fulfill any obligations under this Agreement was the sole and
direct cause of, or solely and directly resulted in, the failure of Closing to
occur prior to April 1, 2011, provided, further that in the event the Acquiror
has incurred the obligation to pay the Purchase Price Interest Amount, the
Acquiror shall not be obligated to pay any interest for any period during which
the failure of the Parent or the Sellers to fulfill any such obligation was the
sole and direct cause of, or solely and directly resulted in, the failure of the
Closing to occur.

(b) Not later than five (5) Business Days prior to the Closing Date, the Parent,
at its own expense, shall prepare in good faith and deliver to the Acquiror a
worksheet (the “Estimated Companies Solvency Capital Worksheet”) in the form
attached as Section 2.04(b) of the Seller Disclosure Letter, which sets forth
the Parent’s good faith estimate, together with explanatory notes and supporting
calculations, of the Companies Solvency Capital (the “Estimated Companies
Solvency Capital”) and the Solvency Deficit (the “Estimated Solvency Deficit”),
each as of the Closing Date, which Estimated Companies Solvency Capital and
Estimated Solvency Deficit shall be calculated in accordance with the Solvency
Capital Calculation Methodology. For the avoidance of doubt, the Estimated
Companies Solvency Capital and the Estimated Solvency Deficit shall be
calculated and expressed in Japanese yen.

 

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Section 2.05. Adjustment to Payment at Closing.

(a) No later than ninety (90) days after the first statutory quarter end
following the Closing Date, the Acquiror shall prepare and deliver to the Parent
a worksheet (the “Actual Closing Solvency Capital Worksheet”) in the form set
forth in Section 2.04(b) of the Seller Disclosure Letter, which sets forth the
Acquiror’s good faith calculation, together with explanatory notes and
supporting calculations, of the Companies Solvency Capital (the “Actual Closing
Solvency Capital”) and the Solvency Deficit (the “Actual Solvency Deficit”),
each as of the Closing Date, which Actual Closing Solvency Capital and Actual
Solvency Deficit shall (1) be prepared from the books and records of the
Companies and (2) be prepared in accordance with the Solvency Capital
Calculation Methodology. For the avoidance of doubt, the Actual Closing Solvency
Capital and the Actual Solvency Deficit shall be calculated and expressed in
Japanese yen.

Each party shall consult with the other party and their respective accountants
with respect to the preparation of the Estimated Companies Solvency Capital
Worksheet or the Actual Closing Solvency Capital Worksheet, as applicable, and
the calculation of the Estimated Companies Solvency Capital and the Estimated
Solvency Deficit or the Actual Closing Solvency Capital and the Actual Solvency
Deficit, as applicable. Each party shall pay the fees and expenses of any
advisors retained by them in connection with the preparation of the Actual
Closing Solvency Capital Worksheet; provided that the Acquiror may request that
an independent certified public accounting firm of international recognition
provide an opinion or attestation with respect to the Actual Closing Solvency
Capital Worksheet; provided further that the Acquiror shall be responsible for
paying the fees and expenses of such certified public accountant unless there is
an Actual Solvency Deficit, in which case such fees and expenses shall be paid
by Parent.

If the Acquiror does not provide the Actual Closing Solvency Capital Worksheet
within the time period set forth in this Section 2.05(a), then, at the election
of the Parent, the Parent may prepare and present the Actual Closing Solvency
Capital Worksheet that has not been so provided within an additional thirty
(30) days thereafter.

(b) For purposes of this Section 2.05, (i) the term “preparer” shall mean the
party that prepares the Estimated Companies Solvency Capital Worksheet or the
Actual Closing Solvency Capital Worksheet and calculates the Actual Closing
Solvency Capital and the Actual Solvency Deficit or Estimated Companies Solvency
Capital and the Estimated Solvency Deficit, as the case may be, and (ii) the
term “recipient” shall mean the party that does not prepare the Estimated
Companies Solvency Capital Worksheet or the Actual Closing Solvency Capital
Worksheet or calculate the Actual Closing Solvency Capital and the Actual
Solvency Deficit or Estimated Companies Solvency Capital and Estimated Solvency
Deficit, as the case may be. Without limiting the generality of Section 5.03 and
subject to Section 5.04, in connection with the preparer’s preparation of the
Actual Closing Solvency Capital Worksheet and the preparer’s calculation of the
Actual Closing Solvency Capital and the Actual Solvency Deficit, to the extent
the preparer does not have all reasonably necessary information in its
possession, the recipient shall (i) permit the preparer to review the
recipient’s working papers and other supporting data, as well as all of the
books, records and other relevant information, in each case, relating to the
operations and finances of the Companies and the Transferred Subsidiaries with
respect to the

 

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period up to and including the Closing Date, (ii) make reasonably available the
individuals in its employ responsible for and knowledgeable about the
information necessary for the preparation of the Actual Closing Solvency Capital
Worksheet and the calculation of the Actual Closing Solvency Capital and the
Actual Solvency Deficit, as the case may be, in order to respond to the
reasonable inquiries of the preparer and (iii) otherwise cooperate in good faith
with the preparer.

(c) During the thirty (30) days immediately following the later of (x) the
recipient’s receipt of the Actual Closing Solvency Capital Worksheet and (y) if
required, the date on which an Auditor’s Letter is executed by the recipient and
the preparer’s independent accountants pursuant to Section 2.05(i) (the
“Purchase Price Adjustment Review Period”), the preparer shall (i) permit the
recipient and its Representatives to review the preparer’s working papers and
other supporting data, as well as all of the books, records and other relevant
information, in each case, relating to the operations and finances of the
Companies and the Transferred Subsidiaries with respect to the period up to and
including the Closing Date, (ii) make reasonably available the individuals in
its employ responsible for, and knowledgeable about the information used in, the
preparation of the Actual Closing Solvency Capital Worksheet and the calculation
of the Actual Closing Solvency Capital and the Actual Solvency Deficit, as the
case may be, in order to respond to the reasonable inquiries of the recipient
and (iii) otherwise cooperate in good faith with the recipient and its
Representatives.

(d) The preparer shall, through the date that the Final Actual Closing Solvency
Capital Worksheet becomes such in accordance with Section 2.05(g), take all
actions necessary or desirable to maintain and preserve all accounting books,
records, policies and procedures on which the Actual Closing Solvency Capital
Worksheet was based or on which the Final Actual Closing Solvency Capital
Worksheet is to be based so as not to impede or delay the calculation of the
Actual Closing Solvency Capital and the Actual Solvency Deficit or the
preparation of the Notice of Purchase Price Adjustment Disagreement or any Final
Actual Closing Solvency Capital Worksheet in the manner and utilizing the
methods permitted by this Agreement.

(e) The recipient shall notify the preparer in writing (the “Notice of Purchase
Price Adjustment Disagreement”) prior to the expiration of the Purchase Price
Adjustment Review Period if the recipient disagrees with the Actual Closing
Solvency Capital Worksheet, or the calculation of the Actual Closing Solvency
Capital or the Actual Solvency Deficit. The Notice of Purchase Price Adjustment
Disagreement shall set forth in reasonable detail the basis for such
disagreement, the amounts involved and the recipient’s determination of such
Actual Closing Solvency Capital Worksheet, Actual Closing Solvency Capital or
Actual Solvency Deficit. If no Notice of Purchase Price Adjustment Disagreement
is received by the preparer on or prior to the expiration date of the Purchase
Price Adjustment Review Period, then the Actual Closing Solvency Capital
Worksheet, the calculation of the Actual Closing Solvency Capital and the
calculation of the Actual Solvency Deficit shall be deemed to have been accepted
by the recipient and shall become final and binding upon the Parent and the
Acquiror in accordance with Section 2.05(g).

(f) During the thirty (30) days immediately following the delivery of a Notice
of Purchase Price Adjustment Disagreement (the “Purchase Price Adjustment
Consultation Period”), the Parent and the Acquiror shall seek in good faith to
resolve any disagreement that they may have with respect to the matters
specified in the Notice of Purchase Price Adjustment Disagreement.

 

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(g) If, at the end of the Purchase Price Adjustment Consultation Period, the
Parent and the Acquiror have been unable to resolve all disagreements that they
may have with respect to the matters specified in the Notice of Purchase Price
Adjustment Disagreement, then the Parent and the Acquiror shall submit all
matters that remain in dispute with respect to the Notice of Purchase Price
Adjustment Disagreement, including information that relates to items which may
not be in dispute but are relevant to the disputed matters (along with a copy of
the Actual Closing Solvency Capital Worksheet marked to indicate those line
items that are in dispute) to KPMG LLP (the “Expert Accountant”). In the event
that KPMG LLP refuses or is otherwise unable to act as the Expert Accountant,
the parties hereto shall cooperate in good faith to appoint, within thirty
(30) days after the Parent and the Acquiror receive notice from KPMG LLP of its
refusal or inability to act as the Expert Accountant, an independent certified
public accounting firm of international recognition mutually agreeable to the
Parent and the Acquiror, in which event “Expert Accountant” shall mean such
firm. Within thirty (30) days after the submission of such matters to the Expert
Accountant, or as soon as practicable thereafter, the Expert Accountant, acting
as an expert and not as an arbitrator, will make a final determination on the
basis of the Solvency Capital Calculation Methodology, and in accordance with
this Section 2.05(g), of the appropriate amount of each of the line items or the
Actual Closing Solvency Capital and the Actual Solvency Deficit in the Actual
Closing Solvency Capital Worksheet as to which the Parent and the Acquiror
disagree as specified in the Notice of Purchase Price Adjustment Disagreement.
The determination by the Expert Accountant shall be binding on the Acquiror and
the Parent, and otherwise shall be final, non-appealable and conclusive. With
respect to each disputed line item, the Actual Closing Solvency Capital or the
Actual Solvency Deficit, as the case may be, such determination, if not in
accordance with the position of either the Parent or the Acquiror, shall not be
in excess of the higher, nor less than the lower, of the amounts advocated by
the recipient in the Notice of Purchase Price Adjustment Disagreement or the
preparer of the Actual Closing Solvency Capital Worksheet with respect to such
disputed line item, the Actual Closing Solvency Capital or the Actual Solvency
Deficit. For the avoidance of doubt, the Expert Accountant shall not review any
line items or make any determination with respect to any matter other than those
matters in the Notice of Purchase Price Adjustment Disagreement that remain in
dispute, unless the Expert Accountant’s review of such other line items is
relevant to the disputed matters or such review or determination is reasonably
necessary in order to resolve any disputes that arise from line items or matters
that were not initially set forth in the Notice of Purchase Price Adjustment
Disagreement but that subsequently arose as a result of the Expert Accountant’s
review and determination of those matters in the Notice of Purchase Price
Adjustment Disagreement that remain in dispute (in which case, such additional
line items and matters shall be deemed to have been included in the Notice of
Purchase Price Adjustment Disagreement). The Actual Closing Solvency Capital
Worksheet, the calculation of the Actual Closing Solvency Capital and the
calculation of the Actual Solvency Deficit that are final and binding on the
Parent and the Acquiror, as determined either through agreement of the Parent
and the Acquiror (deemed or otherwise) pursuant to Sections 2.05(e) or 2.05(f)
or through the determination of the Expert Accountant pursuant to this
Section 2.05(g), are referred to herein as the “Final Actual Closing Solvency
Capital Worksheet,” the “Final Actual Closing Solvency Capital,” and the “Final
Actual Solvency Deficit.” For the avoidance

 

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of doubt, the Final Actual Closing Solvency Capital and the Final Actual
Solvency Deficit shall be calculated and expressed in Japanese yen. The 30-day
period for delivering the written award may be extended by the mutual written
consent of the Parent and the Acquiror or by the Expert Accountant for up to an
additional thirty (30) days for good cause shown. Notwithstanding anything else
contained herein, neither the Parent nor the Acquiror may assert that any award
issued by the Expert Accountant is unenforceable because it has not been timely
rendered.

(h) The cost of the Expert Accountant’s review and determination shall be shared
equally by the Parent and the Acquiror. During the review by the Expert
Accountant, the Acquiror and the Parent shall each make available to the Expert
Accountant such individuals and such information, books, records and work
papers, as may be reasonably required by the Expert Accountant to fulfill its
obligations under Section 2.05(g).

(i) In the event that any party to this Agreement (or the Expert Accountant)
requests, pursuant to this Section 2.05, access to the work papers and other
supporting data of the independent accountants of the other parties to this
Agreement relating to the preparation of the Actual Closing Solvency Capital
Worksheet or the Estimated Companies Solvency Capital Worksheet and the
calculation of the Actual Closing Solvency Capital and the Actual Solvency
Deficit or the Estimated Companies Solvency Capital and Estimated Solvency
Deficit, as the case may be, the providing party shall cause its independent
accountants to make any such work papers and other supporting data available to
the requesting party (including the Expert Accountant) and its independent
accountants; provided, that the requesting party (including the Expert
Accountant) has signed a customary confidentiality and hold harmless agreement
relating to such access to working papers and other supporting data in form and
substance reasonably acceptable to such independent accountants (an “Auditor’s
Letter”). The providing party shall promptly provide any consents requested by
its independent accountants in connection with such access.

(j) The “Post-Closing Solvency Capital True-Up Amount” will be the amount
(expressed in U.S. dollars based on the Applicable Exchange Rate as in effect as
of the Business Day immediately preceding the payment date) equal to (whether
positive or negative) (i) the Final Actual Solvency Deficit calculated based on
the Final Actual Closing Solvency Capital Worksheet (expressed in U.S. dollars
based on the Applicable Exchange Rate as in effect as of the Business Day
immediately preceding the payment date), if any, minus (ii) the Closing Date
Solvency Capital True-Up Amount. If the Post-Closing Solvency Capital True-Up
Amount is a negative amount, then the Acquiror shall, or shall cause a
Designated Acquiror to, pay to the Parent pursuant to Section 2.07 an amount
equal to the absolute value of the Post-Closing Solvency Capital True-Up Amount
plus interest on such amount at the Interest Rate calculated in accordance with
Section 2.08 from the Closing Date to but excluding the date of payment. If the
Post-Closing Solvency Capital True-Up Amount is a positive amount, then the
Parent shall pay to the Acquiror (or to a Designated Acquiror designated by the
Acquiror) pursuant to Section 2.07 an amount equal to the Post-Closing Solvency
Capital True-Up Amount plus interest on such amount at the Interest Rate
calculated in accordance with Section 2.08 from the Closing Date to but
excluding the date of payment. Such payment shall be (i) made within two
(2) Business Days after the date on which the Actual Closing Solvency Capital
Worksheet, the calculation of the Actual Closing Solvency Capital and the
calculation of the Actual Solvency Deficiency become final and binding on the
Parent and the Acquiror, as determined either

 

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through agreement of the Parent and the Acquiror (deemed or otherwise) pursuant
to Section 2.05(e) or 2.05(f) or through the determination of the Expert
Accountant pursuant to Section 2.05(g), and (ii) treated as an adjustment to the
Share Purchase Price.

(k) In the event that (1) Parent has contributed capital to Star or Edison after
the date hereof as a result of a shortfall in the Solvency Margin Ratio of Star
or Edison as contemplated in Section 5.01(z)(xxvii) and (2) there is no Final
Actual Solvency Deficit, the Acquiror shall, or shall cause a Designated
Acquiror to, pay to Parent on the date that would have been applicable for a
payment pursuant to the final sentence of Section 2.05(j) an amount equal to the
lesser of (x) the amount of such contributed capital or (y) the amount that
could be distributed on the Closing Date by the Insurance Company that received
such contributed capital that results in the Companies Solvency Capital to be
equal to ¥554,000,000,000 as of the Closing Date (without giving effect to any
restrictions on the payment of dividends or other distributions that may
applicable to such Insurance Company).

Section 2.06. Transactions; Closing Deliveries.

(a) At the Closing:

(i) the Acquiror shall, or shall cause one or more Designated Acquirors to, pay
to the Parent the amount specified in Section 2.04(a) by wire transfer of
immediately available funds to the account designated by the Parent at least two
(2) Business Days prior to the Closing;

(ii) the Parent shall, and shall cause the Sellers to (x) deliver to the
Acquiror or to the Designated Acquiror designated by the Acquiror in accordance
with Section 2.01(a) (A) one or more stock certificates evidencing the Shares,
duly endorsed in blank or accompanied by stock powers duly executed in proper
form for transfer, and with any required stock transfer stamps affixed thereto,
and (B) written resignations effective as of the Closing Date of each director
and each statutory auditor of the Companies and each director and each statutory
auditor of the Transferred Subsidiaries, in each case who is not an employee of
a Company or Transferred Subsidiary, and (y) cause title to the Shares to be
transferred to the Acquiror or to the Designated Acquiror designated by the
Acquiror in accordance with Section 2.01(a) (including by delivering, or causing
the Sellers to deliver, irrevocable documentation necessary to cause each
Company to enter the name of the Acquiror or the Designated Acquiror designated
by the Acquiror in accordance with Section 2.01(a) as the sole shareholder of
the Shares in the shareholder registry of such Company, duly executed by the
applicable Seller or the Parent, as applicable);

(iii) the Parent shall deliver, or cause its applicable Affiliates to deliver,
to the Acquiror counterparts of each of the Ancillary Agreements duly executed
by the Parent or its applicable Affiliates;

(iv) the Acquiror shall deliver, or cause to be delivered, to the Parent
counterparts of each of the Ancillary Agreements duly executed by the Acquiror
or its applicable Affiliates; and

 

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(v) each of the parties hereto will deliver to the other such other documents as
may be reasonably necessary to consummate the transactions contemplated by this
Agreement.

(b) In addition to the deliverables set forth in Section 2.06(a), at or prior to
the Closing, (i) the Parent shall deliver to the Acquiror the certificate
referred to in Section 8.03(a)(iv), and (ii) the Acquiror shall deliver to the
Parent the certificate referred to in Section 8.02(a)(iv).

(c) Promptly following the Closing, the Acquiror and the Parent shall, and the
Parent shall cause the Sellers to, (i) cause the Companies to enter the name of
the Acquiror or the Designated Acquiror designated by the Acquiror in accordance
with Section 2.01(a) as the sole shareholder of the Shares in the shareholder
registry of each Company, and (ii) cause new directors and statutory auditors of
the Companies and the Transferred Subsidiaries to be appointed and registered in
the commercial registry.

Section 2.07. Payments and Computations.

(a) Each of the parties hereto will make each payment due to the other party (or
its Affiliate) pursuant to this Article II by no later than 10:00 a.m., Tokyo
time, on the day when due (unless otherwise consented to by the party to whom
such payment is due). All payments shall be paid by wire transfer of immediately
available funds to the account or accounts designated by the party (or its
Affiliate) receiving such payment.

(b) The amounts specified in this ARTICLE II shall be paid free and clear of,
and (except to the extent required by Law) without any deduction or withholding
on account of, any Taxes; provided, however, that the Parent shall provide, or
cause its Affiliates to provide, any statements, forms or other documents
reasonably requested by the Acquiror to reduce or eliminate such deduction or
withholding. If any amount is required by Law to be deducted or withheld on
account of any Tax with respect to payments made under this ARTICLE II to the
Parent, such Tax shall be deducted from the amounts required to be paid under
this ARTICLE II and the Acquiror (or the applicable Designated Acquiror) shall
promptly remit such deduction or withholding on account of any Tax (if any) to
the relevant Tax Authority and shall promptly provide the Parent with the
appropriate receipts for such payments. All Tax amounts deducted or withheld
from payments pursuant to the preceding sentence shall be treated as having been
actually paid to the Parent for purposes of this Agreement.

Section 2.08. Interest. All computations of interest with respect to any payment
due to a Person under this Agreement will be based on the Interest Rate (except
that the Purchase Price Interest Amount and any amount payable pursuant to
Section 9.03(a) shall be calculated on the basis of an interest rate per annum
of 5.0%) on the basis of a year of 365 days, in each case for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest is payable. Whenever any payment under this
Agreement will be due on a day other than a Business Day, such payment will be
made on the next succeeding Business Day, and such extension of time will be
included in the computation of payment of interest.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PARENT

Except as set forth in the corresponding sections or subsections of the
disclosure letter delivered to the Acquiror by the Parent concurrently with
entering into this Agreement (the “Seller Disclosure Letter”) (it being
understood and agreed by the parties hereto that disclosure of any item in any
section or subsection of the Seller Disclosure Letter shall be deemed disclosure
with respect to any other section or subsection of the Seller Disclosure Letter
to the extent it is readily apparent from such disclosure that such disclosure
is applicable to such other section or subsection; provided, however, that the
disclosure of any item on Section 3.06(e) of the Seller Disclosure Letter shall
not be deemed to be disclosure against any other section of the Seller
Disclosure Letter), the Parent hereby represents and warrants to the Acquiror as
of the date hereof and as of the Closing Date (or such other date specified
herein) as follows:

Section 3.01. Incorporation, Qualification and Authority of the Parent. The
Parent is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware and has full power and authority to own
or lease and operate its assets and to conduct its business as currently
conducted. Each applicable Affiliate of the Parent which is a party to any
Transaction Agreement is a corporation or other organization duly incorporated
or organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization and has full power and
authority to own or lease and operate its assets and properties and to conduct
its business as currently conducted. The Parent or the applicable Affiliate of
the Parent (as applicable) has full power and authority to enter into,
consummate the transactions contemplated by, and carry out its obligations
under, each of the Transaction Agreements to which it is a party. The execution
and delivery by the Parent or the applicable Affiliate of the Parent (as
applicable) of each of the Transaction Agreements to which it is a party, the
performance by the Parent or the applicable Affiliate of the Parent (as
applicable) of its obligations under each of the Transaction Agreements to which
it is a party and the consummation by the Parent or the applicable Affiliate of
the Parent (as applicable) of the transactions contemplated by each of the
Transaction Agreements to which it is a party, have been or (in the case of the
Ancillary Agreements) will be prior to the Closing (as applicable) duly
authorized by all requisite limited liability company, corporate or other
similar organizational action on the part of the Parent or the applicable
Affiliate of the Parent (as applicable). Each of the Transaction Agreements to
which the Parent or the applicable Affiliate of the Parent (as applicable) is a
party has been, or (in the case of the Ancillary Agreements) upon execution and
delivery thereof, will be, duly executed and delivered by the Parent or the
applicable Affiliate of the Parent (as applicable). Assuming due authorization,
execution and delivery by the other parties hereto or thereto, each of the
Transaction Agreements to which the Parent or the applicable Affiliate of the
Parent (as applicable) is a party constitutes, or (in the case of the Ancillary
Agreements) upon execution and delivery thereof will constitute, the legal,
valid and binding obligation of the Parent or the applicable Affiliate of the
Parent (as applicable), enforceable against it in accordance with its terms,
subject in each case to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium, rehabilitation, liquidation, fraudulent conveyance,
preferential transfer or similar Laws now or hereafter in effect relating to or
affecting creditors’ rights and remedies generally and subject, as to
enforceability, to the effect of general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law).

 

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Section 3.02. Incorporation, Qualification and Authority of the Companies and
the Transferred Subsidiaries.

(a) Each of the Companies and the Transferred Subsidiaries is a corporation or
other organization duly incorporated or organized, validly existing and in good
standing (or the equivalent, if any, in the applicable jurisdiction) under the
Laws of Japan and has full power and authority to own or lease and operate its
assets and properties and to conduct its business as currently conducted.
Neither the character of the Companies’ or the Transferred Subsidiaries’ owned,
operated or leased assets or properties nor the nature of their activities
require that any of them be qualified as a foreign corporation or other
organization in any other jurisdiction besides Japan, except where the failure
to be so qualified, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. The Parent has delivered or made
available to the Acquiror, prior to the date hereof, true, correct and complete
copies of the certificate of incorporation and by-laws (or comparable
organizational documents) for each of the Companies and the Transferred
Subsidiaries (as applicable).

(b) (i) None of the Companies or any of the Transferred Subsidiaries is the
subject of any bankruptcy (Hasan), civil rehabilitation (Minji-Saisei),
corporate reorganization (Kaisha-Kosei), liquidation (Seisan), special
liquidation (Tokubetsu-Seisan), insolvency or other similar proceeding,
(ii) none of the Insurance Companies is subject to (A) any of the following FSA
proceedings under Article 241 of the Insurance Business Law: (x) any proceeding
for the suspension of its business (Gyomu-Teishi), (y) any consultation on
merger, etc., (Gappeitou-no-Kyogi-no-Meirei), or (z) any business and property
management (Gyomu-oyobi-Zaisan-no-Kanri) by an insurance administrator
(Hoken-kanrinin) or (B) any reorganization under the Law Concerning Exceptions
to Reorganization and Bankruptcy Procedure for Financial Institutions of Japan,
and (iii) except as set forth on Section 3.02(b) of the Seller Disclosure
Letter, none of the Companies or any of the Transferred Subsidiaries is
operating under any formal or informal agreement or understanding with a
Governmental Authority, including the U.S. Treasury and the FRBNY, that
restricts its authority to do business or requires it to take, or refrain from
taking, any action, other than generally applicable Law or regulatory
interpretations thereof.

Section 3.03. Capital Structure of the Companies and the Transferred
Subsidiaries; Ownership and Transfer of the Shares.

(a) Section 3.03(a) of the Seller Disclosure Letter sets forth, as of the date
hereof, a true, correct and complete list of (i) all of the authorized Capital
Stock of each of the Companies, (ii) the number of shares (or other applicable
units) of each class or series of Capital Stock of each of the Companies that
are issued and outstanding, together with the name of each holder thereof and
(iii) each Subsidiary of any of the Companies, its jurisdiction of organization
and the Companies’ direct or indirect ownership of each Subsidiary expressed as
a percentage and the name of each other holder of Capital Stock in each
Subsidiary that is not a wholly owned Subsidiary of any of the Companies and the
direct and indirect ownership of each class of Capital Stock of each such
Subsidiary by such holders expressed as a percentage. Neither the Companies nor
any of the Transferred Subsidiaries has any branches or is a party to any Joint

 

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Venture (except for Joint Ventures that comprise part of the Investment Assets).
All of the outstanding shares (or other applicable units or interests) of each
class or series of Capital Stock in each of the Companies and the Transferred
Subsidiaries (as applicable) have been duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of applicable Law
or any preemptive or subscription rights enforceable under applicable Law. There
are no options, calls, warrants or convertible or exchangeable securities, or
conversion, preemptive, subscription or other rights or Contracts, in any such
case, obligating or which may obligate any of the Companies or any of the
Transferred Subsidiaries to issue, sell, purchase, return or redeem, or
otherwise dispose of, transfer or acquire, any shares (or other applicable units
or interests) of its Capital Stock or securities (including bonds, debentures,
notes or other Indebtedness having general voting rights or securities
convertible into such bonds, debentures, notes or other Indebtedness)
convertible into or exchangeable for any shares (or other applicable units or
interests) of its Capital Stock, in each case, with or without payment of
additional consideration in cash or property, either immediately or upon the
occurrence of a specified date or a specified event or the satisfaction or
happening of any other condition or contingency. There are no shares (or other
applicable units or interests) of any Capital Stock of any of the Companies or
any of the Transferred Subsidiaries reserved for issuance. There are no capital
appreciation rights, phantom stock plans, securities with participation rights
or features or similar Contracts of any of the Companies or the Transferred
Subsidiaries. The Parent, the Sellers, the Companies or the Transferred
Subsidiaries own, beneficially and of record, all of the issued and outstanding
shares (or other applicable units or interests) of Capital Stock of each of the
Companies and Transferred Subsidiaries in the respective amounts set forth in
Section 3.03(a) of the Seller Disclosure Letter, in each case, free and clear of
all Liens, other than (A) any restrictions on transfer generally imposed on
equity securities under applicable securities Law and (B) prior to the Closing,
the FRBNY Liens and Liens in favor of Permitted Parties. Upon consummation of
the transactions contemplated by this Agreement, including the execution and
delivery of the documents to be delivered at the Closing, the Acquiror (or a
Designated Acquiror), at the Closing, shall be vested with good and marketable
title in and to the Shares, free and clear of all Liens, including the FRBNY
Liens and Liens in favor of Permitted Parties, other than any restrictions on
transfer generally imposed on equity securities under applicable securities Law.
Upon the delivery of the Shares as provided in this Agreement, the Companies
will continue to directly or indirectly own, beneficially and of record, and
have good and marketable title in and to all of the issued and outstanding
shares (or other applicable units or interests) of Capital Stock representing
the ownership interests set forth on Section 3.03(a) of the Seller Disclosure
Letter in each of the Transferred Subsidiaries, in the shares of common stock,
Preferred Shares B and preferred shares G of Edison owned by AIGFAJ and in the
preferred shares A of AIGFAJ owned by Edison, in each case, free and clear of
all Liens, including the FRBNY Liens and Liens in favor of Permitted Parties,
other than any restrictions on transfer generally imposed on equity securities
under applicable securities Law. AIG Funding is the legal and beneficial owner
of ¥31,937,996,556 aggregate principal amount of the Bridge Loan, which
represents 100% of the outstanding principal amount of the Bridge Loan, in each
case, free and clear of all Liens, other than any Liens arising as a result of
the Transaction Agreements. Upon consummation of the transactions contemplated
by this Agreement, including the execution and delivery of the documents to be
delivered at the Closing, the Acquiror (or a Designated Acquiror), at the
Closing, shall be vested with good and marketable title in and to the Bridge
Loan, free and clear of all Liens, including the FRBNY Liens and Liens

 

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in favor of Permitted Parties. As of the date hereof, the Companies and the
Transferred Subsidiaries do not have any direct or indirect indebtedness for
borrowed money, guarantees of indebtedness for borrowed money, indebtedness
under letters of credit, bonds, debentures, notes or capitalized leases
(collectively “Indebtedness for Borrowed Money”), except for (A)(1) in the case
of Edison, (x) ¥15,276,634,396 principal amount of subordinated debt held by
Credit Saison, Ltd. (the “Credit Saison Debt”) and (y) ¥19,000,000,000 principal
amount of subordinated debt held by AIGFAJ (the “AIGFAJ Subordinated Debt”), and
(2) in the case of AIGFAJ, (a) the Bridge Loan and (b) ¥31,800,000,000 principal
amount of debt under the Syndicated Loan Agreement (the “Syndicated Loan”),
(B) such Indebtedness that is set forth in Section 3.03(a) of the Seller
Disclosure Letter and (C) any such Indebtedness in the aggregate not exceeding
¥1,000,000,000; provided that no such Indebtedness included in this clause
(C) constitutes equity for U.S. federal income tax purposes.

(b) Except for restrictions on transfer generally imposed on equity securities
under applicable securities Law and, prior to the Closing, the FRBNY Liens and
Liens in favor of Permitted Parties, there are no voting trusts, stockholder
agreements, proxies, preemptive rights, rights of first refusal, rights of first
offer or other rights, restrictions or Contracts in effect with respect to the
voting, transfer or dividend rights of the Shares or of the shares (or other
applicable units or interests) of any Capital Stock of any Transferred
Subsidiary. As of the Closing Date, none of the Companies will have any
Subsidiaries other than the Transferred Subsidiaries. Except as set forth on
Section 3.03(b) of the Seller Disclosure Letter, from March 31, 2010 to the date
hereof, none of the Companies has declared, set aside, made or paid any dividend
or other distribution in respect of its Capital Stock.

(c) Except as set forth on Section 3.03(a) of the Seller Disclosure Letter, none
of the Companies or the Transferred Subsidiaries, directly or indirectly, owns
or has the right to acquire, or the obligation to acquire, any interest or
investment (whether debt or equity) in, or the obligation to make a capital
contribution to or investment in, any Person, excluding in respect of Investment
Assets.

Section 3.04. No Conflict. Provided that all consents, approvals, authorizations
and other actions described in Section 3.05 have been obtained or taken, the
execution and delivery by the Parent or the applicable Affiliate of the Parent
(as applicable) of the Transaction Agreements to which it is a party, the
performance by the Parent or the applicable Affiliate of the Parent (as
applicable) of its obligations under each of the Transaction Agreements to which
it is a party and the consummation by the Parent or the applicable Affiliate of
the Parent (as applicable) of the transactions contemplated by each of the
Transaction Agreements to which the Parent or the applicable Affiliate of the
Parent (as applicable) is a party, do not and will not, directly or indirectly
(with or without the giving of notice or lapse of time, or both) (a) violate or
conflict with, or result in a breach of, the organizational documents of the
Parent or the applicable Affiliate of the Parent (as applicable), any of the
Companies or any of the Transferred Subsidiaries, (b) conflict with or violate
in any material respect any Law or Governmental Order applicable to the Parent
or the applicable Affiliate of the Parent (as applicable), any of the Companies
or any of the Transferred Subsidiaries or by which any of them or any of their
respective properties, assets or businesses is bound or subject or (c) violate
or conflict with, result in any breach of, or constitute a default (or event
which, with the giving of notice or lapse of time, or both, would constitute a
default) under, require any consent under, or give to any

 

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Person any rights of termination, acceleration or cancellation of, or result in
a loss of rights under, or result in the creation of any Lien (other than
Permitted Liens) on any of the assets or properties of the Parent, any of the
Sellers, any of the Companies or any of the Transferred Subsidiaries pursuant
to, any Contract to which the Parent, any of the Sellers, any of the Companies
or any of the Transferred Subsidiaries is a party or by which any of them or any
of their respective properties, assets or businesses is bound or subject,
except, in the case of clause (c) of this Section 3.04, for any such conflicts,
violations, breaches, defaults, consents, terminations, accelerations,
cancellations, losses of rights or creations that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.

Section 3.05. Consents and Approvals. Except as may result from the identity or
regulatory status of the Acquiror or its Affiliates, and except in connection,
or in compliance, with the approvals, non-disapprovals, consents, licenses,
permits, orders, qualifications, or authorizations of, or registration with or
other actions by, or any filings with or notifications to, any Governmental
Authority (each, a “Governmental Approval”) required by applicable Law that are
set forth on Section 3.05 of the Seller Disclosure Letter, the execution and
delivery by the Parent or the applicable Affiliate of the Parent (as applicable)
of each of the Transaction Agreements to which it is a party do not, and the
performance by the Parent or the applicable Affiliate of the Parent (as
applicable) of its obligations under, and the consummation by the Parent or the
applicable Affiliate of the Parent (as applicable) of the transactions
contemplated by each of the Transaction Agreements to which it is a party, will
not require any Governmental Approval to be obtained or made by the Parent or
any such applicable Affiliate of the Parent (as applicable), any of the
Companies or any of the Transferred Subsidiaries.

Section 3.06. Financial Information; Absence of Undisclosed Liabilities.

(a) The following statutory statements have been made available to the Acquiror,
in each case together with any exhibits, schedules and notes thereto
(collectively, the “Statutory Statements”): the annual statement of each of Star
and Edison (each, an “Insurance Company”) for the years ended March 31, 2010 and
2009, in each case as required to be filed with the FSA. Each of the Statutory
Statements (except as expressly set forth in such Statutory Statements) has been
prepared, in all material respects, in accordance with GAAP and is consistent
with past practice of the relevant Insurance Company and presents fairly, in all
material respects, the statutory financial position and results of operations of
such Insurance Company as of its respective date or for the respective periods
covered thereby.

(b) Section 3.06(b) of the Seller Disclosure Letter sets forth (i) the audited
non-consolidated balance sheets of each of the Insurance Companies as of
March 31, 2009 and 2010, (ii) the audited non-consolidated statements of
operations of each of the Insurance Companies for the annual periods ended
March 31, 2009 and 2010, (iii) the unaudited non-consolidated balance sheets of
each of Star, Edison, CLIS K.K., Capital System Service K.K. and AIG Business
Service K.K. as of June 30, 2010, (iv) the unaudited non-consolidated statements
of operations of each of the Star, Edison, CLIS K.K. and AIG Business Service
K.K. for the quarterly period ended June 30, 2010 and Capital System Service
K.K. for the four months ended June 30, 2010, (v) the audited non-consolidated
balance sheet of AIGFAJ as of February 28, 2009 and February 28, 2010, (vi) the
audited non-consolidated statement of operations of AIGFAJ for the annual
periods ended February 28, 2009 and February 28, 2010,

 

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(vii) the unaudited non-consolidated balance sheet of Capital System Service
K.K. as of February 28, 2009 and February 28, 2010, (viii) the unaudited
non-consolidated statement of operations of Capital System Service K.K. for the
annual periods ended February 28, 2009 and February 28, 2010, (ix) the unaudited
non-consolidated balance sheets of CLIS K.K., AIG Business Service K.K., Edison
Service and Toho Shinyo Hosho Company as of March 31, 2009 and 2010, (x) the
unaudited non-consolidated statements of operations of CLIS K.K., AIG Business
Service K.K., Edison Service and Toho Shinyo Hosho Company for the annual
periods ended March 31, 2009 and 2010, (xi) the unaudited combined balance sheet
of the Companies and the Transferred Subsidiaries as of March 31, 2010, and
(xii) the unaudited combined statements of operations of the Companies and the
Transferred Subsidiaries for the annual period ended March 31, 2010 (the balance
sheets and other statements referred to in clauses (i) through (xii) being
herein collectively referred to as the “Ancillary Financial Statements”). The
Ancillary Financial Statements (except as expressly set forth on Section 3.06(b)
of the Seller Disclosure Letter or in such Ancillary Financial Statements) have
been prepared in all material respects in accordance with GAAP and are
consistent with the past practice of the relevant entity, and present fairly, in
all material respects, the financial condition and the results of operations of
the Companies and the Transferred Subsidiaries as of their respective dates and
for the respective periods covered thereby, except that the Ancillary Financial
Statements referred to in clauses (iii), (iv) and (vii) through (xii) do not
contain notes and the Ancillary Financial Statements referred to in
clauses (iii) and (iv) are subject to normal year-end adjustments.

(c) If any unaudited financial statements are required to be delivered by the
Parent to the Acquiror pursuant to Section 5.19, such financial statements will
have (i) been prepared from the books and records of the Companies and the
Transferred Subsidiaries, (ii) been prepared in accordance with U.S. GAAP and
Regulation S-X (17 CFR Part 210) applied on a consistent basis, where
appropriate, with its application in connection with the preparation of the
unaudited consolidated financial statements of the Parent and its Subsidiaries
as of and for the same date or periods, and (iii) presented fairly and
accurately, in all material respects, the combined and consolidated financial
position, the combined and consolidated results of operations, the combined and
consolidated cash flows, and the combined and consolidated changes in
stockholders’ equity of the Companies and the Transferred Subsidiaries as of
their respective dates and for the respective quarterly and year-to-date periods
covered thereby, except (A) that any such unaudited financial statements will
not contain footnotes except as otherwise required by U.S. GAAP and (B) as set
forth on Section 3.06(c) of the Seller Disclosure Letter.

(d) If any audited financial statements are required to be delivered by the
Parent to the Acquiror pursuant to Section 5.19, such financial statements will
have (i) been prepared from the books and records of the Companies and the
Transferred Subsidiaries, (ii) been prepared in accordance with U.S. GAAP and
Regulation S-X (17 CFR Part 210) applied on a consistent basis, where
appropriate, with its application in connection with the preparation of the
audited consolidated financial statements of the Parent and its Subsidiaries as
of and for the same date or periods, and (iii) presented fairly and accurately,
in all material respects, the combined and consolidated financial position, the
combined and consolidated results of operations, the combined and consolidated
cash flows and the combined and consolidated changes in stockholders’ equity of
the Companies and the Transferred Subsidiaries as of their respective dates and
for the respective periods covered thereby, except as set forth in

 

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Section 3.06(d) of the Seller Disclosure Letter. When provided, any subsequently
prepared audited financial statements that are delivered as Required Information
will be accompanied by the related opinion of PricewaterhouseCoopers LLP, the
independent accountant of the Parent (the “Independent Auditor”).

(e) Except (i) as reserved against or reflected in the Ancillary Financial
Statements, (ii) for liabilities and obligations incurred in the Ordinary Course
of Business since March 31, 2010, and (iii) as set forth on Section 3.06(e) of
the Seller Disclosure Letter, there is no liability or obligation, or series of
related liabilities or obligations, exceeding ¥30,100,000, of any of the
Companies or any of the Transferred Subsidiaries, of the type required to be set
forth on a balance sheet prepared in accordance with GAAP.

(f) The Companies and the Transferred Subsidiaries have devised and maintain
systems of internal accounting controls with respect to their respective
businesses sufficient to provide reasonable assurances that: (i) all
transactions are executed in accordance with management’s general or specific
authorization; (ii) all transactions are recorded as necessary to permit the
preparation by the Companies and the Transferred Subsidiaries of financial
statements in conformity with GAAP and maintain proper accountability for items;
(iii) access to their respective properties and assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for items is compared with the actual levels at
reasonable intervals and appropriate action is taken with respect to any
differences. Based on Parent’s materiality thresholds applicable to the
Companies and the Transferred Subsidiaries, as set forth on Section 3.06(f) of
the Seller Disclosure Letter, there are no material weaknesses in the internal
controls over financial reporting (as such term is defined in Rule 13a-15(f)
under the Exchange Act) of any of the Companies or any of the Transferred
Subsidiaries which would reasonably be expected to adversely affect in any
material respect the ability of any of the Companies and any of the Transferred
Subsidiaries in the aggregate to record, process, summarize and report financial
data and there is no, and there has not been any instances of, fraud that
involves or involved management or other employees who have or had a significant
role in such internal controls. Since March 31, 2007, neither the Parent, nor
any of the Companies or any of the Transferred Subsidiaries has received, and
the Parent does not otherwise have Knowledge of, any material complaint,
allegation, assertion or claim, regarding any of the Companies’ or any of the
Transferred Subsidiaries’ accounting or auditing practices, procedures,
methodologies or methods, including any material complaint, allegation,
assertion or claim that any of the Companies or any of the Transferred
Subsidiaries has engaged in questionable accounting or auditing practices.

(g) Except as set forth on Section 3.06(g) of the Seller Disclosure Letter, all
costs and expenses exceeding ¥147,500,000 in the aggregate per reporting period
that were incurred by the Parent and its Affiliates (other than the Companies
and the Transferred Subsidiaries) during the periods presented in the Ancillary
Financial Statements in directly providing services to the Companies and the
Transferred Subsidiaries were allocated to the Companies and the Transferred
Subsidiaries; provided, for the avoidance of doubt, such costs and expenses
shall not include payments by the Parent or its Affiliates (other than the
Companies and the Transferred Subsidiaries) of amounts due from the Companies
and the Transferred Subsidiaries on behalf of any of the Companies or any of the
Transferred Subsidiaries subject to subsequent reimbursement from the Companies
and the Transferred Subsidiaries.

 

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Section 3.07. Absence of Certain Changes.

(a) Except for the matters expressly permitted by this Agreement and except as
described on Section 3.07(a) of the Seller Disclosure Letter, since March 31,
2010, (i) the Companies and the Transferred Subsidiaries have conducted the
Business only in the Ordinary Course of Business and (ii) there has not been any
fact, circumstance, event, change, violation, development, effect, condition or
occurrence that, individually or in the aggregate, has had, or would reasonably
be expected to have, a Material Adverse Effect.

(b) Except (i) as expressly permitted by this Agreement, (ii) as set forth on
Section 3.07(b) of the Seller Disclosure Letter or (iii) as required by
applicable Law, during the period from March 31, 2010 to the date hereof, none
of the Parent, the Sellers, the Companies or the Transferred Subsidiaries has
taken any action that would have resulted in a breach of any of the covenants
set forth in Section 5.01(z)(i), (ii), (iii), (iv), (v), (vi), (vii), (viii),
(ix), (xi), (xiv), (xviii), (xix), (xx), (xxiii), (xxv) and (xxviii) if the
Parent, the Sellers, the Companies or the Transferred Subsidiaries had been
subject to such covenants from March 31, 2010 to the date hereof.

Section 3.08. Absence of Litigation. Except as set forth on Section 3.08 of the
Seller Disclosure Letter, there are no Actions pending or, to the Knowledge of
the Parent, threatened in writing against, relating to or affecting the Parent,
any of the Sellers, any of the Companies or any of the Transferred Subsidiaries
or any of their respective assets (including Investment Assets), properties or
businesses, which would reasonably be expected to (a) result in (i) Losses to
any of the Companies or any Transferred Subsidiary in excess of ¥30,100,000 per
Action or (ii) any permanent injunction or other form of equitable relief which
would have an adverse effect in any material respect on any business operations
of the Companies and the Transferred Subsidiaries, taken as a whole, or
(b) otherwise adversely affect the Companies and the Transferred Subsidiaries,
taken as a whole, or their assets (including Investment Assets), properties or
business, taken as a whole, in any material respect, other than, in each case,
Actions involving claims under or in connection with Insurance Contracts in the
Ordinary Course of Business.

Section 3.09. Compliance with Laws. Except as set forth on Section 3.09 of the
Seller Disclosure Letter, none of the Parent, any of the Sellers, any of the
Companies or any of the Transferred Subsidiaries is, or has been, since
March 31, 2007, in violation of (i) its certificate of incorporation and by-laws
(or comparable organizational documents), if any, (ii) any Laws or Governmental
Orders applicable to it or its assets, properties or businesses, or (iii) its
Material Permits or Insurance Permits, except, in the case of clauses (ii) and
(iii) for violations that, individually or in the aggregate, would not
reasonably be expected to adversely affect the Companies and the Transferred
Subsidiaries, taken as a whole, or their assets, properties or businesses, taken
as a whole, in any material respect. Since March 31, 2007, none of the Parent,
any of the Sellers, any of the Companies or any of the Transferred Subsidiaries
has received any written notice from any Governmental Authority that alleges any
material noncompliance (or that the Parent, any Seller, any Company or any
Transferred Subsidiary is under any investigation by such Governmental Authority
for any such alleged noncompliance) with any Governmental Order, Material
Permit, Insurance Permit or material Law applicable to the Parent, any Seller,
any Company, any Transferred Subsidiary or any of their respective

 

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properties, assets or businesses. None of the Parent, any of the Sellers, any of
the Companies or any of the Transferred Subsidiaries is a party to, and none of
the Parent, any of the Sellers, any of the Companies, any of the Transferred
Subsidiaries or any of their respective assets, properties or businesses is
bound by, any Governmental Order that individually or in the aggregate, would
reasonably be expected to adversely affect the Companies and the Transferred
Subsidiaries, taken as a whole, or their assets, properties or businesses, taken
as a whole, in any material respect.

Section 3.10. Governmental Permits.

(a) The Companies and the Transferred Subsidiaries hold all material Permits
necessary to conduct the Business and to own or use their respective assets and
properties (collectively, the “Material Permits”).

(b) All Material Permits are valid and in full force and effect. Except as set
forth on Section 3.10(b) of the Seller Disclosure Letter, none of the Companies
or any of the Transferred Subsidiaries is the subject of any Action pending, or
to the Knowledge of the Parent, threatened in writing, for or contemplating the
revocation, suspension, termination, modification, limitation, cancellation,
nonrenewal or impairment of any Material Permit, and the Parent has no Knowledge
of any existing fact or circumstance that, individually or in the aggregate
(with or without the giving of notice or lapse of time, or both), would be
reasonably likely to result in the revocation, suspension, termination,
modification, limitation, cancellation, nonrenewal or impairment of any Material
Permit. Provided that all consents described in Section 3.05 have been obtained,
no Material Permit shall be suspended, terminated, modified, limited, cancelled,
revoked, not renewed or impaired or become suspended, terminated, modified,
limited, cancelled, revoked, not renewed or impaired, in whole or in part, as a
result of the execution and delivery by the Parent or the applicable Affiliate
of the Parent (as applicable) of, or the consummation of the transactions
contemplated by, the Transaction Agreements to which it is a party.

(c) Except for statutory or regulatory restrictions of general application
applicable to Persons engaged in the same lines of business as any of the
Companies or any of the Transferred Subsidiaries generally, there is no
Governmental Order that would be binding on any of the Companies or any of the
Transferred Subsidiaries following the Closing that prohibits or restricts the
payment of shareholder dividends or other shareholder distributions by any of
the Companies or any of the Transferred Subsidiaries. Except for statutory or
regulatory restrictions of general application applicable to Persons engaged in
the same lines of business as any of the Companies or any of the Transferred
Subsidiaries generally or as set forth on Section 3.10(c) of the Seller
Disclosure Letter, none of the Companies or any of the Transferred Subsidiaries
is subject to any special understanding or arrangement with any Governmental
Authority pursuant to which any of the Companies or any of the Transferred
Subsidiaries is granted relief from compliance with any material Law or is
subject to any material restriction or limitation on its business or operations.

(d) Without limiting the generality of the foregoing, (i) the Companies and the
Transferred Subsidiaries (A) since March 31, 2007, have conducted and are
conducting the Business in compliance in all material respects with all
requirements of applicable Law

 

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regulating the business and products of insurance and reinsurance, including
without limitation the Insurance Business Law (“Insurance Law”) and (B) since
March 31, 2007 have conducted and are conducting all of their respective
insurance and reinsurance operations through the Insurance Companies, (ii) the
Insurance Companies since March 31, 2007 have held and hold all Permits, where
applicable, necessary to write the types of insurance and other products of the
Business and otherwise as necessary for the conduct of their respective
insurance and reinsurance businesses in each of the jurisdictions where the
Insurance Companies conduct or operate such businesses in the manner now
conducted (the “Insurance Permits”), (iii) all of the Insurance Permits are
valid and in full force and effect, (iv) no Insurance Company is the subject of
any pending or, to the Knowledge of the Parent, threatened in writing Action for
or contemplating the suspension, termination, modification, limitation,
cancellation, revocation, nonrenewal or impairment of its Insurance Permits, and
the Parent has no Knowledge of any existing fact or circumstance that,
individually or in the aggregate would be reasonably likely to result in the
suspension, termination, modification, limitation, cancellation, revocation,
nonrenewal or impairment of such Insurance Permits, and (v) provided that all
consents described in Section 3.05 have been obtained, no Insurance Permit of
any of the Insurance Companies shall be suspended, terminated, modified,
limited, cancelled, revoked, not renewed or impaired or become suspended,
terminated, modified, limited, cancelled, revoked, not renewed or impaired, in
whole or in part, as a result of the execution and delivery by the Parent or the
applicable Affiliate of the Parent (as applicable) of, or the consummation of
the transactions contemplated by, the Transaction Agreements. Since March 31,
2007, none of the Insurance Companies has transacted insurance or reinsurance
business in any jurisdiction requiring it to have an Insurance Permit to
transact such business in which it did not possess such Insurance Permit.
Section 3.10(d) of the Seller Disclosure Letter sets forth a true, correct and
complete list of the Insurance Permits. The Parent has made available to the
Acquiror, prior to the date hereof, true, correct, and complete copies of the
Insurance Permits.

Section 3.11. Intellectual Property and Information Technology.

(a) Section 3.11(a) of the Seller Disclosure Letter sets forth, as of the date
hereof, a complete list of (i) all Registered Intellectual Property and (ii) the
jurisdiction in which such Registered Intellectual Property has been registered
or filed and the applicable registration or application number. The Companies
and the Transferred Subsidiaries have complied in all material respects with
their duty of candor and disclosure to the applicable Governmental Authorities
with respect to all applications and registrations for Registered Intellectual
Property and have made no material misrepresentations in any such applications.

(b) The Owned Intellectual Property and the Licensed Intellectual Property
constitute all of the Intellectual Property that is material to, and, to the
Knowledge of the Parent, is used in, the conduct of the Business as currently
conducted. The Companies and/or the Transferred Subsidiaries own the Owned
Intellectual Property and have sufficient right to use the Owned Intellectual
Property and the Licensed Intellectual Property, free and clear of any Liens
(other than Permitted Liens), that is used in the conduct of the Business as
currently conducted.

(c) Since March 31, 2007, in all material respects, each Company and each
Transferred Subsidiary has taken commercially reasonable steps to maintain and
protect the ownership of its Owned Intellectual Property material to the conduct
of the Business.

 

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(d) Except as set forth on Section 3.11(d) of the Seller Disclosure Letter,
since March 31, 2007: (i) there is no litigation pending or, to the Knowledge of
the Parent, threatened in writing against the Parent, any of the Sellers or any
of their respective Affiliates, and (ii) to the Knowledge of the Parent, none of
the Sellers, the Parent or any of their respective Affiliates has received any
written communication that remains unresolved as of the date hereof, in each
case of (i) and (ii) (A) alleging that the conduct of the Business infringes,
dilutes, misappropriates or otherwise violates a third party’s Intellectual
Property rights or (B) challenging the ownership, use, validity, enforceability
or registrability of any Owned Intellectual Property. Except as would not
reasonably be expected to have a Material Adverse Effect, none of the Companies
or the Transferred Subsidiaries uses interactive voice response systems in
connection with telephone call center technologies that infringe on any patents,
or patents that may be issued on patent applications, owned or licensed by any
of Ronald A. Katz, Ronald A. Katz Technology Licensing, L.P. and/or A2D, LP or
any of their respective Affiliates.

(e) Except as set forth on Section 3.11(e) of the Seller Disclosure Letter,
since March 31, 2007, none of the Companies or any of the Transferred
Subsidiaries has brought, or to the Knowledge of the Parent, threatened a claim
against a third party in writing that remains unresolved as of the date hereof
alleging that any Person is materially infringing upon, diluting,
misappropriating or otherwise violating any Owned Intellectual Property.

(f) The Companies and the Transferred Subsidiaries have established and maintain
commercially reasonable data and information security programs and privacy
policies and the Companies and the Transferred Subsidiaries are in material
compliance with such programs and policies. Except as set forth on
Section 3.11(f) of the Seller Disclosure Letter, since March 31, 2007, none of
the Companies, or any of the Transferred Subsidiaries, or, to the Knowledge of
the Parent, any service provider to any of the Companies or any of the
Transferred Subsidiaries (i) has suffered a material security breach with
respect to the data or information systems used in the conduct of the Business
which breach had an effect on the operation of the Business or (ii) has notified
or has been required under applicable Law to notify (A) any employee of any of
the Companies or any of the Transferred Subsidiaries, any customer of the
Business or any other Person in connection with the Business of any information
security breach involving such employee’s, customer’s or other Person’s personal
information (including private, health, medical and financial information) or
(B) any Governmental Authority in relation to any of the foregoing.

(g) The Companies and the Transferred Subsidiaries have taken all commercially
reasonable steps to maintain the confidentiality of proprietary information that
any of the Companies or any of the Transferred Subsidiaries holds, or purports
to hold, as a Trade Secret that is material to the conduct of the Business,
including, since March 31, 2007, taking all commercially reasonable steps to
cause each employee of each Company and Transferred Subsidiary to comply with a
policy of maintaining the confidentiality of any confidential information of
each Company and each Transferred Subsidiary that has been provided to such
employee.

(h) Each Company and each Transferred Subsidiary uses anti-virus software in
accordance with commercially reasonable standards.

 

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(i) All hardware currently being used by the Companies and the Transferred
Subsidiaries that is material to the conduct of the Business is, in all material
respects, in such reasonable and useable operating condition as is necessary to
conduct the Business as currently conducted.

(j) With respect to any Owned Intellectual Property and Licensed Intellectual
Property that is software, (i) such Owned Intellectual Property that is software
does not contain any viruses, malware, time-bombs, key-locks or any other
devices designed to, without the knowledge and authorization of a Company or a
Transferred Subsidiary, disrupt, disable, harm or interfere with the operation
of such Owned Intellectual Property or the integrity of the data or information
produced by such Owned Intellectual Property and (ii) to the Knowledge of the
Parent, such Licensed Intellectual Property does not contain any viruses,
malware, time-bombs, key-locks or any other devices designed to, without the
knowledge and authorization of a Company or a Transferred Subsidiary, disrupt,
disable, harm or interfere with the operation of such Licensed Intellectual
Property or the integrity of the data or information produced by such Licensed
Intellectual Property.

(k) Provided that all Third Party Consents are obtained, neither the execution,
delivery or performance of this Agreement or any of the Ancillary Agreements nor
the consummation of any of the transactions contemplated by this Agreement or
any of the Ancillary Agreements will, with or without the giving of notice or
lapse of time, or both, result in, or give any other Person the right or option
to cause or declare, (i) a loss of, or encumbrance on, any Owned Intellectual
Property used in the conduct of the Business as currently conducted, (ii) a
material breach of any material license agreement to which any of the Companies
or any of the Transferred Subsidiaries is a party, (iii) the release, disclosure
or delivery of any Owned Intellectual Property to any escrow agent or other
Person or (iv) the grant, assignment or transfer to any other Person of any
license or other right or interest under, to or in any of the Owned Intellectual
Property.

Section 3.12. Material Contracts.

(a) Section 3.12(a) of the Seller Disclosure Letter contains a true, correct and
complete list of each of the Material Contracts as in effect as of the date
hereof. Each Material Contract is in full force and effect and is a valid and
binding obligation of the Company or the Transferred Subsidiary (as applicable)
that is party thereto and, to the Knowledge of the Parent, each other party to
such Material Contract. Each such Material Contract is enforceable against the
Company or the Transferred Subsidiary (as applicable) that is party thereto and,
to the Knowledge of the Parent, each other party to such Material Contract, in
accordance with its terms (subject in each case to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation,
fraudulent conveyance, preferential transfer or similar Laws now or hereafter in
effect relating to or affecting creditors’ rights and remedies generally and
subject, as to enforceability, to the effect of general equitable principles or
of Laws regarding prohibition of abuse of rights (kenriranyo-no-kinshi) and
principles of trust (shingiseijitsu-no-gensoku) (regardless of whether
enforcement is sought in a proceeding in equity or at law)). None of the
Companies or any of the Transferred Subsidiaries or, to the Knowledge of the
Parent, any other party to a Material Contract, is in material default or
material breach of a Material Contract and there does not exist any event,
condition or omission that

 

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would constitute such a material default or material breach (with or without the
giving of notice or lapse of time, or both) or that would permit the
termination, cancellation or acceleration of performance of any material
obligation of the Company or the Transferred Subsidiary (as applicable) that is
party thereto or, to the Knowledge of the Parent, any other party to the
Material Contract. None of the Companies or any of the Transferred Subsidiaries
has received any written notice of any material default under any Material
Contract.

(b) Except as set forth on Section 3.12(b) of the Seller Disclosure Letter, no
Material Contract contains any provision providing that any such other party
thereto may terminate, cancel or commute the same by reason of the transactions
contemplated by the Transaction Agreements.

(c) The Parent has delivered or made available to the Acquiror, prior to the
date hereof, true, correct and complete copies of all Material Contracts.

Section 3.13. Employee Benefits; Employees.

(a) The Parent has delivered or made available to the Acquiror, prior to the
date hereof, (i) true, correct and complete copies of all material work rules
(shugyo kisoku), (ii) true, correct and complete copies of all material
incentive, profit-sharing, stock option, stock purchase, other equity-based,
employment, consulting, compensation, congratulatory and condolence pay,
commission pay, the Zaikei plan, vacation or other leave, change in control,
retention, retiree medical or life, supplemental retirement, severance, health,
medical, disability, life insurance, deferred compensation and other employee
compensation and benefit plans, programs, policies, agreements, arrangements and
practices, and all amendments and trust documents related thereto, in each case
established or maintained by the Parent or any of its Affiliates (including any
of the Companies and the Transferred Subsidiaries) or to which the Parent or any
of its Affiliates (including any of the Companies and the Transferred
Subsidiaries) contributed or is obligated to contribute thereunder, for the
benefit of any of the Employees or any former employees of any of the Companies
and the Transferred Subsidiaries (collectively, the “Benefit Plans”),
(iii) true, correct and complete copies of any annual reports for each Benefit
Plan for the most recent completed plan year and (iv) true, correct and complete
copies of any material written Contracts, communications, summary plan
descriptions or correspondence from any Governmental Authority that materially
affect (or could reasonably be expected to materially affect) any Company’s, any
Transferred Subsidiary’s, the Acquiror’s or any of the Acquiror’s Affiliate’s
current or future obligations or liability with respect to any Benefit Plan or
any Employee or former Employee of any Company or any Transferred Subsidiary
(including their dependents, spouses or beneficiaries). Section 3.13(a) of the
Seller Disclosure Letter sets forth a true and complete list of all Benefit
Plans, and separately identifies the Benefit Plans that are sponsored by any of
the Companies or Transferred Subsidiaries (the “Company Benefit Plans”).

(b) Each Company Benefit Plan has been maintained in all material respects in
compliance with its terms and with the requirements prescribed by any and all
applicable Laws (including any special provisions relating to registered or
qualified plans where such Company Benefit Plan was intended to so qualify) and
has been maintained in good standing with applicable regulatory authorities. The
Companies and the Transferred Subsidiaries have made all required contributions
to each Company Benefit Plan with respect to their respective

 

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employees and such contributions have been properly reflected on the balance
sheets included in the Statutory Statements or the Ancillary Financial
Statements, as applicable, other than any failures that, individually or in the
aggregate, would not be material.

(c) Except as otherwise provided on Section 3.13(c) of the Seller Disclosure
Letter, no Company Benefit Plan is subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended, or provides any material
compensation or benefits to Employees based in the United States.

(d) Except as otherwise provided on Section 3.13(d) of the Seller Disclosure
Letter, none of the Companies or the Transferred Subsidiaries nor any of the
persons who is serving or, to the Knowledge of Parent, was serving as an officer
or director of the Companies or the Transferred Subsidiaries has, at any time
during the immediately preceding 13 years, been convicted or released from
imprisonment, whichever is later, as a result of a crime or similar activity
that would disqualify any of the Companies or Transferred Subsidiaries from
qualifying as a qualified professional asset manager, within the meaning of U.S.
Department of Labor Prohibited Transaction Class Exemption 84-14.

(e) No Benefit Plan provides retiree life insurance, retiree health benefits or
other retiree welfare benefits to any Employee or former Employee of any Company
or any Transferred Subsidiary (including any dependents, spouses or
beneficiaries) for any reason other than coverage or benefits (i) mandated by
applicable Law or (ii) the full cost of which is borne by any such Employee or
former Employee of such Company or Transferred Subsidiary (or their dependents,
spouses or beneficiaries).

(f) Except as disclosed on Section 3.13(f) of the Seller Disclosure Letter, the
Companies and the Transferred Subsidiaries have no material unfunded liabilities
with respect to any pension plan, nonqualified deferred compensation,
supplemental or excess plans, or any post-retirement life, health or other
welfare benefits.

(g) Except as otherwise provided on Section 3.13(g) of the Seller Disclosure
Letter, with respect to the Employees:

(i) there is not in existence, nor has there been within the twelve months prior
to the date of this Agreement, any pending or, to the Knowledge of the Parent,
threatened: (A) strike, slowdown, stoppage, picketing, interruption of work,
lockout, or any other dispute or controversy with or involving a labor
organization or with respect to unionization or collective bargaining;
(B) labor-related organizational effort, election activities, or request or
demand for negotiations, recognition or representation; or (C) grievance,
arbitration, administrative hearing, formal claim of unfair labor practice,
other union- or labor-related Action or other formal claim, workers’
compensation claim, formal claim or investigation of wrongful discharge, formal
claim or investigation of employment discrimination or retaliation, formal claim
or investigation of sexual harassment, or other employment dispute of a similar
nature, against any of the Companies or any of the Transferred Subsidiaries
that, individually or in the aggregate, would be reasonably expected to be
material to the Business;

 

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(ii) there is not pending or, to the Knowledge of the Parent, threatened any
Action or other formal claim, audit or investigation against any of the
Companies or any Transferred Subsidiary for actual or possible violation of any
agreement described in Section 3.13(i), or for violation of any right or
obligation under any of the Benefit Plans, nor to the Knowledge of the Parent is
there any reasonable basis for any such Action or other claim or investigation,
except in each case as would not, individually or in the aggregate, reasonably
be expected to be material to the Business; and

(iii) the consummation of the transactions contemplated by this Agreement will
not (either alone or together with any other event) entitle any Employee to
severance, termination, change of control or other similar pay or benefits under
any Benefit Plan or result in an increase in the amount of compensation or
benefits or the acceleration of the vesting or timing of payment of any
compensation or benefits payable to or in respect of any current or former
Employee of the Companies or the Transferred Subsidiaries or any increased or
accelerated funding obligation with respect to any Benefit Plan.

(h) Except as provided on Section 3.13(h) of the Seller Disclosure Letter, there
are no Compensation Restrictions applicable with respect to any Employee.

(i) Section 3.13(i) of the Seller Disclosure Letter sets forth a true and
complete list of each agreement with a labor union, works council or other
similar organization representing the current employees of the Companies and the
Transferred Subsidiaries as of the date hereof. The Companies and the
Transferred Subsidiaries have complied in all material respects with the terms
of such agreements, there have been no material defaults or material breaches of
any such agreements by any party to the agreements and there does not exist any
event, condition or omission that would constitute such a material default or
material breach (with or without the giving of notice or lapse of time, or both)
or that would permit the termination, cancellation or acceleration of
performance of any material obligation of the Company or the Transferred
Subsidiary (as applicable) that is party thereto, or to the Knowledge of the
Parent, any other party to the agreement. Each agreement listed on
Section 3.13(i) of the Seller Disclosure Letter is in full force and effect and
is a valid and binding obligation of the Company or the Transferred Subsidiary
(as applicable) that is party thereto and, to the Knowledge of the Parent, each
other party to such agreement. Each such agreement listed on Section 3.13(i) of
the Seller Disclosure Letter is enforceable against the Company or the
Transferred Subsidiary (as applicable) that is party thereto, and, to the
Knowledge of the Parent, each other party to such agreement, in accordance with
its terms (subject in each case to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent
conveyance, preferential transfer or similar Laws now or hereafter in effect
relating to or affecting creditors’ rights and remedies generally and subject,
as to enforceability, to the effect of general equitable principles or of Laws
regarding prohibition of abuse of rights (kenriranyo-no-kinshi) and principles
of trust (shingiseijitsu-no-gensoku) (regardless of whether enforcement is
sought in a proceeding in equity or at law)). The Parent has made available or
delivered to the Acquiror, prior to the date hereof, complete and accurate
copies of all collective bargaining agreements, charters, work rules, industry
rules, arbitration awards or other Contracts which pertain to Employees who
belong to unions, work councils or other similar organizations. There is no
current, pending, or, to the Knowledge of the Parent,

 

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threatened, Action or audit against any of the Companies or any of the
Transferred Subsidiaries for any violations or breaches of, or defaults under,
(i) any collective bargaining or other union agreements, (ii) obligations with
respect to work councils, (iii) any work rules, or (iv) any arbitration awards
or other mandates that, individually or in the aggregate, would be reasonably
expected to be material to the Business. Except as set forth on Section 3.13(i)
of the Seller Disclosure Letter, no agreement with a labor union, works council
or other similar organization representing the current employees of the
Companies and the Transferred Subsidiaries contains any provision providing that
any such other party thereto may terminate, cancel or commute the same by reason
of the transactions contemplated by the Transaction Agreements.

(j) Except as would not reasonably be expected to be material to the Business,
each Company and each Transferred Subsidiary is (A) in compliance with
applicable Law which relates to employment, classification of employees, agents
and independent contractors (or similar classifications outside of the U.S.),
equal employment opportunity, wages, hours, pay equity, immigration, collective
bargaining, secondment, contractors and temporary employees, withholding and
deduction of payroll and employment and unemployment related Taxes, other
employment terms and conditions, and plant closings layoffs (including, but not
limited to, the Japan Labor Standards Law and any other comparable state, local
or other Laws) and (B) is not and has not been (individually or collectively) in
any respect liable for arrears of wages (including overtime), mandatory
indemnity payments in non-U.S. jurisdictions, other compensation or benefits or
any Taxes or penalties for failure to comply with any of the foregoing.

(k) There is no current, pending or, to the Knowledge of the Parent, threatened
material Action against or involving any of the Companies or any of the
Transferred Subsidiaries for failure to comply with applicable Laws that relate
to employee privacy and employee data protection.

(l) Except as disclosed in Section 3.13(l) of the Seller Disclosure Letter, with
respect to Employees with a current or proposed base compensation rate of
$150,000 (or the equivalent in any other applicable currency) or more, every
Employee who requires permission to work in any jurisdiction in which any of the
Companies or any of the Transferred Subsidiaries is based has current and
appropriate permission to both reside and work in such jurisdiction.

Section 3.14. Insurance Issued by Insurance Companies.

(a) Since March 31, 2007, and except for benefits relating to claims incurred
but not yet reported and reported claims being processed by the Insurance
Companies as of the date hereof, all benefits due and payable under the
Insurance Contracts issued by any of the Insurance Companies have been paid in
accordance, in all material respects, with the terms of the Insurance Contracts
under which they arose, except for such benefits for which an Insurance Company
has reasonably determined, in the Ordinary Course of Business, that there is or
was a reasonable basis to contest payment.

(b) As and where required by applicable Insurance Law, all policy or other
contract forms and rates used since March 31, 2007 by the Insurance Companies
and all endorsements, applications and certificates pertaining thereto, have
been and are in compliance

 

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in all material respects with all applicable Insurance Law, have been and are on
forms that have been, in all material respects, filed and approved by the
applicable Governmental Authorities or filed with, and not objected to by, such
Governmental Authorities within the period provided by applicable Insurance Law
for objection. To the extent required by applicable Insurance Law, all rates and
rating plans established or used since March 31, 2007 by the Insurance Companies
that have been or are in effect have been filed with, and/or approved by,
applicable Governmental Authorities in all material respects, and the premiums
charged have conformed and conform in all material respects to the premiums so
filed and/or approved and are within (and were within at all relevant times) the
amount permitted by any applicable Insurance Law. Since March 31, 2007, none of
the Insurance Companies violated in any material respect its underwriting
guidelines in effect from time to time in connection with its issuance of any
Insurance Contracts in any way that would adversely affect any Insurance
Company’s rights under any Reinsurance Contract.

(c) Except as set forth on Section 3.14(c) of the Seller Disclosure Letter,
there are no material accrued and unpaid or unreported liabilities or
obligations with respect to claims or assessments made against any Insurance
Company by any insurance guaranty associations or similar organizations in
connection with such association’s or organization’s insurance guaranty fund or
similar program.

Section 3.15. Reinsurance.

(a) Section 3.15(a)(i) of the Seller Disclosure Letter sets forth a true,
correct and complete list of all Reinsurance Contracts in effect as of the date
hereof. The Parent has delivered or made available to the Acquiror, prior to the
date hereof, true, correct and complete copies of each Reinsurance Contract.
Each Reinsurance Contract is in full force and effect and is a valid and binding
obligation of the Insurance Company that is a party thereto and, to the
Knowledge of the Parent, each other party to such Reinsurance Contract. Each
Reinsurance Contract is enforceable against the Insurance Company that is a
party thereto and, to the Knowledge of the Parent, each such other party, in
accordance with its terms (subject in each case to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation,
fraudulent conveyance, preferential transfer or similar Laws now or hereafter in
effect relating to or affecting creditors’ rights and remedies generally and
subject, as to enforceability, to the effect of general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law)). No Insurance Company that is a party to a Reinsurance Contract or, to the
Knowledge of the Parent, any other party to such Reinsurance Contract is in
material default or material breach of such Reinsurance Contract, and there does
not exist any event, condition or omission that would constitute such a material
default or material breach (with or without the giving of notice or lapse of
time, or both) or that would permit the termination, cancellation or
acceleration of performance of any material obligation of the Insurance Company
or, to the Knowledge of the Parent, any other party to such Reinsurance
Contract. None of the Insurance Companies has received any written notice of any
material default under any Reinsurance Contract. Except as set forth on
Section 3.15(a)(ii) of the Seller Disclosure Letter, no Reinsurance Contract
contains any provision providing that any such other party thereto may
terminate, cancel, modify or commute the same by reason of the transactions
contemplated by the Transaction Agreements.

 

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(b) Since March 31, 2007, none of the Parent, any of the Sellers, any of the
Companies, or any of the Transferred Subsidiaries has received any written
notice from any other party to a Reinsurance Contract (i) that the financial
condition of such other party to any Reinsurance Contract is impaired with the
result that a default thereunder may reasonably be anticipated, or (ii) that any
amount of reinsurance ceded by any of the Insurance Companies to such other
party will be uncollectible or otherwise defaulted upon.

Section 3.16. Client Companies and Brokers; Sales Practices.

(a) Section 3.16(a) of the Seller Disclosure Letter sets forth a true, correct
and complete list of each Broker Contract in effect on the date hereof. To the
Knowledge of the Parent, (i) each Broker that places or sells products on behalf
of any of the Companies or any of the Transferred Subsidiaries is, and at the
time such Broker placed or sold products on behalf of any of the Companies or
any of the Transferred Subsidiaries was, duly licensed in each jurisdiction in
which such Broker is or was required by applicable Law to have a license to
place or sell such products on behalf of any of the Companies or any of the
Transferred Subsidiaries, and (ii) each such Broker that places or sells
products on behalf of any of the Companies or any of the Transferred
Subsidiaries and each Master Group Policyholder is, and at the time such Broker
or Master Group Policyholder placed or sold products on behalf of such Company
or Transferred Subsidiary was, duly authorized and appointed by such Company or
Transferred Subsidiary, as applicable, pursuant to applicable Law and to the
extent required thereby to place or sell such products, except for failures of
such Brokers or Master Group Policyholders, as applicable, to be licensed or so
authorized and appointed which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. All Broker Contracts
are in compliance in all material respects with all applicable Law. To the
Knowledge of the Parent, no Broker with which any of the Companies or any of the
Transferred Subsidiaries has a Broker Contract is the subject of, or party to,
any disciplinary Action under any applicable Law except as would not adversely
affect the Companies and the Transferred Subsidiaries, taken as a whole, in any
material respect.

(b) Each Producer Contract is in full force and effect and is a valid and
binding obligation of the Company or the Transferred Subsidiary that is a party
thereto, and, to the Knowledge of the Parent, each other party to such Producer
Contract and is enforceable against the Company or the Transferred Subsidiary
that is a party thereto and, to the Knowledge of the Parent, each such other
party, in accordance with its terms (subject in each case to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, rehabilitation,
liquidation, fraudulent conveyance, preferential transfer or similar Laws now or
hereafter in effect relating to or affecting creditors’ rights and remedies
generally and subject, as to enforceability, to the effect of general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law)). None of the Companies or any of the Transferred Subsidiaries
or, to the Knowledge of the Parent, any other party to a Producer Contract is in
material default or material breach of any Producer Contract, and there does not
exist any event, condition or omission that would constitute such a material
default or material breach (with or without the giving of notice or lapse of
time, or both) or that would permit the termination, cancellation or
acceleration of performance of any material obligation of any of the Companies
or any of the Transferred Subsidiaries or, to the Knowledge of the Parent, any
other party to any Producer Contract. None of the Companies or any of the
Transferred Subsidiaries has received

 

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any written notice of any material default under any Producer Contract. Except
as set forth on Section 3.16(b) of the Seller Disclosure Letter, (i) there is no
material dispute pending or, to the Knowledge of the Parent, threatened in
writing against any Company or any Transferred Subsidiary by any Client Company,
Master Group Policyholder or Broker, and (ii) no Producer Contracts contain any
provision providing that any such other party thereto may terminate, cancel or
commute the same by reason of the transactions contemplated by the Transaction
Agreements. The Parent has delivered or made available to the Acquiror, prior to
the date hereof, true, correct and complete copies of all Producer Contracts.

(c) Except as set forth on Section 3.16(c) of the Seller Disclosure Letter, no
Client Company, policyholder, affiliated group of policyholders, or Persons
writing, selling or producing, either directly or through reinsurance assumed by
any of the Insurance Companies, insurance business that accounted for (i) 5% or
more of the gross written premium (as determined in accordance with GAAP) of the
Insurance Companies, taken as a whole, for the 12-month period ended March 31,
2010 or (ii) 1% or more of the unearned premium reserves of the Insurance
Companies, taken as a whole, at March 31, 2010, has terminated or, to the
Knowledge of the Parent, has threatened to terminate its relationship with any
Insurance Company, either as a result of the transactions contemplated by this
Agreement or otherwise.

(d) Except as set forth on Section 3.16(d) of the Seller Disclosure Letter,
(i) the Companies and the Transferred Subsidiaries and, to the Knowledge of the
Parent, the Companies’ and the Transferred Subsidiaries’ Brokers, have marketed,
sold and issued products of the Companies and the Transferred Subsidiaries in
compliance, in all material respects, with applicable Law in the respective
jurisdiction in which such products have been sold, (ii) all advertising,
promotional and sales materials and other marketing practices used by the
Companies and the Transferred Subsidiaries and, to the Knowledge of the Parent,
any Brokers and Master Group Policyholders, have complied and are in compliance
in all material respects, in each case, with applicable Law and (iii) the manner
in which the Companies and the Transferred Subsidiaries compensate any Persons
(including any account or disclosure made as required by applicable Law)
involved in the sale or servicing of products sold or issued by the Companies
and the Transferred Subsidiaries is in compliance in all material respects with
all applicable Law.

(e) There are no material Actions pending or, to the Knowledge of the Parent,
threatened in writing against any of the Companies or any of the Transferred
Subsidiaries with respect to the writing, sale, production or marketing of
products issued or sold by any of the Companies or any of the Transferred
Subsidiaries.

(f) Except for the Producer Contracts, and except as set forth on
Section 3.16(f) of the Seller Disclosure Letter, none of the Companies or any of
the Transferred Subsidiaries has in effect on the date hereof any managing
general agency contracts, third party administration contracts or other similar
arrangements or commitments, or amendments, supplements or modifications thereto
which call for the payment equal to or in excess of ¥45,000,000 in any 12-month
period, under which any Person has authority to perform underwriting analysis
and sell or issue insurance, reinsurance or other products on behalf of any of
the Companies or any of the Transferred Subsidiaries or otherwise bind any of
the Companies or any of the Transferred Subsidiaries without prior approval by
the applicable Company or Transferred Subsidiary, as applicable, or pursuant to
which any underwriting, claims settlement or distribution authority is
delegated.

 

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Section 3.17. Investment Assets.

(a) The Parent has provided to the Acquiror prior to the date hereof (i) a true,
correct and complete list of all investment assets owned beneficially or of
record, including Loan Interests owned, by the Companies and the Transferred
Subsidiaries, excluding the Capital Stock of any of the Transferred Subsidiaries
(collectively, the “Investment Assets”) as of March 31, 2010 and (ii) copies of
the investment policies and guidelines of each Insurance Company in force as of
the date hereof (the “Investment Guidelines”). Except as set forth on
Section 3.17(a) of the Seller Disclosure Letter, as of the date hereof, all such
Investment Assets of the Companies and the Transferred Subsidiaries comply in
all material respects with the Investment Guidelines and in all material
respects with all applicable Law. Each of the Companies and the Transferred
Subsidiaries has good and marketable title in and to all of the Investment
Assets it purports to own, free and clear of all Liens, other than Permitted
Liens.

(b) Each secured Loan Interest owned by any of the Companies or any of the
Transferred Subsidiaries is secured by a Lien, including a first priority
mortgage, deed of trust, security deed, security agreement, as applicable, or
other Lien or equivalent security instrument in the applicable jurisdiction and
the Lien which secures such Loan Interest constitutes a perfected and
enforceable security interest under applicable Law. There are no Material
Contracts pursuant to which any Person has the right or obligation to service or
take any other action for or on behalf of any of the Companies or any of the
Transferred Subsidiaries with respect to any of the Investment Assets, except
those identified on Section 3.17(b)(i) of the Seller Disclosure Letter.
Section 3.17(b)(ii) of the Seller Disclosure Letter sets forth a true, correct
and complete description of the term of, and the fees and other amounts to be
paid by any of the Companies and any of the Transferred Subsidiaries under, and
the names of the contracting parties to, each of the Material Contracts
identified on Section 3.17(b)(i) of the Seller Disclosure Letter. The Companies
and/or the Transferred Subsidiaries, as applicable, have possession of the
original or a copy of fully executed documents which establish, evidence and
secure the material Investment Assets, all material Loan Interest Documents
relating to material Investment Assets and all material Real Estate Venture
Documents relating to material Investment Assets.

(c) Section 3.17(c) of the Seller Disclosure Letter sets forth a true, correct
and complete list of (i) all Real Estate Ventures as to which any of the
Companies or any of the Transferred Subsidiaries holds any ownership interest,
(ii) the real estate interests and other material assets owned, directly or
indirectly, by such Real Estate Ventures, and (iii) the percentage interest
owned by such Company or Transferred Subsidiary directly, or indirectly, in such
Real Estate Ventures.

(d) Except as set forth on Section 3.17(d) of the Seller Disclosure Letter, none
of the Companies or any of the Transferred Subsidiaries has any material funding
obligations of any kind, or material obligation to make any additional advances
or investments (including any obligation relating to any currency or interest
rate swap, hedge or similar arrangement), in respect of any of the Investment
Assets.

 

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(e) Except as set forth on Section 3.17(e) of the Seller Disclosure Letter,
there are no material unfunded outstanding commitments, options, put agreements
or other similar arrangements relating to the Investment Assets, to which the
Acquiror, any Company or any Transferred Subsidiary may be subject upon the
Closing.

(f) None of the Companies or any of the Transferred Subsidiaries engages in or
conducts, or has engaged in or conducted, itself or through others, in the
business of securities lending or in securities lending programs. Except as set
forth on Section 3.17(f) of the Seller Disclosure Letter, there are no loans
extended by the Companies or the Transferred Subsidiaries outstanding.
Section 3.17(f) of the Seller Disclosure Letter sets forth, as to all loans
extended by the Companies or the Transferred Subsidiaries referenced therein,
the outstanding principal balance, interest rate, maturity, extension rights,
holders of the Indebtedness, borrowers and guarantors, including, without
limitation, any guarantees, indemnities or credit enhancement made or issued by
the Parent or any of its Affiliates.

(g) Except as disclosed on Section 3.09 of the Seller Disclosure Letter, as of
the date hereof, none of the Companies or any of the Transferred Subsidiaries
has received written notice of, and the Seller has no Knowledge of, any
violation of applicable Law (including Environmental Laws) in any material
respect relating to the Investment Assets or any real property related thereto
and/or secured thereby.

(h) The Parent has received all necessary approvals and consents from third
party lenders and third party partners in Real Estate Ventures or investment
funds in connection with the transactions contemplated by this Agreement, where
the failure to obtain such approval and/or consent would constitute a default
under the applicable Real Estate Venture Document, Loan Interest Document or
Investment Assets, or would give a third party the right to terminate any of the
Companies’ or any of the Transferred Subsidiaries’ interest in such Real Estate
Venture Document, Loan Interest Document or Investment Assets.

Section 3.18. Insurance.

(a) Section 3.18(a) of the Seller Disclosure Letter sets forth a true, correct
and complete list and description of all material policies of insurance
maintained by or on behalf of any of the Companies or any of the Transferred
Subsidiaries in effect on the date hereof with respect to the assets, properties
or businesses of the Companies and the Transferred Subsidiaries, showing the
subject matter, the beneficiary and the amount of coverage for such party. Each
such insurance policy is a valid and binding obligation of the parties thereto,
enforceable against it and the other parties thereto in accordance with its
terms (subject in each case to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent
conveyance, preferential transfer or similar Laws now or hereafter in effect
relating to or affecting creditors’ rights and remedies generally and subject,
as to enforceability, to the effect of general equitable principles (regardless
of whether enforcement is sought in a proceeding in equity or at law)). Except
as set forth on Section 3.18(a) of the Seller Disclosure Letter, each such
insurance policy remains in full force and effect in accordance with its terms,
including any required notification of change of ownership (with all premiums
due and payable thereon having been paid in full on a timely basis). Except as
set forth on Section 3.18(a) of the Seller Disclosure Letter, (i) none of the
Companies, any of the Transferred Subsidiaries or any of their

 

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respective Affiliates is in material default or material breach of any such
policy, and there does not exist any event, condition or omission that would
constitute such a material default or material breach (with or without the
giving of notice or lapse of time, or both) or that would permit the
termination, cancellation or acceleration of performance of any material
obligation of any Company or any Transferred Subsidiary parties to such policy
or, to the Knowledge of the Parent, any other party to such policy; and (ii) no
party to the policy has repudiated, or given written notice to any Company, any
Transferred Subsidiary or any of their respective Affiliates of an intent to
repudiate, any material provision thereof. No written notice of cancellation,
termination or revocation or other written notice that any such insurance policy
is no longer in full force or effect in accordance with its terms as of the date
hereof or that the issuer of any such insurance policy is not willing or able to
perform its obligations thereunder in any material respect has been received by
any of the Companies, any of the Transferred Subsidiaries or any of their
respective Affiliates. To the Knowledge of the Parent, there are no material
claims under such insurance policies as to which the insurers have denied
liability.

(b) Section 3.18(b) of the Seller Disclosure Letter sets forth a description of
each material self-insured program of insurance maintained by the Parent or any
Affiliate of the Parent on the date hereof for the benefit of any of the
Companies or any of the Transferred Subsidiaries or with respect to any of their
respective assets, properties or businesses.

(c) Except as set forth on Section 3.18(c) of the Seller Disclosure Letter, as
of the date hereof, there are no material outstanding claims made by any Company
or any Transferred Subsidiary under any policies of insurance set forth on
Section 3.18(a) of the Seller Disclosure Letter.

Section 3.19. Real Property.

(a) The Companies and the Transferred Subsidiaries own no real property or
interests in real property, excluding any real property or interests in real
property that are Investment Assets or would have been Investment Assets if
beneficially owned by any of the Insurance Companies as of March 31, 2010.

(b) Section 3.19(b) of the Seller Disclosure Letter sets forth a true, correct
and complete list of all real property leased by any of the Companies or any of
the Transferred Subsidiaries, as lessee (the “Real Property Leases”; the real
properties specified in such leases being referred to herein as the “Leased Real
Properties”). Each Real Property Lease is in full force and effect and is a
valid and binding obligation of the Company or the Transferred Subsidiary that
is party thereto, as applicable, and, to the Knowledge of the Parent, each other
party to such Real Property Lease. Each such Real Property Lease is enforceable
against the Company or the Transferred Subsidiary that is party thereto, as
applicable, and, to the Knowledge of the Parent, each other party to such Real
Property Lease, in accordance with its terms, and a Company or a Transferred
Subsidiary (as the case may be) has a valid, binding and enforceable leasehold
interest (or the equivalent interest in the applicable jurisdiction) under each
of the Real Property Leases (subject in each case to Permitted Liens and to the
effect of any applicable bankruptcy, reorganization, insolvency, moratorium,
rehabilitation, liquidation, fraudulent conveyance, preferential transfer or
similar Laws now or hereafter in effect relating to or affecting creditors’
rights and remedies generally and subject, as to enforceability, to the effect

 

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of Laws regarding prohibition of abuse of rights (kenriranyo-no-kinshi) and
principles of trust (shingiseijitsu-no-gensoku) (including general equitable or
similar principles regardless of whether enforcement is sought in a proceeding
in equity or at law)). None of the Companies or any of the Transferred
Subsidiaries or, to the Knowledge of the Parent, any other party to a Real
Property Lease, is in material default or material breach of a Real Property
Lease and, there does not exist any fact, circumstance, event, change,
violation, development, effect, condition or occurrence that would constitute
such a material default or material breach (with or without the giving of notice
or lapse of time, or both) or that would permit the termination, cancellation or
acceleration of performance of any material obligation of any Company or any
Transferred Subsidiary or, to the Knowledge of the Parent, any other party to
the Real Property Lease. As of the date hereof, none of the Companies or any of
the Transferred Subsidiaries has received any written notice of any default
under any Real Property Lease. No Real Property Lease contains any provision
providing that any such other party thereto may terminate, cancel or commute the
same or declare a material default under the same by reason of the transactions
contemplated by the Transaction Agreements. At or prior to the Closing, the
Parent has or will have delivered or made available to the Acquiror true,
correct and complete copies of all Real Property Leases. All leasing, brokerage,
finder and other similar fees and commissions that are due and payable by any
Company or any Transferred Subsidiary with respect to such Real Property Leases
have been paid in full. All rents and other sums due thereunder have been paid
to date. All Leased Real Property is in good working order and repair in all
respects material to its use or operation, except for any defects which would
not materially impair the use or occupancy of such Leased Real Property. A
Company or a Transferred Subsidiary, as the case may be, enjoys peaceful and
undisturbed possession in all material respects of such Leased Real Property.
None of the Companies or any of the Transferred Subsidiaries has subleased or
otherwise granted to any Person the right to use or occupy such Leased Real
Property or any portion thereof.

Section 3.20. Taxes.

(a) (i) All income and franchise Tax Returns and other Tax Returns that are
material, and that are required to be filed by or on behalf of each of the
Companies and the Transferred Subsidiaries have been timely filed with the
appropriate Tax Authority (after giving effect to any valid extensions of time
in which to make such filings), (ii) all such Tax Returns are or will be true,
complete and correct in all material respects as of the Closing Date, (iii) to
the Knowledge of the Tax Group, the Parent, the Companies and the Transferred
Subsidiaries have maintained all material documents and records relating to such
Tax Returns as are required by applicable Law, (iv) all material amounts shown
as due on such Tax Returns, or material amount of Taxes otherwise due and
payable, by any of the Companies or the Transferred Subsidiaries or the business
or assets of each of the Companies and the Transferred Subsidiaries have been
fully and timely paid and since January 1, 2009 neither any of the Companies nor
any Transferred Subsidiary has forgone the right to any material amount of
refund or rebate of a previously paid Tax, (v) all such Tax Returns that are
with respect to taxable periods ended on or before March 31, 2005, have been
examined and closed, or are Tax Returns with respect to which the applicable
period for assessment under applicable Law, after giving effect to all valid
extensions or waivers, has expired and (vi) none of the Companies or any
Transferred Subsidiary is a beneficiary of any extension of time within which to
file any material Tax Return or agreement to pay any material Tax in
installments.

 

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(b) None of the Companies or the Transferred Subsidiaries has (i) waived any
statute of limitations in respect of material amount of Taxes or any material
Tax Returns of any of the Companies or any Transferred Subsidiary which waiver
is currently in effect, and there are no material written requests or demands to
extend or waive any such period of limitation, (ii) agreed to any extension of
the period for assessment or collection of material Taxes, or (iii) executed or
filed any power of attorney with respect to Taxes, which waiver, agreement or
power of attorney is in force.

(c) Each of the Companies and the Transferred Subsidiaries has complied in all
material respects with all applicable Laws relating to the collection and
withholding of Taxes (including all information reporting and record keeping
requirements), has duly and timely withheld from employee salaries, wages, other
compensation, payments to vendors, payments related to products, payments to
foreign parties and other amounts subject to withholding Taxes and has duly and
timely paid over to the appropriate Tax Authority, all amounts required to be so
withheld and paid over.

(d) All deficiencies asserted in writing or assessments made in writing for
material amounts of Taxes with respect to any of the Companies or any of the
Transferred Subsidiaries have been fully paid, and no other material
reassessments, assessments, audits, inquiries, claims, suits, proceedings,
investigations or inspections by any Tax Authority relating to any Taxes or Tax
Returns of the Companies or any of the Transferred Subsidiaries are in progress,
pending or threatened in writing. No unsettled claim made in writing and, to the
Knowledge of the Tax Group, no other claim that is unsettled, has ever been made
by a Tax Authority in a jurisdiction where any of the Companies or the
Transferred Subsidiaries does not file Tax Returns that such Company or such
Transferred Subsidiary is or may be subject to Tax by that jurisdiction, and, to
the Knowledge of the Tax Group, there is no substantial basis for any such
jurisdiction to successfully assert that any Company or any Transferred
Subsidiary is or may be subject to Tax in such jurisdiction.

(e) None of the Companies or the Transferred Subsidiaries is a party to or bound
by or obligated under any Tax allocation, sharing, indemnification, indemnity or
similar agreement or arrangement (a “Tax Sharing Agreement”) pursuant to which
it will have any obligation after the Closing Date. None of the Companies or the
Transferred Subsidiaries is or has been a member of any group of companies
filing a consolidated, combined or unitary Tax Return. To the Knowledge of the
Tax Group, neither the Companies nor the Transferred Subsidiaries have any
material liability for Taxes of any other Person as a transferee, successor, by
contract or otherwise.

(f) There are no Tax rulings, pending requests for rulings, closing agreements
or other similar agreements in effect or filed with any Tax Authority relating
to any Company or any Transferred Subsidiary which will materially affect such
Company’s or Transferred Subsidiary’s liability for Taxes for any period or
portion thereof after the Closing Date. The Companies and all Transferred
Subsidiaries are in compliance with all material agreements entered into with
any Tax Authority.

(g) There are no Liens for any material amounts of Taxes upon the Shares, the
Bridge Loan, the Capital Stock of any of the Transferred Subsidiaries and the
assets and properties of any of the Companies or any of the Transferred
Subsidiaries, except for Permitted Liens.

 

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(h) The Companies and the Transferred Subsidiaries have paid or will have paid
on or before the Closing Date, or have established or will establish on or
before the Closing Date, an adequate accrual for the payment of all Taxes due or
that may be asserted to be due with respect to any event occurring, income
accrued or period or portion thereof ending on or prior to the Closing Date.

(i) None of the Companies or the Transferred Subsidiaries is subject to any
obligation to file Tax Returns, pay Taxes, withhold or report Taxes or collect
sales or use, value added Taxes or any other similar Taxes, other than those
imposed by Japan or a Governmental Authority within Japan.

(j) (i) None of the Companies or the Transferred Subsidiaries has outstanding
material adjustments for Tax purposes resulting from a change in method of
accounting effected on or before the Closing Date, (ii) no elections for Tax
purposes have been made by any of the Companies or the Transferred Subsidiaries
that are currently in force or by which the Companies or the Transferred
Subsidiaries are bound that are expected materially and adversely to affect any
of the Companies or any Transferred Subsidiary after the Closing and (iii) there
are no outstanding material adjustments for Tax purposes that may result from
any Tax audit or Tax litigation that is in progress that are not duly reserved
against and recognized in the Statutory Statements or Ancillary Financial
Statements, as applicable, of the Companies and the Transferred Subsidiaries.

(k) None of the Companies or any Transferred Subsidiary (i) will be required to
include a material item of taxable income or gain after the Closing Date that is
attributable to a transaction (such as an installment sale or an intercompany
transaction) that occurred prior to the Closing Date or (ii) has taken a
material deduction or claimed a material loss for Tax purposes in any taxable
period (or portion thereof) ending on or before the Closing Date that relates to
or results from a payment that will be made by the Companies, a Transferred
Subsidiary or the Acquiror after the Closing Date, other than any such deduction
or loss incurred in the Ordinary Course of Business.

(l) All material transactions entered into by any of the Companies or any of the
Transferred Subsidiaries with any related party have been carried out at
arm’s-length, and the Companies and the Transferred Subsidiaries have complied
with all applicable material transfer pricing disclosure, reporting and other
similar requirements.

(m) The Parent has made available to the Acquiror complete and accurate copies
of all requested (i) income and franchise Tax Returns and other Tax Returns that
are material, and any amendments thereto, as filed by any of the Companies or
the Transferred Subsidiaries within the last three years, (ii) audit reports
received within the last three years from any Tax Authority relating to any
material Tax Return filed by any of the Companies or the Transferred
Subsidiaries and (iii) closing agreements entered into by the Companies and the
Transferred Subsidiaries with any Tax Authority which will materially affect
such Company’s or Transferred Subsidiary’s Tax liability for any period or
portion thereof after the Closing Date.

 

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To the Knowledge of the Tax Group, the Parent has made available to the Acquiror
complete and accurate copies of all requested Internal Revenue Service Forms
5471, 8621, 8865 and 8858 filed within the last three years in respect of the
Companies, the Transferred Subsidiaries and any investments held by any of such
entities.

(n) To the Knowledge of the Tax Group, none of the Companies or the Transferred
Subsidiaries has participated in a “listed transaction” as defined in U.S.
Treasury Regulations section 1.6011-4.

(o) None of the Companies or Transferred Subsidiaries has participated in, or
cooperated with, an international boycott within the meaning of Section 999 of
the Code, that is subject to the reporting requirements of Section 999 of the
Code.

(p) All material amounts of insurance income within the meaning of
Section 953(a)(1) of the Code generated by each Insurance Company in the period
since such Insurance Company’s acquisition by the Parent or its Affiliates and
during which Section 953(e) has been effective has been eligible to be exempt
insurance income within the meaning of Section 953(e) of the Code.

(q) For all taxable periods that remain open to assessment, the Parent has
delivered or made available to the Acquiror true, correct and complete copies of
all legal and accounting opinions or other material memoranda containing the
conclusive analysis of the Sellers’, the Parent’s, the Companies’ or the
Transferred Subsidiaries’ determinations of whether reserves for contingent
liabilities for Taxes with respect to the Companies or any of the Transferred
Subsidiaries are required for financial, statutory or insurance regulatory
reporting purposes, including all information regarding matters that have been
examined under Financial Accounting Standards Board Interpretation No. 48 to the
extent relating to Tax items in respect of the Companies or the Transferred
Subsidiaries.

(r) All subordinated debt issued by Edison has been reported as debt for
Japanese and U.S. Tax purposes.

(s) None of the Companies or the Transferred Subsidiaries (A) to the Knowledge
of the Parent, owns United States property as defined in Sections 956(c) or
(d) of the Code, (B) to the Knowledge of the Parent, owns an interest in any
United States real property, within the meaning of Section 897 of the Code and
the U.S. Treasury Regulations promulgated thereunder, as a result of owning an
interest in an entity that is characterized as a partnership, trust or estate
for U.S. federal income tax purposes that is treated as owning a United States
real property interest (as defined above) solely as a result of the application
of Section 897(c)(4)(B) of the Code, or (C) owns an interest in any United
States real property interest (other than as described in clause (B)) within the
meaning of Section 897 of the Code and the U.S. Treasury Regulations
promulgated.

(t) The classification of each of the Companies and each of the Transferred
Subsidiaries as a corporation, partnership or disregarded entity for United
States federal income tax purposes is as set forth on Section 3.20(t) of the
Seller Disclosure Letter.

 

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(u) To the Knowledge of the Tax Group, none of the Companies or the Transferred
Subsidiaries owns an interest in a passive foreign investment company as defined
in Section 1297 of the Code, or a partnership organized under the laws of a
United States jurisdiction or a partnership from which it received Schedule K-1
to Form 1065.

(v) To the Knowledge of the Tax Group, none of the Companies or the Transferred
Subsidiaries has a United States taxpayer identification number.

(w) To the Knowledge of the Tax Group. none of the Companies or the Transferred
Subsidiaries owns any material amount (determined for these purposes both
individually and in the aggregate) of debt of Prudential Financial, Inc. or its
Affiliates that are identified on Section 3.20(w) of the Acquiror Disclosure
Letter that was purchased at a discount and (i) was acquired within six months
prior to the Closing or (ii) was acquired in anticipation of the transactions
contemplated by this Agreement.

The parties agree for purposes of this Section 3.20, an item shall be considered
“material” if the aggregate Tax liability associated with all items or matters
addressed by the relevant representation is equal to or greater than $500,000.

Section 3.21. Reserves.

(a) The Insurance Reserves set forth in the Statutory Statements (i) were based
on actuarial assumptions and methodologies which were in accordance with or more
conservative than those called for in the provisions of the relevant Insurance
Contracts, (ii) were computed in accordance with commonly accepted actuarial
standards consistently applied throughout the specified period and the
immediately prior period, (iii) are fairly stated in accordance with sound
actuarial principles and GAAP and (iv) otherwise complied in all respects with
applicable Insurance Law (including any regulations promulgated by the FSA) and
the internal policies, practices and principles of the Insurance Companies
related to reserves; provided, however, that this Section 3.21(a) shall not be
construed as a representation or warranty (expressed or implied) with respect to
the adequacy or sufficiency of the Insurance Reserves.

(b) The Parent has delivered or made available to the Acquiror, prior to the
date hereof, true, correct and complete copies of all material actuarial
reports, actuarial certificates, loss and loss adjustment expense reserve
reports, and deferred acquisition cost and loss recognition analyses prepared by
the Parent and/or any of its Affiliates or by any third party actuarial
consultant on behalf of or made available to the Parent and/or any of its
Affiliates relating to the adequacy of the reserves of any of the Insurance
Companies for any period ended on or after March 31, 2009, and all attachments,
addenda and supplements thereto (the “Actuarial Analyses”). The information and
data furnished by the Insurance Companies to their actuaries in connection with
the preparation of the Actuarial Analyses was, taken as a whole, accurate and
complete in all material respects. Each such Actuarial Analysis was based upon
the policies in force for, and the books and records of, the Insurance
Companies, as the case may be, at the relevant time of preparation (which
preparation was accurate in all material respects), and in conformity in all
material respects with applicable Insurance Law.

 

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(c) Set forth on Section 3.21(c) of the Seller Disclosure Letter is a list of
all material correspondence between any of the Insurance Companies and the FSA
since March 31, 2007 regarding the amount of reserves reflected on any statutory
financial statements of any Insurance Company or the actuarial assumptions or
methodologies employed in the calculation of reserves (provided that such
material correspondence shall only include electronic mail to the extent that,
to the Knowledge of the Parent, such electronic mail communication contains
material information (i) asserting any deficiency in the reserves of either of
the Insurance Companies, (ii) regarding a required increase in the reserves of
either of the Insurance Companies, or (iii) regarding a change in actuarial
assumptions or methodologies employed by either of the Insurance Companies in
the calculation of reserves), and the Parent has delivered or made available to
the Acquiror, prior to the date hereof, true, correct and complete copies of all
such correspondence.

Section 3.22. Solvency Margin Ratio. The Parent has made available to the
Acquiror true and complete copies of all final reports required to be submitted
by the Insurance Companies to the FSA under Article 128 of the Insurance
Business Law during the 12 months prior to the date hereof relating to their
respective Solvency Margin Ratio calculations.

Section 3.23. Regulatory Filings. To the extent permitted by applicable Law and
any confidentiality obligations pursuant to any Contract with any Governmental
Authority, the Parent has made available for inspection by the Acquiror
(a) true, correct and complete copies of any reports of examination (including
financial, market conduct and similar examinations) of any Company or any
Transferred Subsidiary issued by any Governmental Authority since March 31, 2007
and (b) all material filings or submissions made by any Company or any
Transferred Subsidiary with any Governmental Authority since March 31, 2007.
Section 3.23 of the Seller Disclosure Letter sets forth a true, correct and
complete list of any such material reports, filings and submissions that have
not been made available to the Acquiror, prior to the date hereof, for
inspection. The Companies and the Transferred Subsidiaries have complied in all
material respects with the requirements of applicable Law in regard to the
filing of reports, statements, applications, documents, registrations,
submissions and other filings (including any sales material) with any
Governmental Authority and the Companies and the Transferred Subsidiaries are
acting in compliance in all material respects with all such reports, statements,
applications, documents, registrations, submissions and other filings and all
required regulatory approvals in respect thereof are in full force and effect.

Section 3.24. Affiliate Transactions.

(a) Section 3.24(a) of the Seller Disclosure Letter contains a true, correct and
complete list of all Intercompany Agreements. The Parent has delivered or made
available to the Acquiror, prior to the date hereof, true, correct and complete
copies of all Related Party Agreements. Except as provided in the Related Party
Agreements or otherwise set forth on Section 3.24(a) of the Seller Disclosure
Letter, neither the Parent, nor any of its Affiliates (other than the Companies
and the Transferred Subsidiaries) nor any such officer, director or employee of
the Parent or any Affiliates (including the Company and the Transferred
Subsidiary), or, to the Knowledge of the Parent, any immediate family member or
controlled entity of any such Person (A) has or has had, directly or indirectly,
in whole or in part, any interest in any material asset or property that any
Company or any Transferred Subsidiary uses in the conduct of the Business,

 

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(B) has or has had, any financial interest in any material transaction with any
Company or any Transferred Subsidiary or involving any material asset or
property of any Company or any Transferred Subsidiary or (C) has any claim
against, or owes any amounts to, any Company or any Transferred Subsidiary,
except in the case of clauses (B) and (C), claims by officers, directors or
employees of the Companies and the Transferred Subsidiaries in the Ordinary
Course of Business for accrued and unpaid compensation, accrued vacation pay,
accrued benefits under Company Benefit Plans and similar matters.

(b) Section 3.24(b) of the Seller Disclosure Letter contains a true, correct and
complete list of all intercompany balances as of March 31, 2010 between the
Parent and any of its Affiliates (other than the Companies and the Transferred
Subsidiaries), on the one hand, and any of the Companies or any of the
Transferred Subsidiaries, on the other hand.

Section 3.25. Sufficiency of Assets. The assets and properties of the Companies
and the Transferred Subsidiaries constitute all of the assets and properties
necessary to operate the Business as heretofore conducted by the Companies and
the Transferred Subsidiaries, other than assets and properties being, to be or
available to be provided pursuant to the Transition Services Agreement and any
other applicable Transaction Agreements. As of the Closing, there will be no
assets or properties that are necessary for the conduct of the Business as
currently conducted that are owned, leased or otherwise held by the Parent or
any of its Affiliates (other than the Companies and the Transferred
Subsidiaries), other than assets and properties being provided pursuant to
(a) the Transition Services Agreement, (b) services set forth on
Schedule 2.03(b) of the Transition Services Agreement as would be provided under
the Transition Services Agreement if such services set forth on Schedule 2.03(b)
of the Transition Services Agreement were contemplated to be provided thereby,
or (c) any other applicable Transaction Agreements. Upon consummation of the
transactions contemplated by the Transaction Agreements and assuming performance
thereof by the Acquiror and its Affiliates that are parties thereto, the
Acquiror (or a Designated Acquiror), the Companies and the Transferred
Subsidiaries will own, possess, have a valid license to, have a valid leasehold
interest in or otherwise have the right to use all rights, properties and assets
necessary to conduct the Business in all material respects as currently
conducted.

Section 3.26. Title to Tangible Property. Except for assets disposed of in the
Ordinary Course of Business, as permitted by Section 5.01 or as contemplated by
any Transaction Agreement, since March 31, 2010, each of the Companies and the
Transferred Subsidiaries has, and immediately following the Closing Date, will
continue to have, good and marketable title to, or a valid leasehold interest
in, all of the material assets and properties used by it (whether real, personal
or mixed, or whether tangible or intangible) that are reflected in the Ancillary
Financial Statements as owned or leased by it or acquired or leased by it after
March 31, 2010 or located on its premises, free and clear of all Liens, except
for Permitted Liens (other than FRBNY Liens and Liens in favor of Permitted
Parties).

Section 3.27. Creditors. The Parent is not transferring the Companies and the
Transferred Subsidiaries to the Acquiror (or any Designated Acquiror) with any
intent to hinder, delay or defraud any of its creditors.

 

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Section 3.28. Environmental Matters. Except as set forth on Section 3.28 of the
Seller Disclosure Letter:

(a) to the Knowledge of the Parent there have been no past or present conditions
or circumstances at, arising out of, or related to, any current or former
properties (including Investment Assets comprising real property) used in
connection with the Business of any Company or any Transferred Subsidiary since
March 31, 2007, including on-site or off-site use, generation, storage,
treatment, Release or threatened Release of any Hazardous Material which are,
individually or in the aggregate, reasonably likely to give rise to (i) material
liabilities or obligations for any investigation, cleanup, remediation, disposal
or any other methods of corrective action or any monitoring requirements under
Environmental Law or (ii) material claims arising for personal injury, property
damage, or damage to natural resources except in each case as would not
reasonably be expected to result in Losses in excess of ¥45,000,000;

(b) there are no Persons whose liability for any environmental matters or under
any applicable Environmental Law has been retained or assumed, contractually or
by operation of Law, by any Company or any Transferred Subsidiary;

(c) since March 31, 2007 none of the Companies or any of the Transferred
Subsidiaries has handled or directed the management of or participated in any
decision with respect to or exercised any influence or control over the use,
generation, storage, treatment or disposal of any Hazardous Materials at or
related to any of their businesses, assets or properties (including Investment
Assets comprising real property) other than customary quantities of Hazardous
Materials associated with the construction, operation, maintenance and repair of
typical financial service and commercial office operations; and

(d) to the Knowledge of the Parent, the Parent has made available to the
Acquiror, prior to the date hereof, true, correct and complete copies of all
material environmental inspections, studies, surveys, audits, assessments and
reports conducted or prepared by, on behalf of or related to any Company or any
Transferred Subsidiary, or any real property related Investment Asset, that are
in their possession or control.

Section 3.29. Foreign Corrupt Practices, Economic Sanctions, Anti-Money
Laundering and Enforcement Proceedings.

(a) None of the Companies, the Transferred Subsidiaries or, to the Knowledge of
the Parent, any of the Companies’ or any of the Transferred Subsidiaries’
Affiliates, directors, officers, agents, employees or other Persons acting on
behalf of the Companies or the Transferred Subsidiaries has directly or
indirectly, paid, offered or promised to pay, or authorized payment of, any
monies or any other thing of value to any government official or employee
(including employees of government-owned or controlled entities) or any
political party or candidate for political office (collectively, a “Proscribed
Recipient”) for the purpose of, (i) influencing any act or decision of such
Proscribed Recipient, (ii) inducing such Proscribed Recipient to do or omit to
do any act in violation of the lawful duty of such Proscribed Recipient, or to
use his, her or its influence with a Governmental Authority to affect or
influence any act or decision of such Governmental Authority or (iii) assisting
in obtaining or retaining business for or with, or directing business to, any
Person. Each of the Companies and the Transferred

 

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Subsidiaries has at all times been since March 31, 2007 in compliance with the
U.S. Foreign Corrupt Practices Act (the “FCPA”), including maintaining adequate
internal controls as required by the FCPA and complying with the record-keeping
provisions of the FCPA. The Companies and the Transferred Subsidiaries maintain
and will continue to maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, up until and including the
Closing Date, compliance with the foregoing.

(b) Since March 31, 2007, the Companies and the Transferred Subsidiaries are and
have been in compliance with all applicable economic sanctions and restrictions
under any applicable Law administered by OFAC and with the Foreign Exchange and
Foreign Trade Act of Japan. None of the Companies or any of the Transferred
Subsidiaries or, to the Knowledge of the Parent, any of the Companies’ or the
Transferred Subsidiaries’ Affiliates, directors, officers, agents, employees or
other Persons acting on behalf of any of the Companies or any of the Transferred
Subsidiaries, is owned or controlled by, or is acting on behalf of, a Sanctioned
Party.

(c) Since March 31, 2007, the Companies and the Transferred Subsidiaries are and
have been in compliance with all applicable Law relating to money laundering,
currency transfers or other regulations concerning the transfer of monetary
instruments (“AML Measures”). The Companies and the Transferred Subsidiaries
maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, up until and including the Closing Date,
compliance with AML Measures.

(d) With respect to the Companies and the Transferred Subsidiaries, there is no
pending or, to the Knowledge of the Parent, threatened, and, since March 31,
2007, there has not been in the past any audit, review, enforcement Action,
Governmental Order or disclosure by any of the Companies or any of the
Transferred Subsidiaries to a Governmental Authority regarding legal
noncompliance with respect to corrupt practices, money laundering or economic
sanctions.

Section 3.30. Risk Management Instruments. The Parent has provided to the
Acquiror a written statement of the derivatives policies for each of the
Companies and each of the Transferred Subsidiaries, as applicable, in effect as
of the date hereof. Since March 31, 2008, all derivative instruments, including
interest rate swaps, caps, floors and option agreements and other risk
management arrangements, entered into for the account of one or more of the
Companies or the Transferred Subsidiaries, were entered into in conformity in
all material respects with such applicable policies. The Parent has delivered or
made available to the Acquiror, prior to the date hereof, true, correct and
complete copies of each such policy.

Section 3.31. Brokers. Except for Goldman, Sachs & Co. and J.P. Morgan
Securities LLC, whose fees and commissions are obligations solely of the Parent
or the Sellers and will be duly paid by the Parent or the Sellers, no broker,
finder or investment banker is entitled to any brokerage, financial advisory,
finder’s or other fee or commission in connection with this Agreement or with
the consummation of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Parent or its Affiliates.

Section 3.32. Books and Records. Each of the Companies’ and each of the
Transferred Subsidiaries’ books, accounts, data, files, information and records
are true, correct

 

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and complete in all material respects, and are, and have been since March 31,
2007, maintained in any such Person’s usual, regular and ordinary manner, in
accordance with GAAP and any applicable Law in each case to the extent
applicable thereto. All material transactions to which each of such Persons is
or has been a party, since March 31, 2007, are properly reflected therein.

Section 3.33. Fairness Opinion. The Parent’s board of directors has received the
opinions of Goldman, Sachs & Co. and J.P. Morgan Securities LLC, whose fees
shall be paid by the Parent, dated as of the date hereof and to the effect that,
as of the date hereof, subject to and based on such qualifications and
assumptions as set forth therein, the aggregate Purchase Price to be received by
the Parent (on behalf of itself and the Sellers) for the sale of the Shares and
the Bridge Loan pursuant to this Agreement is fair to the Parent from a
financial point of view.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR

Except as set forth in the corresponding sections or subsections of the
disclosure letter delivered to the Parent by the Acquiror concurrently with
entering into this Agreement (the “Acquiror Disclosure Letter”) (it being
understood and agreed by the parties hereto that disclosure of any item in any
section or subsection of the Acquiror Disclosure Letter shall be deemed
disclosure with respect to any other section or subsection of the Acquiror
Disclosure Letter to the extent it is readily apparent from such disclosure that
such disclosure is applicable to such other section or subsection), the Acquiror
hereby represents and warrants to the Parent as of the date hereof and as of the
Closing Date (or such other date specified herein) as follows:

Section 4.01. Incorporation, Qualification and Authority of the Acquiror. The
Acquiror is a corporation duly incorporated, validly existing and in good
standing under the Laws of New Jersey and has full power and authority to own or
lease and operate its assets and to conduct its business as currently conducted.
Each applicable Affiliate of the Acquiror which is a party to any Transaction
Agreement is a corporation or other organization duly incorporated or organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization and has full power and authority to own or lease
and operate its assets and properties and to conduct its business as currently
conducted. The Acquiror or the applicable Affiliate of the Acquiror (as
applicable) has full power and authority to enter into, consummate the
transactions contemplated by, and carry out its obligations under, each of the
Transaction Agreements to which it is a party. The execution and delivery by the
Acquiror or the applicable Affiliate of the Acquiror (as applicable) of each of
the Transaction Agreements to which it is a party, the performance by the
Acquiror or the applicable Affiliate of the Acquiror (as applicable) of its
obligations under each of the Transaction Agreements to which it is a party and
the consummation by the Acquiror or the applicable Affiliate of the Acquiror (as
applicable) of the transactions contemplated by each of the Transaction
Agreements to which it is a party, have been or (in the case of the Ancillary
Agreements) will be prior to the Closing (as applicable) duly authorized by all
requisite limited liability company, corporate or other similar organizational
action on the part of the Acquiror or the applicable Affiliate of the Acquiror
(as applicable). Each of the Transaction Agreements to which the Acquiror or the
applicable Affiliate of the Acquiror (as applicable) is a party has been, or (in
the case of the Ancillary Agreements) upon execution and delivery thereof, will
be, duly executed and delivered by the

 

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Acquiror or the applicable Affiliate of the Acquiror (as applicable). Assuming
due authorization, execution and delivery by the other parties hereto or
thereto, each of the Transaction Agreements to which the Acquiror or the
applicable Affiliate of the Acquiror (as applicable) is a party constitutes, or
(in the case of the Ancillary Agreements) upon execution and delivery thereof
will constitute, the legal, valid and binding obligation of the Acquiror or the
applicable Affiliate of the Acquiror (as applicable), enforceable against it in
accordance with its terms, subject in each case to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation,
fraudulent conveyance, preferential transfer or similar Laws now or hereafter in
effect relating to or affecting creditors’ rights and remedies generally and
subject, as to enforceability, to the effect of general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

Section 4.02. No Conflict. Provided that all consents, approvals, authorizations
and other actions described in Section 4.03 have been obtained or taken, the
execution and delivery by the Acquiror or the applicable Affiliate of the
Acquiror (as applicable) of Transaction Agreements to which it is a party, the
performance by the Acquiror or the applicable Affiliate of the Acquiror (as
applicable) of its obligations under each of the Transaction Agreements to which
it is a party, and the consummation by the Acquiror or the applicable Affiliate
of the Acquiror (as applicable) of the transactions contemplated by each of the
Transaction Agreements to which the Acquiror or the applicable Affiliate of the
Acquiror (as applicable) is a party do not and will not, directly or indirectly
(with or without the giving of notice or lapse of time, or both) (a) violate or
conflict with, or result in a breach of, the organizational documents of the
Acquiror or the applicable Affiliate of the Acquiror (as applicable),
(b) conflict with or violate in any material respect any Law or Governmental
Order applicable to the Acquiror or the applicable Affiliate of the Acquiror (as
applicable) or by which any of them or any of their respective properties,
assets or businesses is bound or subject or (c) violate or conflict with, result
in any breach of, or constitute a default (or event which, with the giving of
notice or lapse of time, or both, would constitute a default) under, require any
consent under, or give to any Person any rights of termination, acceleration or
cancellation of, or result in a loss of rights under, or result in the creation
of any Lien (other than Acquiror Permitted Liens) on any of the assets or
properties of the Acquiror or any of its Affiliates pursuant to, any Contract to
which the Acquiror or any of its Affiliates is a party or by which any of them
or any of their respective properties, assets or businesses is bound or subject,
except, in the case of clause (c) of this Section 4.02, for any such conflicts,
violations, breaches, defaults, consents, terminations, accelerations,
cancellations, losses of rights or creations that, individually or in the
aggregate, would not reasonably be expected to have an Acquiror Material Adverse
Effect.

Section 4.03. Consents and Approvals. Except as may result from the identity or
regulatory status of the Parent, the Seller or their respective Affiliates and
except in connection, or in compliance, with the Governmental Approvals required
by applicable Law that are set forth on Section 4.03 of the Acquiror Disclosure
Letter, the execution and delivery by the Acquiror or the applicable Affiliate
of the Acquiror (as applicable) of each of the Transaction Agreements to which
it is a party do not, and the performance by the Acquiror or the applicable
Affiliate of Acquiror (as applicable) of its obligations under, and the
consummation by the Acquiror or the applicable Affiliate of the Acquiror (as
applicable) of the transactions contemplated by each of the Transaction
Agreements to which it is a party, will not, require any Governmental Approval
to be obtained or made by the Acquiror or the applicable Affiliate of the
Acquiror (as applicable).

 

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Section 4.04. Absence of Litigation. Except as set forth on Section 4.04 of the
Acquiror Disclosure Letter, there are no Actions pending or, to the Knowledge of
the Acquiror, threatened in writing against, relating to or affecting the
Acquiror or any of its Affiliates, which would reasonably be expected to have an
Acquiror Material Adverse Effect.

Section 4.05. Securities Matters. The Shares are being acquired by the Acquiror
(or a Designated Acquiror) for its own account and without a view to the public
distribution or sale of any of the Shares or any interest in them in violation
of the Securities Act, Japanese securities Law, or other applicable state or
foreign securities Law. The Acquiror has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Shares, and the Acquiror is capable of bearing
the economic risks of such investment, including a complete loss of its
investment in the Shares. The Acquiror understands and agrees that it may not
sell, transfer, assign, pledge or otherwise dispose of any of the Shares other
than pursuant to a registered offering in compliance with, or in a transaction
exempt from, the registration requirements of the Securities Act and the
applicable Japanese and other state and foreign securities Law.

Section 4.06. Financial Ability. Subject to the Parent’s compliance with
Section 5.19, the Acquiror, or any Designated Acquiror, as applicable, will have
at the Closing, all funds necessary to pay the Purchase Price and to consummate
the transactions contemplated by this Agreement and the other Transaction
Agreements.

Section 4.07. Brokers. Except for the investment banks listed in Section 4.07 of
the Acquiror Disclosure Letter, whose fees and commissions are obligations
solely of the Acquiror and will be duly paid by the Acquiror, no broker, finder
or investment banker is entitled to any brokerage, financial advisory, finder’s
or other fee or commission in connection with the consummation of the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Acquiror or its Affiliates.

ARTICLE V

ADDITIONAL AGREEMENTS

Section 5.01. Conduct of Business Prior to the Closing. During the period from
the date hereof through the Closing, except (a) to the extent required or
prohibited by applicable Law (provided that the Parent shall promptly notify the
Acquiror of any such prohibition or requirement), (b) as otherwise expressly
provided for in this Agreement, (c) for matters identified in Section 5.01 of
the Seller Disclosure Letter, or (d) to the extent the Parent provides advance
written notice to the Acquiror pursuant to Section 11.02 of this Agreement and
the Acquiror consents in writing or the Acquiror fails to respond to such notice
within five Business Days of receipt of such notice, the Parent shall (w) cause
the Companies and the Transferred Subsidiaries to conduct the Business in the
Ordinary Course of Business except as may be prohibited in clause (z) below,
(x) use its commercially reasonable efforts to cause the Companies and the
Transferred Subsidiaries to preserve intact and maintain their respective

 

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business organizations and current relationships and goodwill with the
policyholders, Brokers, Client Companies, distribution partners and other
customers, suppliers, regulators, rating agencies, agents, resellers, creditors,
lessors, Employees and other business associates and service providers of and to
their respective businesses, (y) cause the Companies and the Transferred
Subsidiaries to effect all transactions in Investment Assets in accordance with
the Investment Guidelines in effect on the date hereof and (z) cause the
Companies and the Transferred Subsidiaries not to do any of the following:

(i) declare, set aside, make or pay any dividend or other distribution in
respect of the Capital Stock of any Company or any Transferred Subsidiary except
for cash dividends and distributions by any wholly owned Transferred Subsidiary
to any other wholly owned Transferred Subsidiary or by any wholly owned
Transferred Subsidiary to any Company, which shall be permitted;

(ii) repurchase, redeem, repay, retire or otherwise acquire any outstanding
shares of Capital Stock or other securities issued by any of the Companies or
any of the Transferred Subsidiaries;

(iii) transfer, issue, sell, pledge, encumber or dispose of, or authorize the
transfer, issuance, sale, pledge, encumbrance or disposition of, any shares of
Capital Stock or other securities of any of the Companies or any of the
Transferred Subsidiaries or grant options, warrants, calls or other rights to
purchase or otherwise acquire any shares of Capital Stock or other securities of
any of the Companies or any of the Transferred Subsidiaries;

(iv) effect any recapitalization, reclassification, stock split, any change in
the terms of any of the Capital Stock or securities listed in Section 3.03 of
the Seller Disclosure Letter or other change in the capitalization of any of the
Companies or any of the Transferred Subsidiaries;

(v) amend the certificate of incorporation or by-laws (or other comparable
organizational documents) of any of the Companies or any of the Transferred
Subsidiaries except with respect to changes in the authorized representative of
such Transferred Subsidiary;

(vi) (A) make any material change (1) in its reinsurance (provided that, with
respect to reinsurance, any actions permitted under Section 5.01(z)(x) shall
also be permitted under this Section 5.01(z)(vi)), hedging, reserving, risk
management, compliance, valuation, financial or accounting policies, practices
or principles in effect on the date hereof, or adopt or implement any new
reinsurance, hedging, reserving, risk management, compliance, valuation,
financial or accounting policies, practices or principles, except to the extent
required by GAAP, or (2) except in the Ordinary Course of Business, in its
underwriting, marketing, administration, claim processing and payment, selling
or pricing policies, practices or principles or adopt or implement any new
underwriting, marketing, administration, claim processing and payment, selling
or pricing policies, practices or principles and (B) amend, terminate,
supplement or otherwise modify the Investment Guidelines or implement new or
replacement investment guidelines with respect to the Investment Assets;

 

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(vii) subject to clause (xxv) below, acquire (by merger, consolidation,
acquisition of stock or assets or otherwise), directly or indirectly, any
assets, securities, properties, interests or businesses, in a single transaction
or a series of transactions, other than (A) in connection with the management of
the Investment Assets in accordance with the Investment Guidelines in effect on
the date hereof (but subject to the limitations in Section 5.16(b)),
(B) treasury and cash management functions conducted by the Insurance Companies
in the Ordinary Course of Business, (C) pursuant to reinsurance and co-insurance
agreements entered into in the Ordinary Course of Business and not otherwise
prohibited by this Section 5.01, (D) any transaction between any Company and any
other Company, between any Company and any Transferred Subsidiary, or between
any Transferred Subsidiary and any other Transferred Subsidiary, and
(E) acquisitions with a purchase price (together with any related assumed
liabilities) that does not exceed ¥250,000,000 individually and ¥1,000,000,000
in the aggregate;

(viii) subject to clause (xxv) below, sell, issue, authorize for issuance,
grant, deliver, award, dispose of, lease or otherwise transfer, or create or
incur any Lien (other than Permitted Liens) on (in each case, by merger,
consolidation, disposition of stock or assets or otherwise), any assets,
securities (or other ownership or voting interests), properties, interests or
businesses, in a single transaction or series of related transactions, other
than (A) in connection with the management of the Investment Assets in
accordance with the Investment Guidelines in effect on the date hereof,
(B) treasury and cash management functions conducted by the Insurance Companies
in the Ordinary Course of Business, (C) pursuant to reinsurance and co-insurance
agreements entered into in the Ordinary Course of Business and not otherwise
prohibited by this Section 5.01, (D) any transaction between any Company and any
other Company, between any Company and any Transferred Subsidiary, or between
any Transferred Subsidiary and any other Transferred Subsidiary, and
(E) dispositions, leases or transfers with a sale or lease price (including any
related assumed Indebtedness) that does not exceed ¥250,000,000 individually and
¥1,000,000,000 in the aggregate;

(ix) (A) create, incur, assume, guarantee, endorse or otherwise become liable or
responsible for (whether directly, contingently or otherwise) any Indebtedness
or guarantees thereof with the exception of Indebtedness of the Companies and
the Transferred Subsidiaries to the Parent up to ¥7,600,000,000 in the
aggregate, which Indebtedness shall be settled prior to, and will not be
outstanding at, the Closing and which shall be extended on arm’s-length terms,
(B) make any loans or advances of borrowed money or capital contributions to, or
equity or other investments in, any other Person, (C) cancel or release any
material Indebtedness owed to or claims held by any Company or any Transferred
Subsidiary or (D) repay any Indebtedness other than in the Ordinary Course of
Business in accordance with the terms of any applicable Contract.
Notwithstanding the foregoing, (1) any refinancing (including any extension,
renewal or exchange) of existing Indebtedness for borrowed money shall be
permitted, so long as the outstanding principal amount of the existing
Indebtedness being refinanced, together with any unpaid accrued interest and
premium thereon, is equal to or more than the principal

 

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amount of any such new Indebtedness being incurred together with any unpaid
accrued interest and premium thereon plus other reasonable fees incurred in
connection with such refinancing, (2) loans or borrowing by any of the Companies
or any of the Transferred Subsidiaries in the Ordinary Course of Business under
lines of credit available as of the date hereof and previously disclosed to the
Acquiror shall be permitted, (3) intercompany loans, guarantees or advances made
among the Companies, among the Transferred Subsidiaries, or among any of the
Companies and any of the Transferred Subsidiaries, shall be permitted, (4) other
Indebtedness incurred or assumed in connection with the transactions permitted
pursuant to any of Section 5.01(z)(vii) and (viii) shall be permitted; provided,
that in no event shall the Parent create or originate or cause or permit any
Company or any Transferred Subsidiary to create or originate any junior or
secondary Loan Interests without the prior approval of the Acquiror;

(x) (A) enter into any Reinsurance Contract or other similar Contract, whether
as reinsurer or reinsured, other than any reinsurance Contract entered into in
the Ordinary Course of Business involving initial or annual premium of less than
¥300,000,000; provided that in no event shall any of the Insurance Companies
enter into any Financial Reinsurance Contract, or (B) enter into, amend (in any
material respect), terminate, renew or extend any Real Property Lease or other
Contract for the leasing or purchase of any real estate, other than any renewal
or extension in the Ordinary Course of Business of a Real Property Lease
expiring or required to be renewed or extended prior to Closing, provided any
such Real Property Lease does not (x) call for monthly rent and common area
maintenance payments in the aggregate in excess of ¥1,000,000 or (y) provide for
a term in excess of two years (unless it provides for termination by the tenant
thereof on no more than six months’ notice without any penalty, termination or
other similar fee), and provided, further, that in connection with (I) any such
renewal in the Ordinary Course of Business or (II) any action to be taken with
respect to any of the exceptions to this Section 5.01(z)(x)(B) disclosed in the
Seller Disclosure Letter, the Companies and Transferred Subsidiaries will notify
the Acquiror of such proposed renewal or other action and consult with the
Acquiror prior to executing such renewal or taking such action (for the
avoidance of doubt, the Companies and Transferred Subsidiaries shall retain the
right to make the final decision with respect to such a renewal in the Ordinary
Course of Business or with respect to the matters listed in
Section 5.01(z)(x)(B) of the Seller Disclosure Letter), (C) other than in the
Ordinary Course of Business, enter into any Contract that would be a Material
Contract if in effect on the date hereof or (D) amend (in any material respect),
terminate, renew or extend in any material respect any Material Contract or
Reinsurance Contract, or grant any material waiver of any terms under, or give
any material approval, consent, authorization or permit with respect to, any
Material Contract or Reinsurance Contract;

(xi) (A) grant any increase in the rate or terms of compensation payable or to
become payable to its Employees, or accelerate the vesting or payment of, any
wages, salaries, bonuses, incentives, change of control benefits, severance pay,
other compensation, pension or other benefits payable to any Employee, including
any increase or change pursuant to any Benefit Plan or (B) establish, adopt,
increase or amend (or promise to take any such action(s) with regard to) any
Benefit Plan or any benefits

 

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potentially available thereunder, in either case of clause (A) or (B), except as
required by Law or by any plan, policy, agreement or arrangement in existence on
the date hereof or any changes related to restrictions, limitations or
directives made by the Office of the Special Master of TARP Executive
Compensation, or, in the case of Clause (A), in the Ordinary Course of Business;

(xii) hire or terminate the employment or services of any Employee, other than
any such hiring of an Employee whose annual base salary rate or base wage rate
is ¥14,000,000 or less or terminations made in the Ordinary Course of Business,
or transfer from a Company or a Transferred Subsidiary, as the case may be, the
employment of any Employee whose duties relate primarily or exclusively to the
Business;

(xiii) enter into, or amend, any employment Contracts with any Employee, or any
collective bargaining agreement, work rules or similar employment related
agreement, except as required by Law or as is required by the terms of any plan,
policy, agreement or arrangement in existence on the date of this Agreement, as
the same shall be specified and summarized in Section 5.01(xiii) of the Seller
Disclosure Letter; provided, that this Section 5.01(xiii) shall not preclude the
entry into a new employment contract with a newly hired employee so long as such
Contract is entered into in the Ordinary Course of Business;

(xiv) pay, discharge, satisfy, settle or compromise any actual or threatened
Action against or adversely affecting any of the Companies, the Transferred
Subsidiaries or the Business (except for claims under Insurance Contracts within
applicable policy limits), other than any payment, discharge, satisfaction,
settlement or compromise that involves solely cash payments, which cash payments
shall not be in excess of ¥45,000,000, individually, or ¥150,000,000, in the
aggregate;

(xv) (A) enter into any Contract between any of the Companies or any of the
Transferred Subsidiaries, on the one hand, and (x) the Parent, any of the
Sellers or any of their respective Affiliates (other than the Companies and the
Transferred Subsidiaries) or (y) any officer, director, or shareholder of the
Parent, any of the Sellers or any of their respective Affiliates (including any
Company and any Transferred Subsidiary) or, to the Knowledge of the Parent, any
member of any such Person’s immediate family or an entity controlled by one or
more of the foregoing, on the other hand, which cannot be terminated upon 60
days’ advance written notice by the Company or the Transferred Subsidiary party
thereto without penalty or interest or (B) amend in any material respect,
terminate, renew or extend, or grant any waiver of any terms under, in any
material respect, or give any approval, consent, authorization or permit with
respect to, in any material respect, any existing Related Party Agreement;

(xvi) pay, discharge or satisfy any liabilities (other than liabilities with
regard to Actions, which are the subject of clause (xiv) above), other than in
the Ordinary Course of Business;

 

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(xvii) change in any material respect the terms for, or policies with respect
to, the payment of commissions or other compensation to any Broker, other than
in the Ordinary Course of Business;

(xviii) conduct any material revaluation or change the valuation methodology of
any assets, other than in the Ordinary Course of Business consistent with GAAP
(as applicable);

(xix) reduce the amount of any Insurance Reserves, other than as a result of
loss or expense payments to other parties in the Ordinary Course of Business in
accordance with the terms of any Insurance Contract;

(xx) make any material Tax election or settle and/or compromise any material Tax
liability; incur any material liability for Taxes other than in the Ordinary
Course of Business; prepare any Tax Return in a manner that is inconsistent with
past practice; or file an amended Tax Return or a claim for refund of material
Taxes;

(xxi) entering into any new line of business (it being understood that the
creation of a new product or a change to an existing product within an existing
line of business shall not be restricted hereby), terminating business
operations in Japan or commencing business operations in any country other than
Japan;

(xxii) abandon, terminate or otherwise change in any material respect any
Material Permit;

(xxiii) authorize, recommend, propose or announce an intention to adopt a plan
of complete or partial liquidation or dissolution of any of the Companies or any
of the Transferred Subsidiaries;

(xxiv) terminate, cancel or amend, or cause the termination, cancellation or
amendment of any insurance coverage to any material extent (and any surety bond,
letters of credit, cash collateral or other deposits related thereto to be
maintained with respect to such coverage) maintained by any of the Companies or
any of the Transferred Subsidiaries that is not replaced by comparable coverage,
provided that any changes made due to an increase in the costs of such insurance
coverage shall not be restricted hereby;

(xxv) engage in any purchases, acquisitions, commitments, sales, transfers or
dispositions of Investment Assets, directly or indirectly, with any Affiliate
that is not a Company or a Transferred Subsidiary;

(xxvi) enter into, or amend in any material respect, any Contract with a labor
organization, work council or similar collective bargaining entity;

(xxvii) for more than 10 Business Days following the public availability of
information regarding the Solvency Margin Ratios of each of the Peers at the end
of any fiscal quarter after the date hereof, fail to maintain the Solvency
Margin Ratio of each of

 

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Star and Edison (A) above 275% and (B) if below 600%, at a level not more than
300 percentage points below the average of the published Solvency Margin Ratios
of the Peers for such completed fiscal quarter (it being understood that such
Solvency Margin Ratios of Star and Edison shall be measured pro forma for any
capital contributions made to bring them into compliance herewith); and

(xxviii) enter into any legally binding commitment with respect to any of the
foregoing.

Notwithstanding the foregoing, the Parent shall cause the Companies and the
Transferred Subsidiaries not to issue any instrument characterized as equity for
U.S. federal income tax purposes and not to effect any change in the terms of
any of the Credit Saison Debt, the AIGFAJ Subordinated Debt, the Bridge Loan or
the Syndicated Loan, except as provided in Section 5.15.

Section 5.02. Access to Information.

(a) From the date hereof until the Closing Date, upon reasonable prior notice
(or, with respect to access to employees, as may otherwise be agreed to by the
parties), Parent shall, and shall cause each of the Sellers, the Companies and
the Transferred Subsidiaries and any such Person’s respective Representatives
to, (i) afford the Acquiror and the Representatives of the Acquiror timely and
reasonable access, during normal business hours, to the offices, properties,
books, data, files, information, records and employees of the Parent, the
Sellers and their respective Affiliates in respect of the Companies, the
Transferred Subsidiaries and the Business, (ii) furnish to the Representatives
of the Acquiror such additional financial data, investment activity reports and
other information regarding the Companies, the Transferred Subsidiaries and the
Business and their personnel as the Acquiror or its Representatives may from
time to time reasonably request, and (iii) reasonably cooperate with, and
assist, the Acquiror and the Representatives of the Acquiror in connection with
the Acquiror’s preparation to integrate the Companies, the Transferred
Subsidiaries and the Business and their personnel into the Acquiror’s
organization following the Closing to the extent any such Person’s or such
Person’s respective Representatives’ assistance and expertise is reasonably
requested in connection therewith; provided, however, that nothing herein shall
require the Parent, any of the Sellers, any of the Companies or any of the
Transferred Subsidiaries, or any of such Person’s respective Representatives, to
disclose any information to the Acquiror or the Representatives of the Acquiror
or take any action that would cause a violation of any Contract to which the
disclosing party or any of its Affiliates is a party, would cause a risk of loss
of legal privilege to the party disclosing such data or information or any of
its Affiliates, or would constitute a violation of applicable Law or obligations
to customers, so long as the Parent, the Seller, the Company and/or the
Transferred Subsidiary, and/or such Person’s Representative, as the case may be,
shall have used its commercially reasonable efforts to provide such information
and protect such privacy and any personal data without violation of applicable
Law or obligations to customers; provided, further, that such investigation
shall not unreasonably interfere with any of the businesses or operations of the
Parent, the Sellers, the Companies, the Transferred Subsidiaries or any of their
respective Affiliates; provided, further, that the auditors and independent
accountants of the Parent, the Sellers, the Companies or the Transferred
Subsidiaries shall not be obligated to make any work papers available to any
Person unless and until such

 

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Person has signed a customary Auditor’s Letter relating to such access to work
papers in form and substance reasonably acceptable to such auditors or
independent accountants. The Parent shall, and shall cause the Sellers, the
Companies and the Transferred Subsidiaries to, promptly provide any consent
requested by their respective independent accountants in connection with such
access. If so reasonably requested by the Parent, the Acquiror shall enter into
a customary joint defense agreement, in form and substance reasonably acceptable
to the Acquiror and the Parent, with any one or more of the Parent, the Sellers,
the Companies and the Transferred Subsidiaries with respect to any information
to be provided to the Acquiror pursuant to this Section 5.02(a). Any information
provided pursuant to this Section 5.02(a) shall be subject to the
Confidentiality Agreement. The Acquiror shall reimburse the Parent and its
Affiliates, in cash, promptly for any reasonable and necessary third party
out-of-pocket expenses incurred by the Parent and its Affiliates and any such
Person’s Representatives in complying with any request by or on behalf of the
Acquiror or its Representatives in connection with this Section 5.02(a). The
Acquiror shall indemnify and hold harmless the Parent, and its Affiliates from
and against any Losses that may be incurred by any of them arising out of or
related to the Acquiror’s use, storage or handling of (A) any personally
identifiable information relating to Employees, Brokers, policyholders or
customers of any of the Companies or any of the Transferred Subsidiaries and
(B) any other information that is protected by applicable Law (including privacy
Laws) or Contract and to which the Acquiror or any of its Affiliates or
Representatives is afforded access pursuant to the terms of this Agreement,
solely to the extent any such Losses are the result of the Acquiror’s actions or
omissions. From the date hereof until the Closing Date, Parent shall, and shall
cause each of the Sellers, the Companies and the Transferred Subsidiaries to,
deliver to the Acquiror monthly financial reports and quarterly financial
statements prepared in the Ordinary Course of Business by or on behalf of the
Companies or the Transferred Subsidiaries promptly following the preparation of
such reports or financial statements.

(b) In addition to the provisions of Section 5.03, from and after the Closing
Date, in connection with (i) the preparation of financial statements required to
be prepared under applicable Law or stock exchange rules or for other bona fide
reporting purposes, (ii) the preparation of filings and submissions to
Governmental Authorities, (iii) the conduct of any litigation, (iv) any
applicable Governmental Orders, (v) the enforcement of any right or remedy
relating to any of the Transaction Agreements or (vi) compliance with applicable
Law, upon reasonable prior notice (or, with respect to access to employees, as
may otherwise be agreed upon by the parties), the Acquiror shall, and shall
cause the Companies and the Transferred Subsidiaries and any such Person’s
respective Representatives to, (A) afford the Parent and the Representatives of
the Parent timely and reasonable access, during normal business hours, to the
offices, properties, books, data, files, information, records and employees of
the Acquiror and its Affiliates in respect of the Companies, the Transferred
Subsidiaries and the Business and their personnel, (B) furnish to the Parent,
and its Representatives such additional financial data and other information
regarding the Companies, the Transferred Subsidiaries and the Business as the
Parent or its Representatives may from time to time reasonably request and
(C) other than for proceedings involving the Acquiror and its Affiliates, use
reasonable efforts to make available to the Parent and its Representatives, the
employees of the Acquiror and its Affiliates in respect of the Companies, the
Transferred Subsidiaries and the Business whose assistance, expertise,
testimony, notes and recollections or presence are necessary to assist the
Parent or its Affiliates

 

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or Representatives in connection with the Parent’s or such Affiliates’ or
Representatives’ inquiries for any of the purposes referred to in this
Section 5.02(b), including the presence of such persons as witnesses in hearings
or trials for such purposes; provided, however, that absent a demonstrable need
for data and information related to periods subsequent to the Closing, the
rights of access of the Representatives of the Parent pursuant to clauses
(A) through (B) above shall be limited to books, data, files, information and
records related to periods ended at or prior to the Closing; provided, further,
that all information provided pursuant to this Section 5.02(b) shall be subject
to the obligation of confidentiality set forth in Section 5.04(b); provided,
further, that nothing herein shall require either the Acquiror, any of the
Companies or any of the Transferred Subsidiaries or any of their respective
Affiliates or Representatives to disclose any information to the Parent or any
of its Affiliates or Representatives or take any action that would cause a
violation of any Contract to which the disclosing party or any of its Affiliates
is a party, would cause a risk of loss of legal privilege to the party
disclosing such data or information or any of its Affiliates, or would
constitute a violation of applicable Law or obligations to customers, so long as
the Acquiror, the Company and/or the Transferred Subsidiary, and/or such
Person’s Affiliates or Representatives, as the case may be, shall have used its
commercially reasonable efforts to provide such information and protect such
privacy without violation of applicable Law or obligations to customers;
provided, further, that such investigation shall not unreasonably interfere with
the business or operations of the Acquiror or any of its Affiliates; and
provided, further, that the auditors and independent accountants of the Acquiror
or any of its Affiliates shall not be obligated to make any work papers
available to any Person unless and until such Person has signed a customary
Auditor’s Letter relating to such access to work papers in form and substance
reasonably acceptable to such auditors or independent accountants. The Acquiror
shall, and shall cause its Affiliates to, promptly provide any consent requested
by their respective independent accountants in connection with such access. If
so reasonably requested by the Acquiror, the Parent shall, and shall cause its
Affiliates to, enter into a customary joint defense agreement, in form and
substance reasonably acceptable to the Acquiror and the Parent, with any one or
more of the Acquiror and its Affiliates with respect to any information to be
provided to the Parent or its Representatives pursuant to this Section 5.02(b).
The Parent shall reimburse the Acquiror and its Affiliates promptly for any
reasonable and necessary third party out-of-pocket expenses incurred by the
Acquiror and its Affiliates and any such Person’s Representatives in complying
with any request by or on behalf of the Parent or its Representatives in
connection with this Section 5.02(b). The Parent shall indemnify and hold
harmless the Acquiror and its Affiliates (including the Companies and the
Transferred Subsidiaries) from and against any Losses that may be incurred by
any of them arising out of or related to the use, storage or handling by the
Parent, and its Representatives of (1) any personally identifiable information
relating to employees, Brokers, policyholders or customers of the Acquiror and
its Affiliates (including the Companies and the Transferred Subsidiaries) and
(2) any other information that is protected by applicable Law (including privacy
Laws) or Contract and to which the Parent, and its Representatives is afforded
access pursuant to the terms of this Agreement solely to the extent any such
Losses are the result of the actions or omissions of the Parent or its
Representatives.

(c) From and after the Closing Date, in connection with (i) the preparation of
financial statements required to be prepared under applicable Law or stock
exchange rules or for other bona fide reporting purposes, (ii) the preparation
of filings and submissions to

 

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Governmental Authorities, (iii) the conduct of any litigation, (iv) the transfer
of any Permits, (v) any applicable Governmental Orders, (vi) the enforcement of
any right or remedy relating to any of the Transaction Agreements or
(vii) compliance with applicable Law, upon reasonable prior notice (or, with
respect to access to employees, as may otherwise be agreed to by the parties),
the Parent shall, and shall cause its Representatives to, (A) afford the
Acquiror and the Representatives of the Acquiror reasonable access, during
normal business hours, to the offices, properties, books, data, files,
information, records and employees of the Parent and its Affiliates in respect
of the Companies, the Transferred Subsidiaries and the Business and their
personnel, (B) furnish to the Acquiror and the Representatives of the Acquiror
such additional financial data and other information regarding the Companies,
the Transferred Subsidiaries and the Business and their personnel as the
Acquiror or its Representatives may from time to time reasonably request and
(C) other than for proceedings involving the Parent and its Affiliates, use
reasonable efforts to make available to the Acquiror and the Representatives of
the Acquiror, the employees of the Parent and its Affiliates in respect of the
Companies, the Transferred Subsidiaries and the Business and their personnel
whose assistance, expertise, testimony, notes and recollections or presence is
necessary to assist the Acquiror or its Affiliates or Representatives in
connection with the Acquiror’s or such Affiliates’ or Representatives’ inquiries
for any of the purposes referred to in this Section 5.02(c), including the
presence of such persons as witnesses in hearings or trials for such purposes;
provided, however, that nothing herein shall require the Parent or any of its
Affiliates or Representatives to disclose any information to the Acquiror or the
Representatives of the Acquiror or take any action that would cause a violation
of any Contract to which the disclosing party or any of its Affiliates is a
party, would cause a risk of loss of legal privilege to the party disclosing
such data or information or any of its Affiliates, or would constitute a
violation of applicable Law or obligations to customers, so long as the Parent
and/or its Affiliates or Representatives, as the case may be, shall have used
its commercially reasonable efforts to provide such information and protect such
privacy and any personal data without violation of applicable Law or obligations
to customers; provided, further, that such investigation shall not unreasonably
interfere with the business or operations of the Parent or any of its
Affiliates; and provided, further, that the auditors and independent accountants
of the Parent or any of its Affiliates shall not be obligated to make any work
papers available to any Person unless and until such Person has signed a
customary Auditor’s Letter relating to such access to work papers in form and
substance reasonably acceptable to such auditors or independent accountants. The
Parent shall, and shall cause its Affiliates to, promptly provide any consent
requested by their respective independent accountants in connection with such
access. If so reasonably requested by the Parent, the Acquiror shall enter into
a customary joint defense agreement, in form and substance reasonably acceptable
to the Acquiror and the Parent, with any one or more of the Parent or any of its
Affiliates with respect to any information to be provided to the Acquiror or its
Affiliates pursuant to this Section 5.02(c). The Acquiror shall reimburse the
Parent and its Affiliates promptly, in cash, for any reasonable and necessary
third party out-of-pocket expenses incurred by the Parent or any of its
Affiliates and any such Person’s Representatives in complying with any request
by or on behalf of the Acquiror or its Representatives in connection with this
Section 5.02(c).

(d) Notwithstanding any provision to the contrary, the provisions of
Section 5.02(a), Section 5.02(b) and Section 5.02(c) above shall not apply to
any matter relating to Taxes or Tax Returns as all such matters are governed
exclusively by the provisions set forth in Article VII.

 

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Section 5.03. Books and Records.

(a) Subject to Section 5.03(b) and Article VII, the Parent and its Affiliates
shall have the right to retain copies of all books, data, files, information and
records in any media (including, for the avoidance of doubt, Tax Returns and
other information and documents relating to Tax matters) of each of the
Companies and the Transferred Subsidiaries and their respective businesses
relating to periods ending on or prior to the Closing Date (i) relating to
information (including employment and medical records) regarding the Employees,
(ii) as required by any Governmental Authority pursuant to applicable Law or as
may be requested thereby or (iii) as may be necessary for the Parent and its
Affiliates to perform their respective obligations pursuant to the Transaction
Agreements, in each case subject to compliance with all applicable privacy Laws,
policies and obligations of the Companies and the Transferred Subsidiaries made
to the past, present or prospective customers, claimants, beneficiaries,
employees or agents and with the Parent’s and its Affiliates’ existing
preservation and retention policies and obligations; provided that the
applicable books, data, files, information and records retained pursuant to
clause (iii) shall be delivered to the Companies and the Transferred
Subsidiaries at the Parent’s and its Affiliates’ expense once they are no longer
needed for the Parent and its Affiliates to perform their respective obligations
under the Transaction Agreements. With respect to all original Books and Records
of each of the Companies and the Transferred Subsidiaries existing as of the
Closing Date, the Acquiror shall, and shall cause each of the Companies and the
Transferred Subsidiaries to, (A) comply in all material respects with all
applicable Law, including the Code, relating to the preservation and retention
of records, (B) apply preservation and retention policies that are no less
stringent than those generally applied by the Acquiror and (C) for seven
(7) years after the Closing Date or until written notice is received from the
Parent of the expiration of the applicable statute of limitations for Japanese
Tax purposes, whichever is earlier, preserve and retain all such original books,
data, files, information and records solely to the extent required under
applicable Law for Tax purposes and thereafter to dispose of such original
books, data, files, information and records only after it shall have given the
Parent ninety (90) days’ prior written notice of such disposition and the
opportunity (at the Parent’s expense) to remove and retain such information
(which shall be treated as confidential information); provided that the Acquiror
shall have no such obligation to provide such original books, data, files,
information and records to the extent that doing so would violate applicable
Law, violate any commitments in privacy policies or obligations made with
respect to privacy or result in the waiver of any attorney-client privilege.

(b) Notwithstanding anything to the contrary contained herein or in any other
Transaction Agreement, to the extent that the Parent or its Affiliates may
possess books, records, files, tapes, software, documents or other materials
(i) containing both data relating to the Companies or the Transferred
Subsidiaries and data relating to the Parent and its Affiliates (other than the
Companies or the Transferred Subsidiaries), (ii) that are not used in the
operation of, or necessary to, the conduct of the Business as currently
conducted, (iii) that have been or will be retained pursuant to applicable Law
or for regulatory purposes, including pursuant to a Litigation Hold or
otherwise, (iv) the possession of which by the Parent would not violate any
privacy policies or legal or contractual obligations of the Companies and the
Transferred Subsidiaries

 

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with respect to privacy, (v) with respect to which, to the Knowledge of the
Parent, the Companies or the Transferred Subsidiaries have duplicate copies of
any data relating to the Companies or the Transferred Subsidiaries, and
(vi) with respect to which it would not be commercially reasonable for the
Parent to separate such data, books, records, files, tapes, software, documents,
or other materials relating to the Companies or the Transferred Subsidiaries
from such data and materials relating to the Sellers, the Parent, or any of
their respective Affiliates (other than the Companies or the Transferred
Subsidiaries) (“Archived Files”), the parties agree that the Archived Files are
not the property of the Companies or the Transferred Subsidiaries and are not
sold, transferred or conveyed pursuant to this Agreement or any other
Transaction Agreement. The Parent agrees that it shall, and shall cause their
Affiliates to, maintain and treat any data in such duplicate Archived Files in
accordance with Section 5.04 as if such Archived Files are the Other Party’s
Confidential Information and shall, and shall cause their Affiliates to,
maintain and dispose of such Archived Files in accordance with applicable Law.
The Parent shall, and shall cause its Affiliates to, provide the Acquiror, at
the Acquiror’s expense, reasonable access to the Archived Files relating to the
Companies or the Transferred Subsidiaries during normal business hours, to the
extent that such Archived Files have not been disposed according to this
Section 5.03.

Section 5.04. Confidentiality.

(a) The confidentiality provisions of the confidentiality agreement, dated
November 25, 2008, between the Parent and Prudential Financial, Inc. (the
“Confidentiality Agreement”) are incorporated into this Agreement by reference
and shall continue in full force and effect until the Closing (notwithstanding
any prior expiration in accordance with their terms that would otherwise occur),
at which time the Confidentiality Agreement shall terminate and become void with
no liability on the part of any party thereto except for liabilities that arose
prior to the Closing. If, for any reason, the transactions contemplated by this
Agreement are not consummated, the Confidentiality Agreement shall nonetheless
continue in full force and effect in accordance with its terms.

(b) From and after the Closing, the Parent and its Affiliates, on the one hand,
and the Acquiror and its Affiliates, on the other hand, shall, and shall cause
their respective Affiliates and Representatives to, maintain in confidence, and
not use or exploit for any purpose other than in connection with fulfilling
their respective obligations under the Transaction Agreements, any written, oral
or other information relating to or obtained from the other party or its
Affiliates, or in the case of the Parent and its Affiliates, all confidential
documents and information concerning the Companies, the Transferred Subsidiaries
and the Business (the “Other Party’s Confidential Information”), except to the
extent that (i) any such Other Party’s Confidential Information is or becomes
generally available to the public other than (A) in the case of information
relating to the Companies or the Transferred Subsidiaries or relating to or
obtained from the Acquiror, its Affiliates or any of their respective
Representatives, as a result of disclosure by the Parent, its Affiliates or any
of their respective Representatives of such information and (B) in the case of
information relating to or obtained from the Parent, its Affiliates or any of
their respective Representatives, as a result of disclosure by the Acquiror or
any of its Affiliates or any of their respective Representatives of such
information, (ii) the Parent or any of its Affiliates, on the one hand, or the
Acquiror or any of its Affiliates, on the other hand, is, upon the advice of
legal counsel, legally compelled to disclose any such Other Party’s

 

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Confidential Information (including any report, statement, testimony or other
submission to a Governmental Authority) pursuant to applicable Law or any
Governmental Order, or by such Governmental Authority, after prior written
notice has been given to the Parent, in the case of compelled disclosure by the
Acquiror or any of its Affiliates, or to the Acquiror, in the case of compelled
disclosure by the Parent or any of its Affiliates, provided that no such notice
is required if prohibited by applicable Law, (iii) any such Other Party’s
Confidential Information is reasonably necessary to be disclosed in connection
with any Action, or in any dispute, with respect to the Transaction Agreements
(including in response to any summons, subpoena or other legal process or formal
or informal investigative demand issued to the disclosing party in the course of
any Action, investigation or administrative proceeding), (iv) any such Other
Party’s Confidential Information was or becomes available to such party on a
non-confidential basis and from a source (other than a party hereto or any
Affiliate or Representative of such party) that is not bound by a
confidentiality agreement with respect to such Other Party’s Confidential
Information or (v) after the Closing any such Other Party’s Confidential
Information becomes known or available pursuant to or as a result of the
carrying out of the provisions of any Ancillary Agreement (which information
shall be governed by the confidentiality provisions set forth in such Ancillary
Agreement). In the event that the Parent or any of its Affiliates, on the one
hand, or the Acquiror or any of its Affiliates, on the other hand, becomes
legally compelled to disclose any such Other Party’s Confidential Information,
the Acquiror, and the Parent, as the case may be, as the disclosing party, shall
cooperate with the party whose information is being disclosed (at such
disclosing party’s expense) to obtain a protective order or similar remedy to
cause such Other Party’s Confidential Information not to be disclosed, including
interposing all available objections thereto, such as objections based on
settlement privilege. In the event that such protective order or other similar
remedy is not obtained, the disclosing party shall furnish only that portion of
such Other Party’s Confidential Information that has been legally compelled, and
shall exercise its commercially reasonable efforts to obtain assurance that
confidential treatment will be accorded such disclosed information. Each of the
Acquiror and the Parent shall, and shall cause their respective Affiliates to,
protect such Other Party’s Confidential Information by using the same degree of
care, but no less than a reasonable degree of care, to prevent the unauthorized
disclosure of such Other Party’s Confidential Information as the Acquiror or the
Parent, as the case may be, used to protect its own confidential information
prior to the date hereof. For the avoidance of doubt, neither the Acquiror nor
any of its Affiliates shall have any obligation to maintain the confidentiality
of any information about the Companies or any of the Transferred Subsidiaries
after the Closing. Each of the parties hereto shall instruct its Affiliates and
Representatives having access to such information of such obligation of
confidentiality. For the avoidance of doubt, the parties may disclose
information about the tax treatment and tax structure of the transactions
contemplated by this Agreement (including any facts or materials relating
thereto or reasonably necessary to understand such treatment or structure).

(c) Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge and agree that the Parent, and its Representatives may,
without notifying the Acquiror or any other Person, share any information
relating to or obtained from any of the Acquiror or its Affiliates with
(i) subject to the terms and conditions of the Nondisclosure Agreement, dated
September 25, 2008, between the FRBNY and the Parent (the “FRBNY NDA”) as in
effect on the date hereof, the FRBNY and its Representatives, (ii) the U.S.
Treasury

 

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and its Representatives and (iii) the Board of Governors of the Federal Reserve
System and its Representatives (the Persons identified in clauses (i), (ii) and
(iii) collectively, the “Government Recipients”), in each case as the Parent
deems may be reasonably necessary or advisable in its good faith judgment;
provided, that the Parent shall, to the extent permitted under applicable Law,
request confidential treatment of any of the information included therein and
shall exercise its reasonable best efforts to enforce the FRBNY NDA with respect
to any such information that the Parent may disclose to the FRBNY; provided,
further, that this provision shall not apply to any information regarding Taxes,
or any matters relating to Taxes, other than with respect to the tax treatment
or tax structure of the transactions contemplated by this Agreement. The Parent
shall promptly notify the Acquiror in the event the Parent learns that any
Government Recipient has been requested or required to disclose any such
information or has taken any action that, if taken by the Parent, would be
deemed a breach of this Section 5.04.

Section 5.05. Regulatory and Other Authorizations; Reasonable Best Efforts.

(a) Each of the Acquiror and the Parent shall use its reasonable best efforts to
obtain as promptly as reasonably practicable any Governmental Approvals that are
necessary, proper or advisable (whether so necessary, proper or advisable prior
to, at or after the Closing) under the Transaction Agreements and applicable Law
to consummate and make effective the transactions contemplated by the
Transaction Agreements. Each of the Acquiror and the Parent shall cooperate with
the reasonable requests of each other in seeking to obtain as promptly as
reasonably practicable all such Governmental Approvals. Neither the Acquiror nor
the Parent shall take or cause to be taken any action that would reasonably be
expected to have the effect of materially delaying, impairing or impeding the
receipt of any such required Governmental Approval.

(b) Without limiting the generality of Section 5.05(a), the Acquiror and the
Parent shall each as promptly as reasonably practicable make all filings and
notifications with all Governmental Authorities that are necessary, proper or
advisable (whether so necessary, proper or advisable prior to, at or after the
Closing) under the Transaction Agreements and applicable Law to consummate and
make effective the transactions contemplated by the Transaction Agreements,
including (i) filing change of control applications or disclaimers of control,
as appropriate, with applicable Governmental Authorities in each jurisdiction
where required by applicable Law with respect to the transactions contemplated
by the Transaction Agreements (which may include, in the case of the Acquiror, a
filing with the FSA to permit the Acquiror (or a Designated Acquiror) to become
either (A) a “major shareholder” of each of the Insurance Companies, or (B) an
“insurance holding company,” in each case as such term is defined in the
Insurance Business Law), (ii) filing market share notifications in each
jurisdiction where required by applicable Insurance Law, and (iii) making any
filing that is necessary, proper or advisable (whether so necessary, proper or
advisable prior to, at or after the Closing) under any antitrust, competition,
privacy, data protection, insurance or other regulatory Law or by any
Governmental Authority with jurisdiction over enforcement of any applicable
antitrust, competition, privacy, data protection, insurance or other regulatory
Laws (including “prior consultation” with the Fair Trade Commission of Japan).
Each such party shall supply promptly any additional information and documentary
material that may be requested pursuant to any applicable Law in connection with
the filings referred to in this Section 5.05, and to seek early termination of
any applicable waiting periods thereunder. The Parent (or its Affiliates), on
the one hand, and the Acquiror (or its Affiliates), on the other hand, shall
share equally the filing fees associated with any required filings.

 

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(c) Subject to the terms and conditions set forth in this Agreement, without
limiting the generality of the other undertakings pursuant to this Section 5.05,
each of the Parent, on the one hand, and the Acquiror, on the other hand, shall
take or cause to be taken the following actions: (i) the prompt provision to a
Governmental Authority of non-privileged information, documents or testimony
requested by such Governmental Authority or that are necessary, proper or
advisable to permit consummation of the transactions contemplated by the
Transaction Agreements; (ii) the prompt use of its reasonable best efforts to
oppose any Action relating to the Transaction Agreements or the transactions
contemplated thereby in order to avoid the entry of or to effect the dissolution
of any permanent, preliminary or temporary injunction or other order, decree,
decision, determination or judgment that would delay, restrain, prevent, enjoin
or otherwise prohibit consummation of the transactions contemplated by the
Transaction Agreements, including (A) use of its reasonable best efforts to
defend through litigation on the merits of any claim asserted in any court,
agency or other proceeding by any Person, including any Governmental Authority,
seeking to delay, restrain, prevent, enjoin or otherwise prohibit consummation
of such transactions and (B) enter into an agreement with any Governmental
Authority by the Acquiror to sell, lease, license or otherwise dispose of or
hold separate pending such disposition, and promptly to effect the sale, lease,
license, disposal and holding separate of, such assets, rights, product lines,
licenses, categories of assets or businesses or other operations or interests
therein of any of the Companies or the Acquiror or their respective Subsidiaries
to the extent such agreement is required by any Governmental Authority in order
to consummate the transactions contemplated by the Transaction Agreements in
accordance with the terms of the Transaction Agreements; and (iii) the prompt
use of its reasonable best efforts to take, in the event that any permanent,
preliminary or temporary injunction, decision, order, judgment, determination or
decree is entered or issued or becomes reasonably foreseeable to be entered or
issued in any proceeding or inquiry of any kind that would make consummation of
the transactions contemplated by the Transaction Agreements in accordance with
the terms of the Transaction Agreements unlawful or that would delay, restrain,
prevent, enjoin or otherwise prohibit consummation of the transactions
contemplated by the Transaction Agreements, any and all steps (including the
appeal thereof, the posting of a bond or the taking of the steps contemplated by
clause (ii) of this Section 5.05(c)) reasonably necessary to resist, vacate,
modify, reverse, suspend, prevent, eliminate or remove such actual, anticipated
or threatened injunction, decision, order, judgment, determination or decree so
as to permit such consummation on a schedule as close as possible to that
contemplated by the Transaction Agreements; provided, however, in no event shall
the Acquiror or any of its Affiliates be required under this Section 5.05 to
commence, threaten or otherwise seek to commence any claim, action, suit,
arbitration or proceeding against any Governmental Authority listed on
Section 5.05(c) of the Acquiror Disclosure Letter. Notwithstanding anything to
the contrary in this Agreement, none of the Acquiror, any Designated Acquiror,
any of the Sellers, the Parent, any of the Companies or any of the Transferred
Subsidiaries shall be required to take any action under this Section 5.05(c)
pursuant to, or otherwise agree to or accept, any condition or restriction
(A) that would not customarily be imposed in transactions of the type
contemplated by the Transaction Agreements, (B) that is not conditioned on the
consummation of the transactions contemplated by the Transaction Agreements in
accordance with the terms of the Transaction

 

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Agreements, (C) that requires the taking of any action, including an amendment
of any Transaction Agreement or the sale, lease, license, disposal or holding
separate by any of the Companies or any of the Transferred Subsidiaries of any
assets, rights, product lines, licenses, categories of assets or business or
other operations or interests therein that would materially adversely affect the
economic benefits reasonably expected to be derived by the Acquiror, and the
Parent, under the Transaction Agreements or in connection with the consummation
of the transactions contemplated thereunder; provided that, in the event that a
Governmental Authority requires that the terms of the Transaction Agreements be
changed or altered in a manner that adversely affects any such benefits
reasonably expected to be derived thereunder, each of the Acquiror and the
Parent shall use its reasonable best efforts and cooperate and negotiate in good
faith to agree to alternative terms to the Transaction Agreements that are
acceptable to such Governmental Authority and provide benefits substantially
similar to the benefits provided under the original terms thereof, (D) that
materially adversely affect the ability of the Acquiror and its Subsidiaries
(other than the Companies and the Transferred Subsidiaries), taken as a whole,
the Companies and the Transferred Subsidiaries, taken as a whole, or the Parent
and its Subsidiaries, taken as a whole, as the case may be, to conduct its
business in the same manner as such business is being conducted, including by
requiring the sale, lease, license, disposal or holding separate of any assets,
rights, product lines, licenses, categories of assets or business or other
operations or interests therein, if such sale, lease, license, disposal or
holding separate would materially adversely affect such ability to conduct such
business in the manner as such business is currently being conducted or (E) that
would otherwise have a Material Adverse Effect or would reasonably be expected
to have, directly or indirectly, a material adverse effect on the business,
operations (including results of operations), assets, liabilities, properties or
condition (financial or otherwise) of Prudential Financial, Inc. and its
subsidiaries taken as a whole, as applicable (the conditions or restrictions
described in clauses (A), (B), (C), (D) and (E) above, the “Negative Conditions
or Restrictions”).

(d) Subject to applicable Law relating to the sharing of information, each of
the Parent, on the one hand, and the Acquiror, on the other hand, shall
(i) promptly notify each other of any communication it or any of its Affiliates
receives from any Governmental Authority, (ii) permit the other parties to
review, in advance to the extent practicable, any material proposed
communication by such party or any of its Affiliates to any Governmental
Authority, (iii) consult with the other parties in connection with any such
proposed communication to the extent practicable and (iv) provide each other
with copies of all material correspondence, filings or communications between
such party or any of its Affiliates or Representatives, on the one hand, and any
Governmental Authority or members of the staff of any Governmental Authority, on
the other hand, in each case to the extent relating to the matters that are the
subject of this Agreement. None of the Acquiror, the Parent, any of the Sellers,
any of the Companies, any of the Transferred Subsidiaries or any of their
respective Affiliates or Representatives shall agree to participate in any
meeting with any Governmental Authority relating to the matters that are the
subject of this Agreement unless it consults with the other parties in advance
and, to the extent permitted by such Governmental Authority or otherwise
practicable, gives the other parties the opportunity to attend and participate
at such meeting. Subject to the Confidentiality Agreement and to this
Section 5.05(d), the Parent and the Acquiror shall coordinate and cooperate
fully with each other in exchanging such information and providing such
assistance as the other parties may reasonably request in connection with the
foregoing; provided, however, that the foregoing shall

 

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not require the Acquiror, the Parent, any of the Sellers, any of the Companies,
any of the Transferred Subsidiaries or any of their respective Affiliates or
Representatives (i) to disclose any information that in the reasonable judgment
of the Acquiror, the Parent, any of the Sellers, any of the Companies, any of
the Transferred Subsidiaries or any of their respective Affiliates (as the case
may be) would result in the disclosure of any Trade Secrets of third parties or
violate any of its obligations with respect to confidentiality or privacy or
(ii) to disclose any privileged information or confidential competitive
information of the Acquiror, the Parent, any of the Sellers, any of the
Companies, any of the Transferred Subsidiaries or any of their respective
Affiliates (as the case may be); and provided, further, that the parties’
obligations to notify the other parties with respect to communications received
from a Tax Authority, as well as the rights and obligations of the parties
hereto with respect to any matter related to Taxes, shall be governed solely by
ARTICLE VII; and provided, further, that none of the parties shall be required
to comply with any provision of this Section 5.05(d) to the extent that such
compliance would be prohibited by applicable Law. Notwithstanding anything to
the contrary in this Agreement, any materials or information may be withheld or
redacted to the extent that they are protected by professional privilege rules
(including attorney-client privilege) or as necessary to comply with contractual
arrangements or applicable Law.

(e) The Acquiror and the Parent shall each use their reasonable best efforts to
timely obtain any approval, consent, license, sublicense, permit, waiver, order,
qualification or authorization with respect to (i) any Material Contracts,
Reinsurance Contracts, Broker Contracts, Real Estate Venture Documents, Loan
Interest Documents and the Contracts set forth on Section 5.05(e)(i) of the
Seller Disclosure Letter (collectively, the “Specified Contracts”) as a result
of such Specified Contracts containing a “change in control” or other similar
provision or (ii) any Contracts between the Parent or any of its Affiliates
(including the Companies and the Transferred Subsidiaries) and a third party,
required for the provision, under the Transition Services Agreement, of Services
or access to Facilities (each, a “Third Party Consent”), in each case, with the
other party’s participation and cooperation; provided, however, that the Parent
may request the Acquiror’s consent not to seek a required approval, consent,
license, sublicense, permit, waiver, order, qualification or authorization with
respect to any Specified Contract, such consent not to be unreasonably withheld.
The Parent, on the one hand, and the Acquiror, on the other hand, shall pay the
costs of all Third Party Consents and any “kill fees” or other penalties
(including penalties for unused minimum volume commitments) in connection with
procuring any such Third Party Consent in equal proportions. In the event that
the Parent cannot obtain any Third Party Consent prior to Closing, the Parent
and the Acquiror (A) shall, with respect to Contracts contemplated by clauses
(i) or (ii) above to which the Parent or any of its Affiliates (other than the
Companies and the Transferred Subsidiaries) is a party, use their reasonable
best efforts to provide or cause to be provided to the other party or parties or
its or their Affiliates, as the case may be, the benefits, and the costs and
expenses, of any such Contract, for not longer than the remainder of the term of
such Contract, to the extent permitted thereunder and (B) shall use reasonable
best efforts to secure, and with respect to any Contracts for which a Third
Party Consent is required to provide Services and access to Facilities under the
Transition Services Agreement or to prevent termination of such Contract by a
third party, shall secure, an alternative arrangement designed to reasonably
provide, where necessary, the operational equivalents of the Intellectual
Property, products, services or benefits provided pursuant to such Contract, for
not longer than the remainder of the term of such Contract, for which the Third

 

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Party Consent was not obtained, provided, that the present value of the costs
and expenses of such provision of benefits or alternative arrangement (other
than attorney’s fees or fees for consultants advising on such alternative
arrangement) in excess of the costs and expenses that would have been incurred
pursuant to such Contract had such Third Party Consent been obtained at no cost,
shall be borne by the Acquiror, on the one hand, and the Parent, on the other
hand, in equal proportion; provided, further, that if the alternative
arrangement provides for the Contract to be provided for a longer period of time
than would have been provided for if the Third Party Consent had been obtained,
the Acquiror shall be solely responsible for the costs not reasonably
attributable to the term of service under the original Contract had the Third
Party Consent been obtained. In no event shall the Parent be required to
commence, or threaten or otherwise seek to commence, any claim, action, suit,
arbitration or proceeding to obtain any Third Party Consent. For the avoidance
of doubt, (1) the terms “approval,” “consent,” “license,” “sublicense,”
“permit,” “waiver,” “order,” “qualification” or “authorization” when used in
this Section 5.05(e) shall in no way be construed to mean an “approval,”
“consent,” “license,” “sublicense,” “permit,” “waiver,” “order,” “qualification”
or “authorization” from a Governmental Authority except to the extent such
Governmental Authority is a counterparty to any third party Contract with the
Acquiror, the Parent or any of their respective Affiliates and (2) the provision
of benefits or alternative arrangements may include assignment of a Contract or
portion of a Contract if such Contract or portion of such Contract is solely
related to the Business and such assignment would not prevent the Acquiror, the
Parent or their respective Affiliates from performing their obligations under
any Transaction Agreement.

Section 5.06. Insurance.

(a) From and after the Closing Date, the Companies and the Transferred
Subsidiaries shall cease to be insured by the Parent’s, or its Affiliates’
(other than the Companies’ and the Transferred Subsidiaries’) (as the case may
be) blanket insurance policies or by any of their self-insured programs in place
to the extent such insurance policies or programs cover any of the Companies or
any of the Transferred Subsidiaries. From and after the Closing Date, if any of
the Companies or any of the Transferred Subsidiaries reports a claim solely
arising out of its operations covered by the Parent’s, or its Affiliates’
insurance policies, the Companies, the Transferred Subsidiaries or the Acquiror
will fully satisfy the deductible or retention applicable to such claim.

(b) With respect to events or circumstances relating to the Companies or the
Transferred Subsidiaries that occurred or existed prior to the Closing Date that
are covered by occurrence-based third party liability insurance policies of the
Parent or its Affiliates (other than the Companies and the Transferred
Subsidiaries) and any third party workers’ compensation insurance policies or
comparable workers’ compensation self-insurance programs sponsored by the Parent
or its Affiliates and that apply to the locations at which the Companies and the
Transferred Subsidiaries operate their respective businesses, the Acquiror may,
and may cause the Companies and the Transferred Subsidiaries to make claims
under such policies and programs; provided, however, that by making any such
claims, the Acquiror agrees to reimburse the Parent, in cash, for any increased
costs incurred by the Parent, or its Affiliates as a result of such claims,
including any retroactive or prospective premium adjustments associated with
such coverage, as such amounts are determined in accordance with those policies
and programs generally applicable from time to time to the Parent or its
Affiliates; and provided, further, that

 

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neither the Acquiror nor any of its Affiliates shall make any such claims if,
and to the extent that, such claims are covered by insurance policies issued or
sponsored by the Acquiror or its Affiliates. As of the third anniversary of the
date hereof, the Acquiror shall no longer be permitted to report claims with
respect to such occurrence-based third party liability insurance policies of the
Parent or its Affiliates or to any such workers’ compensation insurance policies
or comparable workers’ compensation self-insurance programs that apply to the
locations at which the Companies and the Transferred Subsidiaries operate their
respective businesses, and the Acquiror shall assume full responsibility for,
and release the Parent and its Affiliates from, all liability for such claims,
known or unknown, resulting from occurrences prior to the Closing Date, other
than any Losses with respect to which any Acquiror Indemnified Party is entitled
to recovery under any Transaction Agreement.

Section 5.07. Intercompany Obligations and Arrangements.

(a) The Parent shall, and shall cause its Affiliates to, take such actions and
make such payments so that prior to the Closing Date, the Companies and the
Transferred Subsidiaries, on the one hand, and the Parent and its Affiliates
(other than the Companies and the Transferred Subsidiaries), on the other hand,
shall settle, discharge, offset, pay, repay in full, terminate, commute or
extinguish all outstanding intercompany receivables and payables (other than any
principal or interest owed under the Bridge Loan), including any accrued and
unpaid interest to but excluding the date of payment; provided, however, that
this Section 5.07(a) shall not apply to any intercompany receivables or payables
(i) arising under any Intercompany Agreement set forth on Section 5.07(b) of the
Seller Disclosure Letter, or (ii) arising under any Insurance Agreement. To the
extent that the amount of any intercompany receivable or payable cannot be
settled, discharged, offset, paid, repaid in full, terminated, commuted or
extinguished concurrently with the Closing in accordance with the preceding
sentence (whether as a result of contractual or legal restrictions or
otherwise), such amount (plus any accrued and unpaid interest) shall be paid in
full following the Closing by, as the case may be, the Companies and the
Transferred Subsidiaries, on the one hand, and the Parent and its Affiliates
(other than the Companies and the Transferred Subsidiaries), on the other hand,
within 10 days of receipt of an invoice detailing the amount due with respect to
such outstanding intercompany receivable or payable (but in no event later than
30 days after the Closing Date); provided such intercompany receivables or
payables are reflected in the Estimated Companies Solvency Capital Worksheet.
The Parent shall notify the Acquiror, at least five (5) Business Days prior to
Closing if the Parent becomes aware of any intercompany receivable or payable
that cannot be settled, discharged, offset, paid, repaid in full, terminated,
commuted or extinguished concurrently with the Closing.

(b) The Parent shall, and shall cause its Affiliates to, take such actions as
may be necessary to terminate or commute, effective on or prior to the Closing
Date, all Intercompany Agreements; provided, however, that this Section 5.07(b)
shall not apply to (i) any Intercompany Agreement set forth on Section 5.07(b)
of the Seller Disclosure Letter or (ii) any Insurance Agreement. For the
avoidance of doubt, this Section 5.07(b) shall not apply to (1) any Contract
between a third party, on the one hand, and the Parent or any of its Affiliates,
on the other hand, to which a Company or Transferred Subsidiary is not a party,
but under which a Company and/or a Transferred Subsidiary may otherwise derive
benefits, such as enterprise-wide licenses or “master” agreements, or (2) any
Contract among (x) a third party, (y) the Parent or any of its Affiliates, and
(z) any Company or any Transferred Subsidiary. All of such Contracts

 

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are governed exclusively by Section 5.05(e). If any Intercompany Agreement
provides that any term or condition survives its expiration or termination, this
Agreement hereby modifies and amends such Intercompany Agreement to cancel and
negate such survival; provided, however, that the foregoing shall not apply to
any term or condition that imposes confidentiality obligations. The parties
agree to cooperate in good faith to execute additional documents and take
further actions to accomplish the foregoing.

Section 5.08. Guarantees.

(a) Subject to Section 5.13, from and after the date of this Agreement, the
parties shall use their respective reasonable best efforts to obtain, on or
prior to the Closing, the termination of, and full release of the Parent, the
Sellers and any of their respective Affiliates (including the Companies and the
Transferred Subsidiaries) from any and all obligations arising under, any and
all guarantees, keepwells, letters of credit, indemnity or contribution
agreements, support agreements, insurance surety bonds or other similar
agreements (excluding Insurance Contracts) made in respect of the obligations
of, or for the benefit of any obligee of, (i) the Companies or the Transferred
Subsidiaries by the Parent, the Sellers or any of their respective Affiliates
(other than the Companies and the Transferred Subsidiaries) or (ii) the Parent,
the Sellers or any of their respective Affiliates (other than the Companies and
the Transferred Subsidiaries) by the Companies or the Transferred Subsidiaries
(each, a “Guaranty,” and each party obligated thereunder, a “Guarantor”), in
each case, as set forth in Section 5.08 of the Seller Disclosure Letter.

(b) With respect to the general guarantee agreement, dated as of August 29,
2003, made by American Home Assurance Company on behalf of Edison, the general
guarantee agreement dated as of August 20, 2003, made by Lexington Insurance
Company on behalf of Edison and any other Guaranty for which the parties do not
obtain termination and a full release of the Guarantor from any and all
obligations arising under such Guaranty, the Acquiror, or an Affiliate of the
Acquiror with the Parent’s consent, or the Parent, as applicable shall,
concurrently with the Closing, enter into a Hold Harmless Agreement with respect
to such Guaranty.

Section 5.09. Non Competition; Non Solicitation; No Hire.

(a) For a period beginning on the day following the Closing Date and ending on
the two year anniversary of the Closing Date (the “Restricted Period”), each
Parent Entity shall not, without the prior written consent of the Acquiror,
directly or indirectly, engage in the Restricted Business.

(b) Notwithstanding the restrictions set forth in Section 5.09(a), and without
implication that the following activities (or activities not listed below)
otherwise would be subject to the provisions of Section 5.09(a), nothing in
Section 5.09(a) shall preclude, prohibit or restrict or otherwise limit any
Parent Entity from engaging, or require the Parent to cause the Parent or any
Parent Entity not to engage, in any manner in any of the following:

(i) consummating the transactions or providing or receiving the services
contemplated by the Transaction Agreements;

 

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(ii) engaging in (A) the business of marketing, underwriting, issuing and
administering accident and health insurance products, “third sector” insurance
products, property and casualty insurance products, Simple Life Insurance
Products and Takaful products (“Non-Restricted Products”) and (B) any business
in any jurisdiction other than the Restricted Business in Japan;

(iii) engaging in any Restricted Business to the extent such Parent Entity does
so as of the date of this Agreement;

(iv) acquiring, holding investments or owning, directly or indirectly, any
voting stock, Capital Stock or any other equity interest (including convertible
securities) of any Person engaged in any Restricted Business, which ownership
interest represents at all times not more than 10% of the aggregate voting power
or outstanding Capital Stock or other equity interests of such Person; provided,
that such percentage shall be not more than 25% if such ownership interest is
acquired by any Parent Entity as consideration for the disposition of any Parent
Entity; and provided, further that such acquisition or ownership is and remains
during the Non-Compete Period solely for investment purposes;

(v) engaging directly or indirectly in any Restricted Business by acquiring,
holding investments or owning, directly or indirectly, Capital Stock or any
other equity interest (including convertible securities) of FFM or TDH;

(vi) entering into alliances or joint ventures that engage in a Restricted
Business so long as the GAAP pre-tax operating income derived by the activities,
services or businesses contributed by a Parent Entity and the other party or
parties to such alliance or joint venture attributable to the portion of the
Restricted Business constituted less than 10% of the consolidated GAAP pre-tax
operating income (excluding any effects attributable to short-term and
extraordinary events) of such activities, services or businesses contributed by
a Parent Entity and the other party or parties to such alliance or joint venture
(or, in the event that such Acquired Entity is not a separate Person, the
consolidated GAAP pre-tax operating income attributable to the assets and
liabilities used in connection with the Restricted Business constituted less
than 10% of the consolidated GAAP pre-tax operating income (excluding any
effects attributable to short-term and extraordinary events) attributable to the
assets and liabilities transferred as part of such Acquisition Transaction);

(vii) entering into alliances or joint ventures involving the distribution of
Non-Restricted Products through the distribution platform of a Person that
engages in Restricted Business or the distribution of products of such other
Person through the distribution platform of a Parent Entity;

(viii) if it is a Covered Business that has completed a Spin-Off Transaction,
engaging in any business in any jurisdiction;

(ix) managing, controlling, advising or providing administrative or similar
services to general or separate accounts of insurance companies, investment
funds

 

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or other investment vehicles or any employee benefit plan or trust of any Parent
Entity that makes investments in Persons engaging in a Restricted Business, so
long as such investments are in the Ordinary Course of Business of such fund,
vehicle, plan or trust;

(x) providing investment management, investment advisory, administrative or
similar services to any Person; and

(xi) selling, distributing, marketing, underwriting or otherwise providing any
products or services in the Ordinary Course of Business to a Person engaged in a
Restricted Business.

(c) Notwithstanding anything to the contrary contained in this Section 5.09, the
covenant set forth in Section 5.09(a) shall not be breached by reason of a
Parent Entity entering into any agreement to acquire or acquiring, or after such
acquisition, owning and operating, in whole or in part, any Person or any asset
or business that, directly or indirectly, engages in any Restricted Business
(any such Person or business, an “Acquired Entity” and such transaction and any
related series of transactions, an “Acquisition Transaction”); provided, that
(x) the Parent provides to the Acquiror prompt written notice of the entry into
such agreement or the consummation of such Acquisition Transaction (whichever
first occurs), which notice shall identify the Acquired Entity and the
Restricted Business in which such Acquired Entity engages and (y) such Parent
Entity satisfies any one of the Acquisition Conditions set forth below. For
purposes of this Section 5.09(c), each of the following shall constitute an
“Acquisition Condition”:

(i) within 12 months after the closing or effective date (the “Transaction
Date”) of such Acquisition Transaction, the Restricted Business (or the assets
used in connection therewith) of such Acquired Entity are disposed of to a
Person that is not an Affiliate of any Parent Entity;

(ii) within 12 months after the Transaction Date of such Acquisition
Transaction, such Acquired Entity ceases to engage in the Restricted Business;
or

(iii) (A) a principal purpose of such Acquisition Transaction is not to
circumvent the restrictions contained in this Section 5.09; (B) during the four
most recently completed full quarters preceding the Transaction Date, the GAAP
pre-tax operating income derived by such Acquired Entity from the Restricted
Business constituted less than 20% of the consolidated GAAP pre-tax operating
income (excluding any effects attributable to short-term and extraordinary
events) of such Acquired Entity (or, in the event that such Acquired Entity is
not a separate Person, the consolidated GAAP pre-tax operating income
attributable to the assets and liabilities used in connection with the
Restricted Business constituted less than 20% of the consolidated GAAP pre-tax
operating income (excluding any effects attributable to short-term and
extraordinary events) attributable to the assets and liabilities transferred as
part of such Acquisition Transaction); and (C) from and after the Transaction
Date of such Acquisition Transaction, the Parent Entities (other than the
Acquired Entity to the extent set forth in this Section 5.09(c)(iii)) remain
subject to this Section 5.09.

 

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(d) Notwithstanding anything to the contrary contained in this Section 5.09, the
covenant set forth in Section 5.09(a) shall not be breached by reason of any of
the following:

(i) any Person engaged in the Restricted Business agreeing to hold or holding,
or agreeing to acquire or acquiring, directly or indirectly, voting securities
of the Parent, whether by means of a stock purchase, merger, consolidation,
tender offer or otherwise (such Person, an “Acquiring Entity” and such
transaction, a “Change of Control Transaction”);

(ii) following a Spin-Off Transaction, any Person engaged in the Restricted
Business agreeing to acquire or acquiring, directly or indirectly, voting
securities of the Covered Business that is the subject of such Spin-Off
Transaction, whether by means of a stock purchase, merger, consolidation, tender
offer or otherwise (such Person, an “Acquiring Entity” and such transaction, a
“Spin-Off Change of Control Transaction”); or

(iii) if a Spin-Off Transaction shall not have occurred, any Person engaged in
the Restricted Business agreeing to acquire or acquiring, directly or
indirectly, all or a material portion of any Covered Business from the Parent or
one of its Affiliates, whether by means of a stock or asset purchase, merger,
consolidation, reinsurance transaction, tender offer or otherwise (such Person,
an “Acquiring Entity” and such transaction, which for the avoidance of doubt
shall not include a Spin-Off Transaction, a “Covered Business Sale”);

provided, that, in each case, the Parent or the Covered Business, as applicable,
provides to the Acquiror prompt written notice of the entry into such agreement
or the consummation of such Change of Control/Sale Transaction (whichever first
occurs), which notice shall identify the Acquiring Entity and the Restricted
Business in which such Acquiring Entity engages.

(e) During the Restricted Period, the Parent shall not, and shall cause the
other Parent Entities not to, without the prior written consent of the Acquiror,
directly or indirectly, solicit for employment, employ or retain the services of
(i) any employee of the Company or any Transferred Subsidiary, (ii) any employee
of the Acquiror or any of its Affiliates whose primary job duties consist of
transition, migration, and integration of the Business, such employees to be
designated in writing by the Acquiror prior to the Closing Date and consented to
by the Parent (which consent shall not be unreasonably withheld), (iii) any
former employee of any Company or any Transferred Subsidiary who, from or after
the Closing Date, voluntarily terminated his or her employment with such Company
or Transferred Subsidiary or whose employment is terminated for material
misconduct or failure to substantially perform his or her duties for a period of
six months following such termination or (iv) any employee of the Parent or any
of its Affiliates who is required to be transferred to one of the Companies or
one of the Transferred Subsidiaries pursuant to this Agreement, whether or not
such employee is so transferred; provided, however, that, except as otherwise
provided in clause (iii), the Parent and its Affiliates may employ or hire any
such Person who is terminated by any Company or any Transferred Subsidiary after
the Closing Date, provided, that notwithstanding anything to the contrary in
this Section 5.09(e), for any person covered by clause (iii), any restrictions
under this Section 5.09(e) shall lapse at the earlier of (A) the sixth month
anniversary of the termination or (B) the

 

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expiration of the Non-Compete Period, and provided further, however, that the
foregoing shall not prohibit (i) general solicitations (including by third party
recruiter contacts) or advertisements of employment (or hiring as a result
thereof) not specifically directed at such persons or (ii) solicitation of such
Employees who initiate discussions with any Parent Entity regarding such
employment with any Parent Entity without any direct or indirect solicitation by
any Parent Entity.

(f) During the Restricted Period, the Parent shall not, and shall cause the
other Parent Entities not to, without the prior written consent of the Acquiror,
directly or indirectly, on a targeted and systematic basis, solicit for
employment, employ or retain the services of any “tied agent” who is engaged by
any of the Companies or any of the Transferred Subsidiaries in Japan, other than
employment or retention for selling Non-Restricted Products.

(g) The parties hereto acknowledge that the covenants set forth in this
Section 5.09 are an essential element of this Agreement and that, but for these
covenants, the parties hereto would not have entered into this Agreement. The
parties hereto acknowledge that this Section 5.09 constitutes an independent
covenant and shall not be affected by performance or nonperformance of any other
provision of this Agreement or any other document contemplated by this
Agreement.

(h) It is the intention of the parties that the provisions of this Section 5.09
be enforced to the fullest extent permissible under the Laws and policies of
each jurisdiction in which enforcement may be sought, and that the
unenforceability (or the modification to conform to such Laws or policies) of
any provisions of this Section 5.09 shall not render unenforceable or impair the
remainder of the provisions of this Section 5.09. Accordingly, if at the time of
enforcement of any provision of this Section 5.09, a court of competent
jurisdiction holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographic area reasonable under such circumstances will be substituted
for the stated period, scope or geographical area and that such court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and geographical area permitted by Law.

(i) The Parent expressly acknowledges that the restrictive covenants set forth
in this Section 5.09, including the geographic scope and duration of such
covenants, are necessary in order to protect and maintain the proprietary
interests and other legitimate business interests of the Acquiror and its
Affiliates, and that any violation thereof could result in irreparable injury to
the Acquiror and its Affiliates that would not be readily ascertainable or
compensable in terms of money, and therefore the Acquiror and its Affiliates
shall be entitled to seek from any court of competent jurisdiction temporary,
preliminary and permanent injunctive relief as well as damages, which rights
shall be cumulative and in addition to any other rights or remedies to which it
may be entitled.

Section 5.10. D&O Liabilities.

(a) Effective upon the Closing Date, the Acquiror shall, on its own behalf and
on behalf of each of its Affiliates (including the Companies and the Transferred
Subsidiaries), irrevocably waive, release and discharge forever each former
director, statutory auditor and

 

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officer of the Companies and the Transferred Subsidiaries who resigned effective
immediately after the Closing from any and all liabilities and obligations to,
and agreements or understandings with, the Companies and Transferred
Subsidiaries (or any of their respective Affiliates) of any kind or nature
whatsoever, including in respect of rights of the Acquiror and its Affiliates
(including the Companies and the Transferred Subsidiaries) to receive
contribution or indemnification from such former officers, statutory auditors
and directors, in each case whether absolute or contingent, liquidated or
unliquidated, and whether arising hereunder or under any other agreement or
understanding or otherwise at Law or in equity, and the Acquiror hereby
covenants and agrees on its own behalf and on behalf of each of its Affiliates
(including the Companies and the Transferred Subsidiaries) that it will not seek
to recover any amounts in connection therewith or thereunder from any such
former director, statutory auditor or officer; provided, however, that the
Acquiror shall not, for itself or for any of its Affiliates (including the
Companies and the Transferred Subsidiaries), waive, release or discharge any
such director, statutory auditor or officer from, or covenant not to seek to
recover any amounts for, any liabilities or obligations, or agreements or
understandings, in each case, to the extent related to or arising from any
willful misconduct by such director, auditor or officer.

(b) After the Closing Date, the Acquiror agrees that it shall not, and shall
cause each of its Affiliates (including the Companies and the Transferred
Subsidiaries) not to, amend their organizational documents or other instruments
in a manner that would affect adversely in any material respect the rights of
any individual who served as a director, statutory auditor or officer of any
Company or Transferred Subsidiary at any time prior to the Closing Date (each, a
“D&O Indemnified Person”) to be indemnified, either under Japanese law or other
applicable Law, as those rights existed immediately prior to the Closing Date,
against any costs or expenses (including attorneys’ fees and expenses of
investigation, defense and ongoing monitoring) judgments, penalties, fines,
losses, charges, demands, actions, suits, proceedings, settlements, assessments,
deficiencies, Taxes, interest, obligations, damages, liabilities or amounts paid
in settlement incurred in connection with any claim, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Closing Date and relating to the fact
that the D&O Indemnified Person was a director, statutory auditor or officer of
any Company or Transferred Subsidiary, whether asserted or claimed prior to, at
or after the Closing Date; provided, however, that the Acquiror may cause any of
its Affiliates (including, following the Closing Date, the Companies and the
Transferred Subsidiaries) to effect such amendments to its articles of
incorporation and other organizational documents or instruments as are necessary
to conform the provisions thereof in respect of director and officer
indemnification, whether in their entirety or in part, to the Acquiror’s
director and officer indemnification standard as attached hereto as Exhibit H.

Section 5.11. Mutual Release.

(a) Effective as of the Closing, the Parent, for itself and on behalf of its
Affiliates, and its and their successors, heirs and executors (each, a “Parent
Releasor”), hereby irrevocably, knowingly and voluntarily releases, discharges
and forever waives and relinquishes all claims, demands, obligations,
liabilities, defenses, affirmative defenses, setoffs, counterclaims, actions,
and causes of action of whatever kind or nature, whether known or unknown, which
any Parent Releasor has, may have, or might have or may assert now or in the
future, against the Companies and the Transferred Subsidiaries and their
respective successors,

 

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assigns, officers, directors, partners and employees or any of their heirs or
executors (in each case in their capacity as such) (each, a “Company Releasee”),
arising out of, based upon or resulting from any Contract, transaction, event,
circumstance, action, failure to act, or occurrence of any sort or type, whether
known or unknown, and which occurred, existed, was taken or permitted prior to
the Closing; provided, however, that nothing contained in this Section 5.11(a)
shall release, waive, discharge, relinquish or otherwise affect the rights or
obligations of any Person to the extent related to or arising out of (i) any
intercompany receivable or payable as to which the Parent notifies the Acquiror
pursuant to the last sentence of Section 5.07(a), (ii) any Intercompany
Agreement set forth on Section 5.07(b) of the Seller Disclosure Letter,
(iii) any Insurance Agreement, (iv) any Guaranty to the extent not terminated
and fully released pursuant to Section 5.08, or (v) any other Contracts or any
other claims, demands, obligations, liabilities, defenses, affirmative defenses,
setoffs, counterclaims, actions and causes of action of whatever kind or nature
as set forth on Section 5.11(a) of the Seller Disclosure Letter. The foregoing
release shall not apply to any claim arising under the terms of any Transaction
Agreement or any claim alleging fraud or intentional misconduct. The Parent
shall, and shall cause each Parent Releasor to, refrain from, directly or
indirectly, asserting any claim or demand, or commencing, instituting or causing
to be commenced, any legal proceeding of any kind against any Company Releasee
based upon any matter released pursuant to this Section 5.11(a). The parties
hereby acknowledge and agree that (i) nothing in this Section 5.11(a) shall in
any way limit any Indemnified Party’s right to indemnification under ARTICLE X
and (ii) the execution of this Agreement shall not constitute an acknowledgment
of or an admission by any Parent Releasor or Company Releasee of the existence
of any such claims or of liability for any matter or precedent upon which any
liability may be asserted.

(b) Effective as of the Closing, the Acquiror, on behalf of the Companies and
the Transferred Subsidiaries, and their successors, heirs and executors (each,
an “Acquiror Releasor”), hereby irrevocably, knowingly and voluntarily releases,
discharges and forever waives and relinquishes all claims, demands, obligations,
liabilities, defenses, affirmative defenses, setoffs, counterclaims, actions,
and causes of action of whatever kind or nature, whether known or unknown, which
any Acquiror Releasor has, may have, or might have or may assert now or in the
future, against the Parent, the Sellers and their respective Affiliates and its
and their respective successors, assigns, officers, directors, partners and
employees or any of their heirs or executors (in each case in their capacity as
such) (each, a “Parent Releasee”), arising out of, based upon or resulting from
any Contract, transaction, event, circumstance, action, failure to act, or
occurrence of any sort or type, whether known or unknown, and which occurred,
existed, was taken or permitted prior to the Closing; provided, however, that
nothing contained in this Section 5.11(b) shall release, waive, discharge,
relinquish or otherwise affect the rights or obligations of any party to the
extent related to or arising out of (i) any intercompany receivable or payable
as to which the Parent notifies the Acquiror pursuant to the last sentence of
Section 5.07(a), (ii) any Intercompany Agreement set forth on Section 5.07(b) of
the Seller Disclosure Letter, (iii) any Insurance Agreement, (iv) any Guaranty
to the extent not terminated and fully released pursuant to Section 5.08, or
(v) any other Contracts or any other claims, demands, obligations, liabilities,
defenses, affirmative defenses, setoffs, counterclaims, actions and causes of
action of whatever kind or nature as set forth on Section 5.11(b) of the Seller
Disclosure Letter. The foregoing release shall not apply to any claim arising
under the terms of any Transaction Agreement or any claim alleging fraud or
intentional misconduct. The

 

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Acquiror shall, and shall cause each Acquiror Releasor to, refrain from,
directly or indirectly, asserting any claim or demand, or commencing,
instituting or causing to be commenced, any legal proceeding of any kind against
any Parent Releasee based upon any matter released pursuant to this
Section 5.11(b). The parties hereby acknowledge and agree that (i) nothing in
this Section 5.11(b) shall in any way limit any Indemnified Party’s rights to
indemnification under ARTICLE X and (ii) the execution of this Agreement shall
not constitute an acknowledgment of or an admission by any Acquiror Releasor or
Parent Releasee of the existence of any such claims or of liability for any
matter or precedent upon which any liability may be asserted.

Section 5.12. Certain Waivers. The parties agree that with respect to (a) each
Intercompany Agreement set forth in Section 5.07(b) of the Seller Disclosure
Letter and (b) each Insurance Agreement, each party, on behalf of itself and its
Affiliates (including the Companies and the Transferred Subsidiaries), hereby
waives any breach or default under such Intercompany Agreements or Insurance
Agreements, and any rights to terminate, accelerate or cancel under such
Intercompany Agreements or Insurance Agreements, arising out of or in connection
with any “change of control,” “change in control” or similar phrase or concept
as defined in such Intercompany Agreements or Insurance Agreements (A) of the
Companies or any Transferred Subsidiary pursuant to or as a result of the
consummation of the transactions contemplated by this Agreement and (B) of the
Parent’s Affiliates pursuant to or as a result of the transactions contemplated
by the Credit Agreement, dated as of September 22, 2008, between the Parent and
the FRBNY (as amended, modified or supplemented from time to time in accordance
with its terms).

Section 5.13. SMBC Loan

(a) From and after the date of this Agreement, the parties shall use their
respective commercially reasonable efforts to obtain, on or prior to the
Closing, the consent of Sumitomo Mitsui Banking Corporation (“SMBC”) under the
Syndicated Loan Agreement (the “Syndicated Loan Agreement”), dated as of
March 26, 2008, among AIGFAJ and SMBC, to (i) amend the Syndicated Loan
Agreement to substitute the Acquiror (or, with the SMBC’s consent, an Affiliate
of the Acquiror) for the Parent as Guarantor (as defined in the Syndicated Loan
Agreement), (ii) obtain the termination of, and full release of the Parent from,
the Parent’s obligations under the Guarantee of American International Group,
Inc., dated as of March 28, 2008 (the “SMBC Guarantee”), entered into in
connection with the Syndicated Loan Agreement, and (iii) waive any Default or
Event of Default (as defined under the Syndicated Loan Agreement) that has
arisen or would be expected to arise in connection with the execution of this
Agreement and/or the consummation of the transactions contemplated hereby. For
the avoidance of doubt, such efforts shall include an offer by the Acquiror to
execute a guarantee agreement to become effective as of the Closing on no less
favorable terms to the Acquiror than the SMBC Guarantee, but the Acquiror shall
not be obligated (A) to offer or to execute a guarantee agreement on terms less
favorable to the Acquiror than the terms of the SMBC Guarantee or (B) to make
any consent payment or other payment to SMBC or any of its Affiliates in
connection therewith.

(b) If the parties fail to obtain the consent of SMBC as set forth in
Section 5.13(a) on or before the date that is fifteen (15) Business Days prior
to Closing, (i) the

 

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Parent shall promptly cause AIGFAJ to notify SMBC that 100% of the principal
amount then outstanding under the Syndicated Loan Agreement will be prepaid on
the Closing Date, (ii) the Acquiror shall, or shall cause one of its Affiliates
to, prepay and discharge the Syndicated Loan Agreement concurrently with the
Closing, and (iii) the Syndicated Loan Amount shall be increased by the amount
of any break-funding fees or other fees or expenses required to be paid under
the Syndicated Loan Agreement. For the avoidance of doubt, AIGFAJ shall not, and
the Parent shall not permit AIGFAJ to, repay the principal amount outstanding
under the Syndicated Loan Agreement prior to Closing.

Section 5.14. Parent Cash Pool. Prior to the Closing Date, the Parent shall
cause the transfer of all of the funds of the Companies and the Transferred
Subsidiaries, including accrued and unpaid interest, out of the Parent Cash Pool
and into accounts controlled by the Companies and/or Transferred Subsidiaries,
as applicable.

Section 5.15. Further Action.

(a) As soon as practicable after the date hereof, the Parent shall (i) cause
AIGFAJ to make all filings and notifications that are necessary, desirable,
advisable or appropriate to amend its articles of incorporation in substantially
the form attached hereto as Exhibit I, which amendment provides that the
preferred shares A issued by AIGFAJ will not have voting rights and (ii) cause
Edison to make all filings and notifications that are necessary, desirable,
advisable or appropriate to (A) amend its articles of incorporation in
substantially the form attached hereto as Exhibit J, which amendment
(x) provides that the preferred shares H issued by Edison will have voting
rights (including rights to cast votes for directors of Edison), and will be
subordinated to the other preferred shares of Edison and (y) reflects a 4:1
share split of such preferred shares H and (B) redesignate the preferred shares
G of Edison owned by the Parent as the preferred shares H and cause a 4:1 share
split of the preferred shares H. For the avoidance of doubt, no such amendments
to the Edison articles of incorporation shall apply to the preferred shares G of
Edison owned by AIGFAJ. The Parent shall, and shall cause its Affiliates to, use
reasonable best efforts to cause the amendments to the articles of incorporation
of AIGFAJ and Edison, the redesignation and the share split referred to in
clauses (i) and (ii) above to become effective no later than thirty
(30) Business Days after the date hereof. The Parent shall furnish copies of the
amended articles of incorporation of AIGFAJ and Edison, certified copies of the
commercial registry and copies of the shareholders registries of AIGFAJ and
Edison, which reflect the amendments, redesignation and share split referred to
in clauses (i) and (ii) to the Acquiror as promptly as practicable after the
effective date thereof.

(b) If the amendments to the articles of incorporation of Edison referred to in
clause (ii) of Section 5.15(a) above do not become effective within thirty
(30) Business Days after the date hereof, the Parent shall, if requested by the
Acquiror, prepare in good faith and deliver to the Acquiror, not later than the
date that is approximately thirty (30) Business Days prior to the expected
Closing Date, a worksheet in the form attached as Section 2.04(b) of the Seller
Disclosure Letter, which sets forth the Parent’s good faith estimate, together
with explanatory notes and supporting calculations, of the Companies Solvency
Capital as of the last day of the immediately preceding month, which estimated
Companies Solvency Capital shall be calculated in accordance with the Solvency
Capital Calculation Methodology. For the avoidance of doubt, the calculation of
the Companies Solvency Capital pursuant this Section 5.15(b) shall not be
binding on either party for purposes of the purchase price adjustments
contemplated in Article II.

 

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(c) If the amendments to the articles of incorporation of Edison, the
redesignation and the share split referred to in clause (ii) of Section 5.15(a)
above do not become effective within thirty (30) Business Days after the date
hereof, during the five (5) Business Days immediately following the Parent’s
delivery of the calculation of the Companies Solvency Capital as contemplated
above, the Parent shall (i) permit the Acquiror and its Representatives to
review the preparer’s working papers and other supporting data used in such
calculation, (ii) make reasonably available the individuals in its employ
responsible for, and knowledgeable about the information used in, the
calculation of the Companies Solvency Capital in order to respond to the
reasonable inquiries of the Acquiror and (iii) otherwise cooperate in good faith
with the Acquiror and its Representatives.

(d) If the amendments to the articles of incorporation of Edison, the
redesignation and the share split referred to in clause (ii) of Section 5.15(a)
above do not become effective within thirty (30) Business Days after the date
hereof, no later than the date that is approximately twenty-five (25) Business
Days prior to the expected Closing Date, at the request of the Acquiror:

(i) the Parent shall cause its Affiliates to make all filings and notifications
that are necessary, desirable, advisable or appropriate so that, effective no
later than one (1) Business Day prior to the Closing Date, the Bridge Loan is
converted into common shares of AIGFAJ. If requested by the Acquiror, the Parent
shall, and shall cause its Affiliates to, use reasonable best efforts to cause
the Bridge Loan to be converted into common shares of AIGFAJ as described above
no later than one (1) Business Day prior to the Closing Date. The Parent shall
furnish a certified copy of the commercial registry and a copy of the
shareholders registry, reflecting the conversion of the Bridge Loan to the
Acquiror as promptly as practicable after the effective date thereof; and

(ii) the Parent and the Acquiror shall cooperate in good faith in order to cause
a capital contribution to be made to AIGFAJ or Edison, as reasonably determined
by the parties, in exchange for additional common shares of AIGFAJ or Edison, as
applicable. In the event of a direct capital contribution to Edison, the shares
of common stock of Edison issuable in connection therewith shall be issued to
the Parent or AIRCO. For the avoidance of doubt, nothing contained herein shall
be deemed to constitute a commitment by the Parent to make, or cause to be made,
any such capital contribution. In the event the Parent or one of its affiliates
(other than any of the Companies or any of the Transferred Subsidiaries) makes a
capital contribution pursuant to this Section 5.15(d)(ii), then the Acquiror
shall pay to Parent on the Closing Date an amount equal to the amount of such
contributed capital. For the avoidance of doubt, any capital contributed
pursuant to this Section 5.15(d)(ii) shall be excluded from the calculation of
the Companies Solvency Capital under Section 2.04(b) and Section 2.05.

(e) Any new preferred shares H of Edison issued in accordance with
Section 5.15(a) and any other shares of Capital Stock of AIGFAJ or Edison issued
pursuant to clauses (i)

 

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or (ii) of Section 5.15(d) shall be deemed to be “Shares” for purposes of this
Agreement and shall be included in the sale and purchase contemplated in Article
II hereof (without any increase to the Purchase Price other than the payment
provided in Section 5.15(d)(ii)), except to the extent any such shares of
Capital Stock are owned by one of the Companies or the Transferred Subsidiaries.
Prior to Closing, the parties shall amend Section 2.04(b) of the Seller
Disclosure Letter to reflect any changes resulting from any change in the
capitalization of AIGFAJ or Edison pursuant to Sections 5.01(a) or (d). If the
Bridge Loan is converted into common stock of AIGFAJ, the Bridge Loan Purchase
Price shall be reduced to $0.

(f) The Parent and the Acquiror (i) shall execute and deliver, or shall cause to
be executed and delivered, such documents and other papers and shall take, or
shall cause to be taken, such further actions as may be reasonably required to
carry out the provisions of the Transaction Agreements and give effect to the
transactions contemplated by the Transaction Agreements, (ii) shall refrain from
taking any actions that could reasonably be expected to impair, delay or impede
the Closing, and (iii) except as otherwise set forth in this Agreement,
including in Section 5.05(c), shall use their respective reasonable best efforts
to cause all the conditions to the obligations of the other party to consummate
the transactions contemplated by this Agreement to be met as soon as reasonably
practicable.

Section 5.16. Investment Assets.

(a) (i) From the date hereof through the Closing, the Parent shall deliver to
the Acquiror, on a weekly basis, a true, correct and complete list of all
purchases, acquisitions, commitments, derivatives, transactions, sales and
dispositions during the previous week of Investment Assets of any of the
Companies or any of the Transferred Subsidiaries and all investments and
reinvestments of income and proceeds in respect thereof (such purchases,
acquisitions, commitments, derivatives, transactions, sales, dispositions,
investments and reinvestment, the “Investment Asset Transactions”), including
the dates of each such Investment Asset Transaction and the book value or
amortized cost and market value of the associated Investment Asset, (ii) no
later than 30 days after the last day of each fiscal quarter prior to the
Closing, the Parent shall deliver to the Acquiror a true, correct and complete
list of the Investment Assets as of such quarter end date, and (iii) for the
five Business Days prior to the anticipated Closing Date, as reasonably
practicable, the Parent shall deliver to the Acquiror daily updates of the
Investment Asset Transactions. The Parent shall provide to the Acquiror, on a
periodic basis, the regular investment reports that are provided to the Chief
Investment Officer of any of the Companies or any of the Transferred
Subsidiaries.

(b) The Parent shall provide the Acquiror written notice of any Company’s or any
Transferred Subsidiary’s intention to effect an Investment Asset Transaction the
book value of which exceeds ¥3,010,000,000 per transaction or series of related
transactions, excluding (i) transactions relating to Investment Assets belonging
to one or more separate accounts of any Company or any Transferred Subsidiary or
(ii) an Investment Asset Transaction in Japanese government bonds that does not
exceed ¥5,000,000,000. The Parent shall, and shall cause the applicable Company
or Transferred Subsidiary to, at least five Business Days prior to effecting
such Investment Asset Transaction, (i) afford the Acquiror with a reasonable
opportunity to review the principal terms and relevant financial data relating
to such proposed transaction (or series of related Investment Asset
Transactions) and (ii) consider in good faith the views and

 

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comments of the Acquiror in connection with the proposed transaction (or series
of related transactions). Notwithstanding anything to the contrary in this
Agreement, including Section 5.01, but subject to the immediately following
sentence, the Parent shall cause the Companies and the Transferred Subsidiaries
not to purchase or otherwise acquire any of the Investment Assets listed on
Section 5.16(b)(i) of the Seller Disclosure Letter or enter into any derivative
transactions, swaps, caps, floors, options or other risk management arrangements
with any of the counterparties listed on Section 5.16(b)(ii) of the Seller
Disclosure Letter. For Investment Asset Transactions prohibited by the
immediately preceding sentence, to the extent Parent or the applicable Company
or Transferred Subsidiary provides written notice (by email with receipt
confirmed) to the Representative of the Acquiror designated as an observer
pursuant to Section 5.16(c), including the principal terms and relevant
financial data relating to a proposed transaction (or series of related
Investment Asset Transactions), Acquiror shall provide a written response within
the time periods specified in Section 5.16(b)(ii) of the Seller Disclosure
Letter following receipt of such written notice, either providing consent or
withholding consent for such Investment Asset Transaction (or series of related
Investment Asset Transactions), and failure by the Acquiror to respond in
writing to such request within such applicable time period shall be deemed
consent to the Investment Asset Transaction (or series of related Investment
Asset Transactions) for purposes of the immediately preceding sentence.

(c) Prior to the Closing, the Acquiror shall have the right to designate a
Representative as an observer. The observer shall have the right to (i) listen
via telephone to, but not speak during, any substantive meetings of the
investment committee of any of the Companies or any of the Transferred
Subsidiaries or any other similar body responsible for the investment policies
of any of the Companies or any of the Transferred Subsidiaries, (ii) have
reasonable access, during normal business hours, to the chief investment officer
(or other similar executive officer in charge of the investment activities of
any of the Companies or any of the Transferred Subsidiaries) and to other
employees of the Companies reporting to such chief investment or other similar
officer, provided that any access to such employees shall be subject to the
prior approval (not to be unreasonably withheld or delayed) and supervision of
such chief investment or other similar officer, (iii) listen via telephone to,
but not speak during, any substantive meetings at which division heads discuss
material decisions affecting the Companies and the Transferred Subsidiaries
regarding Investment Assets with the president, chief executive officer, or
other similar executive officer of any of the Companies or any of the
Transferred Subsidiaries (other than meetings of the board of directors of the
Companies and the Transferred Subsidiaries), and (iv) in addition to the reports
provided under Section 5.16(a), receive reasonable access to lists of Investment
Assets, Investment Asset Transactions, information concerning executed realized
gains and losses and cash flows and other investment activity reports (including
performance and risk analysis reports) generated by the Companies in the
Ordinary Course of Business; provided that the applicable Company or Transferred
Subsidiary may withhold any information and exclude such observer from any
meeting or portion thereof if access to such information or attendance at such
meeting could adversely affect the attorney-client privilege between any of the
Companies or any of the Transferred Subsidiaries and its counsel, result in
disclosure of Trade Secrets, or result in a violation of applicable Law. For the
avoidance of doubt, the Companies and the Transferred Subsidiaries shall have
sole discretion with respect to all Investment Asset Transactions, subject to
the limitations set forth on Section 5.16(b) of the Seller Disclosure Letter.
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Acquiror’s rights under Section 5.16(b), the observer’s rights under this
Section 5.16(c) are limited to the right to listen, take notes and, except with
respect to the observer’s rights in clauses (i) and (iii) above, ask questions.
Except as set forth in Section 5.16(b), the Acquiror’s rights under this
Section 5.16 shall not require the Companies or the Transferred Subsidiaries to
wait for or to solicit any opinions of the observer or the Acquiror on any
matter, action, non-action or decision whatsoever.

Section 5.17. Transitional Matters.

(a) The parties acknowledge and agree that between the date hereof and the
Closing, the Parent shall, and shall cause its Affiliates to, complete certain
actions for the operational and physical separation of the Companies and the
Transferred Subsidiaries from the Parent and its Affiliates (other than the
Companies and the Transferred Subsidiaries) set forth in Section 5.17(a) of the
Seller Disclosure Letter. Any internal costs or expenses or third-party
out-of-pocket costs or expenses incurred by the Parent or any of its Affiliates
in connection with the separation actions contemplated in this Section 5.17(a)
shall be borne by the Parent.

(b) Without limiting Section 5.02, promptly after the date of this Agreement,
the Parent and the Acquiror shall, and shall cause their relevant Affiliates to,
establish a team consisting of one senior manager from each of the Insurance
Companies, the Parent and the Acquiror or one of the Acquiror’s Affiliates (the
“Transition Services Management Team”). The purpose of such Transition Services
Management Team will be to coordinate transition activities (including the
separation actions contemplated in Section 5.17(a) and the migration activities
contemplated in Section 5.17(c)) between the date hereof and the Closing Date.
The Parent and the Acquiror shall cause such Transition Services Management Team
to be subject to confidentiality and other restrictions necessary or appropriate
to ensure compliance with all applicable Laws.

(c) (i) Following the date hereof, in furtherance of the provisions of
Section 5.02 and the transactions contemplated hereby, the Parent, the Companies
and the Transferred Subsidiaries shall use commercially reasonable efforts to
cooperate with the Acquiror, at the Acquiror’s request and direction, in
planning for the provision of Services and access to Facilities pursuant to the
Transition Services Agreement and planning for the migration and integration of
the Business (including the data, systems, operations and administration) and
their personnel to and into the Acquiror, in accordance with mutually acceptable
timetables, guidelines and procedures (which shall comply with applicable Law),
with such cooperation to include appointing the Transition Services Management
Team and each of the Parent, the Sellers and the service providers under the
Transition Services Agreement (collectively), the Companies and the Transferred
Subsidiaries (collectively) and the Acquiror: (A) establishing divestiture
planning committees as mutually agreed; (B) setting regular meetings of the
Transition Services Management Team and the divestiture planning committees;
(C) making available appropriate knowledgeable business, operations,
administration and technology personnel and any other personnel reasonably
needed for the planning for the provision of Services and access to Facilities
pursuant to the Transition Services Agreement and the planning for the migration
and integration of the Business; (D) developing detailed project plans and
budgets for the provision of Services and access to Facilities pursuant to the
Transition Services Agreement and the migration and integration of the Business;
and (E) dedicating commercially reasonable resources

 

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to accomplish the foregoing. With respect to the members of the Transition
Services Management Team appointed by the Parent and the Insurance Companies,
such members shall be Persons with sufficient knowledge and authority, inside
and outside Japan, to ensure that the appropriate personnel from the Parent, the
Sellers, the service providers under the Transition Services Agreement, the
Companies and the Transferred Subsidiaries, respectively, are assigned to the
appropriate divestiture planning committees to be involved in the foregoing. All
planning and cooperation contemplated by this Section 5.17(c) shall be conducted
in compliance with applicable Law (including antitrust and competition Law) and
with the intention to minimize disruption to the Business and the businesses of
the Parent, the Sellers, the Acquiror and their respective Affiliates.

(ii) During the period commencing on the date hereof and extending until the
Closing Date, the Parent shall, and shall cause its Affiliates to, use
commercially reasonable efforts to cooperate with the Acquiror, at the
Acquiror’s request and direction, to (A) perform any migration services
reasonably required in order to migrate such services or access to facilities as
were provided by or on behalf of the Parent or any of its Affiliates to any of
the Companies or any of the Transferred Subsidiaries prior to the Closing, but
that are not contemplated to be so provided under the Transition Services
Agreement from and after the Closing, and (B) perform any other migration
services as are mutually agreed to by the Parent and the Acquiror. The
applicable party shall provide, or cause to be provided, such migration services
as if they were Migration Services pursuant to the Transition Services
Agreement, as if such agreement were in effect as of the date hereof.

(iii) Each of the Parent and the Acquiror shall bear its own costs and expenses
incurred in connection with the planning and cooperation contemplated by this
Section 5.17(c), provided that the Acquiror shall reimburse the Parent for any
reasonable, necessary and adequately documented third-party out-of-pocket
expenses paid by the Parent or any of its affiliates to an unaffiliated Person
in connection with the planning or cooperation contemplated by this
Section 5.17(c) to the extent such expenses are incurred by the Parent or its
Affiliates with the prior written approval of the Acquiror.

(iv) (A) Prior to the Closing, the Parent shall, reasonably and in good faith,
propose to Acquiror an allocation of the existing Service Charges among the
Service Names set forth under the “Information Technology Infrastructure” and
“Information Service” Services provided by AIGKK, as set forth on Schedule 2.01
to the Transition Services Agreement (collectively, the “Sub-characterized
Services”). Absent objection from Acquiror, each Sub-characterized Service shall
be a separate Service under the Transition Services Agreement and Schedule 2.01
shall be amended accordingly. (B) If the Parent fails to submit such a proposal
to the Acquiror prior to Closing, the Acquiror may, reasonably and in good
faith, propose to the Parent an allocation of such Sub-characterized Service and
the monthly services charges related thereto, for each Sub-characterized
Service, and the Parent shall not unreasonably reject such proposal unless it is
not reasonable in relation to the Fully Burdened Costs of the Provider of such
Service (as those terms are defined in the Transition Services Agreement),
provided that, in the case of any such rejection, the Parent and the Acquiror
shall in good faith agree on a proposal that is reasonable in relation to such
Fully

 

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Burdened Costs. In each case of a proposal presented pursuant to clauses (A) or
(B), the Sub-characterized Service, and the allocated Service Charge associated
therewith, shall be reasonable in relation to (i) the nature of such
Sub-characterized Service and (ii) in the case of (A), the actual Fully Burdened
Costs of each Provider associated with its provision and, in the case of (B),
the definition of Fully Burdened Costs in the Transition Services Agreement. In
no event shall a proposal presented pursuant to clauses (A) or (B) propose an
aggregate amount of monthly service charges for the aggregate of the
Sub-characterized Services more than, or less than, the amount of aggregate
monthly Service Charges set forth in Schedule 2.01 to the Transition Services
Agreement with respect to such Sub-characterized Services.

(d) During the period commencing on the date hereof and extending until the
Closing Date, the Parent shall, and shall cause its Affiliates to, use
commercially reasonable efforts to cause all of the space identified in
Section 5.17(d) of the Seller Disclosure Letter (the “Dedicated Space”) to be
assigned to, or a new lease or sublease with respect to such Dedicated Space to
be entered into with, one of the Companies or the Transferred Subsidiaries,
subject to any applicable regulatory requirements and any consents that are
necessary for purposes of such assignment. If, prior to the Closing, such
Dedicated Space is assigned to one of the Companies or the Transferred
Subsidiaries, or an Affiliate of the Acquiror, or if one of the Companies or the
Transferred Subsidiaries or such Affiliate enters into a new lease or sublease
in relation to such Dedicated Space, to the extent that the service charges
under the Transition Services Agreement include any costs attributable to the
lease or sublease of such Dedicated Space, such service charges shall be reduced
accordingly.

(e) Prior to Closing, the Parent shall use commercially reasonable efforts to
cause AIGFAJ, Edison, Edison Service and AIRCO to enter into an amendment to the
agreement identified in Section 5.17(e)(i) of the Seller Disclosure Letter,
which amendment shall be in substantially the form set forth in
Section 5.17(e)(ii) of the Seller Disclosure Letter.

(f) During October 2010, the Parent and the Acquiror will cooperate in
reconciling any potential discrepancies in Schedule 2.01 to the Transition
Services Agreement, with respect to services provided by American International
Group K.K. to each of Edison and Star, as such services relate to any assets and
leases having an annual expenditure in excess of $5,000. If there are errors or
omissions with regard to such assets or leases that, in the aggregate, exceed
$50,000, the Parent and the Acquiror shall, in good faith, make appropriate
corresponding changes to the Services Charges (as that term is used in the
Transition Services Agreement) for such services.

(g) By no later than forty-five (45) days after the date hereof, the Acquiror
shall notify the Parent whether it does not need any transition service for
which the Initial Scheduled Term (as defined in the Transition Services
Agreement) is three (3) months. If the Acquiror provides such notice, such
service shall be deleted from Schedule 2.01 of the Transition Services Agreement
and the Parent need not provide to the Acquiror Entities (as defined in the
Transition Services Agreement) such service under the Transition Services
Agreement.

 

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Section 5.18. Notification of Certain Matters.

(a) Between the date hereof and the Closing Date, the Parent, on the one hand,
and the Acquiror, on the other hand, shall promptly notify the other of: (i) the
occurrence or non-occurrence of any event that is reasonably likely to result in
the failure of any condition to the Closing or that indicates that any of the
representations and warranties contained in the Transaction Agreements will not
be, or are not, true and correct and (ii) the receipt of any material notice or
other communication from any third Person alleging that the approval, consent,
authorization, permission or act of, or the making by the Parent, the Acquiror
or any of their respective Affiliates, as the case may be, of any notices to or
declaration, filing or registration with, such third Person is or may be
required in connection with the transactions contemplated by this Agreement or
that such transactions otherwise may violate the rights of or confer remedies
upon such third Person; provided, however, that in each case, such disclosure
shall not be deemed to cure any breach of a representation, warranty, covenant
or agreement or any failure of a condition to the Closing, or to otherwise limit
or affect in any way the remedies available hereunder to the party receiving
such notice; and provided, further, that failure to deliver any notice pursuant
to this Section 5.18(a) shall not result in a failure of any condition set forth
in Article VIII or liability to any party hereto under ARTICLE X unless the
underlying event or breach would independently result in the failure of such
condition or such liability.

(b) Each of the Parent, on the one hand, and the Acquiror, on the other hand,
shall promptly notify the other of any Action that shall be instituted or
threatened against such party to restrain, prohibit or otherwise challenge the
legality of any transaction contemplated by the Transaction Agreements. Each
party hereto shall promptly notify the other of any Action that may be
threatened, brought, asserted or commenced against the Parent, the Acquiror or
any of their respective Affiliates, as the case may be, that would have been
listed on Section 3.08 of the Seller Disclosure Letter or Section 4.04 of the
Acquiror Disclosure Letter, as the case may be, if such Action had arisen prior
to the date hereof; provided, however, that in each case, such disclosure shall
not be deemed to cure any breach of a representation, warranty, covenant or
agreement or to satisfy any condition or otherwise limit or affect the remedies
available hereunder to the party receiving such notice; and provided, further,
that failure to deliver any notice pursuant to this Section 5.18(b) shall not
result in a failure of any condition set forth in Article VIII.

Section 5.19. Acquiror Financing Activities and Exchange Act Reporting. The
Parent shall provide, and shall cause the Sellers, the Companies and the
Transferred Subsidiaries and its and their respective Representatives to
provide, reasonable cooperation in connection with the arrangement of any
financing the proceeds of which may be used to consummate the transactions
contemplated by the Transaction Agreements or in connection with other
financings (collectively, the “Financings”) or in connection with satisfying any
reporting obligation under the Exchange Act, in each case as may be reasonably
requested by the Acquiror, including:

(a) providing to the Acquiror information (which the Acquiror may provide to its
financing sources) regarding the Companies and the Transferred Subsidiaries and
their respective industries reasonably requested by the Persons providing or
arranging the Financings and identifying any portion of such information that
constitutes material non-public information;

 

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(b) assisting the Acquiror and its financing sources in the preparation of
(i) one or more offering documents and/or confidential information memoranda for
any Financing, including by (A) preparing and delivering to the Acquiror any
audited or unaudited financial statements of the Companies and the Transferred
Subsidiaries requested by the Acquiror, and (B) cooperating in the preparation
of any pro forma financial statements, in each case of (A) and (B) to the extent
the Acquiror reasonably determines that such financial statements are required
by Regulation S-X (without regard to Rule 3-05(b)(4) thereof) and Regulation S-K
under the Securities Act (treating each Financing as an offering registered
under the Securities Act), and (ii) materials for rating agency presentations;

(c) assisting the Acquiror in the preparation of any audited or unaudited
financial statements of the Companies and the Transferred Subsidiaries to the
extent the Acquiror reasonably determines that such financial statements will be
required in connection with its post-Closing reporting obligations under the
Exchange Act;

(d) causing the appropriate members of management to participate , at the
Acquiror’s expense, in a reasonable number of meetings, presentations, road
shows, due diligence sessions and sessions with rating agencies;

(e) providing and executing documents as may be reasonably requested by the
Acquiror, including customary certificates (including solvency certificates),
legal opinions, consents of accountants for use of their reports in any
materials relating to any Financing and customary representations letters in
connection with bank confidential information memoranda;

(f) using its commercially reasonable efforts to cause the Independent Auditor
to provide assistance to the Acquiror, at the Acquiror’s expense, including
providing consents to the Acquiror to use their audit reports relating to the
Companies and the Transferred Subsidiaries and to provide any necessary “comfort
letters”;

The Parent will use commercially reasonable efforts to periodically update any
financial statements, pro forma financial information, financial data, audit
reports and other information required by Regulation S-X (without regard to Rule
3-05(b)(4) thereof) and Regulation S-K under the Securities Act (treating each
Financing as an offering registered under the Securities Act) and the other
accounting rules and regulations of the SEC provided in connection with the
consummation of any Financing or in connection with any other financing
obligation or reporting obligation under the Exchange Act. Subject to prior
consultation with the Acquiror, any reasonable, and adequately documented, third
party costs incurred by the Parent or its Affiliates in connection with the
Parent’s obligations under this Section 5.19 shall be reimbursed by the Acquiror
as directed by the Parent.

Section 5.20. Release of Liens. Prior to the Closing, the Parent shall take all
actions necessary or desirable to obtain and effect the full release and
discharge, effective at or prior to the Closing, of (a) any and all Liens on the
Shares, the Bridge Loan, the Capital Stock of any of the Transferred
Subsidiaries and the assets and properties of any of the Companies or any of the
Transferred Subsidiaries, other than any Permitted Liens that are not FRBNY
Liens or Liens in favor of Permitted Parties and (b) any and all obligations of
any Company or any Transferred Subsidiary, including guarantees or similar
obligations, under (i) the Guarantee and

 

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Pledge Agreement, dated as of September 22, 2008 (as may be amended, modified or
supplemented from time to time), between the Parent and the FRBNY, (ii) the
Credit Agreement, dated as of September 22, 2008 (as may be amended, modified or
supplemented from time to time), between the Parent and the FRBNY and
(iii) Liens in favor of Permitted Parties.

Section 5.21. Troubled Asset Relief Program. The Parent shall use its reasonable
best efforts to release the Companies and the Target Subsidiaries from any
obligations under any contracts with the U.S. Treasury, the FRBNY or the Board
of Governors of the Federal Reserve Board arising from the affiliation of the
Companies and the Target Subsidiaries with the Parent in the event that such
companies have any obligations or remain subject to any limitations following
the Closing.

ARTICLE VI

EMPLOYEE MATTERS

Section 6.01. Employee Matters.

(a) Except as otherwise expressly provided in this Section 6.01, as of the
Closing Date, the Companies and the Transferred Subsidiaries shall terminate
their participation in each Benefit Plan that is not a Company Benefit Plan, and
in no event shall any Employee be entitled to accrue any benefits under such
Benefit Plans with respect to services rendered or compensation paid on or after
the Closing Date. The Companies and the Transferred Subsidiaries shall retain
all rights, liabilities and obligations under, and neither the Parent nor any of
its Affiliates shall have any liability or obligation under, each Company
Benefit Plan on and after the Closing Date.

(b) Prior to the Closing Date, the Parent and the Acquiror shall agree whether,
and to what extent, (i) the employment of any employee of the Parent or any of
its Affiliates whose duties relate primarily to the Business (other than an
Employee who is on (A) long-term disability or other unpaid medical leave or
(B) leave due to a workplace injury covered by a workers’ compensation policy or
program incurred more than six months prior to the Closing date; unless the
failure to transfer any such employee violates applicable Law, as determined by
the Parent in good faith and in consultation with the Acquiror) and who at such
time is not already employed by a Company or Transferred Subsidiary shall be
transferred to a Company or Transferred Subsidiary (each, a “Transferred
Employee”) with such transfer occurring on or prior to the Closing Date to the
extent permitted by applicable Law, and (ii) the employment of each employee of
a Company or Transferred Subsidiary whose duties do not relate primarily to the
Business shall cease or otherwise be transferred to the Parent or an Affiliate
other than the Companies and the Transferred Subsidiaries (each, a “Returned
Employee”). The employees whom, as of the date hereof, the Parent and the
Acquiror have agreed will be Transferred Employees or Returned Employees are so
identified in Section 6.01(b) of the Seller Disclosure Letter, under the heading
“Transferred Employees.” The employees whom, as of the date hereof, the Parent
and the Acquiror reasonably expect to be Returned Employees are so identified in
Section 6.01(b) of the Seller Disclosure Letter under the heading “Returned
Employees.” The Parent and the Acquiror agree that the list of “Returned
Employees” contained in Section 6.01(b) of the Seller Disclosure Letter shall be
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the period between the date hereof and the Closing Date; provided that such list
shall be final and not subject to change as of the Closing Date. For a period of
at least 12 months after the Closing Date, and subject to applicable Law, the
Acquiror shall, and shall cause its Affiliates (including the Companies and the
Transferred Subsidiaries) to take all action necessary to provide that during
each Employee’s period of employment with the Acquiror or any of its Affiliates
(including the Companies and the Transferred Subsidiaries), (i) such Employee
shall receive base salary at a rate not less than such Employee’s base salary in
effect immediately prior to the Closing Date and (ii) such Employee shall be
eligible for total incentive compensation opportunities that are no less
favorable in the aggregate than the total incentive compensation opportunities
provided to such Employee by the Parent and its Affiliates (including the
Companies and the Transferred Subsidiaries) immediately prior to the Closing
Date. All other terms and conditions of employment and of employee benefits
shall be determined in accordance with applicable Law. Notwithstanding the
previous sentence, for a period of 12 months after the Closing Date, (i) all
Employees (other than Transferred Employees) shall be provided with employee
benefits that are substantially no less favorable in the aggregate than the
employee benefits provided to such Employee by the Parent and its Affiliates
immediately prior to the Closing Date and (ii) all Transferred Employees shall
be provided with employee benefits that are substantially no less favorable in
the aggregate than those generally made available to Acquiror’s similarly
situated employees in the jurisdiction. Nothing in this Section 6.01 shall limit
in any way the right of the Acquiror or any of its Affiliates to terminate the
employment of any Employee at any time, to change or modify the terms of any
Benefit Plan at any time and in any manner, or to change or to change or modify
the terms or conditions of employment of any Employee, subject in any such case
to the express terms of any applicable Benefit Plan and applicable Law.

(c) For purposes of determining eligibility, benefit accrual and vesting (but
not for purposes of benefit accruals under any defined benefit pension plan or
benefit accruals that would result in duplication of benefits) under all benefit
plans, programs and arrangements maintained by the Acquiror or its Affiliates
(including, after the Closing, the Companies and the Transferred Subsidiaries),
the Acquiror shall, and shall cause its Affiliates (including, after the
Closing, the Companies and the Transferred Subsidiaries) to, give each Employee,
credit for such Employee’s service with the Parent and its Affiliates (including
the Companies and the Transferred Subsidiaries) to the same extent recognized by
the Parent and its Affiliates (including the Companies and the Transferred
Subsidiaries) under the Benefits Plans immediately prior to the Closing Date;
notwithstanding the foregoing, this Section 6.01(c) shall not apply to any
equity based benefit plans, programs or arrangements.

(d) The Acquiror shall cause the Companies and the Transferred Subsidiaries to
recognize and provide all accrued but unused vacation and sick pay of the
Employees as of the Closing Date.

(e) From and after the Closing Date, the Acquiror shall assume any and all
obligation for and shall pay, or cause the Companies and the Transferred
Subsidiaries to assume any and all obligation for and pay, any retention
bonuses, any cash incentive payments and any annual incentive bonuses, whether
the obligation therefor arises before, after or as a result of the Closing,
payable to any Employee pursuant to the terms of any Company Benefit Plans that
are bonus plans or arrangements in effect immediately prior to the Closing Date
and applicable to

 

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such Employees (in each case to the extent not paid by the Parent (or any of its
Affiliates), the Companies or the Transferred Subsidiaries prior to the
Closing). In furtherance of the foregoing, Acquiror shall pay, or shall cause
the Companies or the Transferred Subsidiaries to pay, an aggregate amount in
bonuses in respect of the foregoing plans and arrangements that is no less than
the amount accrued therefor (as adjusted through the Closing Date). From and
after the Closing Date, neither the Parent nor any of its Affiliates (other than
the Companies or the Transferred Subsidiaries) shall retain any responsibility
for such payment obligations, regardless of when such amounts were earned or
accrued. For the avoidance of doubt, the liability for the ECAP Severance and
Completion Plans of the Companies shall be accrued on the balance sheet included
in the Final Actual Closing Solvency Capital Worksheet of the Insurance
Companies at Closing, and, the obligation of the Acquiror with respect thereto
shall be limited to such accrued amount (including any liability arising from
any amendments to the ECAP Severance and Completion Plans between the date
hereof and Closing).

(f) With respect to the Employees, after the Closing Date, the Acquiror, the
Companies and the Transferred Subsidiaries shall have the liability and
obligation for, in respect to any Company Benefit Plans, and neither the Parent
nor any of its Affiliates shall have any liability or obligation for: (i) any
short-term disability, sick pay or salary continuation benefits; or (ii) any
medical, dental, life insurance, long-term disability or other welfare benefit
claims. Any preexisting condition clause in any of the welfare plans (including
medical, dental and disability coverage) included in the Acquiror’s benefit
programs shall be waived for the Employees. Notwithstanding anything to the
contrary in this Section 6.01(f), the Parent and its Affiliates (other than the
Companies and the Transferred Subsidiaries) shall retain all the liabilities and
obligations referenced in this Section 6.01(f) to the extent arising prior to
the Closing Date under Benefit Plans that are not Company Benefit Plans.

(g) The Acquiror, the Companies and the Transferred Subsidiaries shall, and
hereby do, assume all liability and obligation for, and neither the Parent nor
any of its Affiliates shall retain any liability or obligation for,
(i) severance pay and obligations payable to any former employee of any of the
Companies or the Transferred Subsidiaries who, as of the Closing Date, is
receiving or due to receive severance payments and benefits from the Parent or
any of its Affiliates or the Companies or the Transferred Subsidiaries from and
after the Closing Date and (ii) severance pay and obligations payable to any
Employee who is terminated by the Acquiror, the Companies or any Transferred
Subsidiary on or after the Closing Date. With respect to any Employee whose
employment is terminated by the Acquiror or any of its Affiliates during the 6
month period immediately following the Closing Date, the Acquiror shall provide,
or cause its Affiliates to provide, severance benefits to such Employee, which
shall be determined and payable in accordance with the severance benefit plan or
agreement maintained by the Parent, the Companies, the Transferred Subsidiaries
or any of their Affiliates for the benefit of such Employee immediately prior to
the Closing Date.

(h) The Parent and the Acquiror shall, or shall ensure that their Affiliates
shall, comply with their respective consultation and other obligations arising
out of any of the transactions contemplated by this Agreement with respect to
the Employees (including those individuals who will become Employees on or prior
to the Closing Date) of any of the Companies, any of the Transferred
Subsidiaries, or their respective union or elected representatives, or other
employee representative body, as required by Law, collective bargaining

 

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agreements or any other applicable regulations and shall cooperate in connection
therewith, with such cooperation to include, if applicable, obtaining from all
Employees, directors, independent contractors, agents and brokers of the
Companies and Transferred Subsidiaries express written consents to the cross
border transfer of their personal data to the Acquiror following the signing of
this Agreement. Each of the parties hereto will use good faith efforts to comply
with their obligations under this Section 6.01(h) as promptly as reasonably
practicable.

(i) The Parent or its Affiliates shall be responsible for providing workers’
compensation or similar workers’ protection benefits with respect to any
Employee prior to the Closing Date. The Acquiror, the Companies and the
Transferred Subsidiaries shall be responsible for providing any workers’
compensation or similar workers’ protection benefits to any Employee on or after
the Closing Date; provided, however, the Parent or its Affiliates (other than
the Companies or the Transferred Subsidiaries) shall retain the obligation and
liability for any workers’ compensation or similar workers’ protection claims of
any Employee or former employee that arose, or relate to, an incident that
occurred and with respect to which a claim was filed on or prior to the Closing
Date (unless such obligations were accrued as liabilities of the Companies or
the Transferred Subsidiaries prior to the Closing Date). Any workers’
compensation insurance arrangements maintained by the Companies and the
Transferred Subsidiaries shall inure to the benefit of the Acquiror. For
purposes of this Section 6.01(i), a workers’ compensation or similar workers’
protection claim shall be deemed to have been incurred upon the injury or
condition giving rise to the benefits thereunder.

(j) The provisions of this Section 6.01 are solely for the benefit of the
parties hereto, and no current or former employee or any other individual
associated therewith shall be regarded for any purpose as a third party
beneficiary of the Agreement, whether in respect of continued employment or
service, or resumed employment or service, compensation, benefits, incentives,
or otherwise. Nothing herein, whether express or implied, shall be construed as
a modification of or amendment to any Benefit Plan for any purpose.

(k) Notwithstanding anything in this ARTICLE VI, with respect to any expatriate
Employee of the Companies or the Transferred Subsidiaries who is a citizen or
resident alien of the United States principally employed or rendering
substantial services in Japan (each, a “U.S. Expatriate Employee”), none of the
rules regarding compensation programs or benefits set forth in Section 6.01(b)
through Section 6.01(i) of this ARTICLE VI shall apply. Following the Closing
Date, each U.S. Expatriate Employee shall be provided with compensation programs
and employee benefits that are substantially similar in all respects (including
with respect to terms and conditions of the applicable governing plans, programs
and policies) to the compensation programs and employee benefits that are made
available by the Acquiror to other similarly situated citizens or resident
aliens of the United States principally employed by or rendering substantial
services for the Acquiror in Japan. For a period of at least 12 months after the
Closing Date, and subject to applicable Law, the Acquiror shall, and shall cause
its Affiliates (including the Companies and the Transferred Subsidiaries) to
take all action necessary to provide that during each U.S. Expatriate Employee’s
period of employment with the Acquiror or any of its Affiliates (including the
Companies and the Transferred Subsidiaries), (i) such U.S. Expatriate Employee
shall receive base salary at a rate not less than such U.S. Expatriate
Employee’s base salary in effect immediately prior to the Closing Date and
(ii) such U.S. Expatriate Employee shall be eligible for total incentive
compensation opportunities that are

 

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no less favorable in the aggregate than the total incentive compensation
opportunities provided to such U.S. Expatriate Employee by the Parent and its
Affiliates (including the Companies and the Transferred Subsidiaries)
immediately prior to the Closing Date. All other terms and conditions of
employment and of employee benefits shall be determined in accordance with
applicable Law but otherwise in accordance with the principles of this
Section 6.01(k). Notwithstanding the previous sentence, (i) for a period of 12
months after the Closing Date, each U.S. Expatriate Employee shall be provided
with employee benefits that are substantially no less favorable in the aggregate
than those generally made available to Acquiror’s similarly situated employees
in the jurisdiction and (ii) in the event that the employment of a U.S.
Expatriate Employee is terminated by the Acquiror within 6 months after the
Closing Date, such U.S. Expatriate Employee shall be provided with severance
benefits that are substantially no less favorable in the aggregate than those
severance benefits generally made available to Acquiror’s similarly situated
employees in the jurisdiction (after giving effect to such U.S. Expatriate
Employee’s years of service with the Companies and the Transferred Subsidiaries
for purposes of severance benefit calculations); provided, however, that, if the
U.S. Expatriate Employee is eligible for Star’s Employee Continuity Assurance
Plan and is terminated by the Acquiror within 12 months of the Closing Date,
Acquiror (or, as applicable, the Companies or one of the Transferred
Subsidiaries) shall provide such U.S. Expatriate Employee the severance benefits
determined in accordance with the terms of the individual agreement entered into
by such U.S. Expatriate Employee pursuant to such plan and none of Acquiror, the
Companies nor the Transferred Subsidiaries shall have any other obligation to
provide severance or other termination benefits to such U.S. Expatriate
Employee.

In applying the provisions of this Article to any Employee, the Acquiror, the
Companies and the Transferred Subsidiaries shall not take into account any
Compensation Restrictions, if so permitted under applicable Law.

ARTICLE VII

TAX MATTERS

Section 7.01. Liability for Taxes.

(a) The Parent shall be liable for and pay, or shall cause the applicable Seller
to pay, and shall indemnify, defend, and hold harmless the Acquiror Indemnified
Parties (as defined in Section 10.02(a)) from and against, all Taxes and Losses
imposed on or incurred by any Acquiror Indemnified Party, or for which any
Acquiror Indemnified Party may otherwise be liable, relating to (i) any Taxes
imposed upon any Company or any Transferred Subsidiary with respect to any
Pre-Closing Taxable Period and, with respect to any Straddle Period, the portion
of such Straddle Period ending on and including the Closing Date, (ii) any Taxes
imposed upon any Company or any Transferred Subsidiary or any Successor Entity
with respect to any Post-Closing Taxable Period or, with respect to any Straddle
Period, the portion of such Straddle Period ending after the Closing Date, that
would not be payable by, or imposed upon, such Company or such Transferred
Subsidiary or such Successor Entity if any amount of net operating losses or
credits generated during the Parent or its Affiliates’ period of ownership of
the applicable Company or Transferred Subsidiary as of the Closing Date had not
been decreased as a result of any Tax audits or proceedings by any Tax
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decrease in net operating losses or credits (A) is expected to give rise to a
Tax benefit to any Company or any Transferred Subsidiary or any Successor Entity
in a Post-Closing Taxable Period or, with respect to any Straddle Period, the
portion of such Straddle Period ending after the Closing Date, (B) is caused by
an action taken by or transaction entered into by the Acquiror or its Affiliates
other than those contemplated by the Transaction Agreements (excluding, for the
avoidance of doubt, any reorganization or other transfer of the interests or
assets of the Companies or the Transferred Subsidiaries by the Acquiror or any
of its Affiliates following the Closing) or (C) is a result of the carryback of
any item from a Post-Closing Taxable Period or with respect to the portion of
any Straddle Period relating to after the Closing Date, (iii) any breach or
inaccuracy in any representation contained in Section 3.20 or (iv) any breach or
failure by the Parent to perform (or cause to be performed) any of the covenants
or agreements set forth in this Article VII; provided, however, that the Parent
shall not be liable for or pay, and shall not indemnify the Acquiror Indemnified
Parties from and against (A) any Taxes shown as an accrued tax payable on the
Final Actual Closing Solvency Capital Worksheet, and (B) any Taxes imposed on
any Company or Transferred Subsidiary, or for which any Company or Transferred
Subsidiary may otherwise be liable, as a result of transactions occurring or
deemed to occur on the Closing Date but after the Closing (other than those
contemplated by the Transaction Agreements (excluding, for the avoidance of
doubt, any reorganization or other transfer of the interests or assets of the
Companies or the Transferred Subsidiaries by the Acquiror or any of its
Affiliates following the Closing) or occurring in the Ordinary Course of
Business) (Taxes described in clauses (A) and (B) above, hereinafter “Excluded
Taxes”).

(b) The Acquiror shall be liable for and pay, and shall indemnify, defend, and
hold harmless the Parent Indemnified Parties from and against, (i) all
liabilities for Taxes imposed on any Company or Transferred Subsidiary, or for
which any Company or Transferred Subsidiary may otherwise be liable, for any
Post-Closing Taxable Periods and, with respect to any Straddle Period, the
portion of such Straddle Period beginning after the Closing Date, (ii) Excluded
Taxes and (iii) any breach or failure by the Acquiror to perform (or cause to be
performed) any of the covenants or agreements set forth in this Article VII.

(c) For purposes of clauses (a) and (b) of this Section 7.01, whenever it is
necessary to determine the liability for Taxes for a Straddle Period, the
determination of the Taxes of any Company or Transferred Subsidiary for the
portion of the Straddle Period ending on and including, and the portion of the
Straddle Period beginning after, the Closing Date shall be determined by
assuming that the Straddle Period consisted of two taxable years or periods, one
which ended at the close of the Closing Date and the other which began at the
beginning of the day following the Closing Date, and items of income, gain,
deduction, loss or credit of such Company or Transferred Subsidiary for the
Straddle Period shall be allocated between such two taxable years or periods on
a “closing of the books basis” by assuming that the books of such Company or
Transferred Subsidiary were closed at the close of the Closing Date, provided,
however, that Taxes imposed on a periodic basis (e.g., property taxes), and
exemptions, allowances or deductions that are calculated on an annual basis,
such as the deduction for depreciation, shall be apportioned between such two
taxable years or periods on a daily basis.

(d) (i) To the extent any indemnity pursuant to Section 7.01(a)(i),
Section 7.01(a)(iii) or Section 7.01(a)(iv) is includible in income, the Parent
shall increase such indemnity payment to the applicable Acquiror Indemnified
Party to compensate for the Japanese

 

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Tax detriment resulting from such inclusion (the aggregate of such indemnity
payment and such increase, a “Tax Indemnity Payment”); provided, however, that
Parent and Acquiror shall cooperate to direct payment to the Parent or a Seller
on one hand, and the Acquiror or a Designated Acquiror on the other hand, as the
case may be, if doing so would result in the Tax Indemnity Payment’s being
treated as an adjustment to the Share Purchase Price.

(ii) To the extent the adjustment that gave rise to a Tax Indemnity Payment
results in a Tax benefit for Japanese Tax purposes to any of the Companies, the
Transferred Subsidiaries or any Successor Entity that is actually realized by
any of them prior to the end of the close of the taxable year in which the
fourth anniversary of such Tax Indemnity Payment occurs, the Acquiror or any
Designated Acquiror shall remit to the Parent such Tax benefit (determined on a
with and without basis) (a “Tax Benefit Payment”); provided that in no event
shall the cumulative Tax benefit remitted by the Acquiror or any Designated
Acquiror to the Parent exceed the amount of the applicable Tax Indemnity
Payment. If any such Tax benefit is subsequently disallowed prior to the end of
the close of the taxable year in which the fourth anniversary of such Tax
Benefit Payment occurs, the Parent shall make an appropriate reconciliation
payment to the Acquiror.

(iii) In the event there has been a Tax Indemnity Payment, the Acquiror shall
provide on an annual basis a certification by a responsible tax officer of the
Acquiror with the knowledge of the Companies and the Transferred Subsidiaries of
the amount (if any) of any increase to a tax indemnity payment pursuant to
Section 7.01(d)(i) and the amount (if any) of the Tax benefit to be remitted to
Parent pursuant to Section 7.01(d)(ii).

Section 7.02. Tax Returns.

(a) The Parent shall timely file or cause to be timely filed when due (taking
into account all extensions properly obtained) all Tax Returns that are required
to be filed by or with respect to the Companies and the Transferred Subsidiaries
for Pre-Closing Taxable Periods that are due on or before the Closing Date, and
in each case the Parent shall remit or cause to be remitted any Taxes due in
respect of such Tax Returns, and the Acquiror shall timely file or cause to be
timely filed when due (taking into account all extensions properly obtained) all
other Tax Returns that are required to be filed by or with respect to each
Company and Transferred Subsidiary and the Acquiror shall remit or cause to be
remitted any Taxes due in respect of such Tax Returns. With respect to Tax
Returns to be filed or caused to be filed by the Parent or the Acquiror pursuant
to the preceding sentence that relate to Pre-Closing Taxable Periods or Straddle
Periods (x) to the extent permitted by Law, such Tax Returns shall be filed in a
manner consistent with the last previous Tax Return relating to the same Taxes
filed as of the date hereof, except to the extent failure to do so would not
reasonably be expected to result, directly or indirectly, in a material cost to
the other party and (y) such Tax Returns shall be submitted to the Parent or the
Acquiror, as the case may be, not later than 30 days prior to the due date for
filing such Tax Returns (or, if such due date is within 30 days following the
Closing Date, as promptly as practicable following the Closing Date) for review
and approval by the Parent or the Acquiror, as the case may be, which approval
may not be unreasonably withheld. The Parent or the Acquiror, as the case may
be, shall pay the other or cause to be paid to the other the Taxes for

 

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which the Parent or the Acquiror, respectively, is liable pursuant to
Section 7.01 but which are payable with any Tax Return to be filed or caused to
be filed by the Parent, on the one hand, and Acquiror, on the other hand,
pursuant to this Section 7.02(a) upon the written request of the Party entitled
to payment, setting forth in reasonable detail the computation of the amount
owed by the Parent, on the one hand, and the Acquiror, on the other hand, as the
case may be, but in no event earlier than 10 days prior to the due date for
paying such Taxes.

(b) Except in accordance with Section 7.03, none of the Parent, the Acquiror or
any Affiliate of either shall (or shall cause or permit any Company or
Transferred Subsidiary to) amend, re-file or otherwise modify (or grant an
extension of any statute of limitation with respect to) any Tax Return relating
in whole or in part to any Company or Transferred Subsidiary with respect to any
Pre-Closing Taxable Periods (or with respect to any Straddle Period) without the
prior written consent of the Parent or the Acquiror, as the case may be, except
to the extent such amendment, refiling, modification or grant is required by Law
or would not reasonably be expected to result, directly or indirectly, in a
material cost to the other party.

(c) In order to assist the Parent and its Affiliates in filing their Tax
Returns, the Parent will deliver to the Acquiror a questionnaire in a form
substantially similar to the form set forth on Section 7.02(c) of the Seller
Disclosure Letter, and consistent with past practice, the Company and the
Transferred Subsidiaries will use their reasonable efforts promptly to complete
such questionnaire (which for the avoidance of doubt will not include any
information relating to periods after the Closing Date or any information
related to the Section 338 elections described in Section 7.06(b)).

(d) The Parent hereby agrees and covenants to furnish to the Acquiror, prior to
Closing, complete and accurate copies of all Internal Revenue Service Forms
5471, 8621, 8865 and 8858 filed within the last three years in respect of the
Companies, the Transferred Subsidiaries and any investments held by any of such
entities, which Forms have not been otherwise previously furnished.

Section 7.03. Contest Provisions.

(a) After the Closing Date, the Acquiror (or a Designated Acquiror) and the
Parent shall promptly notify the other in writing upon receipt by any Acquiror
Indemnified Party or Parent Indemnified Party, as the case may be, of written
notice of any pending or threatened tax audits, examinations or assessments (a
“Tax Claim”) which would reasonably be expected to affect the Tax liabilities
for which the Parent or the Acquiror may be liable under Section 7.01; provided,
that the failure by the Acquiror or the Parent, as the case may be, to notify
the other of any Tax Claim shall not relieve the Parent or the Acquiror (or a
Designated Acquiror), as the case may be, of its obligations under this Article
VII in whole or in part except to the extent the Parent or the Acquiror, as the
case may be, is materially prejudiced as a consequence of such failure.

(b)

(i) The Parent shall have the right to control the contest of any Tax Claim for
which the Parent is solely liable under this Agreement; provided, that (A) the

 

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Acquiror shall have the right, at its own expense, to participate in (but not
control) all proceedings related to such Tax Claim, (B) the Parent shall
promptly furnish to the Acquiror copies of all relevant correspondence and
documentation in connection with any such Tax Claim and shall provide the
Acquiror with the opportunity to comment on all proposed correspondence and
submissions to the relevant tax authority, which comments the Parent shall
consider in good faith, (C) the Parent shall consult in good faith with the
Acquiror regarding the conduct of the contest of any such Tax Claim and (D) the
Parent shall use good faith reasonable efforts to take positions in any contest
that are consistent with the positions taken in prior settlements with respect
to substantially similar issues if the failure to take a consistent position
would give rise to a material adverse effect to any of the Companies or the
Transferred Subsidiaries. The Parent shall not, and shall not permit any
relevant party to, enter into any settlement or otherwise compromise any such
Tax Claim without the prior written consent of the Acquiror, provided, that if
the Acquiror shall refuse to consent to any settlement or compromise that the
relevant tax authorities and the Parent propose to accept (a “Proposed
Settlement”) and such Proposed Settlement would not reasonably be expected to
result in a material Tax cost to the Acquiror Indemnified Parties that is not
indemnified by the Parent, then (X) the liability of the Parent with respect to
the subject matter of the Proposed Settlement shall be limited to the amount
that such liability would have been to the Parent were the Proposed Settlement
accepted, and (Y) the Acquiror shall thereafter be entitled to assume control of
the contest, settlement and compromise of such Tax Claim and shall bear its own
costs and expenses in connection with such Tax Claim.

(ii) With respect to any Straddle Period, the Parent and the Acquiror shall
jointly control the contest, settlement and compromise of any relevant Tax Claim
and each party shall cooperate with the other party at its own expense and no
settlement or compromise with respect thereto shall be entered into without the
consent of the other party, which consent shall not be unreasonably withheld.

(iii) Within 20 days of receiving notice from the Acquiror of a Tax Claim
pursuant to Section 7.03(a), the Parent shall notify the Acquiror in writing if
its intention to control the contest of any Tax Claim that is the subject of
such notice and that the Parent is otherwise entitled to control (or jointly
control) pursuant to Section 7.03(b)(i) or Section 7.03(b)(ii). If the Acquiror
does not receive such notice from the Parent within such period, or if the
Parent shall notify the Acquiror that it does not wish to control (or jointly
control) the contest of such Tax Claim (or any other Tax Claim), the Acquiror
thereupon shall be entitled to control the contest, settlement and compromise of
such Tax Claim in its sole discretion; provided, however, that the failure of
the Parent to provide notice shall not result in the Parent waiving any of its
rights under this Agreement (including its right to control the contest of the
Tax Claim) in whole or in part except to the extent the Acquiror is materially
prejudiced as a consequence of such failure.

(iv) Except as otherwise expressly provided, nothing contained in this
Section 7.03(b) shall be construed as limiting the Acquiror Indemnified Parties’
right to indemnification under Section 7.01, provided, that the Acquiror may
elect (by written notice to the Parent) to forgo indemnification under
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portion thereof, in which case the Acquiror shall be entitled to control the
contest, settlement and compromise of such Tax Claim or applicable portion
thereof in its sole discretion and at its own expense.

(v) The foregoing provisions of this Section 7.03(b) shall apply to the Parent
and its Affiliates, on the one hand, and to the Acquiror and its Affiliates, on
the other hand, mutatis mutandis.

Section 7.04. Tax Refunds. The Parent shall be entitled to retain, or receive
payment from the relevant Company or Transferred Subsidiary of, any refund or
credit of Taxes of any such entity (net of any Tax cost arising out of such
receipt) from the applicable taxing authorities that are described as being the
responsibility of the Parent in Section 7.01(a), except to the extent such
refunds relate to Excluded Taxes or result from the carryback of any item from a
Post-Closing Taxable Period. Each Company and any Transferred Subsidiary shall
be entitled to retain all other refunds or credits with respect to Taxes of such
entities. The Person that is to enjoy the economic benefit of a refund or credit
under this Section 7.04 shall bear the reasonable out-of-pocket expenses
incurred in seeking such refund.

Section 7.05. Assistance and Cooperation. After the Closing Date, each of the
Parent and the Acquiror shall (and cause their respective Affiliates to):

(a) assist the other party, as may reasonably be requested, in preparing any Tax
Returns which such other party is responsible for preparing and filing in
accordance with Section 7.02;

(b) cooperate in preparing for any audits of, or disputes with Tax Authorities
regarding, any Tax Returns of any Company or Transferred Subsidiary;

(c) make available to the other and to any Tax Authority as reasonably requested
all information, records, and documents relating to Taxes of each Company and
Transferred Subsidiary;

(d) furnish the other with copies of all correspondence regarding a Tax Claim
received from any Tax Authority in connection with any Tax audit or information
request with respect to any taxable period;

(e) timely sign and deliver such certificates or forms as may be necessary or
appropriate to establish an exemption from (or otherwise reduce), or file Tax
Returns or other reports with respect to, Transfer Taxes described in
Section 7.06(c); and

(f) timely provide to the other powers of attorney or similar authorizations
necessary to carry out the purposes of this Article VII;

(g) assist the other, as may reasonably be requested, in connection with tax
matters of the Parent or the Acquiror, as the case may be, or their Affiliates,
in relation to the transactions contemplated hereby, including tax matters
relating to U.S. federal income tax compliance (which shall, for the avoidance
of doubt, include providing reasonable assistance to the Acquiror in connection
with the Acquiror’s filing of any applicable Internal Revenue Service forms);
and

 

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(h) otherwise cooperate with the other as may reasonably be requested with
respect to legitimate matters related to Taxes.

If the Parent or the Acquiror makes a request to the other (including, for the
avoidance of doubt, the request under Section 7.02(c)) that, in the reasonable
judgment of the party receiving the request, requires the engagement of third
party consultants to fulfill, the requesting party shall engage such consultants
(provided they are reasonably acceptable to the other party) and shall be solely
responsible for the remuneration of such consultants.

Section 7.06. Other Tax Matters.

(a) In the event of any inconsistency between this Article VII and Article X,
this Article VII shall control with respect to any Tax matters. The obligations
of the parties hereto set forth in this Article VII shall: (i) be unconditional
and absolute, (ii) remain in full force and effect until 60 days following the
expiration of the applicable statute of limitations (taking into account all
extensions thereof) and (iii) not be subject to the limitations on
indemnification set forth in Article X.

(b) The Acquiror shall have the right to make, or cause to be made, an election
under Section 338(g) of the Code with respect to the sale or deemed sale of the
stock of the Companies and the Transferred Subsidiaries (other than CLIS K.K.).
Should the Acquiror make, or cause to be made, an election under Section 338(g)
of the Code with respect to the sale or deemed sale of the stock of any of the
Companies or the Transferred Subsidiaries, the Acquiror shall send a notice, or
cause a notice to be sent, to the Parent or its Affiliates as required pursuant
to applicable U.S. Treasury Regulations under Section 338 of the Code.

(c) Notwithstanding any other provision of this Agreement to the contrary, all
Japanese sales, transfer, securities transaction, documentary, stamp, duties,
recording and similar Taxes and fees imposed in connection with the transactions
contemplated by this Agreement (collectively, the “Transfer Taxes”) shall be
borne equally by the Parent and the Acquiror. The Parent and the Acquiror shall
cooperate in accurately filing or causing to be filed all necessary Tax Returns
and other documentation with respect to any Transfer Tax, and any reasonable
expenses incurred in connection with such filings shall be borne equally by the
Parent and the Acquiror.

(d) The Parent hereby agrees and covenants that any and all existing Tax Sharing
Agreements binding on any Company or Transferred Subsidiary shall be terminated
on or before the Closing Date such that no Company or Transferred Subsidiary
shall have any obligation thereunder after the Closing.

(e) The parties agree for purposes of this Article VII, an item shall be
considered “material” if the aggregate Tax liability associated with all items
or matters addressed by the relevant provision is equal to or greater than
$500,000.

 

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ARTICLE VIII

CONDITIONS TO CLOSING AND RELATED MATTERS

Section 8.01. Conditions to Obligations of Each Party. The respective
obligations of each party hereto to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment or waiver, at or prior to the
Closing, of each of the following conditions:

(a) No Governmental Order. Subject to Section 8.01(b), there shall be no Law or
Governmental Order enacted, issued, promulgated, enforced or entered that, in
each case, enjoins or prohibits the consummation of the transactions
contemplated by this Agreement or makes illegal the consummation of the
transactions contemplated by this Agreement unless such Law or Governmental
Order is vacated, terminated or withdrawn.

(b) Approvals of Governmental Authorities. The Governmental Approvals listed on
Section 8.01(b) of the Seller Disclosure Letter shall have been obtained (or any
waiting period shall have been terminated or shall have expired) and shall be in
full force and effect without the imposition of any Negative Conditions or
Restrictions.

Section 8.02. Conditions to Obligations of the Parent. The obligations of the
Parent to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver in writing, at or prior to the Closing, of
each of the following conditions:

(a) Representations and Warranties; Covenants. (i) The representations and
warranties of the Acquiror contained in this Agreement (other than Section 4.01)
shall have been true and correct as of the date hereof and as of the Closing
Date as though made on and as of the Closing Date (other than the
representations and warranties made as of another stated date, which
representations and warranties shall have been true and correct as of such date)
except where the failure to be so true and correct (without giving effect to any
limitations as to materiality or “Acquiror Material Adverse Effect” set forth
therein), individually or in the aggregate, has not had, or would not reasonably
be expected to have, an Acquiror Material Adverse Effect; (ii) Section 4.01
shall have been true and correct as of the date hereof and as of the Closing
Date as though made on and as of the Closing Date (other than the
representations and warranties made as of another stated date, which
representations and warranties shall have been true and correct as of such date)
in all respects; (iii) all of the obligations of the Acquiror to be performed or
complied with on or prior to the Closing pursuant to the terms of this Agreement
shall have been duly and fully performed and complied with in all material
respects; and (iv) the Parent shall have received a certificate dated the
Closing Date of the Acquiror signed by a duly authorized executive officer of
the Acquiror certifying that the conditions specified in clauses (i), (ii) and
(iii) of this Section 8.02(a) have been waived or satisfied.

(b) Ancillary Agreements. The Acquiror shall have executed and delivered each of
the Ancillary Agreements to which it is a party and shall have caused each
applicable Affiliate of the Acquiror to execute and deliver each of the
Ancillary Agreements to which such Affiliate of the Acquiror is a party.

 

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Section 8.03. Conditions to Obligations of the Acquiror. The obligations of the
Acquiror to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment or waiver in writing, at or prior to the Closing, of
each of the following conditions:

(a) Representations and Warranties; Covenants. (i) The representations and
warranties of the Parent contained in this Agreement (other than Section 3.01,
Section 3.02, Section 3.03(a) and (b), and Section 3.04) (in each case, only to
the extent applicable to the Parent, the Sellers and the Companies) shall have
been true and correct as of the date hereof and as of the Closing Date as though
made on and as of the Closing Date (other than the representations and
warranties made as of another stated date, which representations and warranties
shall have been true and correct as of such date) except where the failure to be
so true and correct (without giving effect to any limitations as to materiality
or “Material Adverse Effect” set forth therein), individually or in the
aggregate, has not had, or would not reasonably be expected to have, a Material
Adverse Effect; (ii) Section 3.01, Section 3.02, Section 3.03(a) and (b), and
Section 3.04 (in each case, only to the extent applicable to the Parent, the
Sellers and the Companies) shall have been true and correct as of the date
hereof and as of the Closing Date as though made on and as of the Closing Date
(other than the representations and warranties made as of another stated date,
which representations and warranties shall have been true and correct as of such
date) in all respects; (iii) all of the obligations of the Parent or any of its
Affiliates to be performed or complied with on or prior to the Closing pursuant
to the terms of this Agreement shall have been duly and fully performed and
complied with in all material respects; and (iv) the Acquiror shall have
received a certificate dated the Closing Date of the Parent signed by a duly
authorized officer or representative of the Parent certifying that the
conditions specified in clauses (i), (ii) and (iii) of this Section 8.03(a) have
been waived or satisfied; provided, that in the event that all of the other
conditions to Closing have been satisfied but the Parent requires additional
time to prepare and deliver any financial statements requested by the Acquiror
to be delivered by the Parent to the Acquiror pursuant to Section 5.19(b) only,
the references to “Closing Date” in clause (i) of this Section 8.03(a) shall be
deemed to refer, for purposes of all of the representations and warranties of
the Parent contained in this Agreement other than Section 3.01, Section 3.02,
Section 3.03(a) and (b), and Section 3.04, to the date prior to the Closing Date
on which the last of such conditions shall have been satisfied (the
“Representation and Warranty Date Limitation”).

(b) Ancillary Agreements. The Parent shall have executed and delivered each of
the Ancillary Agreements to which it is a party and shall have caused each
applicable Affiliate of the Parent to execute and deliver each of the Ancillary
Agreements to which such Affiliate is a party.

(c) No Material Adverse Effect. Since the date hereof, there shall have been no
Material Adverse Effect.

 

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ARTICLE IX

TERMINATION AND WAIVER

Section 9.01. Termination. This Agreement may be terminated prior to the
Closing:

(a) by the mutual written consent of the Parent and the Acquiror;

(b) by either the Parent or the Acquiror if the Closing has not occurred on or
before April 1, 2011; provided, however, that if the sole reason that the
Closing has not occurred is either (i) that one or more of the approvals
required pursuant to Section 8.01(b) have not been obtained on or prior to such
date or (ii) that the Parent requires additional time to prepare and deliver any
financial statements requested by the Acquiror to be delivered by the Parent to
the Acquiror pursuant to Section 5.19(b), such date may be extended by either
party to a date not beyond October 1, 2011; and provided, however, that the
right to terminate this Agreement under this Section 9.01(b) shall not be
available to any party hereto whose failure to take any action required to
fulfill any of such party’s obligations under this Agreement or other breach of
any provision of this Agreement has caused or resulted in the failure of the
Closing to occur prior to such date;

(c) by either the Parent or the Acquiror in the event of the issuance of a
final, non-appealable Governmental Order restraining or prohibiting the
consummation of the transactions contemplated by the Transaction Agreements;

(d) by the Acquiror (but only so long as the Acquiror is not in material breach
of its obligations under this Agreement) if there has been a material breach of
any representation, warranty, covenant or agreement of the Parent such that one
or more of the conditions to Closing set forth in Sections 8.01 and 8.03 are not
capable of being fulfilled as of April 1, 2011 (subject to extension pursuant to
the first proviso in Section 9.01(b)); or

(e) by the Parent (but only so long as the Parent is not in material breach of
its obligations under this Agreement) if there has been a material breach of any
representation, warranty, covenant or agreement of the Acquiror such that one or
more of the conditions to Closing set forth in Sections 8.01 and 8.02 are not
capable of being fulfilled as of April 1, 2011 (subject to extension pursuant to
the first proviso in Section 9.01(b)).

Section 9.02. Notice of Termination. Any party hereto desiring to terminate this
Agreement pursuant to Section 9.01 shall give written notice of such termination
to the other party or parties, as the case may be, to this Agreement.

Section 9.03. Effect of Termination. In the event of the termination of this
Agreement as provided in Section 9.01, this Agreement shall forthwith become
void and there shall be no liability on the part of any party to this Agreement
(or any of its Affiliates or Representatives), except that Section 5.04(a), this
Article IX, and Article XI shall survive any such termination; provided,
however, that nothing in this Section 9.03 shall relieve any party from
liability for an intentional breach of this Agreement. If this Agreement is
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April 1, 2011 pursuant to Section 9.01(b), Section 9.01(c) or Section 9.01(e) as
a result of a failure by the Acquiror to obtain any approval from the FSA
necessary to consummate the transactions contemplated hereby, the Acquiror shall
be obligated to pay to the Parent in cash interest on the Purchase Price, at a
rate of 5% per annum, for the period commencing on April 1, 2011 and ending on
the date the Parent terminates this agreement pursuant to Section 9.01(b),
Section 9.01(c) or Section 9.01(e). Notwithstanding anything to the contrary in
this Section 9.03, neither the Acquiror nor any Designated Acquiror shall be
required to pay such Purchase Price Interest Amount if the failure of the Parent
or the Sellers to fulfill any obligations under this Agreement was the sole and
direct cause of, or solely and directly resulted in, the failure of Closing to
occur prior to April 1, 2011, provided, further that in the event the Acquiror
has incurred the obligation to pay the Purchase Price Interest Amount, the
Acquiror shall not be obligated to pay any interest for any period during which
the failure of the Parent or the Sellers to fulfill any such obligation was the
sole and direct cause of, or solely and directly resulted in, the failure of the
Closing to occur.

ARTICLE X

INDEMNIFICATION

Section 10.01. Survival.

(a) Except as otherwise provided in ARTICLE VII, the representations and
warranties of the parties hereto contained in or made pursuant to this Agreement
or any certificate contemplated to be delivered pursuant hereto shall survive in
full force and effect until the date that is 21 months after the Closing Date,
at which time they shall terminate (and no claims shall be made for
indemnification under Section 10.02 or Section 10.03 thereafter), except:
(i) the Parent Fundamental Representations and the Acquiror Fundamental
Representations shall survive the Closing indefinitely; (ii) the representations
and warranties in Section 3.20 shall survive as provided in Article VII; and
(iii) the covenants and agreements of the parties hereto contained in or made
pursuant to this Agreement or any certificate contemplated to be delivered
pursuant hereto shall survive the Closing indefinitely.

(b) Neither the applicable survival period nor the right to indemnification or
other remedy based upon the representations, warranties, covenants and
agreements of the parties in this Agreement will be affected by any
investigation conducted, or any knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
of or compliance with any such representation, warranty, covenant or agreement.
The waiver of any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any covenant or agreement,
will not affect the right to indemnification or other remedy based on such
representations, warranties, covenants or agreements.

Section 10.02. Indemnification by the Parent.

(a) From and after the Closing and subject to this ARTICLE X, the Parent shall
indemnify, defend and hold harmless the Acquiror, its Affiliates (including the
Companies and the Transferred Subsidiaries) and its and their respective
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“Acquiror Indemnified Parties”) from and against, and reimburse any Acquiror
Indemnified Party for, all Losses that such Acquiror Indemnified Party may at
any time suffer or incur as a result of, arising out of, relating to or in
connection with:

(i) any inaccuracy or breach of any representation or warranty made by the
Parent in this Agreement or the certificates required to be delivered pursuant
to Section 8.03(a) (other than any representation or warranty made in
Section 3.20 which, for the avoidance of doubt shall be governed by ARTICLE VII)
after giving effect, if applicable, to the Representation and Warranty Date
Limitation;

(ii) any breach or failure by the Parent or any of its Affiliates to perform any
of their respective covenants, obligations or agreements contained in this
Agreement;

(iii) costs or expenses (including any termination fees, “kill fees” or other
penalties) incurred by any of the Companies or the Transferred Subsidiaries in
connection with the matter described in Section 10.02(a)(iii) of the Seller
Disclosure Letter, but only up to an amount equal to 50% of such costs and
expenses; and

(iv) the matters identified in Section 10.02(a)(iv) of the Seller Disclosure
Letter.

(b) Notwithstanding anything to the contrary contained herein, the Parent shall
not be required to indemnify, defend or hold harmless any Acquiror Indemnified
Party against, or reimburse any Acquiror Indemnified Party for, any Losses
pursuant to Section 10.02(a)(i) (other than Losses arising out of the inaccuracy
or breach of any Parent Fundamental Representations and the representations and
warranties in Section 3.20) (such Losses pursuant to Section 10.02(a)(i), other
than Losses arising out of the inaccuracy or breach of any Parent Fundamental
Representations and the representations and warranties in Section 3.20, being
referred to as the “Capped Losses”): (i) with respect to any claim (or series of
related claims arising from substantially the same underlying facts, events or
circumstances) unless such claim (or series of related claims arising from
substantially the same underlying facts, events or circumstances) involves
Losses in excess of ¥5,000,000 (nor shall any such claim or series of related
claims that do not meet the ¥5,000,000 threshold be applied to or considered for
purposes of calculating the aggregate amount of the Acquiror Indemnified
Parties’ Losses for which the Parent has responsibility under clause (ii) of
this Section 10.02(b) below); and (ii) until the aggregate amount of the Capped
Losses for which the Acquiror Indemnified Parties are entitled to
indemnification exceeds ¥4,100,000,000, after which the Parent shall be
obligated to indemnify and reimburse the Acquiror Indemnified Parties for the
aggregate amount of all Capped Losses for which the Acquiror Indemnified Parties
are entitled to indemnification under Section 10.02(a)(i) that are in excess of
¥4,100,000,000; but only if such Losses arise with respect to any claim (or
series of related claims arising from substantially the same underlying facts,
events or circumstances) that involves Losses in excess of ¥5,000,000.
Notwithstanding anything to the contrary herein, in no event shall the Parent be
required to indemnify, defend or hold harmless any Acquiror Indemnified Party
against, or reimburse any Acquiror Indemnified Party for, with respect to Capped
Losses, any amount in excess of ¥102,000,000,000; provided, that for purposes of
determining whether the amount of Losses has exceeded ¥102,000,000,000, such
Losses shall be diminished by any reduction in indemnification occurring by
reason of clauses (i) or (ii) of Section 10.07.

 

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Section 10.03. Indemnification by the Acquiror.

(a) From and after the Closing and subject to this ARTICLE X, the Acquiror shall
indemnify, defend and hold harmless the Parent, its Affiliates and its and their
respective Representatives (collectively, the “Parent Indemnified Parties”) from
and against, and reimburse any Parent Indemnified Party for, all Losses that
such Parent Indemnified Party may at any time suffer or incur, as a result of,
arising out of, relating to or in connection with:

(i) any inaccuracy or breach of any representation or warranty made by the
Acquiror in this Agreement or the certificate required to be delivered pursuant
to Section 8.02(a); and

(ii) any breach or failure by the Acquiror or any of its Affiliates to perform
any of its covenants, obligations or agreements contained in this Agreement.

(b) Notwithstanding anything to the contrary contained herein, the Acquiror
shall not be required to indemnify, defend or hold harmless any Parent
Indemnified Party against, or reimburse any Parent Indemnified Party for, any
Losses pursuant to Section 10.03(a)(i) (other than Losses arising out of the
inaccuracy or breach of any Acquiror Fundamental Representations) (such Losses
pursuant to Section 10.03(a)(i), other than Losses arising out of the inaccuracy
or breach of any Acquiror Fundamental Representations, being referred to as the
“Section 10.03(a)(i) Losses”): (i) with respect to any claim (or series of
related claims arising from substantially the same underlying facts, events or
circumstances) unless such claim (or series of related claims arising from
substantially the same underlying facts, events or circumstances) involves
Losses in excess of ¥5,000,000 (nor shall any such claim or series of related
claims that do not meet the ¥5,000,000 threshold be applied to or considered for
purposes of calculating the aggregate amount of the Parent Indemnified Parties’
Losses for which the Acquiror has responsibility under clause (ii) of this
Section 10.03(b) below); (ii) until the aggregate amount of the
Section 10.03(a)(i) Losses for which the Parent Indemnified Parties are entitled
to indemnification exceeds ¥4,100,000,000, after which the Acquiror shall be
obligated to indemnify and reimburse the Parent Indemnified Parties for the
aggregate of all Section 10.03(a)(i) Losses for which the Parent Indemnified
Parties are entitled to indemnification under Section 10.03(a)(i) that are in
excess of ¥4,100,000,000, but only if such Losses arise with respect to any
claim (or series of related claims arising from substantially the same
underlying facts, events or circumstances) that involves Losses in excess of
¥5,000,000; and (iii) any amount in excess of ¥102,000,000,000; provided, that
for purposes of determining whether the amount of Losses has exceeded
¥102,000,000,000, such Losses shall be diminished by any reduction in
indemnification occurring by reason of clauses (i) or (ii) of Section 10.07.

Section 10.04. Notification of Claims.

(a) A Person that may be entitled to be indemnified under this ARTICLE X (the
“Indemnified Party”) shall promptly notify the party or parties liable for such
indemnification (the “Indemnifying Party”) in writing of any claim in respect of
which

 

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indemnity may be sought under this ARTICLE X, including any pending or
threatened claim or demand by a third party that the Indemnified Party has
determined has given or could reasonably give rise to a right of indemnification
under this ARTICLE X (including a pending or threatened claim or demand asserted
by a third party against the Indemnified Party whether by litigation,
arbitration or otherwise) (each, a “Third Party Claim”), describing in
reasonable detail the facts and circumstances with respect to the subject matter
of such claim or demand; provided, however, that the failure to provide such
notice shall not release the Indemnifying Party from any of its obligations
under this ARTICLE X except to the extent that such failure materially
prejudices the defense of such claim by the Indemnifying Party. Any
indemnifiable claim that is not a Third Party Claim shall be asserted by written
notice to the Indemnifying Party. The parties agree that (i) in this ARTICLE X
they intend to shorten (in the case of the limited survival periods specified in
Section 10.01) and lengthen (in the case of the indefinite survival periods
specified in Section 10.01) (as the case may be) the applicable statute of
limitations period with respect to certain claims; (ii) notices for claims in
respect of a breach of a representation or warranty must be delivered prior to
the expiration of any applicable survival period specified in Section 10.01 for
such representation or warranty; and (iii) any claims for indemnification under
this ARTICLE X for which notice is not timely delivered in accordance with this
Section 10.04(a) shall be expressly barred and are hereby waived; provided,
further, that if, prior to such applicable date, a party hereto shall have
notified the other party hereto in accordance with the requirements of this
Section 10.04(a) of a claim for indemnification under this ARTICLE X (whether or
not formal legal action shall have been commenced based upon such claim), such
claim shall continue to be subject to indemnification in accordance with this
ARTICLE X notwithstanding the passing of such applicable date until such time as
such claim is fully and finally resolved.

(b) Upon receipt of a notice of a claim for indemnity from an Indemnified Party
pursuant to Section 10.04(a) in respect of a Third Party Claim, the Indemnifying
Party may, by notice to the Indemnified Party delivered within 20 Business Days
after the receipt of notice of such Third Party Claim, elect to compromise,
settle, defend or appeal such Third Party Claim with its own counsel,
contractors and consultants (who shall be reasonably acceptable to the
Indemnified Party) and at its own expense, and the Indemnified Party shall, and
the Parent, on the one hand, or the Acquiror, on the other hand (as the case may
be), shall cause each of their respective Affiliates and Representatives to,
cooperate fully with the Indemnifying Party in the compromise, settlement or
appeal of, or defense against, such Third Party Claim; provided that if the
Indemnifying Party assumes the compromise, defense, appeal or settlement of such
Third Party Claim, (i) the Indemnifying Party shall promptly reimburse the
Indemnified Party for reasonable out-of-pocket expenses incurred by the
Indemnified Party (such as reasonable travel costs, but not internal time
charges) in providing its cooperation, (ii) the Indemnified Party shall be
entitled to employ one counsel to represent itself if an actual conflict of
interest exists in the reasonable opinion of counsel to the Indemnified Party
between the Indemnifying Party and the Indemnified Party in respect of such
Third Party Claim, and in that event the reasonable fees and expenses of such
counsel shall promptly be paid by the Indemnifying Party (it being understood
that all Indemnified Parties may employ not more than one counsel to represent
them at the expense of the Indemnifying Party) and (iii) with respect to any
Third Party Claim that is asserted, initiated or brought by a Governmental
Authority or involves or alleges any violations of Laws, the Indemnifying Party
shall not agree to participate in any meeting with any

 

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Governmental Authority relating to any such Third Party Claim unless it consults
with the Indemnified Party in advance and, to the extent permitted by such
Governmental Authority or otherwise practicable, gives the Indemnified Party the
opportunity to attend and participate at such meeting. The Indemnified Party may
take any actions reasonably necessary to defend such Third Party Claim prior to
the time that it receives a notice from the Indemnifying Party as contemplated
by the immediately preceding sentence. In the event that the Indemnifying Party
fails to assume the compromise, settlement or appeal of, or defense against,
such Third Party Claim within 20 Business Days after receipt of notice thereof
from the Indemnified Party, such Indemnified Party shall have the right to
undertake the compromise, settlement or appeal of, or defense against such Third
Party Claim on behalf of and for the account and risk of the Indemnifying Party;
provided, however, that the Indemnified Party shall keep the Indemnifying Party
reasonably apprised of any significant developments relating to such Third Party
Claim and the compromise, settlement, appeal or defense thereof. If the
Indemnifying Party elects to assume the compromise, settlement or appeal of, or
defense against a Third Party Claim, the Indemnifying Party shall not, without
the prior written consent of the Indemnified Party (which shall not be
unreasonably withheld), consent to a settlement, compromise or discharge of, or
the entry of any judgment arising from, any Third Party Claim, unless such
settlement, compromise, or discharge or entry or any judgment does not involve
any finding or admission of any violation of Law or admission of any wrongdoing
or liability by the Indemnified Party and such settlement, compromise, discharge
or judgment involves only the payment of money damages, and the Indemnifying
Party shall (i) pay or cause to be paid all amounts arising out of such
settlement, compromise, discharge or judgment concurrently with the
effectiveness of such settlement, compromise, discharge or judgment (unless
otherwise provided therein) and (ii) obtain, as a condition of any settlement,
compromise, discharge, entry of judgment (if applicable), or other resolution, a
complete and unconditional general release of each Indemnified Party from any
and all liabilities in respect of such Third Party Claim. The Indemnified Party
shall not settle, compromise or consent to the entry of any judgment with
respect to any claim or demand for which it is seeking indemnification from the
Indemnifying Party, or admit to any liability with respect to such claim or
demand without the prior written consent of the Indemnifying Party (which
consent shall not be unreasonably withheld).

(c) Notwithstanding anything to the contrary contained in this ARTICLE X
(including Section 10.02 and Section 10.03), no Indemnifying Party shall have
any liability under this ARTICLE X for any Losses arising out of or in
connection with any Third Party Claim that is settled or compromised by an
Indemnified Party without the consent of such Indemnifying Party, except as
permitted under Section 10.04(b) in cases where the Indemnifying Party has
failed to assume the compromise, settlement, defense or appeal of a Third Party
Claim.

(d) In the event any Indemnifying Party receives a notice of a claim for
indemnity from an Indemnified Party pursuant to Section 10.04(a) that does not
involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified
Party within 20 Business Days following its receipt of such notice whether the
Indemnifying Party disputes its liability to the Indemnified Party under this
ARTICLE X. The Indemnified Party shall reasonably cooperate with and assist the
Indemnifying Party in determining the validity of any such claim for indemnity
by the Indemnified Party.

 

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Section 10.05. Payment. In the event a claim or any Action for indemnification
under this ARTICLE X has been finally determined, the amount of such final
determination shall be paid (i) if the Indemnified Party is an Acquiror
Indemnified Party, by the Parent to the Indemnified Party, and (ii) if the
Indemnified Party is a Parent Indemnified Party, by the Acquiror to the
Indemnified Party, in each case on demand in immediately available funds;
provided, however, that Parent and Acquiror shall cooperate to direct payment to
the Parent or the Sellers on one hand, and the Acquiror or any Designated
Acquiror on the other hand, as the case may be, if doing so would result in the
indemnification payment made under this Agreement to be treated as an adjustment
to the Share Purchase Price. A claim or an Action, and the liability for and
amount of damages therefor, shall be deemed to be “finally determined” for
purposes of this ARTICLE X when the Parties to this Agreement have so determined
by mutual agreement or, if disputed, when a final non-appealable Governmental
Order has been issued or entered into with respect to such claim or Action.

Section 10.06. Exclusive Remedies. Each party acknowledges and agrees that,
following the Closing, except in cases of fraud and except as otherwise provided
in this Agreement, the indemnification provisions of this ARTICLE X and, with
respect to taxes, Article VII, shall be the sole and exclusive monetary remedies
(including equitable remedies that involve monetary payment, such as restitution
or disgorgement, other than specific performance to enforce any payment or
performance due hereunder) of the parties in connection with any breach of a
representation and warranty, or non-performance, partial or total, of any
covenant or agreement contained in this Agreement. For the avoidance of doubt,
in no event shall any claims based upon fraud be subject to the limitations on
indemnification set forth in this ARTICLE X.

Section 10.07. Additional Indemnification Provisions.

(a) The Parent and the Acquiror agree, for themselves and on behalf of their
respective Affiliates and Representatives, that with respect to each
indemnification obligation set forth in ARTICLE X of this Agreement or any other
certificate executed or delivered in connection with the Closing: (i) Deductible
Losses shall be calculated on an After-Tax Basis; (ii) all Losses shall be net
of any Eligible Insurance Proceeds; (iii) in no event shall the Parent have any
liability or obligation to any Acquiror Indemnified Party pursuant to this
ARTICLE X with respect to the inaccuracy or breach of a representation or
warranty made by the Parent pursuant to this Agreement to the extent that Losses
resulting from or in connection with such inaccuracy or breach have been
recovered by the Acquiror in connection with the calculation of the Final Actual
Closing Solvency Capital; (iv) the Indemnifying Party shall be liable to the
Indemnified Party for any Losses to the extent incurred in connection with the
Indemnified Party’s successful assertion, enforcement, dispute or resolution of
its indemnification or other rights under this Agreement or the collection of
any amounts payable to a Party under this Agreement; (v) solely with respect to
claims that are not Third Party Claims, the Indemnified Party shall be liable to
the Indemnifying Party for any Losses to the extent incurred in connection with
the Indemnifying Party’s successful defense of any claim by the Indemnified
Party for indemnification or other rights under this Agreement; (vi) in no event
shall the Parent have any liability or obligation to any Acquiror Indemnified
Party to the extent that any Loss, or any portion thereof, for which
indemnification is sought hereunder is specifically reflected or reserved for in
the Final Actual Closing Solvency Capital Worksheet and taken into account in
the calculation of the Final Actual Closing Solvency Capital; and
(vii) notwithstanding anything

 

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contained in this Agreement to the contrary, for purposes of ARTICLE VII and
this ARTICLE X, (A) a breach of a representation or warranty shall be deemed to
exist either if such representation or warranty is actually inaccurate or
breached or would have been inaccurate or breached if such representation or
warranty had not contained any qualification as to materiality, or Acquiror
Material Adverse Effect or Material Adverse Effect (which, in each case, instead
will be read as any adverse effect or change) or similar language, and (B) the
amount of Losses in respect of any breach of a representation or warranty,
including any deemed breach resulting from the application of clause (A), shall
be determined without regard to any limitation or qualification as to
materiality, or Acquiror Material Adverse Effect or Material Adverse Effect
(which, in each case, instead will be read as any adverse effect or change) or
similar language set forth in such representation or warranty.

(b) Any amount payable by an Indemnifying Party pursuant to this ARTICLE X shall
be paid promptly and without reduction, and payment shall not be delayed pending
any determination of Eligible Insurance Proceeds. In any case where an
Indemnified Party recovers from a third Person any Eligible Insurance Proceeds
or any other amount in respect of any Loss for which an Indemnifying Party has
actually reimbursed it pursuant to this ARTICLE X, such Indemnified Party shall
promptly pay over to the Indemnifying Party the amount of such Eligible
Insurance Proceeds, but not in excess of the amount actually reimbursed by the
Indemnifying Party to or on behalf of the Indemnified Party in respect of such
claim.

(c) To the extent permitted by applicable Law, the parties hereto shall treat
any indemnification payment made under this Agreement as an adjustment to the
Share Purchase Price.

(d) If any portion of Losses to be reimbursed by the Indemnifying Party may be
covered, in whole or in part, by third party insurance coverage, the Indemnified
Party shall promptly give notice thereof to the Indemnifying Party (a “Notice of
Insurance”). If the Indemnifying Party so requests within 180 days after receipt
of a Notice of Insurance, the Indemnified Party shall use its commercially
reasonable efforts to seek to collect insurance proceeds under such third party
insurance coverage; provided, however, that the Indemnified Party has no
obligation to commence, or threaten or otherwise seek to commence, any Action
against any Person, including any Governmental Authority, to collect insurance
proceeds under such third party insurance coverage.

Section 10.08. Mitigation. Except as otherwise specified herein, each of the
parties hereto agrees to take commercially reasonable steps to mitigate their
respective Losses upon and after becoming aware of any event or condition which
would reasonably be expected to give rise to any Losses that are indemnifiable
hereunder.

ARTICLE XI

GENERAL PROVISIONS

Section 11.01. Expenses. Except as may be otherwise specified in the Transaction
Agreements, all costs and expenses, including fees and disbursements of counsel,
financial advisers and accountants, incurred in connection with the Transaction
Agreements and the transactions contemplated by the Transaction Agreements shall
be paid by the Person incurring such costs and expenses, whether or not the
Closing shall have occurred.

 

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Section 11.02. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, by facsimile with receipt
confirmed (followed by delivery of an original via overnight courier service) or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this
Section 11.02):

 

  (i) if to the Parent:

American International Group, Inc.

80 Pine Street

New York, NY 10005

Attention: General Counsel

Facsimile: 212-425-2175

with a copy to:

Simpson Thacher & Bartlett LLP

12-32 Akasaka, 1-chome

Minato-ku, Tokyo 107-6037

Attention: David Sneider

Facsimile: +81-3-5562-6202

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attention: Gary I. Horowitz

Patrick J. Naughton

Facsimile: 212-455-2502

 

  (ii) if to the Acquiror:

Prudential Financial, Inc.,

Japan Representative Office

Prudential Tower

2-13-10 Nagatacho

Chiyoda-ku

Tokyo 100-0014

Japan

Attention: International Counsel

Facsimile: +813-3539-5645

 

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and

Prudential Financial, Inc.

751 Broad Street

Newark, NJ 07102

USA

Attention: Anthony Torre

Facsimile: 1-973-802-2290

with copies to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, NY 10022

Attention: Paul S. Bird

Facsimile: 212-521-7435

and

Nishimura & Asahi

Ark Mori Building, 29th Floor

12-32 Akasaka 1-chome, Minato-ku

Tokyo 107-6029

Japan

Attention: Masakazu Iwakura

Facsimile: +813-5561-9711

Section 11.03. Public Announcements. No party to this Agreement or any Affiliate
or Representative of such party shall issue or cause the publication of any
press release or public announcement or otherwise communicate with any news
media in respect of this Agreement or the transactions contemplated by this
Agreement without the prior written consent of the other party (which consent
shall not be unreasonably withheld, conditioned or delayed), except as may be
required by Law or applicable securities exchange rules, in which case to the
extent practicable, the party required to publish such press release or public
announcement shall allow the other party a reasonable opportunity to comment on
such press release or public announcement in advance of such publication. Prior
to the Closing, neither of the parties to this Agreement, nor any of their
respective Affiliates or Representatives, shall make any disclosure concerning
plans or intentions relating to the customers, agents or employees of, or other
Persons with significant business relationships with, the Companies or the
Transferred Subsidiaries (including any of agents or Brokers) without first
obtaining the prior written approval of the other party, which approval will not
be unreasonably withheld, conditioned or delayed.

Section 11.04. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any Law or as a matter of
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such

 

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determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties to this Agreement shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement be consummated as originally
contemplated to the greatest extent possible.

Section 11.05. Entire Agreement. Except as otherwise expressly provided in the
Transaction Agreements, the Transaction Agreements constitute the entire
agreement of the parties hereto with respect to the subject matter of the
Transaction Agreements and supersede all prior agreements and undertakings, both
written and oral, other than the Confidentiality Agreement to the extent not in
conflict with this Agreement, between or on behalf of the Parent and/or its
Affiliates, on the one hand, and the Acquiror and/or its Affiliates, on the
other hand, with respect to the subject matter of the Transaction Agreements.

Section 11.06. Assignment. This Agreement shall not be assigned, in whole or in
part, by operation of Law or otherwise without the prior written consent of the
parties hereto. Any attempted assignment in violation of this Section 11.06
shall be void. This Agreement shall be binding upon, shall inure to the benefit
of, and shall be enforceable by the parties hereto and their successors and
permitted assigns. Notwithstanding the foregoing, without the consent of the
Parent, the Acquiror may transfer or assign (including by way of a pledge), in
whole or in part, to one or more of its Affiliates, any or all of its rights
hereunder (including its rights to seek indemnification hereunder); provided
that no such transfer or assignment will relieve the Acquiror of its obligations
hereunder and such transfer shall cease to be effective if such transferee
ceases to be an Affiliate of the Acquiror. Notwithstanding anything to the
contrary in this Agreement, without the consent of the Acquiror, the Parent may
assign the right to receive the Purchase Price and other payments to be made to
Parent pursuant to the terms of this Agreement (when and if such payments are
made) to any of the Permitted Parties; provided that no such assignment will
relieve the Parent of its obligations hereunder and that no such assignee shall
be deemed to be a third-party beneficiary under this Agreement or have any legal
or equitable rights to enforce any provision of this Agreement and such
assignee’s rights shall be limited to the right to receive the Purchase Price
and other payments to be made to Parent pursuant to the terms of this Agreement
(when and if such payments are made). For the avoidance of doubt, the payment of
the Purchase Price to such assignee shall constitute full satisfaction of the
Acquiror’s obligations hereunder to pay the Purchase Price to the Parent and the
Sellers as contemplated in ARTICLE II.

Section 11.07. No Third-Party Beneficiaries. Except as provided in Section 5.10
with respect to directors, statutory auditors and officers of the Companies and
Transferred Subsidiaries, in Section 5.11 with respect to Company Releasees and
Parent Releasees, in Section 7.01 with respect to Acquiror Indemnified Parties,
and in Article X with respect to Parent Indemnified Parties and Acquiror
Indemnified Parties, this Agreement is for the sole benefit of the parties to
this Agreement and their permitted successors and assigns and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person (including any policyholder of any Company or Insurance Company except as
explicitly provided in a Hold Harmless Agreement) any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
The Sellers shall be express third-party beneficiaries under this Agreement and,
as such, this Agreement may be enforced by each of the Sellers as if it were a
party hereto.

 

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Section 11.08. Amendment; Waiver. No provision of this Agreement or any other
Transaction Agreement may be amended, supplemented or modified except by a
written instrument signed by all the parties to such agreement. No provision of
this Agreement or any other Transaction Agreement may be waived except by a
written instrument signed by the party to such agreement against whom the waiver
is to be effective. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by Law.

Section 11.09. Disclosure Schedules. Matters reflected in any Section of this
Agreement, including any section or subsection of the Seller Disclosure Letter
or the Acquiror Disclosure Letter, are not necessarily limited to matters
required by this Agreement to be so reflected. Such additional matters are set
forth for informational purposes and do not necessarily include other matters of
a similar nature. No reference to or disclosure of any item or other matter in
any Section or Schedule of this Agreement shall be construed as an admission or
indication that such item or other matter is material or that such item or other
matter is required to be referred to or disclosed in this Agreement. Without
limiting the foregoing, no such reference to or disclosure of a possible breach
or violation of any contract, Law or Governmental Order shall be construed as an
admission or indication that breach or violation exists or has actually
occurred.

Section 11.10. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall in all respects be governed by, and construed and
interpreted in accordance with, the Laws of the State of New York without giving
effect to any conflicts of law principles of such state that might refer the
governance, construction or interpretation of this Agreement to the Laws of
another jurisdiction.

(b) Each of the Parent and the Acquiror irrevocably and unconditionally:

(i) submits itself and its property in any Action arising out of or relating to
the interpretation and enforcement of the provisions of this Agreement and of
the documents referred to herein and in respect of the transactions contemplated
hereby, to the exclusive jurisdiction of the Courts of Chancery of the State of
Delaware or, if under applicable Law, jurisdiction is vested in the United
States federal courts, the federal courts of the United States located in the
State of Delaware;

(ii) consents that any such Action may and shall be brought in such courts and
waives any objection that it may now or hereafter have to the venue or
jurisdiction of any such Action in any such court or that such Action was
brought in an inconvenient court and agrees not to assert, plead or claim the
same;

 

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(iii) agrees that service of process in any such Action may be effected by
mailing a copy of such process by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Party at its
address as provided in Section 11.02; and

(iv) agrees that nothing in this Agreement shall affect the right to effect
service of process in any other manner permitted by the Laws of the State of
New York.

(c) EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

Section 11.11. Rules of Construction. Interpretation of this Agreement and the
other Transaction Agreements (except as specifically provided in any such
agreement, in which case such specified rules of construction shall govern with
respect to such agreement) shall be governed by the following rules of
construction: (a) words in the singular shall be held to include the plural and
vice versa, and words of one gender shall be held to include the other gender as
the context requires; (b) references to the terms Article, Section, paragraph,
Exhibit and Schedule are references to the Articles, Sections, paragraphs,
Exhibits and Schedules to this Agreement unless otherwise specified;
(c) references to “$” shall mean U.S. dollars and “¥” shall mean Japanese yen;
(d) the word “including” and words of similar import when used in the
Transaction Agreements shall mean “including without limitation,” unless
otherwise specified; (e) the word “or” shall not be exclusive; (f) the words
“herein,” “hereof” or “hereunder,” and similar terms are to be deemed to refer
to this Agreement as a whole and not to any specific section; (g) the headings
contained in the Transaction Agreements are for reference purposes only and
shall not affect in any way the meaning or interpretation of the Transaction
Agreements; (h) the Transaction Agreements shall be construed without regard to
any presumption or rule requiring construction or interpretation against the
Party drafting or causing any instrument to be drafted; (i) if a word or phrase
is defined, the other grammatical forms of such word or phrase have a
corresponding meaning; (j) references to any statute, listing rule, rule,
standard, regulation or other Law include a reference to (1) the corresponding
rules and regulations and (2) each of them as amended, modified, supplemented,
consolidated, replaced or rewritten from time to time; and (k) references to any
section of any statute, listing rule, rule, standard, regulation or other Law
include any successor to such section.

Section 11.12. Specific Performance. 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. It
is accordingly agreed that, without the necessity of posting bond or other
undertaking, the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in accordance with this Agreement, in addition to
any other remedy to which such party is 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.

 

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Section 11.13. Counterparts. This Agreement and each of the other Transaction
Agreements may be executed in one or more counterparts, and by the different
parties to each such agreement in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to any Transaction Agreement by facsimile or other means of
electronic transmission shall be as effective as delivery of a manually executed
counterpart of any such Transaction Agreement.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first written above by their respective duly authorized officers.

 

AMERICAN INTERNATIONAL GROUP, INC. By  

/s/ P. Nicholas Kourides

  Name: P. Nicholas Kourides   Title:   Deputy General Counsel, Attorney-in-Fact
PRUDENTIAL FINANCIAL, INC. By  

/s/ Thomas DePatie

  Name: Thomas DePatie   Title:   Second Vice President

Signature Page

Stock Purchase Agreement

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EXHIBIT A

DEFINITIONS

“Acquired Entity” shall have the meaning set forth in Section 5.09(c).

“Acquiring Entity” shall have the meaning set forth in Section 5.09(d)(i),
Section 5.09(d)(ii) and Section 5.09(d)(iii).

“Acquiror” shall have the meaning set forth in the Preamble.

“Acquiror Disclosure Letter” shall have the meaning set forth in the first
paragraph of Article IV.

“Acquiror Fundamental Representations” means the representations and warranties
made in Section 4.01 (Incorporation, Qualification and Authority of the
Acquiror) and Section 4.07 (Brokers).

“Acquiror Indemnified Parties” shall have the meaning set forth in
Section 10.02(a).

“Acquiror Material Adverse Effect” means any fact, circumstance, event, change,
violation, development, effect, condition or occurrence, either individually or
in the aggregate with any other facts, circumstances, events, changes,
violations, developments, effects, conditions or occurrences, that materially
impedes or materially delays, or would reasonably be likely to materially impede
or materially delay, the ability of the Acquiror to perform its obligations
under the Transaction Agreements or to consummate the transactions contemplated
by the Transaction Agreements.

“Acquiror Permitted Liens” means the following Liens, provided in all events,
that such Liens and each of the items set forth in (a) through (m) below will
not, individually or in the aggregate, materially interfere with the conduct of
the Ordinary Course of Business: (a) statutory Liens for Tax that are not yet
due or payable or that are being contested in good faith by appropriate
proceedings and with respect to which adequate accruals or reserves have been
established; (b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen and other Liens imposed by Law
for amounts not yet due or payable arising in the Ordinary Course of Business
consistent with past practices or which are being contested in good faith by
appropriate proceedings and with respect to which adequate accruals or reserves
have been established; (c) Liens incurred or deposits made to a Governmental
Authority in connection with a governmental authorization, registration, filing,
license, permit or approval; (d) pledges or deposits made in the Ordinary Course
of Business in compliance with workers’ compensation, unemployment insurance or
other types of social security; (e) easements, rights of way, covenants,
restrictions, licenses and other similar encumbrances of record; (f) Liens not
created by the Acquiror or any Subsidiary of the Acquiror that affect the
underlying fee interest of any real property leased by the Acquiror or any
Subsidiary of the Acquiror; provided, that the Acquiror or the Subsidiary of the
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applicable, continue to enjoy any non-disturbance rights with respect to any
such material real property leased by the Acquiror or the Subsidiary of the
Acquiror; (g) zoning, building and other generally applicable land use
restrictions; (h) Liens that have been placed by a third party on the fee title
of the real property constituting the real property leased by the Acquiror or
any of Subsidiary of the Acquiror or real property over which the Acquiror or
the Subsidiaries of the Acquiror have easement rights; provided that the
Acquiror or the Subsidiary of the Acquiror, as applicable, continues to enjoy
non-disturbance rights with respect to any such material real property leased by
the Acquiror or any Subsidiary of the Acquiror; (i) any set of facts that an
accurate up-to-date survey would show; (j) pledges or other collateral
assignments of assets, including by means of a credit for reinsurance trust, to
or for the benefit of cedents under reinsurance written by any Subsidiary of the
Acquiror that is an insurance company, for purposes of statutory accounting
credit; (k) Liens granted under securities lending and borrowing agreements,
repurchase and reverse repurchase agreements and derivatives entered into in the
Ordinary Course of Business; (l) clearing and settlement Liens on securities and
other investment properties incurred in the ordinary course of clearing and
settlement transactions in such securities and other investment properties and
holding them with custodians in the Ordinary Course of Business; and
(m) licenses affecting Intellectual Property owned by the Acquiror or any
Subsidiary of the Acquiror.

“Acquiror Releasor” shall have the meaning set forth in Section 5.11(b).

“Acquisition Condition” shall have the meaning set forth in Section 5.09(c).

“Acquisition Transaction” shall have the meaning set forth in Section 5.09(c).

“Action” means any claim, action, suit, litigation, arbitration or proceeding by
or before any Governmental Authority, arbitrator, or arbitral body.

“Actual Closing Solvency Capital” shall have the meaning set forth in
Section 2.05(a).

“Actual Closing Solvency Capital Worksheet” shall have the meaning set forth in
Section 2.05(a).

“Actual Solvency Deficit” shall have the meaning set forth in Section 2.05(a).

“Actuarial Analyses” shall have the meaning set forth in Section 3.21(b).

“Affiliate” means, with respect to any specified Person, any other Person that,
at the time of determination, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control with such
specified Person, and the term “Affiliated” shall have a correlative meaning;
for the avoidance of doubt, unless otherwise specified herein, the Companies and
the Transferred Subsidiaries shall be deemed “Affiliates” of the Parent (and not
the Acquiror) prior to the Closing and shall be deemed “Affiliates” of the
Acquiror (not the Parent) from and after the Closing; provided, however, that,
for the purposes of this definition, neither the Sellers nor the Parent shall be
deemed to be an Affiliate of the Acquiror and neither the FRBNY nor the U.S.
Treasury shall be deemed an Affiliate of Sellers or the Parent.

 

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“After-Tax Basis” means that, in determining the amount of the payment necessary
to indemnify any Indemnified Party for Deductible Losses, the amount of such
Losses shall be determined net of any Tax benefit derived by the Indemnified
Party, which for these purposes shall be deemed to equal 15% of the amount of
such Losses.

“Agreement” means this Stock Purchase Agreement, dated as of September 30, 2010,
between the Parent and the Acquiror, including the Schedules and Exhibits
hereto, the Seller Disclosure Letter, the Acquiror Disclosure Letter, and all
amendments to such agreement made in accordance with Section 11.08.

“AIA SPV” shall have the meaning set forth in the definition of Permitted Liens.

“AIG Funding” shall have the meaning set forth in the Recitals.

“AIGFAJ” shall have the meaning set forth in the Recitals.

“AIGFAJ Shares” shall have the meaning set forth in the Recitals.

“AIGFAJ Subordinated Debt” shall have the meaning set forth in Section 3.03(a).

“AIRCO” shall have the meaning set forth in the Recitals.

“ALICO SPV” shall have the meaning set forth in the definition of Permitted
Liens.

“AML Measures” shall have the meaning set forth in Section 3.29(c).

“Ancillary Agreements” means the Transition Services Agreement, the Transitional
Trademark License Agreement, the Intellectual Property Agreement, the Bridge
Loan Assignment Agreement, the Provider Letter Agreements, the Seller Letter
Agreements and the Hold Harmless Agreements.

“Ancillary Financial Statements” shall have the meaning set forth in
Section 3.06(b).

“Applicable Exchange Rate” means as of any date of determination, the exchange
rate for Japanese yen into U.S. dollars as published by Bloomberg at 5:00 p.m.
New York time using the Bloomberg function “JPY CRNCY HP” on such date.

“Archived Files” shall have the meaning set forth in Section 5.03(b).

“Auditor’s Letter” shall have the meaning set forth in Section 2.05(i).

“Bankruptcy Event” means, with respect to any Person, any of the following
events: (a) the entry by a court having jurisdiction in the premises of a decree
or order (i) for relief in respect of such Person in an involuntary case or
proceeding under any Bankruptcy Law or (ii) approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of such Person under any Bankruptcy Law or ordering the winding

 

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up or liquidation of its affairs, and the continuance of such decree or order
for thirty (30) consecutive days; (b) the appointment by the United States
Secretary of the Treasury of the Federal Deposit Insurance Corporation as
receiver of such Person or any substantial part of its property or the entry by
a court having jurisdiction in the premises of a decree or order appointing any
receiver, liquidator, assignee, trustee, administrator, sequestrator or other
similar official of such Person or any substantial part of its property, and the
continuance of such appointment for thirty (30) consecutive days; or (c) the
commencement by such Person of a voluntary case or proceeding under any
Bankruptcy Law or the consent by it to the entry of a decree or order for relief
in respect of such Person in an involuntary case or proceeding under any
Bankruptcy Law, or the filing by it of a petition seeking reorganization or
relief under any Bankruptcy Law, or the consent by it to the filing of such
petition or to the appointment of any receiver (including the Federal Deposit
Insurance Corporation), liquidator, assignee, trustee, administrator,
sequestrator or other similar official of such Person or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the taking of corporate action by such Person in furtherance of
any such action.

“Bankruptcy Law” means any applicable bankruptcy, insolvency, reorganization,
liquidation, rehabilitation, conservation, dissolution, examination or other
similar Law.

“Benefit Plans” shall have the meaning set forth in Section 3.13(a).

“Bridge Loan” shall have the meaning set forth in the Recitals.

“Bridge Loan Assignment Agreement” shall have the meaning set forth in the
Recitals.

“Bridge Loan Purchase Price” means an amount, expressed in U.S. dollars based on
the Applicable Exchange Rate as in effect as of the date hereof, representing
the principal amount of debt under the Bridge Loan outstanding as of the date
hereof, plus accrued and unpaid interest thereon to but excluding the Closing
Date.

“Broker” means any agent, marketer, underwriter, wholesaler, broker,
intermediary, distributor, manager, arranger, plan sponsor or other producer or
broker. For the avoidance of doubt, “Broker” shall not include any Master Group
Policyholder.

“Broker Contract” means any Contract which calls for the payment, whether
contingent or otherwise, by or on behalf of any of the Companies or any of the
Transferred Subsidiaries in excess of ¥85,500,000 in any 12-month period during
the remaining term thereof between any Broker or any Master Group Policyholder,
on the one hand, and any of the Companies or any of the Transferred
Subsidiaries, on the other hand, providing for the placement or sale of any
products on its behalf.

“Business” means the business conducted by the Companies and the Transferred
Subsidiaries as of the date hereof.

 

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“Business Day” means any day that is not a Saturday, a Sunday or any other day
on which commercial banks in the City of New York, New York or in Tokyo, Japan
are required or authorized by Law to remain closed.

“Capital Stock” means capital stock or any other type of equity interest in (as
applicable) a Person.

“Capped Losses” shall have the meaning set forth in Section 10.02(b).

“Change of Control/Sale Transaction” means a Change of Control Transaction, a
Spin-Off Change of Control Transaction or a Covered Business Sale, as
applicable.

“Change of Control Transaction” shall have the meaning set forth in
Section 5.09(d)(i).

“Client Company” means an insurance company (other than the Company or the
Transferred Subsidiaries) that is party to an Insurance Contract, that generated
annual premiums equal to or greater than ¥45,000,000, with an Insurance Company
pursuant to which such Insurance Company, as reinsurer, reinsured certain
coverages, including underlying insurance policies issued by such Client Company
as cedent.

“Client Company Contract” means an Insurance Contract that generated annual
premiums equal to or greater than ¥45,000,000 between a Client Company and an
Insurance Company.

“Closing” shall have the meaning set forth in Section 2.02.

“Closing Date” shall have the meaning set forth in Section 2.02.

“Closing Date Solvency Capital True-Up Amount” means the amount, expressed in
U.S. dollars based on the Applicable Exchange Rate as in effect as of the
Business Day immediately preceding the Closing Date, if any, equal to the
Estimated Solvency Deficit calculated based on the Estimated Companies Solvency
Capital Worksheet.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Common Shares” shall have the meaning set forth in the Recitals.

“Companies” shall have the meaning set forth in the Recitals.

“Companies Solvency Capital” means, as of any date of determination, the
Insurance Companies’ combined solvency capital, calculated in accordance with
the Solvency Capital Calculation Methodology.

“Company Benefit Plans” shall have the meaning set forth in Section 3.13(a).

“Company Releasee” shall have the meaning set forth in Section 5.11(a).

 

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“Compensation Restrictions” means (i) any restrictions on the timing, amount or
form of compensation of any Employee imposed on such Employee (or on the Parent
with respect to such Employee) (a) as a condition or result of the Parent’s
compliance with the TARP Standards for Compensation and Corporate Governance, 31
C.F.R. Part 30, including any guidance or regulation promulgated thereunder,
(b) under any applicable Law enacted or implemented on or following October 3,
2008, (c) under any agreement entered into by the Parent, its Subsidiaries or
any Employee in connection with any of the foregoing, or (d) as a condition or
result of the Parent’s consultation with and determinations of the Office of the
Special Master for TARP Executive Compensation or (ii) the effect of Taxes on
such compensation.

“Confidentiality Agreement” shall have the meaning set forth in Section 5.04(a).

“Contract” means any contract, agreement, undertaking, indenture, commitment,
loan, license, consent, note, lease or other legally binding obligation, whether
written or oral.

“Control,” “Controlled” and “Controlling” mean, as to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. The terms “Controlled
by,” “under common Control with” and “Controlling” shall have correlative
meanings. For the purposes of this Agreement, the Parent shall be deemed not to
be Controlled by any Person.

“Copyrights” shall have the meaning set forth in the definition of Intellectual
Property.

“Covered Business” means any Restricted Business of any Parent Entity unless
such Restricted Business is part of a completed Spin-Off Transaction.

“Covered Business Sale” shall have the meaning set forth in
Section 5.09(d)(iii).

“Credit Saison Debt” shall have the meaning set forth in Section 3.03(a).

“Credit Saison Debt Amount” means an amount, expressed in U.S. dollars based on
the Applicable Exchange Rate as in effect as of the date hereof, representing
the principal amount of subordinated debt held by Credit Saison, Ltd.
outstanding as of the date hereof, plus accrued and unpaid interest thereon to
but excluding the Closing Date.

“Dedicated Space” shall have the meaning set forth in Section 5.17(d).

“Deductible Losses” shall mean Losses that are deductible for income tax
purposes by the Person incurring such Loss and with respect to which the receipt
of indemnification by the applicable Indemnified Party is not includible for
income tax purposes by such Indemnified Party.

“Designated Acquiror” shall mean Prudential Holdings of Japan, Inc., The
Gibraltar Life Insurance Company, Ltd. or, solely with respect to the Bridge
Loan, Prudential Insurance Company of America.

 

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“D&O Indemnified Person” shall have the meaning set forth in Section 5.10(b).

“Domiciliary Regulator” means the Governmental Authority charged with the
supervision of an insurance company in the jurisdiction of domicile of such
insurance company. For purposes of this Agreement, an insurance company shall be
deemed to be domiciled in each jurisdiction in which it (i) is organized,
(ii) has a branch or other division regulated as a branch and (iii) is
“commercially domiciled” under applicable Law.

“Edison” shall have the meaning set forth in the Recitals.

“Edison Service” shall have the meaning set forth in the Recitals.

“Edison Service Shares” shall have the meaning set forth in the Recitals.

“Edison Shares” shall have the meaning set forth in the Recitals.

“Eligible Insurance Proceeds” means, with respect to Losses to be reimbursed by
an Indemnifying Party that may be covered, in whole or in part, by third party
insurance coverage, the amount of insurance proceeds actually received in cash
under such third party insurance coverage with respect to such Losses, net of
the costs in seeking such collection.

“Employee” means (i) each person who as of the Closing Date is an active
employee of any Company or Transferred Subsidiary and (ii) each person who is an
employee of any Company or Transferred Subsidiary as of the Closing Date who is
absent from employment due to illness, vacation, injury, military service or
other authorized absence (including an employee who is “disabled” within the
meaning of the short-term disability plan currently in place for the Companies
and the Transferred Subsidiaries, or who is on approved leave under applicable
Law). For purposes of Sections 6.01(f) and (g), “Employees” shall also mean each
former employee of any Company or Transferred Subsidiary (or any predecessors,
as the context requires).

“Environmental Law” means all Laws relating to the environment, natural
resources, or to the safety or health of humans or other living organisms (as it
relates to exposure to Hazardous Material).

“Estimated Companies Solvency Capital” shall have the meaning set forth in
Section 2.04(b).

“Estimated Companies Solvency Capital Worksheet” shall have the meaning set
forth in Section 2.04(b).

“Estimated Solvency Deficit” shall have the meaning set forth in
Section 2.04(b).

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Taxes” shall have the meaning set forth in Section 7.01(a).

“Expert Accountant” shall have the meaning set forth in Section 2.05(g).

 

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“Facilities” shall have the meaning set forth in the Transition Services
Agreement.

“FCPA” shall have the meaning set forth in Section 3.29(a).

“Final Actual Closing Solvency Capital” shall have the meaning set forth in
Section 2.05(g).

“Final Actual Closing Solvency Capital Worksheet” shall have the meaning set
forth in Section 2.05(g).

“Final Actual Solvency Deficit” shall have the meaning set forth in
Section 2.05(g).

“Financial Reinsurance Contract” means any reinsurance Contract that does not
transfer sufficient risk to the reinsurer to constitute reinsurance under
applicable accounting principles (such as under GAAP, U.S. GAAP or other
statutory accounting principles).

“Financings” shall have the meaning set forth in Section 5.19.

“FRBNY” means the Federal Reserve Bank of New York.

“FRBNY Liens” shall have the meaning set forth in the definition of Permitted
Liens.

“FRBNY NDA” shall have the meaning set forth in Section 5.04(c).

“FSA” means the Financial Services Agency of Japan.

“GAAP” means generally accepted accounting principles in Japan.

“Government Recipients” shall have the meaning set forth in Section 5.04(c).

“Governmental Approval” shall have the meaning set forth in Section 3.05.

“Governmental Authority” means any Japanese, U.S. or other governmental,
quasi-governmental, legislative, judicial, administrative or regulatory
authority, agency, commission, body, court, instrumentality or entity, any
self-regulatory organization and any political or other subdivision, department,
branch or Representative of the foregoing.

“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered or issued by or with any
Governmental Authority.

“Guarantor” shall have the meaning set forth in Section 5.08(a).

“Guaranty” shall have the meaning set forth in Section 5.08(a).

“Hazardous Material” means any pollutant, contaminant, hazardous substance,
hazardous waste, medical waste, special waste, toxic substance, petroleum or
petroleum-derived substance, waste or additive, asbestos, polychlorinated
biphenyl (PCB), radioactive material, or other compound, element or substance in
any form (including products) regulated, restricted or addressed by or under any
Environmental Law.

 

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“Hold Harmless Agreement” shall have the meaning set forth in the Recitals.

“Holdings” shall have the meaning set forth in the Recitals.

“Indebtedness” means, without duplication, with respect to any Person, any
(a) liabilities, obligations and indebtedness of such Person, of any kind or
nature, now or hereafter owing, arising, due or payable, howsoever evidenced,
created, incurred, acquired or owing, whether primary, secondary, direct,
contingent, fixed or otherwise, consisting of indebtedness for borrowed money or
the deferred purchase price of property or services, excluding indebtedness of
less than 60 days duration incurred in connection with purchases of merchandise
and services in the Ordinary Course of Business; (b) obligations and liabilities
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP; (c) obligations and liabilities under
guarantees by such Person of indebtedness of another Person; (d) obligations and
liabilities of such Person in respect of letters of credit, bankers’ acceptances
or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person; and (e) obligations of such Person
evidenced by bonds, notes, debentures, or similar instruments. Notwithstanding
anything herein to the contrary, Indebtedness shall not include (i) any
obligation of any Person to make any payment, hold funds or securities in trust
or to segregate funds or securities for the benefit of one or more third parties
(including any policyholder, pension fund or mutual fund shareholder or
unitholder) pursuant to (A) any insurance or reinsurance contract, annuity
contract, variable annuity contract, unit-linked or mutual fund account or other
similar agreement or instrument, (B) any pension fund or mutual fund contract or
(C) any capital redemption contract or suretyship contract issued pursuant to
its insurance business license in the Ordinary Course of Business, (ii) any
Indebtedness issued, assumed, guaranteed or otherwise incurred by any Insurance
Company, for or on behalf of any separate account of such Insurance Company, in
respect of which the recourse of the holder of such indebtedness is limited to
assets of such separate account and no other assets or property whatsoever of
the Companies or the Transferred Subsidiaries, (iii) any Indebtedness that is
secured by a real property mortgage under which the recourse of the lender is
limited to the relevant real property and no other assets or property whatsoever
of the Companies or the Transferred Subsidiaries other than recourse liability
for customary “bad boy” acts, (iv) the obligations of any investment funds
Controlled by the Companies that would be considered as liabilities of the
Companies on the consolidated financial statements prepared in accordance with
GAAP but not, for the sake of clarity, in respect of indebtedness for borrowed
money, (v) obligations under or arising out of any employee benefit plan,
employment contract or other similar arrangement in existence as of the Closing
Date or (vi) obligations under any severance or termination of employment
agreement or plan. For the avoidance of doubt, Indebtedness shall not include
statutory liens incurred or advances or deposits or other security granted to
any Governmental Authority in connection with a governmental authorization,
registration, filing, license, permit or approval of the Ordinary Course of
Business.

 

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“Indebtedness for Borrowed Money” shall have the meaning set forth in
Section 3.03(a).

“Indemnified Party” shall have the meaning set forth in Section 10.04(a).

“Indemnifying Party” shall have the meaning set forth in Section 10.04(a).

“Independent Auditor” shall have the meaning set forth in Section 3.06(d).

“Insurance Agreement” means (a) any reinsurance or retrocession Contract between
the Parent or any of its Affiliates (other than any of the Companies or any of
the Transferred Subsidiaries), on the one hand, and any of the Companies or any
of the Transferred Subsidiaries, on the other hand, (b) any insurance policies
purchased or obtained by any of the Companies or any of the Transferred
Subsidiaries from the Parent or any of its Affiliates (other than any of the
Companies or any of the Transferred Subsidiaries), which policy solely provides
coverage to any of the Companies or any of the Transferred Subsidiaries, and
(c) any other Contracts entered into in connection with any Contract or policy
contemplated by clauses (a) or (b) of this definition.

“Insurance Business Law” means the Insurance Business Law of Japan, Law No. 105
of 1995.

“Insurance Company” shall have the meaning set forth in Section 3.06(a).

“Insurance Contract” means any insurance policy, annuity, binder, slip or
contract or reinsurance treaty, contract, binder or slip issued by an Insurance
Company in connection with the Business in effect as of the date hereof (in each
case, including all applications, supplements, endorsements, certificates,
riders, ancillary agreements and marketing materials pertaining thereto).

“Insurance Law” shall have the meaning set forth in Section 3.10(d).

“Insurance Permits” shall have the meaning set forth in Section 3.10(d).

“Insurance Reserves” means any reserves, funds, or provisions for losses,
claims, premiums, expenses and other liabilities in respect of Insurance
Contracts.

“Intellectual Property” means: (a) patents, patent applications and statutory
invention registrations, including reissues, divisions, continuations,
continuations in part, renewals, extensions and reexaminations of any of the
foregoing, all patents that may issue on such applications, and all rights
therein provided by applicable local Law, international treaties or conventions
(“Patents”), (b) trademarks, service marks, trade dress, logos, designs,
emblems, slogans, insignia, Internet domain names, other similar designations of
source, any and all common law rights thereto, and registrations and
applications for registration of any of the foregoing (including intent-to-use
applications), all rights therein provided by applicable local Law,
international treaties or conventions and all extensions and renewals of any of
the foregoing together with the goodwill symbolized by or associated with any of
the foregoing (“Trademarks”), (c) copyrightable works and works of authorship
(including software (in any

 

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form including source code and executable or object code)), copyrights, whether
or not registered, moral rights, rights of attribution and integrity and
registrations and applications for registration of any of the foregoing, and all
rights therein provided by applicable local Law, international treaties or
conventions (“Copyrights”), (d) Trade Secrets, (e) data, databases and datasets,
(f) rights of publicity and (g) the right to sue for past infringement of any of
the foregoing.

“Intellectual Property Agreement” shall have the meaning set forth in the
Recitals.

“Intercompany Agreements” means any Contract which (i) calls for a payment in
excess of ¥45,000,000 in any 12-month period, or for the delivery of goods or
services with a fair market value in excess of ¥45,000,000 in any 12-month
period, during the remaining term thereof or (ii) provides for the receipt of
any payments in excess of, or any property with a fair market value in excess
of, ¥45,000,000 or more in any 12-month period during the remaining term
thereof, in either case, between any of the Companies or any of the Transferred
Subsidiaries, on the one hand, and the Parent, the Sellers or any of their
respective Affiliates (other than the Companies and the Transferred
Subsidiaries), on the other hand.

“Interest Rate” means an interest rate per annum equal to the average of the
three month LIBOR for U.S. dollars that appears on page LIBOR 01 (or a successor
page) of the Reuters Telerate Screen as of 11:00 a.m. (London time) on each day
during the period for which interest is to be paid.

“Investment Asset Transactions” shall have the meaning set forth in
Section 5.16(a)(i).

“Investment Assets” shall have the meaning set forth in Section 3.17(a).

“Investment Guidelines” shall have the meaning set forth in Section 3.17(a).

“Joint Venture” means any partnership, joint venture, limited liability company,
corporation, business trust or other entity to which any of the Companies or any
of the Transferred Subsidiaries is a party to or member of, or that any of the
Companies or any of the Transferred Subsidiaries holds, and in which any of the
Companies or any of the Transferred Subsidiaries holds an interest of 25% or
greater but 50% or less of the equity or voting rights of such joint venture.

“Knowledge” of a Person other than the Tax Group means: (a) in the case of the
Parent, the actual knowledge of any Person listed in Section 1.01(c) of the
Seller Disclosure Letter, subject to the subject matter limitations set forth in
such section of the Seller Disclosure Letter or (b) in the case of the Acquiror,
the actual knowledge of any Person listed in Section 1.01(b) of the Acquiror
Disclosure Letter, subject to the subject matter limitations set forth in such
section of the Acquiror Disclosure Letter.

“Knowledge of the Tax Group” means the actual knowledge of any Person listed
under the heading “Knowledge of the Tax Group” in Section 3.20 of the Seller
Disclosure Letter.

 

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“Law” means any federal, state, provincial or local, domestic or foreign law,
statute, legislation, code, treaty, ordinance, or common law or any rule,
regulation, judgment, order, writ, injunction, ruling, decree, agency
requirement or other requirement or rule of law of any Governmental Authority or
Tax Authority.

“Leased Real Properties” shall have the meaning set forth in Section 3.19(b).

“Licensed Intellectual Property” means the Intellectual Property owned by a
third party that is used by or for the benefit of any of the Companies or any of
the Transferred Subsidiaries.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, claim, lien or charge of any kind.

“Litigation Hold” means the information, documents, records and materials that
fall within the scope of a preservation notice issued by a Person that owns,
possesses, has custody of or controls such information, documents, records and
materials in connection with any pending or reasonably anticipated litigation,
arbitration, mediation (or other form of dispute resolution), third party
subpoena, Governmental Order or regulatory inquiry.

“Loan Interest” means all indebtedness for money borrowed in excess of
¥147,500,000 that is owed by any Person (other than any of the Companies or any
of the Transferred Subsidiaries), and all direct and indirect interests in such
Indebtedness for money borrowed, which in any such case is secured by a Lien on
real property, any interest in real property or the partnership interests,
membership interests, shares of stock or other ownership interests in any Person
whose direct or indirect assets are substantially related to real property or
interests therein, including mortgage loans, deed of trust loans, mezzanine
loans, and any participation or other interests therein.

“Loan Interest Documents” means all documents and instruments which evidence or
secure any Loan Interest owned by the Companies or any Transferred Subsidiary.

“Losses” means any and all losses, damages, costs (including costs of
remediation), expenses, liabilities, settlement payments, assessments, awards,
settlements, judgments, fines, penalties, obligations, claims and deficiencies
of any kind, including reasonable legal and other professional fees and
disbursements, but for purposes of Article X and Article VII shall exclude
punitive, exemplary or consequential damages or lost profits except
(i) punitive, exemplary or consequential damages or lost profits recovered by
third parties in connection with Third Party Claims, which shall, for purposes
of this clause (i), include claims brought against a party to this Agreement
(including the Companies and the Transferred Subsidiaries) by a person that is
not a party to this Agreement and is not an Affiliate of the Acquiror to the
extent such claim gives rise to an indemnity under Article VII and (ii) lost
profits to the extent that a trier of fact would take lost profits into account
for purposes of determining Losses resulting from diminution of value; provided
that punitive, exemplary and consequential damages and lost profits shall not be
excluded from Losses for purposes of Section 10.02(a)(iv).

 

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“Master Group Policyholder” means any Person that purchases a master group
insurance policy from any of the Companies or any of the Transferred
Subsidiaries with the purpose of selling individual insurance policies to its
employees.

“Material Adverse Effect” means any fact, circumstance, event, change,
violation, development, effect, condition or occurrence, either individually or
in the aggregate with any other facts, circumstances, events, changes,
violations, developments, effects, conditions or occurrences, that (a) is, or
would reasonably be expected to be, directly or indirectly, materially adverse
to the business, operations (including results of operations), assets,
liabilities, properties or condition (financial or otherwise) of the Companies
and the Transferred Subsidiaries, taken as a whole, excluding any such fact,
circumstance, event, change, violation, development, effect, condition or
occurrence arising out of, in connection with or resulting from, in whole or in
part, after the date hereof, (i) (A) changes in conditions in the Japanese, the
United States or global economy generally or capital or financial markets
generally, including changes in interest or exchange rates, (B) changes in
political conditions generally of Japan, the United States or any other country
or jurisdiction in which any of the Companies or any of the Transferred
Subsidiaries operates or (C) changes that are the result of business, economic
or market conditions generally affecting any of the industries in which the
Companies and the Transferred Subsidiaries operate, (ii) the public disclosure
of the transactions contemplated by the Transaction Agreements, (iii) the
identity of the Acquiror or its Affiliates, (iv) any changes in applicable Law
or GAAP or the enforcement or interpretation thereof, (v) actions permitted to
be taken or omitted pursuant to the Transaction Agreements, (vi) actions or
omissions taken by the Parent with the Acquiror’s written consent given in
accordance with the notice procedures set forth in Section 11.02, (vii) actions
taken by the Acquiror or its Affiliates with respect to the transactions
contemplated by the Transaction Agreements, (viii) hostilities, act of war,
sabotage, terrorism or military actions, or any escalation or worsening of any
such hostilities, act of war, sabotage, terrorism or military actions, (ix) any
failure by any of the Companies or any of the Transferred Subsidiaries to
achieve any earnings, premiums written or other financial projections or
forecasts, in and of itself; provided that the underlying causes of such failure
will not be excluded from the determination of a Material Adverse Effect by
virtue of this clause, and (x) any effect that is cured by the Parent or its
Affiliates prior to the Closing, except to the extent any such fact,
circumstance, event, change, violation, development, effect, condition or
occurrence described in the foregoing clauses (a)(i) and (a)(viii) is materially
disproportionately adverse to the business, operations (including results of
operations), assets, liabilities, properties or condition (financial or
otherwise) of the Companies and the Transferred Subsidiaries, taken as a whole,
as compared to other Persons engaged in the industries in which the Companies
and the Transferred Subsidiaries operate or (b) materially impedes or materially
delays, or would reasonably be likely to materially impede or materially delay,
the ability of the Parent or any Affiliate of the Parent to perform its
respective obligations under the Transaction Agreements or to consummate the
transactions contemplated by the Transaction Agreements. For the avoidance of
doubt, neither (1) any change or development in the business, financial
condition, results of operations or credit, financial strength or other ratings
of the Parent or any of its Affiliates (other than the Companies and the
Transferred Subsidiaries), in and of itself, or (2) any Bankruptcy Event
involving the Parent or any of its Affiliates (other than the Companies or any
of the Transferred Subsidiaries), in and of itself (any of the events referred
to in the foregoing clauses (1) and (2), a “Parent Event”), shall be deemed, in
and of itself, to constitute a Material Adverse

 

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Effect, except to the extent that such Parent Event (or the underlying cause of
such Parent Event) (x) materially adversely affects the business, operations
(including results of operations), assets, liabilities, properties or condition
(financial or otherwise) of the Companies and the Transferred Subsidiaries,
taken as a whole, or (y) materially impedes or materially delays, or would
reasonably be likely to materially impede or materially delay, the ability of
the Parent, the Sellers or any or their respective Affiliates to perform their
respective obligations under the Transaction Agreements or to consummate the
transactions contemplated by the Transaction Agreements.

“Material Contract” means, together with any amendments or supplements thereto,
(a) any Contract to which any of the Companies or any of the Transferred
Subsidiaries is a party or by which their respective assets or properties are
bound (other than any Contract (i) that is terminable pursuant to its terms by
the Company or the Transferred Subsidiary that is a party thereto upon notice of
90 days or less, provided that such termination by the applicable Company or
Transferred Subsidiary will not require the payment of any amounts to the other
party to such Contract, (ii) is a union contract, works council agreement,
collective bargaining agreement or other contract with any labor union or any
other similar organization, or (iii) is a contract with a financial institution
for automatic withdrawal of premium payments from policyholder accounts (koza
furikae keiyaku) or a contract with a group policyholder to act as collection
agent from its member policyholders (shuno daiko keiyaku) and any Real Property
Leases, Insurance Contracts entered into by the Insurance Companies in the
Ordinary Course of Business, Reinsurance Contracts, Producer Contracts and
Benefit Plans) which (i) calls for the payment, whether contingent or otherwise,
by or on behalf of any of the Companies or any of the Transferred Subsidiaries
in excess of ¥85,500,000 in any 12-month period during the remaining term
thereof (or ¥427,000,000 in the aggregate during the remaining term thereof), or
for the delivery by any of the Companies or any of the Transferred Subsidiaries
of goods or services with a fair market value in excess of ¥85,500,000 in any
12-month period during the remaining term thereof (or ¥427,000,000 in the
aggregate during the remaining term thereof), (ii) provides for any of the
Companies or any of the Transferred Subsidiaries to receive any payments in
excess of, or any property with a fair market value in excess of, ¥85,500,000 or
more in any 12-month period during the remaining term thereof or ¥427,000,000 in
the aggregate during the remaining term thereof, or (iii) contains covenants
restricting the ability of any of the Companies or any of the Transferred
Subsidiaries to engage in any line of business including, without limitation,
acquiring, selling, owning or managing Investment Assets, engage in business in
any geographical area or compete with any Person, (b) any material Joint Venture
or material partnership Contract to which any of the Companies or any of the
Transferred Subsidiaries is a party or any material Contract to which any of the
Companies or any of the Transferred Subsidiaries is a party providing for the
sharing of losses and profits and (c) any Contract to which any of the Companies
or any of the Transferred Subsidiaries is a party relating to the acquisition or
disposition of any material business (whether by merger, acquisition or sale of
stock or assets or otherwise) or any material amount of assets (other than
Investment Assets) (x) entered into on or after March 31, 2007 or (y) pursuant
to which any of the Companies or any Transferred Subsidiary has any continuing
indemnification or other liability or obligation to make payments (whether in
cash or otherwise and whether known or unknown, absolute or contingent, accrued
or unaccrued, due or to become due) to another Person party thereto and (d) any
contract providing for or evidencing Indebtedness.

 

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“Material Permits” shall have the meaning set forth in Section 3.10(a).

“Negative Conditions or Restrictions” shall have the meaning set forth in
Section 5.05(c).

“New Solvency Margin Guideline” means the New Solvency Margin Guideline
published by the FSA on April 20, 2010, as the same may be amended, modified,
supplemented, consolidated, replaced, or rewritten from time to time, and
including any successor to such guideline.

“Non-Restricted Products” shall have the meaning set forth in
Section 5.09(b)(ii).

“Notice of Insurance” shall have the meaning set forth in Section 10.07(d).

“Notice of Purchase Price Adjustment Disagreement” shall have the meaning set
forth in Section 2.05(e).

“OFAC” means the Office of Foreign Asset Control of the U.S. Treasury.

“Office of the Special Master for TARP Executive Compensation” means the
individual appointed by the U.S. Treasury to oversee the compensation of top
executives at companies that have received TARP funding.

“Ordinary Course of Business” means, with respect to a Person, the ordinary
course of business of such Person, consistent with past practice.

“Other Party’s Confidential Information” shall have the meaning set forth in
Section 5.04(b).

“Owned Intellectual Property” means the Intellectual Property in which any of
the Companies or any of the Transferred Subsidiaries has or purports to have an
ownership interest (solely, or jointly with any other Person).

“Parent” shall have the meaning set forth in the Preamble hereto.

“Parent Cash Pool” means the American International Companies Overseas Pool
Account.

“Parent Entity” and “Parent Entities” means the Parent and its respective
controlled Affiliates; provided, that the following shall be excluded from this
definition as used in this Section 5.09 for all purposes: (a) American
International Assurance Limited and its controlled Affiliates; (b) Fuji Fire and
Marine Insurance Company, Limited and its controlled Affiliates (collectively,
“FFM”); (c) any Person that purchases or receives a Parent Entity or assets,
operations or a business of a Parent Entity, if such Person is not a Subsidiary
of Parent after such transaction is consummated; (d) any Affiliate of Parent in
which a Person who is not an Affiliate of Parent holds equity interests; and
(e) any such Affiliate (and each of its controlled Affiliates) shall cease to be
a Parent Entity upon the listing on an internationally recognized securities
exchange of the securities of such Affiliate (or its Affiliate or any successor
person or person acquiring assets or securities of any such Affiliate) or the
sale of the voting securities of such Affiliate that results in such Affiliate
no longer being an Affiliate of the Parent.

 

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“Parent Event” shall have the meaning set forth in the definition of Material
Adverse Effect.

“Parent Fundamental Representations” means the representations and warranties
made in Section 3.01 (Incorporation, Qualification and Authority of the Parent),
Section 3.02 (Incorporation, Qualification and Authority of the Companies and
the Transferred Subsidiaries) only to the extent applicable to the Companies,
Section 3.03(a) and (b) (Capital Structure of the Companies and the Transferred
Subsidiaries; Ownership and Transfer of Shares), Section 3.04 (No Conflict) only
to the extent applicable to the Parent or the Companies and Section 3.31
(Brokers).

“Parent Indemnified Parties” shall have the meaning set forth in
Section 10.03(a).

“Parent Releasee” shall have the meaning set forth in Section 5.11(b).

“Parent Releasor” shall have the meaning set forth in Section 5.11(a).

“Patents” shall have the meaning set forth in the definition of “Intellectual
Property.”

“Peers” means Nippon Life Insurance Company, The Dai-Ichi Life Insurance
Company, Limited, Meiji Yasuda Life Insurance Company and Sumitomo Life
Insurance Company.

“Permits” shall mean qualifications, registrations franchises, filings,
licenses, permits, certificates, consents, approvals or authorizations issued or
granted by Governmental Authorities.

“Permitted Liens” means the following Liens, provided in all events, such Liens
and each of the items set forth in (a) through (n) below will not, individually
or in the aggregate (i) materially interfere with the conduct of the Ordinary
Course of Business of the Companies and the Transferred Subsidiaries, or
(ii) materially interfere with the continued use, operation or occupancy of the
Leased Real Property by the Companies or the Transferred Subsidiaries in a
manner consistent with the present use: (a) statutory Liens for Taxes that are
not yet due or payable or that are being contested in good faith by appropriate
proceedings and with respect to which adequate accruals or reserves have been
established; (b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen and other Liens imposed by Law
for amounts not yet due or payable arising in the Ordinary Course of Business
consistent with past practices or which are being contested in good faith by
appropriate proceedings and with respect to which adequate accruals or reserves
have been established; (c) Liens incurred or deposits made to a Governmental
Authority in connection with a governmental authorization, registration, filing,
license, permit or approval; (d) pledges or deposits made in the Ordinary Course
of Business in compliance with workers’ compensation, unemployment insurance or
other types of social security; (e) easements, rights of way, covenants,
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other similar encumbrances of record; (f) Liens not created by any of the
Companies or any of the Transferred Subsidiaries that affect the underlying fee
interest of any Leased Real Property; provided, that the applicable Company or
Transferred Subsidiary continues to enjoy any non-disturbance rights with
respect to any such Leased Real Property; (g) zoning, building and other
generally applicable land use restrictions; (h) Liens that have been placed by a
third party on the fee title of the real property constituting the Leased Real
Property or real property over which the Companies or the Transferred
Subsidiaries have easement rights; provided that the applicable Company or
Transferred Subsidiary continues to enjoy non-disturbance rights with respect to
any such Leased Real Property; (i) any set of facts an accurate up-to-date
survey would show; (j) pledges or other collateral assignments of assets,
including by means of a credit for reinsurance trust, to or for the benefit of
cedents under reinsurance written by an Insurance Company, for purposes of
statutory accounting credit; (k) Liens granted under securities lending and
borrowing agreements, repurchase and reverse repurchase agreements and
derivatives entered into in the Ordinary Course of Business; (l) clearing and
settlement Liens on securities and other investment properties incurred in the
ordinary course of clearing and settlement transactions in such securities and
other investment properties and holding them with custodians in the Ordinary
Course of Business; (m) licenses affecting Intellectual Property owned by the
Companies and the Transferred Subsidiaries; and (n) prior to the Closing, any
Liens created by (x) the Guarantee and Pledge Agreement, dated as of
September 22, 2008 (as may be amended, modified, or supplemented from time to
time), between the Seller and the FRBNY, (y) the Credit Agreement, dated as of
September 22, 2008 (as may be amended, modified, or supplemented from time to
time), between the Seller and the FRBNY (the foregoing (x) and (y) collectively,
the “FRBNY Liens”) and (z) any pledge of the equity interests of Star or Edison
to the FRBNY, the U.S. Treasury, the AIG Credit Facility Trust (“Trust”), AIA
Aurora LLC (the “AIA SPV”) and ALICO Holdings LLC (the “ALICO SPV”, and together
with the AIA SPV, the Trust, the U.S. Treasury and the FRBNY, the “Permitted
Parties”).

“Permitted Parties” shall have the meaning set forth in the definition of
Permitted Liens.

“Person” means any natural person, general or limited partnership, corporation,
limited liability company, limited liability partnership, firm, association or
organization or other legal entity.

“Post-Closing Solvency Capital True-Up Amount” shall have the meaning set forth
in Section 2.05(j).

“Post-Closing Taxable Period” means a taxable period, excluding a Straddle
Period, that, to the extent it relates to a Company or a Transferred Subsidiary
or a Successor Entity, begins after the Closing Date.

“Pre-Closing Taxable Period” means a taxable period, excluding a Straddle
Period, that, to the extent it relates to a Company or a Transferred Subsidiary,
ends on or before the Closing Date.

“Preferred Shares” shall have the meaning set forth in the Recitals.

 

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“Preferred Shares A” shall have the meaning set forth in the Recitals.

“Preferred Shares B” shall have the meaning set forth in the Recitals.

“Preferred Shares C” shall have the meaning set forth in the Recitals.

“Preferred Shares D” shall have the meaning set forth in the Recitals.

“Preferred Shares E” shall have the meaning set forth in the Recitals.

“Preferred Shares G” shall have the meaning set forth in the Recitals.

“Producer Contracts” means Broker Contracts and Client Company Contracts.

“Proposed Settlement” shall have the meaning set forth in Section 7.03(b)(i).

“Proscribed Recipient” shall have the meaning set forth in Section 3.29(a).

“Provider Letter Agreement” shall have the meaning set forth in the Recitals.

“Purchase Price” shall have the meaning set forth in Section 2.03.

“Purchase Price Adjustment Consultation Period” shall have the meaning set forth
in Section 2.05(f).

“Purchase Price Adjustment Review Period” shall have the meaning set forth in
Section 2.05(c).

“Purchase Price Interest Amount” shall have the meaning set forth in
Section 2.04(a).

“Real Estate Venture” means any partnership, joint venture, limited liability
company, corporation, business trust or other entity, formed for the purpose of,
directly or indirectly, investing primarily in real property or interests
therein.

“Real Estate Venture Documents” means the documents and instruments which
establish or evidence a Real Estate Venture as to which any of the Companies or
any of the Transferred Subsidiaries holds any ownership interest, including
partnership agreements, limited liability company agreements, joint venture
documents, charters, by-laws, certificates of formation or incorporation,
shareholder agreements and all documents related to the formation, ownership,
management and operation of any such Real Estate Venture.

“Real Property Leases” shall have the meaning set forth in Section 3.19(b).

“Registered Intellectual Property” means all Intellectual Property that any of
the Companies or any of the Transferred Subsidiaries owns or purports to own
(solely, or jointly with any other Person) that is registered, filed or issued
under the authority of any Governmental Authority (or, with respect to an
Internet domain name, is filed or issued under the authority of a

 

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domain name registrar), or for which an application to register has been filed
with any Governmental Authority, including any registered Copyrights, registered
Trademarks and issued Patents.

“Reinsurance Contract” means any reinsurance and retrocession treaties and
agreements in effect as of the date hereof that the annual premium associated
therewith is greater than or equal to ¥45,000,000 or the liabilities or reserves
in association therewith are greater than or equal to ¥45,000,000 under which
any Insurance Company may be either obligated to make payments or be eligible to
continue to receive benefits, to which any of the Insurance Companies is a party
(whether as a ceding or assuming company) or by or to which any of them are
bound or subject, as each such treaty or agreement may have been amended,
modified or supplemented.

“Related Party Agreements” means (i) any Intercompany Agreement and (ii) any
Contract which (x) calls for any payment, whether contingent or otherwise, in
excess of ¥45,000,000 in any 12-month period, or for the delivery of goods or
services with a fair market value in excess of ¥45,000,000 in any 12-month
period, during the remaining term thereof or (y) provides for the receipt of any
payments in excess of, or any property with a fair market value in excess of,
¥45,000,000 or more in any 12-month period during the remaining term thereof
between (A) any officer, director, or shareholder of the Parent, the Sellers or
any of their respective Affiliates (including the Companies and the Transferred
Subsidiaries) or, to the Knowledge of the Parent, any member of any such
Person’s immediate family or an entity controlled by one or more of the
foregoing, on the one hand, and (B) any of the Companies or any of the
Transferred Subsidiaries, on the other hand.

“Release” means any release, pumping, pouring, emptying, injecting, escaping,
leaching, migrating, dumping, seepage, spill, leak, flow, discharge or emission.

“Representation and Warranty Date Limitation” shall have the meaning set forth
in Section 8.03(a).

“Representative” of a Person means the directors, officers, employees, advisors,
agents, stockholders, members, partners, principals, consultants, accountants,
investment bankers or other representatives of such Person and of such Person’s
Affiliates.

“Restricted Business” means the business of marketing, underwriting, issuing,
and administering ordinary life insurance products, endowment life insurance
products, universal life insurance products, variable life insurance products,
pension products, annuities products, guaranteed and non-guaranteed insurance
savings products in Japan; provided that for the avoidance of doubt the
Restricted Business shall not include accident and health insurance products,
“third sector” insurance products, property and casualty insurance products and
Takaful products.

“Restricted Period” shall have the meaning set forth in Section 5.09(a).

“Retained Affiliate” means any Affiliate of the Parent other than the Companies
or the Transferred Subsidiaries.

 

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“Returned Employee” shall have the meaning set forth in Section 6.01(b).

“Sanctioned Party” means: (i) a “Blocked Person,” “Specially Designated
National,” “Specially Designated Terrorist,” “Specially Designated Global
Terrorist,” “Foreign Terrorist Organization” or “Specially Designated Narcotics
Trafficker” within the meaning of OFAC sanctions or (ii) a Person who is
otherwise subject to OFAC sanctions, including but not limited to (A) public
authorities, entities and nationals of Cuba, and (B) as to Burma, Iran, Syria
and Sudan, public authorities, entities that are government owned or controlled,
and individuals who are employed by or represent such public authorities or
entities.

“SEC” means the United States Securities and Exchange Commission.

“Section 10.03(a)(i) Losses” shall have the meaning set forth in
Section 10.03(b).

“Securities Act” means the Securities Act of 1933.

“Seller Disclosure Letter” shall have the meaning set forth in the first
paragraph of Article III.

“Seller Letter Agreement” shall have the meaning set forth in the Recitals.

“Sellers” shall have the meaning set forth in the Recitals.

“Service” shall have the meaning set forth in the Transition Services Agreement.

“Share Purchase Price” shall have the meaning set forth in Section 2.03.

“Shares” shall have the meaning set forth in the Recitals.

“Simple Life Insurance” means credit life insurance products, mortgage life
insurance products, term life insurance products and funeral benefits products.

“SMBC” shall have the meaning set forth in Section 5.13(a).

“SMBC Guarantee” shall have the meaning set forth in Section 5.13(a).

“Solvency Capital Calculation Methodology” means the calculation methodologies
for determining the Companies Solvency Capital set forth in Section 2.04(b) of
the Seller Disclosure Letter.

“Solvency Deficit” means the amount (if positive) that would need to be
contributed to the Insurance Companies on the Closing Date in order for the
Companies Solvency Capital to be equal to ¥554 billion as of the Closing Date.
If the Solvency Deficit is a negative amount, it shall equal ¥0.

“Solvency Margin Ratio” of any Insurance Company or Peer means the solvency
margin ratio of such Insurance Company or Peer as determined in accordance with
the Insurance Business Law, including, if applicable, the New Solvency Margin
Guideline; provided that for purposes of Section 5.01(z)(xxvii) the Solvency
Margin Ratio shall be calculated without giving effect to the New Solvency
Margin Guideline.

 

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“Specified Contracts” shall have the meaning set forth in Section 5.05(e).

“Spin-Off Change of Control Transaction” shall have the meaning set forth in
Section 5.09(d)(ii).

“Spin-Off Transaction” means a distribution of equity or other interests in any
Covered Business to the stockholders of the Parent or an initial public offering
of equity securities or other interests in any Covered Business.

“Star” shall have the meaning set forth in the Recitals.

“Star Shares” shall have the meaning set forth in the Recitals.

“Statutory Statements” shall have the meaning set forth in Section 3.06(a).

“Straddle Period” means a taxable period that, to the extent it relates to a
Company or a Transferred Subsidiary, includes, but does not end on, the Closing
Date.

“Sub-characterized Services” shall have the meaning set forth in
Section 5/17(c)(iv).

“Subsidiary” of any Person means any corporation, general or limited
partnership, joint venture, limited liability company, limited liability
partnership or other Person that is a legal entity, trust or estate of which (or
in which) (a) the issued and outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors (or a majority of another
body performing similar functions) of such corporation or other Person
(irrespective of whether at the time Capital Stock of any other class or classes
of such corporation or other Person shall or might have voting power upon the
occurrence of any contingency), (b) more than 50% of the interest in the capital
or profits of such partnership, joint venture or limited liability company or
(c) more than 50% of the beneficial interest in such trust or estate, is at the
time of determination directly or indirectly beneficially owned or Controlled by
such Person.

“Successor Entity” means any successor to any of the Companies or the
Transferred Subsidiaries where such successor is either the Acquiror or an
Affiliate of the Acquiror.

“Syndicated Loan” shall have the meaning set forth in Section 3.03(a).

“Syndicated Loan Agreement” shall have the meaning set forth in Section 5.13(a).

“Syndicated Loan Debt Amount” means an amount, expressed in U.S. dollars based
on the Applicable Exchange Rate as in effect as of the date hereof, representing
the principal amount of debt under the Syndicated Loan Agreement outstanding as
of the date hereof, plus accrued and unpaid interest thereon to but excluding
the Closing Date. For the avoidance of doubt, the Syndicated Loan Amount shall
not be reduced for any amounts paid by, or on behalf of, the Acquiror or any of
its Affiliates to SMBC to prepay and discharge the Syndicated Loan pursuant to
the provisions of Section 5.13(b).

 

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“TARP” means the Troubled Asset Relief Program enacted under the Emergency
Economic Stabilization Act of 2008.

“Tax Authority” means any Governmental Authority having jurisdiction over the
assessment, determination, collection or imposition of any Tax.

“Tax Claim” shall have the meaning set forth in Section 7.03(a).

“Tax Indemnity Payment” shall have the meaning set forth in Section 7.01(d).

“Tax Returns” means all returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be
supplied to a Tax Authority relating to Taxes (other than any such returns and
reports filed (i) on a consolidated, combined or unitary basis by a group that
includes any Company or any Transferred Subsidiary as a member where no material
item included in such returns or reports is with respect to any Company or any
Transferred Subsidiary or (ii) by the Parent or any of its Affiliates as part of
the Parent’s U.S. consolidated federal income Tax Returns, except for Forms 5471
in respect of CLIS K.K.).

“Tax Sharing Agreement” shall have the meaning set forth in Section 3.20(e).

“Taxes” means any national, state, foreign or local tax, duty, or other
governmental charge in any jurisdiction, including, without limitation, net or
gross income, alternative minimum, accumulated earnings, personal holding
company, franchise, doing business, capital stock, net worth, capital, profits,
windfall profits, gross receipts, business, securities transaction, value added,
sales, use, excise, custom, transfer, registration, stamp, premium, real
property, personal property, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment, social security, disability, workers
compensation, payroll, withholding, estimated separate income, corporate
additional capital gains, inheritance and gift, securities transaction,
education, acquisition, residence, composite land, business office, property,
inhabitant, enterprise and any other taxes, duties, public dues, and
withholdings thereof imposed under the laws of Japan or any other country or
jurisdiction, and all interest, penalties, delinquency taxes or additional taxes
thereon and costs related to tax audits or inquiries and additions thereto,
whether disputed or not.

“TDH” means T&D Holdings, Inc.

“Third Party Claim” shall have the meaning set forth in Section 10.04(a).

“Third Party Consent” shall have the meaning set forth in Section 5.05(e).

“Trade Secrets” means trade secrets and all other proprietary confidential
information, including customer lists, confidential financial, business,
scientific, technical, economic, or engineering information or know-how,
including algorithms, plans, compilations, formulae, designs, methods,
techniques, processes, inventions, procedures, programs or codes.

 

A-22

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“Trademarks” shall have the meaning set forth in the definition of “Intellectual
Property”.

“Transaction Agreements” means, collectively, this Agreement and the Ancillary
Agreements.

“Transaction Date” shall have the meaning set forth in Section 5.09(c)(i).

“Transfer Taxes” shall have the meaning set forth in Section 7.06(b).

“Transferred Employee” shall have the meaning set forth in Section 6.01(b).

“Transferred Subsidiaries” shall have the meaning set forth in the Recitals.

“Transition Services Agreement” shall have the meaning set forth in the
Recitals.

“Transition Services Management Team” shall have the meaning set forth in
Section 5.17(b).

“Transitional Trademark License Agreement” shall have the meaning set forth in
the Recitals.

“Trust” shall have the meaning set forth in the definition of Permitted Liens.

“United States” means the United States of America, including its territories
and possessions.

“U.S. Expatriate Employee” shall have the meaning set forth in Section 6.01(k).

“U.S. GAAP” means generally accepted accounting principles in the United States.

“U.S. Treasury” means the United States Department of the Treasury.

“U.S. Treasury Regulations” means the regulations prescribed under the Code.

 

A-23

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Exhibit B

 

 

 

TRANSITION SERVICES AGREEMENT

dated as of [CLOSING DATE —], 2010

between

AMERICAN INTERNATIONAL GROUP, INC.

and

[ACQUIROR]

 

 

 

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TABLE OF CONTENTS

(continued)

 

     Page

ARTICLE I DEFINITIONS

   1

Section 1.01 Certain Defined Terms

   1

ARTICLE II SERVICES AND ACCESS TO FACILITIES

   6

Section 2.01 Services

   6

Section 2.02 Access to Facilities

   6

Section 2.03 Additional Services and Access to Additional Facilities

   6

Section 2.04 Knowledge Transfer

   7

Section 2.05 Third-Party Vendor Services

   7

Section 2.06 [Reserved]

   7

Section 2.07 Resumed Services

   7

Section 2.08 Exception to Obligation to Provide Services or Access to Facilities

   7

Section 2.09 Standard of the Provision of Services or Access to Facilities

   8

Section 2.10 Reports

   8

Section 2.11 Failure to Meet Standards for Services; Inability to Perform

   8

Section 2.12 Change in Services or Access to Facilities

   9

Section 2.13 Services and Access to Facilities Provided by Other Persons

   9

Section 2.14 Consents

   10

Section 2.15 Dedicated Assets and Dedicated Third-Party Agreements

   10

Section 2.16 Personnel

   11

Section 2.17 Cooperation

   11

Section 2.18 Security; Electronic and Other Access

   11

Section 2.19 No Agency

   13

Section 2.20 Ownership of Intellectual Property; Ownership of Data

   13

Section 2.21 Divestitures

   15

Section 2.22 Reorganization

   15

Section 2.23 [Reserved]

   15

Section 2.24 Migration

   15

Section 2.25 Primary Points of Contact for this Agreement

   16

Section 2.26 TSA Records

   17

ARTICLE III COSTS AND DISBURSEMENTS

   17

Section 3.01 Costs and Disbursements

   17

Section 3.02 No Right to Set-Off; Disputed Invoice Amounts

   20

ARTICLE IV WARRANTIES AND COMPLIANCE

   20

Section 4.01 Disclaimer of Warranties

   20

Section 4.02 Compliance with Laws and Regulations

   21

Section 4.03 Foreign Corrupt Practices Act

   21

ARTICLE V LIMITED LIABILITY AND INDEMNIFICATION

   21

Section 5.01 Indemnification

   21

Section 5.02 Additional Limitations on Liability

   21

Section 5.03 Procedures

   22

Section 5.04 Exclusive Remedy

   22

ARTICLE VI TERM AND TERMINATION

   22

Section 6.01 Term and Termination

   22

 

i

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TABLE OF CONTENTS

(continued)

 

     Page

Section 6.02 Termination Charges

   24

Section 6.03 Effect of Termination

   25

Section 6.04 Force Majeure

   26

ARTICLE VII GENERAL PROVISIONS

   26

Section 7.01 Treatment of Confidential Information

   26

Section 7.02 Security Incidents

   28

Section 7.03 Notices

   28

Section 7.04 Severability

   30

Section 7.05 Entire Agreement

   30

Section 7.06 Assignment

   30

Section 7.07 No Third-Party Beneficiaries

   30

Section 7.08 Amendment; Waiver

   30

Section 7.09 Dispute Resolution

   31

Section 7.10 Governing Law; Waiver of Jury Trial

   31

Section 7.11 Rules of Construction

   32

Section 7.12 Obligations of Parties

   33

Section 7.13 Additional Transition Services Agreements

   33

Section 7.14 Counterparts

   33

 

ii

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TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT, dated as of [CLOSING DATE—], 2010 (this
“Agreement”), is entered into by and between American International Group, Inc.,
a Delaware corporation (the “Parent”), and [            ], a [            ]
corporation (the “Acquiror”).

RECITALS

WHEREAS, the Acquiror and the Parent have entered into the Stock Purchase
Agreement, dated as of September 30, 2010 (as amended, modified or supplemented
from time to time in accordance with its terms, the “Purchase Agreement”),
pursuant to which the Parent has agreed to sell, convey, assign, transfer and
deliver and cause the Sellers to sell, convey, assign, transfer and deliver to
the Acquiror, and the Acquiror has agreed to purchase, acquire and accept from
the Parent and the Sellers, all of the right, title and interest of the Parent
and the Sellers in and to the Shares and the Debt (as such terms are defined in
the Purchase Agreement); and

WHEREAS, in connection therewith, the Parent shall provide or cause to be
provided to the Acquiror Entities certain services, access to facilities,
equipment, software and other assistance on a transitional basis commencing
immediately following the Closing and in accordance with the terms and subject
to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Certain Defined Terms.

(a) Unless otherwise defined herein, all capitalized terms used herein shall
have the same meanings as set forth in the Purchase Agreement.

(b) The following capitalized terms used in this Agreement shall have the
meanings set forth below:

“Acquired Resource” shall have the meaning set forth in Section 6.03(c).

“Acquiror” shall have the meaning set forth in the Preamble.

“Acquiror Contract Manager” shall have the meaning set forth in
Section 2.25(a)(i).

“Acquiror Entities” means the Companies and the Transferred Subsidiaries.

“Acquiror Indemnified Parties” shall have the meaning set forth in
Section 5.01(a).

“Acquiror Work Product” shall have the meaning set forth in Section 2.20(b).

“Additional Facilities” shall have the meaning set forth in Section 2.03(a).

“Additional Services” shall have the meaning set forth in Section 2.03(a).

“Additional Service Term” shall have the meaning set forth in Section 6.01(a).

“Agreed Price” shall have the meaning set forth in Section 3.01(a).

“Agreed Service Fee” shall have the meaning set forth in Section 3.01(a).

 

1

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“Agreement” shall have the meaning set forth in the Preamble.

“Applicable Rate Card” shall have the meaning set forth in Section 3.01(a).

“Change” shall have the meaning set forth in Section 2.12(a).

“Change Request” shall have the meaning set forth in Section 2.12(b).

“Change Request Proposal” shall have the meaning set forth in Section 2.12(b).

“Confidential Information” shall have the meaning set forth in Section 7.01(a).

“Contract Managers” means the Acquiror Contract Manager and the Parent Contract
Manager.

“Controller” means any Person that determines the purposes and means of the
Processing of Personally Identifiable Information.

“Data Processor” means any Person (other than an employee of a Controller) who
Processes Personally Identifiable Information on behalf of a Controller.

“Dedicated Assets” shall have the meaning set forth in Section 2.15.

“Dedicated Third-Party Agreements” shall have the meaning set forth in
Section 2.15.

“Dispute” shall have the meaning set forth in Section 7.09.

“Facilities” shall have the meaning set forth in Section 2.02.

“FCPA” shall have the meaning set forth in Section 4.03.

“First Extended Term” shall have the meaning set forth in Section 6.01(a).

“Force Majeure” means, with respect to a Party, an event (i) beyond the control
of such Party (or any Person acting on its behalf), including acts of God,
storms, floods, riots, fires, earthquakes, sabotage, civil commotion or civil
unrest, strikes, lockouts, labor difficulties, interference by civil or military
authorities, riots, insurrections or other hostilities, embargo, fuel or energy
shortage, acts of Governmental Authorities (including bank closings and seizures
and other Governmental Orders), acts of war (declared or undeclared) or armed
hostilities or other national or international calamity or one or more acts of
terrorism or failure or interruption of networks or energy sources and (ii) that
is not reasonably likely to have been prevented by the Party’s commercially
reasonable precautions or commercially accepted processes or by the Party’s
implementation of its disaster recovery and business continuity plans and
policies.

“FRBNY NDA” shall have the meaning set forth in Section 7.01(b).

“Fully-Burdened Cost” means, with respect to a Service or access to a Facility,
the sum of Provider Cost and Overhead Cost. “Provider Cost” with respect to a
Service or access to a Facility, means (i) all costs directly incurred by the
applicable Provider in providing such Service or access to such Facility,
including but not limited to, direct labor, direct supervision, benefits, travel
and related costs, service-related training, permits and any direct third-party
costs incurred to provide such Service or access to such Facility but excluding
Pass-Through Charges and (ii) the portion of the overhead costs of the
applicable Provider which are allocated by such Provider to such Service or
access to such Facility, including but not limited to, indirect labor, indirect
materials, employee benefit costs, building occupancy costs including rent and
property and related taxes, site costs, depreciation, amortization, information
technology, telephone and other voice communication, data communication, desktop
hardware and software, desktop support, application support, data center and
related hardware costs and administration, insurance, maintenance, utilities,
security costs, office administration and supplies, costs for executives
including but not

 

2

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limited to those overseeing such Service or access to such Facility, corporate
marketing costs and other costs necessary to support the provision of such
Service or access to such Facility. “Overhead Cost”, with respect to a Service
or access to a Facility, means the portion of the overhead costs charged to the
applicable Provider which are allocated by such Provider to such Service or
access to such Facility, including but not limited to, indirect labor, indirect
materials, employee benefit costs, building occupancy costs including rent and
property and related taxes, site costs, depreciation, amortization, information
technology, telephone and other voice communication, data communication, desktop
hardware and software, desktop support, application support, data center and
related hardware costs and administration, insurance, maintenance, utilities,
security costs, office administration and supplies, costs for executives
including but not limited to those overseeing such Service or access to such
Facility, corporate marketing costs and other costs necessary to support the
provision of such Service or access to such Facility.

“Government Recipients” shall have the meaning set forth in Section 7.01(b).

“Hourly Rate” shall have the meaning set forth in Section 3.01(a)(iii).

“Initial Additional Service Term” shall have the meaning set forth in
Section 6.01(a).

“Initial Scheduled Term” shall have the meaning set forth in Section 6.01(a).

“Inspection” shall have the meaning set forth in Section 2.26(b).

“Knowledge Transfer Services” shall have the meaning set forth in Section 2.04.

“Licensee” shall have the meaning set forth in Section 2.20(a).

“Migration Services” shall have the meaning set forth in Section 2.24(a).

“Migration Services Provider” shall have the meaning set forth in
Section 2.24(b).

“Migration Services Recipient” shall have the meaning set forth in
Section 2.24(b).

“New Security Threat” means a new security related issue or issues related to
new technology or threats, in each case which represents a material threat to
the integrity of the Systems or data so threatened.

“Notice of Dispute” shall have the meaning set forth in Section 7.09(a).

“Overhead Cost” shall have the meaning set forth in the definition of
Fully-Burdened Cost.

“Parent” shall have the meaning set forth in the Preamble.

“Parent Contract Manager” shall have the meaning set forth in
Section 2.25(a)(ii).

“Parent Entities” means the Parent and its Affiliates, excluding the Acquiror
Entities.

“Parent Indemnified Parties” shall have the meaning set forth in
Section 5.01(b).

“Parent Provider” means the Parent or a Provider that is an Affiliate of the
Parent after the Closing.

“Party” means the Parent and the Acquiror individually, and, in each case, their
respective successors and permitted assigns.

“Parties” means the Parent and the Acquiror collectively, and, in each case,
their respective successors and permitted assigns.

 

3

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“Pass-Through Charges” shall have the meaning set forth in Section 3.01(b).

“Personally Identifiable Information” means any information received by a
Provider from a Recipient in connection with the performance of such Provider’s
obligations hereunder (a) from which an individual may be identified,
(b) concerning an individual that would be considered “nonpublic personal
information” within the meaning of Title V of the Gramm-Leach Bliley Act of 1999
and the regulations promulgated thereunder or (c) regarding such Recipient’s
past, present or prospective customers, claimants, beneficiaries, employees or
agents, including (i) any individual’s name, business or home address, e-mail
address, computer IP address, telephone number, social security number, passport
number or other identification number issued by a Governmental Authority,
(ii) the fact that an individual has a relationship with Recipient or any of its
Affiliates, (iii) any information regarding an individual’s bank accounts,
securities accounts and other similar accounts, (iv) any information regarding
an individual’s medical history or treatment, (v) any sensitive information,
including non-public information regarding an individual’s human race, religion,
family status, legal domicile, medical history or treatment, or criminal record,
(vi) any information regarding the ability to repay indebtedness, (vii) other
information that can be used to authenticate an individual (including passwords
or PINs, biometric data, unique identification numbers, answers to security
questions or other personal identifiers) and (viii) any other information of or
relating to an individual that is protected from unauthorized disclosure by
applicable Privacy Laws.

“Pre-Closing Period” means, with respect to any service or access to any
facilities, equipment or software provided by, or on behalf of, a Provider to a
Recipient (a) any time during the six (6) months prior to the Closing Date or
(b) with respect to such services, access to facilities, equipment or software
and other resources provided on only a periodic basis, any time during the
twelve (12) months prior to the Closing Date (in each case, unless such service
or access to facilities, equipment or software was terminated in the normal
course of business prior to the Closing Date).

“Pre-Signing Agreement” shall have the meaning set forth in Section 2.08.

“Privacy Laws” means all Laws related to privacy, security or confidentiality of
Personally Identifiable Information including, Laws of the United States of
America (including the Health Insurance Portability and Accountability Act of
1996 and Title V of the Gramm-Leach Bliley Act of 1999) and the laws of Japan
(including the Personal Information Protection Law (kojinjyouhou no hogo ni
kansuru houritsu) and regulations and guidelines promulgated thereunder and the
Insurance Business Act (hokengyou hou)) or regulations promulgated thereunder);
regulatory policies, guidelines (including guidelines published by a
Governmental Authority or relevant self regulatory organization) or industry
codes of any applicable jurisdiction which are relevant and applicable to the
privacy of Personally Identifiable Information, during the course of providing a
Service, access to Facilities or otherwise.

“Process” means any operation or set of operations which is performed upon
Personally Identifiable Information, and includes obtaining, recording,
transmitting, disseminating, retrieving or holding the information or data or
carrying out any operation or set of operations on the information or data.

“Provider” means a Person providing a Service or access to a Facility under this
Agreement, in its capacity as the provider of such Service or access to such
Facility.

“Provider Cost” shall have the meaning set forth in the definition of
Fully-Burdened Cost.

“Provider Work Product” shall have the meaning set forth in Section 2.20(c).

“Purchase Agreement” shall have the meaning set forth in the Recitals.

“Recipient” means a Person to whom a Service or access to a Facility is being
provided under this Agreement, in its capacity as the recipient of such Service
or access to such Facility.

“Recipient Data” shall have the meaning set forth in Section 2.20(i).

 

4

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“Reports” shall have the meaning set forth in Section 2.10.

“Required Change” shall have the meaning set forth in Section 2.12(c).

“Required Technology” shall have the meaning set forth in Section 2.18(c).

“Sales Taxes” shall have the meaning set forth in Section 3.01(d).

“Scheduled Services” shall have the meaning set forth in Section 2.01.

“Scheduled Term” shall have the meaning set forth in Section 6.01(a).

“Second Extended Term” shall have the meaning set forth in Section 6.01(a).

“Security Incident” shall have the meaning set forth in Section 7.02(a).

“Security Regulations” shall have the meaning set forth in Section 2.18(c).

“Service Charge” shall have the meaning set forth in Section 3.01(a).

“Services” means the Scheduled Services, the Additional Services, the
Third-Party Vendor Services, the Knowledge Transfer Services, the Migration
Services and the Resumed Services.

“Service Shortfall” shall have the meaning set forth in Section 2.11(a).

“Set-Up Costs” means reasonable costs incurred by a Provider (other than Third
Party Consents) after the date of the Purchase Agreement in contemplation of
providing a service or access to a facility to a Recipient solely necessary to
make changes to the service or access to facility as it was provided by such
Provider to such Recipient prior to the Closing Date which changes are required
(A) (1) by applicable Law, (2) by the Provider’s written risk management,
information security or privacy policies in effect as of the execution of the
Purchase Agreement, or (3) as required by Parent’s Complex Structured Financial
Transactions Committee in its commercially reasonable judgment solely with
respect to risk management, information security or privacy and solely with
respect to Migration Services, Knowledge Transfer Services and Resumed Services,
in each case as a result of the fact that, as of the Closing Date, such
Recipient will not be affiliated to the Provider, (B) as a result of a change
made or requested by the Recipient which change would affect the provision or
receipt of the service or access to facility or (C) because of changes made to
such service or access to such facility by the Provider arising from the
Provider’s receipt of written notification by the Recipient that it did not wish
to receive the service or access to facility from the Provider; provided, that
such costs are set forth in Schedule 2.01 or Schedule 2.02, as may be amended by
the Parties from time to time in accordance with Section 2.03(a); and provided,
further, that the pricing for any Set-Up Costs shall be determined, and the
payment terms and process for any Set-Up Costs shall be, in accordance with the
provisions of Section 3.01 hereof. For the avoidance of doubt, (i) to the extent
any Set-Up Costs include Pass-Through Charges for resources that are fully
charged to a Recipient, the provisions of Section 6.03(c) shall apply and
(ii) the costs of actually providing a Service or access to a Facility shall not
be included in Set-Up Costs.

“Systems” means systems, computers, software (including any source code or
executable or object code), servers, networks, workstations, routers, hubs,
switches, voice or data communication lines, intranet, data, data centers, test
environments, back-up of all the foregoing and all other information technology,
whether tangible or intangible, infrastructure including interfacing
infrastructure, databases and related facilities.

“Third Extended Term” shall have the meaning set forth in Section 6.01(a).

“Third-Party Vendors” means those unaffiliated third-Persons who are Providers
hereunder as of the effective date of this Agreement.

“Third-Party Vendor Services” shall have the meaning set forth in Section 2.05.

 

5

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“VAT” means the tax imposed in accordance with Directive 2006/112/EC and any
permitted derogations therefrom, as well as any equivalent or similar tax
imposed under the Laws of any jurisdiction that is not a Member State of the
European Union. For the avoidance of doubt, the term “VAT” shall not include any
sales or use tax imposed by any state or political subdivision of the United
States.

“Virus(es)” means any malicious computer code or instructions that have a
material adverse effect on the operation, security or integrity of (a) a
computing, telecommunications or other electronic operating or processing system
or environment, (b) software programs, data, databases or other computer files
or libraries or (c) computer hardware, networking devices or telecommunications
equipment, including (i) viruses, Trojan horses, malware, time bombs,
undisclosed back door devices, worms or any other software routine or hardware
component designed to permit unauthorized access, disable, erase or otherwise
harm software, hardware or data or perform any other such harmful or
unauthorized actions and (ii) similar malicious code or data.

“Work Product” shall have the meaning set forth in Section 2.20(b). All Work
Product is Acquiror Work Product or Provider Work Product.

ARTICLE II

SERVICES AND ACCESS TO FACILITIES

Section 2.01 Services. On the terms and subject to the conditions set forth in
this Agreement, from and after the Closing and for the periods set forth in
Schedule 2.01, subject to Section 6.01, the Parent shall provide or cause to be
provided to the Acquiror Entities the services set forth in Schedule 2.01, as
they may be amended prior to Closing (collectively with any Additional Services,
the “Scheduled Services”).

Section 2.02 Access to Facilities. On the terms and subject to the conditions
set forth in this Agreement, from and after the Closing and for the periods set
forth in Schedule 2.02, subject to Section 6.01, the Parent shall provide or
cause to be provided to the Acquiror Entities access to the facilities,
equipment and software set forth in Schedule 2.02 (collectively with any
Additional Facilities, the “Facilities”).

Section 2.03 Additional Services and Access to Additional Facilities.

(a) Services or access to facilities, equipment or software not agreed upon in a
Schedule attached hereto but provided prior to the Closing by a Parent Entity to
an Acquiror Entity can be requested in writing within one hundred twenty
(120) days of the Closing by the Acquiror upon reasonable notice to the Parent’s
service manager and Contract Manager in accordance with Section 7.03(a). Upon
receipt of such notice, within a commercially reasonable period of time under
the circumstances, the Parent shall provide or cause to be provided to the
Acquiror Entities such additional services (the “Additional Services”) and such
access to such additional facilities, equipment and software (the “Additional
Facilities”) in each case on the terms and conditions (other than price) as were
applicable to such services or access to such facilities, software and equipment
prior to Closing, at the Agreed Price, for a term determined pursuant to
Section 6.01 and with any applicable reasonable Set-Up Costs and any termination
charges, determined pursuant to Section 6.02, which price, terms and charges
shall be (x) proposed in writing by the applicable Provider within ten
(10) Business Days of the request from the applicable Recipient for such
Additional Services or Additional Facilities and (y) agreed by the Parties on or
about the time the Provider begins to provide such Additional Services or access
to such Additional Facility; if the Parties fail to reach agreement on the
amount of the Agreed Price, Initial Additional Service Term, or extension of
such term or any applicable termination charges or Set-Up Costs, such issues
shall be resolved in accordance with Section 7.09(a), but any such failure to
reach agreement on the foregoing shall not delay the provision of the Additional
Service or access to Additional Facilities. The applicable Schedule 2.01 or
Schedule 2.02 shall be deemed amended to include the Additional Services and
access to Additional Facilities (along with the Agreed Price, Initial Additional
Service Term, extension of such term and termination charges, if any), which
shall be provided in accordance with the terms and conditions of this Agreement
and the Additional Services shall be deemed to be Scheduled Services hereunder
and the Additional Facilities shall be deemed to be Facilities hereunder.

(b) Notwithstanding anything to the contrary set forth herein, the Parent shall
have no obligation to provide the services or access to the facilities set forth
on Schedule 2.03(b) hereto.

 

6

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Section 2.04 Knowledge Transfer. The Parent will provide, upon the reasonable
request of the Acquiror (a) the knowledge transfer with respect to the Scheduled
Services and the Facilities, (b) knowledge transfer to assist the Acquiror in
the migration and integration of the Scheduled Services and use of the
Facilities and (c) knowledge transfer to assist the Acquiror in the migration
and integration of the Business (collectively, “Knowledge Transfer Services”).
Knowledge Transfer Services will be provided for no longer than the thirty
(30) days following termination of the particular associated Service or
associated Facility for which such Knowledge Transfer Services are being used
(or, with respect to any Service or access to Facilities provided by the Parent
or its Affiliates during the Pre-Closing Period but that will not be provided by
the Parent or its Affiliates following the Closing, for thirty (30) days
following the Closing). Knowledge Transfer Services will be charged to the
Acquiror or the applicable Affiliate of the Acquiror receiving Knowledge
Transfer Services at the Agreed Price plus any related Pass-Through Charges
incurred by the Parent or the applicable Affiliate of the Parent providing such
Knowledge Transfer Service; provided, that there will be no charge for (i) de
minimis Knowledge Transfer Services (which, by way of example, includes meetings
(without travel by Provider) or phone calls, in each case of one hour or less in
duration), (ii) transfer of written documentation regarding data systems or the
data environment, or (iii) Provider Costs other than incremental Provider Costs
incurred as a result of the use of additional labor employed by a Provider, or
additional materials, assets or other resources acquired by a Provider, in order
to provide such Knowledge Transfer Services, if and to the extent Acquiror has
approved Provider incurring such incremental Provider Costs.

Section 2.05 Third-Party Vendor Services. Upon the Acquiror’s reasonable written
request, the Parent shall cooperate or cause its Affiliates to cooperate in the
Acquiror’s negotiation for a direct agreement with any Third-Party Vendor
(collectively, “Third-Party Vendor Services”); provided, however, that neither
the Parent nor its Affiliates will be required to amend any contract, pay any
amount of consideration or otherwise enter into any accommodation or undertaking
with any such Third-Party Vendor in connection with these Third-Party Vendor
Services. Third-Party Vendor Services shall be provided for no longer than the
duration of the particular associated Service or associated Facility for which
such Third-Party Vendor Services are being used. Third-Party Vendor Services
will be charged to Acquiror at the Agreed Price plus any related Pass-Through
Charges incurred by the Parent and its Affiliates in providing such Third-Party
Vendor Services; provided, however, that for Third-Party Vendor Services
provided in connection with the provision of Additional Services or access to
Additional Facilities, the Provider may charge any Overhead Costs incurred in
connection with providing such Additional Services or access to Additional
Facilities, if and to the extent Acquiror has approved Provider using such
Third-Party Vendor Services.

Section 2.06 [Reserved].

Section 2.07 Resumed Services. If, within sixty (60) days following termination
by a Recipient of a Service or access to a Facility in accordance with
Section 6.01(c)(i), such Recipient concludes that such Service or access to a
Facility is still needed, the Recipient will so notify the applicable Provider
in writing, and such Provider will promptly resume providing such Service or
access to such Facility, if commercially reasonable and technologically
feasible. The Recipient shall be responsible for the Agreed Price and related
Pass-Through Charges of Provider associated with resuming such Service or access
to such Facility, and to the extent practicable, such Provider shall provide
such Recipient with an estimate (with reasonably supportive detail) of such
Agreed Price in advance of resuming such Service or access to such Facility.
Nothing in this Section 2.07 shall require a Provider to retain any personnel,
to maintain any facilities or systems or to take, or refrain from taking, any
other action, following a termination by a Recipient of a Service in
anticipation of or preparation for the possibility of a Service or Facility
being resumed pursuant to this Section 2.07. For the avoidance of doubt, no
Service or Facility resumed pursuant to this Section 2.07 will extend the term
of such Service or Facility beyond the Scheduled Term of such Service or
Facility.

Section 2.08 Exception to Obligation to Provide Services or Access to
Facilities. Notwithstanding anything to the contrary contained herein, including
Section 2.01 and Section 2.02, no Provider shall be obligated to (and no Party
shall be obligated to cause any Provider to) provide any Service or access to
any Facility, if the provision of such Service or access to such Facility would
(a) violate any applicable Law, (b) violate any agreement, license or promise to
customers; provided, however, that the foregoing limitation with respect to
agreements, licenses and promises shall only apply to any such agreement,
license or promise entered into with an unaffiliated third party prior to the
date of the Purchase Agreement (each, a “Pre-Signing Agreement”); provided,
further, that Provider shall promptly notify Recipient of any such Pre-Signing
Agreement and any Service or access to Facility

 

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affected thereby; or (c) result in the disclosure of information subject to any
applicable privileges (including the attorney-client or similar privilege);
provided, however, that the Parent and the Acquiror shall use commercially
reasonable efforts to (w) subject to Section 5.05(e) and Section 5.17 of the
Purchase Agreement, obtain or cause to be obtained Third Party Consents such
that the Services or access to the Facilities might be provided without
violation of Law or any Pre-Signing Agreements, (x) make any commercially
reasonable changes with respect to the Services or access to the Facilities such
that they might be provided without violation of Law or any Pre-Signing
Agreements or disclosure of information subject to applicable privileges, (y) if
no such changes are reasonably possible, provide commercially reasonable
alternative sources of such Services or Facilities and disclose or cause to be
disclosed such information or its substantial equivalent in such a way as to not
constitute disclosure of privileged information; and provided, further, the
Provider shall continue to be obligated to provide the Service or access to
Facility to the extent that doing so would not result in a violation of
applicable Law, or any Pre-Signing Agreements, or disclosure of privileged
information. For the avoidance of doubt, nothing in this Section 2.08 is
intended to relieve a Party of its obligations, or to modify the obligations,
under Section 5.05(e) or Section 5.17 of the Purchase Agreement or Section 2.14
hereof.

Section 2.09 Standard of the Provision of Services or Access to Facilities. Each
Provider shall provide the Services, the access to Facilities and other services
and rights hereunder: (a) in accordance with applicable Law and with Provider’s
written policies and procedures, to the extent applicable, (b) at substantially
the same standards of performance consistent with such Provider’s practices for
providing such Services or access to Facilities during the Pre-Closing Period,
to the extent applicable, (c) in a competent and workmanlike manner, (d) as if
Provider were performing such services for itself or its Affiliates and (e) with
the same priority it accords its own operations and those of its Affiliates. In
instances where such Services or access to Facilities were provided in
accordance with service level agreements or targets in effect during the
Pre-Closing Period, Provider shall promptly provide Recipient with copies of the
applicable service level agreements or targets in the event of a written notice
by Recipient to the applicable service manager and Contract Manager of a
purported Service Shortfall or a dispute as to whether a Service or access to a
Facility is provided in accordance with this Section 2.09.

Section 2.10 Reports. Each Provider shall provide to its corresponding Recipient
the same reports that it provided during the Pre-Closing Period with respect to
the Scheduled Services and the access to Facilities in the same form and at the
same times as provided during the Pre-Closing Period or otherwise agreed to in
writing by the Parties (the “Reports”).

Section 2.11 Failure to Meet Standards for Services; Inability to Perform.

(a) If a Recipient provides its corresponding Provider with a written notice to
the applicable service manager and Contract Manager of any purported failure to
meet any standard of the Services or access to Facilities required by this
Agreement (a “Service Shortfall”), as determined by such Recipient in good
faith, and if such Provider agrees that a Service Shortfall exists, such
Provider shall promptly rectify such failure at its own expense, using
commercially reasonable efforts, and reimburse Service Charges related to such
agreed Service Shortfall previously paid, or reduce such Service Charges not yet
paid, in an amount reasonably determined to compensate such Recipient for the
Service Shortfall; provided, however, that, in accordance with Section 3.02, the
Acquiror may withhold payment of an amount that it reasonably determines in good
faith would compensate such Recipient for the Service Shortfall. Any
disagreement as to whether a Service Shortfall has occurred or as to any
purported Service Shortfall (resulting in timing or quality of performance of
any Service falling materially below the standard set forth in Section 2.09)
that is not promptly rectified to such Recipient’s reasonable satisfaction shall
be rapidly and timely escalated and resolved in accordance with
Section 7.09(a)(i) on an expedited basis.

(b) To the extent that any Provider fails to provide, or fails to timely
provide, any Service or access to any Facility as required under this Agreement
or fails to meet the applicable standards for any Service or access to any
Facility as set forth herein, unless such failure resulted primarily from the
act or omission of Recipient (even if such failure to provide Service or access
to a Facility is excused by Force Majeure pursuant to Section 6.04 hereof), then
Recipient and Recipient’s Affiliates shall have no obligations or liability
hereunder or under any other Transaction Agreement for failure to meet their
obligations hereunder or under any other Transaction Agreement to the extent
such failure by Recipient or its Affiliates is attributable to Provider’s
failure to provide, to timely provide, or to meet the applicable standards with
respect to such Service or access to a Facility until such time as such Provider
cures such failure to the extent required to enable Recipient or its Affiliates
to resume fulfilling such obligations hereunder or under the other applicable
Transaction Agreements.

 

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Section 2.12 Change in Services or Access to Facilities.

(a) Subject to Section 2.09, a Provider may, from time to time, reasonably
supplement, modify, substitute or otherwise alter (“Change”) the Services and
access to the Facilities provided by it in a manner that does not adversely
affect in any material respect the quality or availability of such Services or
access to such Facilities or increase the cost to Recipient of receiving or
using such Services or accessing such Facilities; provided, that to the extent
that any such Change is reasonably likely to modify, substitute or otherwise
alter the receipt or use of such Services or access to such Facilities, Provider
shall provide Recipient with reasonable advance written notice to the applicable
service manager and Contract Manager of the implementation of the Change to the
extent practicable under the circumstances.

(b) Each Recipient may request in writing any Change to a Service or access to a
Facility, which request shall include a description of the proposed Change
requested and the associated business specifications (a “Change Request”);
provided, however, that any proposed Change requested pursuant to such Change
Request shall not result in any material change to the manner of provision or
the contents of the Services or access to the Facilities that are the subject of
such Change Request; provided further, however, that (i) any upgrades or changes
to a Service or access to a Facility that are made in the ordinary course of
business, including but not limited to, system upgrades, configuration changes,
changes to the environment and installation of new releases, shall in no event
be regarded as “material changes” and (ii) any disputes as to whether a Change
Request results in any “material change” shall be resolved in accordance with
Section 7.09(a)(i). Provider shall have ten (10) Business Days from the date of
receipt of the Change Request (unless otherwise mutually agreed in writing by
the Parties) to provide Recipient with a written proposal (a “Change Request
Proposal”), prepared at the Agreed Price at Recipient’s expense. Provider and
Recipient shall then engage in good faith negotiations regarding such Change
Request, including with regard to the estimated time and price of implementing
the Change Request (including any Third-Party Consents necessary to implement
the Change Request) and any potential impact of the Change Request on
then-existing Services or access to Facilities. For the avoidance of doubt, the
estimated price for any Change Request shall be determined using the Agreed
Price. If the Parties agree in writing upon a Change Request Proposal or a
written variation thereof, the Schedules hereto (if applicable) shall be deemed
amended to include the terms and conditions of such agreed-upon Change Request.

(c) Notwithstanding the foregoing, if a Change is required by applicable Law or
is in response to a New Security Threat, a Provider shall make, at its own
initiative or upon the request of a Recipient, any and all changes to the
Services or the access to the Facilities necessary to comply with applicable Law
and any changes thereto or to respond to such New Security Threat (any such
changes to the Services or access to the Facilities, a “Required Change”);
provided, that (i) such Provider shall provide Recipient with reasonable advance
written notice to the applicable service manager and Contract Manager of the
implementation of any Required Changes, and (ii) any disputes arising in
connection therewith shall be rapidly and timely escalated and resolved in
accordance with Section 7.09(a)(i) on an expedited basis. The Recipient shall
pay to the Provider the Agreed Price for such Required Change and any related
Pass-Through Charges incurred by the Provider in making any Required Changes and
will pay any incremental Agreed Price and related Pass-Through Charges incurred
by the Provider in providing the Services or providing access to the Facilities
after implementation of the Required Change. The Recipient will receive the
benefits of any incremental reduction in the Agreed Price enjoyed by the
Provider in providing the Services or providing access to the Facility after
implementation of the Required Change; provided, that with respect to a change
in Law or New Security Threat that is applicable to the businesses of both
Provider and the Recipient, the Parties will share on a pro rata basis in the
Agreed Price and related Pass-Through Charges incurred by the Provider in making
any Required Change, the incremental Agreed Price and related Pass-Through
Charges incurred by the Provider in providing the Services after implementation
of the Required Change and the benefits of any incremental reduction in the
Agreed Price enjoyed by the Provider in providing the Services after
implementation of the Required Change. Each Party shall promptly notify the
other Party in writing of any changes in applicable Law or New Security Threat
that may relate to the provision or receipt of the Services or access to the
Facilities.

Section 2.13 Services and Access to Facilities Provided by Other Persons. The
Parent may engage or cause any Person, including any Affiliate of the Parent to
provide any Service or access to any Facility or any

 

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portion thereof; provided, however, that such Person and all Services or access
to Facilities provided by such Person shall be subject to confidentiality and
security provisions at least as stringent as those herein and to the terms and
conditions set forth herein, including service standards, and that the Parent
shall remain responsible for the performance by such Person of all of its
obligations hereunder with respect to the Services or access to the Facilities
provided by such Person so that such performance is in accordance with the terms
and conditions hereof; provided, further, that Provider shall provide Recipient
with reasonable advance written notice to the applicable service manager and
Contract Manager of its intention to engage such Person to provide such Services
or access to such Facilities, or any portion thereof; provided, further, that
the engagement of any Person that is not either (i) an Affiliate of the Parent
either as of the date hereof or as of the date such engagement occurs,
(ii) providing the same or similar Services or access to Facilities to the
Acquiror during the Pre-Closing Period, or (iii) a Person providing Services or
access to Facilities after the Closing to a Recipient and concurrently providing
similar Services or access to Facilities to the Acquiror shall be subject to the
Acquiror’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. The Parent shall cause any such Person that is
an Affiliate of the Parent to waive any existing restriction or constraint on
its Work Product, any requirement for consent, and any other term of service or
performance (and, if applicable, shall not impose such other new terms) that
would prevent or impede such Person from providing the Services or the access to
Facilities in accordance with the terms and conditions of this Agreement.

Section 2.14 Consents. The Parent shall obtain or cause its Affiliates and
Persons providing Services or providing access to Facilities on its behalf to
obtain any Third Party Consents necessary for the Services to be provided to and
received by the applicable Recipient and for the access to Facilities to be
provided to and received by the applicable Recipient and to use any deliverables
(including Work Product) provided in connection therewith and shall either
(a) use commercially reasonable efforts to obtain any such necessary Third Party
Consent from any Person that is not an Affiliate of the Parent or (b) in the
event such Third Party Consents are not obtained, immediately notify the
applicable Recipient and provide commercially reasonable alternative
arrangements reasonably acceptable to the applicable Recipient for the provision
of such Services or access to Facilities consistent with existing service levels
and the standards set forth in Section 2.09. All out-of-pocket costs of Third
Party Consents or providing such acceptable alternative arrangements with
respect to the Scheduled Services, access to the Scheduled Facilities and
Additional Services and access to Additional Facilities shall be equally split
between the Parent and the Acquiror. The applicable Recipient shall bear the
costs of any Third Party Consents for Knowledge Transfer Services, Third-Party
Vendor Services, Resumed Services, Migration Services and Changes made pursuant
to a Change Request; and the cost of any Third Party Consents for a Required
Change shall be allocated in accordance with the second and third sentences of
Section 2.12(c).

Section 2.15 Dedicated Assets and Dedicated Third-Party Agreements. Schedule
2.15 sets forth certain equipment and other assets owned by the Parent Entities
(“Dedicated Assets”) and certain agreements between one or more Parent Entities
and Persons that are not Affiliates of the Parent (“Dedicated Third-Party
Agreements”), which in each case will be used exclusively to provide Scheduled
Services. If, within sixty (60) days prior to the scheduled date of termination
of a Service (whether such date appears on a Schedule or is set forth in a
notice of termination given pursuant to Section 6.01), the Acquiror delivers
written notice to the Parent that the Acquiror elects to acquire any Dedicated
Asset used to provide such Service, the Parent shall sell such Dedicated Asset
to the Acquiror on the date of such scheduled termination at a price equal to
the net book value of such Dedicated Asset as of the last day of the quarterly
fiscal period completed immediately prior to such notice date. Upon the
Acquiror’s reasonable written request delivered to the Parent within sixty
(60) days prior to the scheduled date of termination of a Service (whether such
date appears on a Schedule or is set forth in a notice of termination given
pursuant to Section 6.01), the Parent shall cooperate or cause its Affiliates to
cooperate in the Acquiror’s negotiation of an assignment to an Acquiror Entity
of any Dedicated Third-Party Agreement used to provide such Service or in
Acquiror’s paying off any obligations owed under any Dedicated Third-Party
Agreement, including by way of Parent or its Affiliates providing a letter of
agency to allow the Acquiror to be assigned, or to assume obligations under, any
Dedicated Third-Party Agreement, in either case effective on the date of such
scheduled termination; provided, however, that neither the Parent nor its
Affiliates will be required to pay any consideration or otherwise enter into any
accommodation or undertaking with any counterparty to such Dedicated Third-Party
Agreement in connection with such assignment. For the avoidance of doubt,
whether or not an agreement is a Dedicated Third-Party Agreement listed on
Schedule 2.15, the Parent and its Affiliates will not assign any agreements to
an Acquiror Entity that do not exclusively relate to the provision of the
Scheduled Services.

 

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Section 2.16 Personnel.

(a) The Parent shall, and shall cause the Provider of any Service or access to
any Facility to make available to the Recipient of such Service or access to
such Facility such personnel as may be necessary to provide such Service or
access to such Facility; provided, however, that, subject to Section 2.09, the
Provider shall have the right, in its reasonable discretion, to (i) designate
which personnel it will assign to perform such Service or provide access to such
Facility and (ii) remove and replace such personnel at any time. Subject to
Section 2.09, nothing in this Agreement shall obligate a Provider (or the Parent
to cause any Provider) to hire any additional employees or provide any
incentives to employees in addition to those in effect immediately prior to the
Closing or to retain the employment of any particular employee or retain the
services of any particular consultant, contractor or agent.

(b) The Provider of any Service or access to any Facility shall be solely
responsible for all (i) salary, employment and other benefits and liabilities;
(ii) payroll, employment, social security, workers compensation, unemployment,
disability and similar taxes (including all withholding taxes on such payments
or benefits) and (iii) compliance with all employment, immigration and any other
applicable Laws, in the case of (i) through (iii) relating to the personnel of
such Provider assigned to perform such Service or provide access to such
Facility. In performing their respective duties hereunder, all such personnel of
a Provider shall be under the direction, control and supervision of such
Provider and, subject to Section 2.09 and Section 2.16(a), such Provider shall
have the sole right to exercise all authority with respect to the employment
(including termination of employment), assignment and compensation of such
personnel.

(c) The Parties hereby agree that the employees of the Acquired Entities listed
in Schedule 2.16(c) hereto (the “Seconded Employees”) have been seconded to
American International Group K.K. (“AIG KK”) in accordance with the terms of the
respective secondment agreements between the Acquired Entities and AIG KK listed
on Schedule 2.16(c) hereto (the “Secondment Agreements”) and for the purpose of
performing job functions related to the Services and access to the Facilities
provided hereunder. The Seconded Employees will remain at all times employees of
the Acquired Entities, to the extent applicable, but they shall, at all times
during the Secondment Term (as defined below), work under the direction,
supervision and control of AIG KK or one of its Affiliates. All contractual
salary and benefits due and payable to the Seconded Employees during the
Secondment Term shall be in accordance with the Secondment Agreements. For each
Seconded Employee, the “Secondment Term” shall be that period of time from such
employee’s initial secondment pursuant to the Secondment Agreements until the
earlier of: (i) completion of the period provided in Schedule 2.01 for the
provision of the Services in which such Seconded Employee is engaged or (ii) the
termination of this Agreement for whatever cause. Upon completion of a Seconded
Employee’s Secondment Term such Seconded Employee shall immediately cease
working under the direction, supervision and control of AIG KK or any of its
Affiliates, as applicable, and such Seconded Employee shall be transferred to
the applicable Acquiror Entity.

Section 2.17 Cooperation. Each Party agrees to perform all obligations under
this Agreement in good faith and to use commercially reasonable efforts to
cooperate with the other in all matters relating to the provision and receipt of
the Services and access to the Facilities. In furtherance of the foregoing:
(a) each Party shall timely notify the other in writing as soon as practicable
in advance of any circumstances that could have a material adverse effect on the
Services or the access to the Facilities or security and work with the other
Party to minimize the effect of such circumstances; (b) each Party shall timely
provide information and documentation reasonably requested by the other Party to
be used in the provision or receipt of Services and access to Facilities
hereunder; and (c) each Recipient and its Affiliates shall use commercially
reasonable efforts to (i) cooperate with the applicable Provider and its
Affiliates with respect to the provision of any Service and access to any
Facility and (ii) enable the applicable Provider and its Affiliates to provide
the Services and access to the Facilities in accordance with this Agreement.
Except as required by applicable Law, no Recipient or its Affiliates shall take
any action that would interfere with or materially increase the cost of a
Provider’s providing any of the Services or access to any of the Facilities.

Section 2.18 Security; Electronic and Other Access.

(a) The Parties shall work together (i) to ensure that each Provider is able to
maintain or exceed its current level of security during the term of this
Agreement and (ii) to address any New Security Threat, (including compliance
with applicable Law (including Privacy Laws) related to such New Security
Threat) or the security and protection of Personally Identifiable Information,
provided, however, that the Provider shall not be required to take

 

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action in connection with the foregoing (ii) except under a Required Change The
Acquiror shall be entitled to perform, with reasonable advance written notice,
audits of the data and physical, electronic and systems security procedures in
effect at the locations where the Provider is providing Services or access to
any Facilities , which audits shall be of the type and conducted in a manner
that is reasonable under the circumstances of the provision of services, access
to facilities, equipment, software and other assistance on a transitional basis.
Notwithstanding the foregoing, such right to perform audits shall include the
ability to perform Statement of Auditing Standards 70 Type II audits if such
audits are required by a Governmental Authority. At the Acquiror’s request, the
Provider shall, in accordance with Section 2.17, provide such cooperation as is
required to conduct and complete such audits.

(b) As of the Closing, except as otherwise expressly provided in the Purchase
Agreement or in this Agreement or as expressly agreed to in writing by the
Parties, (i) the Acquiror Entities shall cease to use and shall have no further
access to, and the Parent shall have no obligation to otherwise provide or make
available, any business or other services, including any Parent Entity’s
intranet and other owned, licensed, leased or used computer software, networks,
hardware or technology of a Parent Entity, provided or made available to the
Acquiror Entities by any Parent Entity prior to the Closing and (ii) the
Acquiror Entities shall have no access to, and the Parent Entities shall have no
obligation to otherwise provide, any Parent Entity’s computer-based resources
(including third-Person services, e-mail and access to its computer networks,
databases and equipment), whether or not such resources require a password or
are available on a secured access basis or on a non-secured access basis.

(c) To the extent that the performance or receipt of Services or access to
Facilities hereunder requires any Party or Provider to have access to the other
Party’s or its Affiliates’ Systems (including third-Person services, e-mail and
access to computer networks, database and equipment) owned, licensed, leased or
used by such other Party or its Affiliates (“Required Technology”), such other
Party or its Affiliates shall provide limited access to such Required Technology
in accordance with applicable Law (including Privacy Laws) and subject to the
security, use, Virus protection, disaster recovery and confidentiality policies
and procedures (including physical security, network access, Internet security,
confidentiality and Processing of Personally Identifiable Information and
security guidelines and procedures) of such Provider, as they may be amended
from time to time, provided that such policies were in effect at the time of
such access and are made known to the other Party’s personnel who are seeking
such access prior to such access (the “Security Regulations”). The Parent and
the Acquiror, as the case may be, shall, and shall cause the Parent Entities and
the Acquiror Entities, as the case may be, and all of their respective personnel
having access to the Required Technology to (i) comply with all of such Party’s
or its Affiliates’ Security Regulations that are applicable to the provision of
any Service or access to any Facility; (ii) not tamper with, compromise or
circumvent any security or audit measures employed by such Party or its
Affiliate whose Required Technology is being accessed; (iii) execute a separate
system access agreement, upon commercially reasonable terms, with such Party or
its Affiliate; (iv) ensure that only those users who are specifically authorized
by such Party or its Affiliates, as the case may be, gain access to the Required
Technology; and (v) use commercially reasonable efforts to prevent unauthorized
destruction, alteration or loss of information contained therein by such users.
The rights of access to the Required Technology granted hereunder shall be
restricted to user access only, unless otherwise agreed to in writing by the
Parties, and shall not include privileged or higher level access rights or
rights to functionality. Other than as specifically permitted under this
Agreement or the other Transaction Agreements, no Person shall have any rights
of access to the other Party’s Required Technology or Systems.

(d) While Services are being provided hereunder, each Party shall take
commercially reasonable measures to ensure that, in connection with the
provision or receipt of any Services or access to any Facilities, no Virus or
similar items are coded or introduced into either its own (including its
Affiliates’) or the other Party’s (including its Affiliates’) Systems. If, in
connection with the provision of any Services or access to any Facilities, a
Virus is found to have been introduced into such Systems, each Party shall use
commercially reasonable efforts to cooperate and to diligently work together
with the other Party, each at its own cost, to eliminate the effects of such
Virus.

(e) The Parties shall, and shall cause their respective Providers and Recipients
to, exercise commercially reasonable care or such higher standard that may be
required by applicable Privacy Laws to prevent unauthorized Persons from
accessing the Services, Facilities, Personally Identifiable Information,
Required Technology or other Systems of the other Party and its Affiliates,
including (i) promptly terminating the rights of any user under its control that
has sought to circumvent or has circumvented the applicable Security
Regulations, (ii) immediately notifying (verbally and then in writing) the other
Party if it learns that an unauthorized Person has accessed or may access any
Required Technology or other Systems of such other Party or that a Person has
engaged in activities that

 

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may lead to the unauthorized access, destruction or alteration or loss of
Personally Identifiable Information, or other data, information or software
whether on such other Party’s Required Technology or other Systems, and
(iii) immediately implementing the notification procedures and actions required
by Section 7.02.

(f) Each Party shall cooperate, and shall cause its Affiliates and other
Providers to cooperate, fully and in a timely way with any investigation, audit
or review relating to the security of Personally Identifiable Information, the
Facilities, the Required Technology or other Systems that arises in connection
with this Agreement, including providing any relevant information or material in
its possession or under its control that is reasonably requested by the other
Party (but excluding internal audit reports and external audit opinions other
than a reasonably detailed summary of the portions thereof that describe or
address any exceptions from compliance policies or practices that are pertinent
to the Services or the Facilities).

(g) Subject to Section 7.02, the Contract Managers shall be advised promptly
(both orally, if practicable, and in any event in writing) of any material
breach of the provisions of this Section 2.18 or any breach of the Security
Regulations or unauthorized access to Personally Identifiable Information, the
Required Technology, Facilities or other Systems used hereunder. If such breach
has not been rectified or such unauthorized access has not been terminated
within three (3) days from the notice to the Contract Managers, the matter shall
be immediately escalated to the Contract Managers and resolved in accordance
with Section 7.09(a)(i) on an expedited basis. On reasonable advance written
notice to the applicable Contract Manager, and to the extent permitted by
applicable Law, each Party may audit the other Party’s use of the Required
Technology or other Systems used in providing or receiving the Services or
access to Facilities solely with respect to security and compliance with the
applicable Security Regulations no more than once every calendar year, unless in
connection with a Security Incident.

(h) Each Provider shall use the same level of effort and services as used or
caused to be used, to recover or recreate Provider’s own lost data prior to the
Closing Date but in no event less than a commercially reasonable effort, to
recover or recreate any data lost or destroyed in performing any Services or
providing access to any Facility due to Provider’s negligence, at Provider’s
cost. In addition, each Provider shall, at the reasonable request of Recipient,
use commercially reasonable efforts (or as otherwise required by applicable Law)
to restore or procure the restoration of such Personally Identifiable
Information to its state immediately prior to any corruption or loss.

Section 2.19 No Agency. Nothing in this Agreement shall be deemed in any way or
for any purpose to constitute any Party acting as an agent of another
unaffiliated Party in the conduct of such other Party’s business. A Provider of
any Service or access to any Facility hereunder shall act as an independent
contractor and not as the agent of any Recipient or its Affiliates in performing
such Service or providing access to such Facility.

Section 2.20 Ownership of Intellectual Property; Ownership of Data.

(a) Except as otherwise expressly provided in this Agreement or in the Purchase
Agreement, each of the Parent and the Acquiror and their respective Affiliates
shall retain all right, title and interest in and to their respective
Intellectual Property (including Work Product, as provided for herein) and any
and all improvements, modifications and derivative works thereof. No license or
right, express or implied, is granted under this Agreement by the Parent, the
Acquiror or their respective Affiliates in or to their respective Intellectual
Property, except that, solely to the extent required for the provision or
receipt of the Services or access to the Facilities in accordance with this
Agreement, each of the Parent and the Acquiror, for itself and on behalf of
their respective Affiliates, hereby grants to the other (and their respective
Affiliates) (“Licensee”) a non-exclusive, fully paid up, royalty-free,
worldwide, revocable (only as expressly set forth herein), non-transferable
(except as provided in Section 7.06) license during the term of this Agreement
to such Intellectual Property, but only to the extent and for the duration
necessary for the Licensee to provide or receive the applicable Service or
access to the applicable Facility as permitted by this Agreement. Upon the
expiration of such time, or the earlier termination of such Service or access to
such Facility in accordance with Section 6.01(d), the license to the relevant
Intellectual Property will terminate; provided, however, that, subject to
Section 6.03(a), all licenses granted hereunder shall terminate immediately upon
the expiration or earlier termination of this Agreement in accordance with the
terms hereof. The foregoing license is subject to any licenses granted by others
with respect to Intellectual Property not owned by the Parent, the Acquiror or
their respective Affiliates.

 

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(b) All right, title and interest (including Intellectual Property rights) in
the results and proceeds of the Services performed hereunder and the access to
Facilities, including all materials, products, reports, computer programs
(source or object code), documentation, deliverables and inventions developed or
prepared by Provider in performance of such services (the “Work Product”) that
is created exclusively on behalf of the Acquiror and its Affiliates or the
Business (subject to Section 2.20(a)) (the “Acquiror Work Product”) shall be
owned exclusively by the Acquiror (as between the Acquiror and its Affiliates,
on the one hand, and the Parent and its Affiliates on the other), in whatever
stage of completion such Acquiror Work Product may exist from time to time. All
such Acquiror Work Product shall be considered “works made for hire” (within the
meaning of the United States Copyright Law) of the Acquiror. In the event such
Acquiror Work Product is for any reason or in any jurisdiction determined not to
be “works made for hire” or that title to any such Acquiror Work Product may not
vest in the Acquiror or its Affiliates by operation of applicable Law or
otherwise, then the Parent hereby assigns and shall cause its Affiliates or
applicable Providers to assign all right, title and interest (including
Copyrights) in such Acquiror Work Product to the Acquiror, and Acquiror shall
reimburse the Parent for its and its Affiliates’ or the applicable Agreed Price
related to such actions. All such Acquiror Work Product, where practicable,
shall bear Acquiror’s Copyright and trade secret notices, as specified by the
Acquiror, and Acquiror shall reimburse the Parent for its and its Affiliates’ or
the applicable Agreed Price related to such actions. No rights to Acquiror Work
Product shall remain with the Parent or its Affiliates following the end of the
term of this Agreement.

(c) All right, title and interest (including Intellectual Property rights) in
Work Product that is created hereunder and that is not Acquiror Work Product
shall belong to the Provider that created such Work Product (the “Provider Work
Product”) (as between Provider and its Affiliates, on the one hand, and
Recipient and its Affiliates on the other), in whatever stage of completion such
Provider Work Product may exist from time to time, unless otherwise agreed to by
the Parties in writing. In the event that in any jurisdiction ownership of the
Provider Work Product does not vest in such Provider or its Affiliates by
operation of applicable Law or otherwise, then the Acquiror, as Recipient,
hereby assigns and shall cause its Affiliates to assign all right, title and
interest (including Intellectual Property rights) in such Provider Work Product
to the applicable Provider, and such Provider shall reimburse the Acquiror for
the Agreed Price related to such actions. Each Provider grants each Recipient a
non-exclusive, fully paid-up, royalty-free, worldwide, perpetual and irrevocable
and only to the extent necessary for Recipient to receive the Services license
for Recipient to copy, prepare derivative works of, distribute, display, perform
and otherwise use such Work Product (including, in the case of Work Product that
is software, any source code or executable or object code) in such Recipient’s
business and that of such Recipient’s Affiliates.

(d) If a Provider hereunder that is not an Affiliate of the Parent entered into
agreements with the Parent or its Affiliates prior to the Closing, which
agreements allocate title in work product to such Provider or another third
party, then the Parent shall use commercially reasonable efforts to obtain for
the applicable Recipient at the Recipient’s expense, (i) in the case of Work
Product to be owned by such Recipient, a non-exclusive, fully paid-up,
royalty-free, transferable, worldwide, perpetual and irrevocable license for
Recipient to copy, prepare derivative works of, distribute, display, perform and
otherwise use such work product in such Recipient’s business and that of such
Recipient’s Affiliates and (ii) in the case of Work Product to be owned by
Provider, a non-exclusive, fully paid-up, royalty-free, non-transferable,
worldwide license to use the work product in accordance with Section 2.20(a). In
the event that such licenses cannot be obtained, the Parent shall use
commercially reasonable efforts to obtain an alternative at the Recipient’s
expense.

(e) The Parent, as Provider, and its Affiliates will (i) promptly provide each
Recipient with written notice to the applicable service manager and the Contract
Manager of any restrictions, terms and conditions on Recipient’s rights in Work
Product otherwise owned by such Recipient (arising solely from third-party
rights, and not rights of Provider or its Affiliates) and (ii) use commercially
reasonable efforts, in consultation with Recipient, to remove or minimize such
restrictions, terms and conditions.

(f) During the term of this Agreement, each Provider will make reasonable
efforts to provide Recipient, upon Recipient’s request, with access to and
delivery of the Work Product owned by such Recipient.

(g) Except as otherwise expressly provided in this Agreement or in any other
Transaction Agreement, no Party (or its Affiliates) shall have any rights or
licenses with respect to any Intellectual Property (including software),
hardware or facility of the other Party. All rights and licenses not expressly
granted in this Agreement or in any other Transaction Agreement are expressly
reserved by the relevant Party. Each Party shall from time to time, and shall
cause its Affiliates to, execute any documents and take any other actions
reasonably requested by the other Party to effectuate the intent of this
Section 2.20.

 

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(h) All Recipient Data is, will be and will remain the property of the Recipient
or any of its designees and will be deemed Confidential Information of such
Persons. The Recipient or such designees shall have all right, title and
interest in and to, including worldwide ownership of all Intellectual Property
rights in the Recipient Data and all copies thereof. “Recipient Data” means all
books, records, files, tapes, software data, documents, storage devices, media
and other information (i) submitted to a Provider by or on behalf of any
Recipient, and any of its Affiliates, successors or agents, or (ii) obtained,
developed or produced by the Provider in connection with providing the Services
or access to any Facilities to the extent such data or information is based on,
summarizes or includes data and information of any Recipient, or any of its
Affiliates, successors or agents, submitted to or obtained by the Provider in
connection with such Services or access to such Facilities.

Section 2.21 Divestitures.

(a) If the Parent sells or divests any Affiliate that provides Services or
access to Facilities hereunder or assets that are used to provide Services or
access to Facilities hereunder, the Parent shall provide, or cause the divested
Affiliate or another Person to provide, for the continuity of Services and
access to Facilities on the same price, terms and conditions as are in effect
immediately prior to such sale or divestiture, and in a manner which does not
cause a degradation in any material respect in the service standards set forth
herein and without requiring a material change to the Recipient’s business
processes or operations.

(b) If the Acquiror sells or divests any Affiliate that receives Services or
access to Facilities hereunder, the Parent shall provide and shall cause its
Affiliates to provide for continuity of Services and access to Facilities on the
same price, terms and conditions as are in effect immediately prior to such sale
or divestiture, and in a manner which does not cause a degradation in the
service standards set forth herein; provided, that the Parent shall not be
required to incur any material additional costs or to make any material change
to the manner in which the Parent provides Services or access to Facilities;
provided, further, that the Acquiror shall remain responsible for all payment
and other obligations hereunder with respect to such Services and access to
Facilities.

Section 2.22 Reorganization. In the event that the Acquiror internally
restructures, reorganizes or transfers the Business to an Affiliate (including,
without limitation any merger or other integration of any Company or Transferred
Subsidiary with or into any other Company or Transferred Subsidiary or any
Affiliate of the Acquiror), the Parent shall be obligated to continue to
provide, or cause to be provided, the Services and the access to Facilities to
such Affiliate on the same price, terms and conditions as are in effect
immediately prior to such reorganization, and in a manner which does not cause a
degradation in any material respect in the service standards set forth herein;
provided, that the Parent shall not be required to incur any material additional
costs or to make any material change to the manner in which the Parent provides
such Services or access to Facilities.

Section 2.23 [Reserved].

Section 2.24 Migration.

(a) The Parties agree to use, and to cause their respective Affiliates that are
Providers or Recipients to use, their reasonable good faith efforts to cooperate
with and assist each other in connection with the migration of the Business or
the Acquiror Entities from the Parent and the Seller to the Acquiror, in each
case and to the extent reasonably agreed by the Parties, taking into account the
need to minimize both the cost of such migration and the disruption to the
ongoing business activities of the Parties and their respective Affiliates. In
furtherance thereof, to the extent that the Parties have not already done so
prior to the Closing Date, the Parties shall (i) identify the respective tasks
to be accomplished by each Party in connection with the orderly migration from
the performance of any Service or provision of access to any Facility by a
Provider to the performance of such Service and provision of access to such
Facility by a Recipient, its Affiliates or a third Person (the “Migration
Services”), (ii) agree upon the terms by which Provider will provide such
Migration Services and (iii) agree to the period during which the Migration
Services are to be provided. Any disputes between the Parties as to the
identification of, terms of or Schedule for Migration Services shall be rapidly
and timely escalated and resolved in accordance with Section 7.09(a)(i) on an
expedited basis.

 

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(b) The Parties acknowledge that Migration Services may include the provision of
services requested by a Recipient in connection with its migration to
non-Provider Systems, including the transfer of records, segregation and
migration of historical data, migration-specific enhancements and cooperation
with and assistance to third-Person consultants engaged by such Recipient in
connection with the foregoing. Migration Services shall be charged to the Party
or Affiliate of such Party that is receiving Migration Services (the “Migration
Services Recipient”) at the Agreed Price plus related Pass-Through Charges (less
any VAT or Sales Tax recoverable by the Migration Services Provider or any of
its Affiliates) incurred by the Party that is providing such Migration Services
(the “Migration Services Provider”) in the provision of Migration Services;
provided, however, that to the extent that the Migration Services for a
particular Service are provided by human resources, or utilize equipment or
third-party services, that are otherwise being used to provide such particular
Service (and, therefore, are included in the calculation of the Service Charge
for such Service), there shall be no additional charges for such Migration
Services beyond the Services Charge; provided further, however, that for any
human resources, equipment or third-party services that Provider retains in
order to provide Migration Services beyond those otherwise used to provide such
particular Service, then, if and to the extent that an authorized representative
of Recipient specifically authorizes in writing the use thereof, such Recipient
may be charged the incremental costs incurred by Provider for such additional
resources, equipment or services.

Section 2.25 Primary Points of Contact for this Agreement.

(a) Each Party shall appoint an individual to act as the primary point of
operational contact for the administration and operation of this Agreement, as
follows:

(i) The individual appointed by the Acquiror as the primary point of operational
contact pursuant to this Section 2.25(a) (the “Acquiror Contract Manager”
identified on Schedule 2.25) shall have overall operational responsibility for
coordinating, on behalf of the Acquiror, all activities undertaken by the
Acquiror and the Acquiror Entities and their Affiliates and Representatives
hereunder, including the performance of the Acquiror’s obligations hereunder,
the coordination of the provision of the Services and access to the Facilities
with the Parent, acting as a day-to-day contact with the Parent Contract Manager
and making available to the Parent the data, facilities, resources and other
support services from the Acquiror required for the Parent Providers to be able
to provide the Services and access to the Facilities in accordance with the
requirements of this Agreement. The Acquiror may replace the Acquiror Contract
Manager with an employee or officer with comparable knowledge, expertise and
decision-making authority from time to time upon written notice to the Parent
pursuant to Section 7.03(b). The Acquiror shall use commercially reasonable
efforts to provide at least thirty (30) days’ prior written notice of any such
change.

(ii) The individual appointed by the Parent as the primary point of operational
contact pursuant to this Section 2.25(a) (the “Parent Contract Manager”
identified on Schedule 2.25) shall have overall operational responsibility for
coordinating, on behalf of the Parent, all activities undertaken by the Parent
Providers and their Affiliates and Representatives hereunder, including the
performance of the Parent’s obligations hereunder, the coordination of the
provision of the Services and access to the Facilities with the Acquiror, acting
as a day-to-day contact with the Acquiror Contract Manager and making available
to the Acquiror the data, facilities, resources and other support services from
the Parent required for the Acquiror Entities to be able to receive the Services
and access to the Facilities in accordance with the requirements of this
Agreement. The Parent may replace the Parent Contract Manager with an employee
or officer with comparable knowledge, expertise and decision-making authority
from time to time upon written notice to the Acquiror pursuant to
Section 7.03(b). The Parent shall use commercially reasonable efforts to provide
at least thirty (30) days’ prior written notice of any such change.

(iii) In addition to the responsibilities set forth in Section 2.25(a)(i) and
Section 2.25(a)(ii) and Section 7.09(a), the Contract Managers shall have the
authority to approve in writing modifications to the Services, access to
Facilities, the terms on which the foregoing are provided and the Schedules
hereto.

(b) The Parties shall ensure that the Parent Contract Manager and the Acquiror
Contract Manager shall meet in person or telephonically as frequently as
necessary or advisable for the performance of the Parties’ obligations
hereunder, but in no event less than weekly for the first six (6) months of the
term and no less than every other week during the remainder of the term. In
addition, at least once per quarter during the term of this Agreement, the
Contract Managers and the senior executives identified in Section 7.09(a) shall
meet to discuss this Agreement and any issues arising hereunder.

 

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Section 2.26 TSA Records.

(a) During the Scheduled Term of any Service or access to any Facility and for
an additional period thereafter as required by applicable Law and/or the
Parent’s record retention policies that are provided to Recipient (but in no
event shall such additional period be fewer than twelve (12) months after the
end of such Scheduled Term), the Parent shall each maintain, and shall use
commercially reasonable efforts to cause Providers to maintain, true and correct
records of all receipts, invoices, reports and other documents relating to the
services rendered and activities performed hereunder in accordance with
applicable Law and its standard accounting and record management practices and
procedures, consistently applied, which practices and procedures are employed by
the Parent or such Providers (as applicable) in their provision or receipt of
services for themselves and their Affiliates.

(b) As and when so reasonably requested by Recipient for purposes of verifying
invoices submitted to Recipient pursuant to Article III and/or any Provider’s
performance of the Services, or by a Governmental Authority acting pursuant to
applicable Law, the Parent shall cause each Provider to permit at reasonable
times and from time to time, but in no event more than one inspection per year,
by the Acquiror and/or its external auditors (an “Inspection”) wherein such
Provider shall (i) make books and records concerning the Business (but excluding
Provider’s internal audit reports and external audit opinions, other than a
reasonably detailed summary of the portions thereof that describe or address any
exceptions from compliance policies or practices that are pertinent to the
Services or the Facilities), the calculation of any fees or Taxes, the
performance of Services or access to Facilities provided pursuant to this
Agreement (including IT infrastructure and general IT controls) and/or the
invoices submitted to the Acquiror pursuant to Article III, available for
inspection and copying by such Person(s) as the Acquiror designates as its
authorized representative(s), who shall, subject to the terms of Section 7.01,
have the right to take copies of or extracts from any such books and records,
and (ii) give the Acquiror’s representatives reasonable access during regular
business hours to facilities, officers, employees and other representatives of
such Provider, including attorneys, accountants and others, in connection with
such Inspection without disruption of the business operations of such Provider.

(c) If it is determined pursuant to the dispute resolution process in
Section 7.09 or any legal proceeding between the Parties, or the Parties
otherwise agree, that an Inspection has revealed that the Parent has overcharged
the Acquiror for Services or access to Facilities for any billing period, the
Parent promptly shall credit (or, if the applicable Provider has ceased
providing Services or access to Facilities, promptly shall refund) the Acquiror
for the amount of the overcharge plus interest thereon calculated from the date
of the Acquiror’s payment of the overcharge using the applicable Interest Rate.
The costs and expenses incurred by the Recipient and the Parent and its
Affiliates in connection with an Inspection shall be borne by Recipient unless
the overcharge exceeds ten percent (10%) of the actual amount owed for the
applicable billing period, in which event the costs and expenses incurred by the
Recipient and the Parent and its Affiliates in connection with such Inspection
shall be borne by the Parent.

ARTICLE III

COSTS AND DISBURSEMENTS

Section 3.01 Costs and Disbursements.

As consideration for providing the Services and access to the Facilities:

(a) Except as otherwise set forth on the applicable Schedule, the Acquiror shall
cause the Recipient of any Service set forth in Schedule 2.01 or access to any
Facility set forth in Schedule 2.02 to pay to the applicable Provider the amount
specified next to such Service or Facility in the applicable Schedule, as it may
be amended prior to Closing (with respect to a Service or Facility, the “Service
Charge” for such Service or Facility), subject to any reduction thereof made
pursuant to the last sentence of Section 2.15. For the avoidance of doubt and
not including Pass-Through Charges, Set-Up Costs, termination charges pursuant
to Section 6.02(b) and Third Party Consents, the Service Charge shall be the
amount set forth on the applicable Schedule and such amount shall not be subject
to any additional increase except as contemplated by Section 6.01. In addition,
except as otherwise set forth

 

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on the applicable Schedule or as otherwise agreed in writing by the Parties,
each Recipient shall pay the Agreed Price for Knowledge Transfer Services,
Third-Party Vendor Services, Additional Services, Migration Services received by
such Recipient and for any actual incremental costs of resuming any Resumed
Services (it being understood that, in the absence of any such incremental
costs, Resumed Services shall be charged at the same amounts as were specified
in the applicable Schedule for the Scheduled Service or access to a Facility).
Each month’s Service Charges and charges for Knowledge Transfer Services,
Third-Party Vendor Services, Additional Services, Resumed Services and Migration
Services (pro-rated if applicable to less than a full calendar month) for such
Recipient shall be (X) set forth in an invoice (which invoice or related
documentation shall provide reasonable detail regarding the calculation of the
amount set forth in the invoice unless such amount is a fixed amount set forth
in a Schedule hereto) from the Provider and submitted to the applicable
Recipient, sent in electronic format to the applicable Person at such Recipient
designated to receive such invoices, with copies of all such invoices sent
simultaneously in electronic format to the applicable Contract Manager, and with
all amounts due calculated and payable in the currency of the Recipient, unless
otherwise required by applicable Law, otherwise designated in the applicable
Schedule, or otherwise agreed to by the Parties in writing; provided, that
regardless of the currency of the Recipient, in the event that the business unit
AIG KK is the Provider such charges shall be in Japanese yen and in the event
that the business unit AIG Global Services is the Provider such charges will be
in U.S. dollars, and (Y) payable in arrears, unless otherwise specified for each
Service in Schedule 2.01 or Schedule 2.02. The Acquiror shall cause the
applicable Recipient to pay all such amounts set forth in such invoice and not
disputed pursuant to Section 3.02 via electronic funds transfer (instructions to
be separately provided), within thirty (30) days of the applicable Recipient’s
and Contract Manager’s receipt of the invoice.

“Agreed Price” shall (I) apply only to Knowledge Transfer Services, Third-Party
Vendor Services, Additional Services, Migration Services and to any actual
incremental costs of resuming any Resumed Services, (II) exclude any
Pass-Through Charges and (III) be determined as follows, with no additional
charges for Provider Costs, Overhead Costs or any other costs (except as
expressly set forth below and in Section 2.05 hereof):

(i) Where the Parties can agree upon a fee or method of fee calculation
regardless of past practice, such fee or method of fee calculation shall be used
(“Agreed Service Fee”) and the Agreed Price shall be the product of (A) the
Agreed Service Fee and (B) 1.2.

(ii) If there is no Agreed Service Fee, where an internal rate exists (the
“Applicable Rate Card”) that would apply to the Service or access to the
Facility that is charged on a unit basis, the Agreed Price shall be the product
of (A) the unit charge set forth on the then-current Applicable Rate Card,
(B) the number of units used and (C) 1.2.

(iii) If there is no Agreed Service Fee or Applicable Rate Card and an hourly
rate can be applied with respect to the Service, access to the Facility, a
portion of such Service or a portion of access to such Facility, the Agreed
Price for such Service, access to such Facility, portion of such Service or
portion of access to such Facility shall be $175 per hour (unless the Provider
of such Service, access to Facility, portion of such Service or portion of
access to such Facility is located in Japan, in which case the Agreed Price for
such Service, access to such Facility, portion of such Service or portion of
access to such Facility shall be ¥15,640 per hour) (an “Hourly Rate”).

(iv) If there is no Agreed Service Fee or Applicable Rate Card and an Hourly
Rate cannot be applied to the Service, access to the Facility, a portion of such
Service or a portion of access to such Facility and the Provider has
historically charged for such Service or Facility by allocating its total
Provider Cost among all of the recipients of its services or access to its
facilities in proportion to the percentage each such recipient represents of
such Provider’s total Provider Cost, the Agreed Price for such Service,
Facility, portion of such Service or portion of access to such Facility shall be
the product of (A) the total Provider Cost of such Provider for all services and
access to all facilities provided by such Provider to Recipients pursuant to
this Agreement and to recipients other than pursuant to this Agreement, (B) the
proportion of such Provider’s total Provider Cost that is attributable to such
Recipient and (C) 1.2.

(v) If there is no Agreed Service Fee or Applicable Rate Card, an Hourly Rate
cannot be applied to the Service, access to the Facility, a portion of such
Service or a portion of access to such Facility, and the Provider has not
historically charged for such Service or Facility by allocating its total
Provider Cost among

 

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all of the recipients of its services or access to its facilities in proportion
to the percentage each such recipient represents of such Provider’s total
Provider Cost, the Agreed Price for such Service, Facility, portion of such
Service or portion of access to such Facility shall be the Fully-Burdened Cost.

(b) Except as otherwise set forth on the applicable Schedule, in addition to any
Service Charges, the Acquiror shall cause the Recipient to pay to the Provider
any actual out-of-pocket costs and expenses paid to any unaffiliated third
Person (less any VAT or Sales Tax recoverable by the Provider or any of its
Affiliates) of the type set forth in Schedule 3.01(b), incurred by a Provider in
the provision of any Services or access to any Facilities (collectively, the
“Pass-Through Charges”) including any Pass-Through Charges specified on Schedule
2.01 or Schedule 2.02 or otherwise agreed to in writing by the Parties;
provided, that all travel expenses that are included as a Pass-Through Charge
shall only be reimbursed in accordance with Recipient’s travel policies
previously provided in writing to the Parent and the Provider. Pass-Through
Charges in excess of ten thousand dollars ($10,000) for a single expense will
not be incurred without the prior written approval of the applicable Recipient;
provided, that if such applicable Recipient does not approve the incurrence of
such expense, the Parent and the Acquiror shall discuss in good faith
commercially reasonable alternatives to the incurrence of such expense; and
provided, further that if the Parent and the Acquiror do not agree to a
commercially reasonable alternative to the incurrence of such expense and the
applicable Recipient still does not approve the incurrence of such expense, then
the applicable Provider may terminate the Service related to such Pass-Through
Charge within fifteen (15) Business Days of delivering a written notice to such
effect to the Acquiror in accordance with Section 7.03(b) and to the applicable
Contract Manager, unless, during such fifteen (15) Business Day period, the
Recipient approves the incurrence of such expense. Pass-Through Charges shall be
set forth in an invoice in reasonable detail and with reasonable back-up from
the Provider and without any mark-up or additional fee and shall be submitted to
the applicable Recipient in electronic format sent to the applicable Person at
Recipient designated to receive such invoices, with copies of all such invoices
sent simultaneously in electronic format to the Acquiror Contract Manager, and
with all amounts due calculated and payable in the currency of the Recipient,
unless otherwise required by applicable Law, otherwise designated in the
applicable Schedule, or otherwise agreed to by the Parties in writing. The
Acquiror shall cause the applicable Recipient to pay all amounts for such
Pass-Through Charges set forth in such invoice and not disputed pursuant to
Section 3.02 via electronic funds transfer (instructions to be separately
provided), within thirty (30) days of the Recipient’s and Acquiror Contract
Manager’s receipt of the invoice.

(c) [Reserved].

(d) Notwithstanding any provision to the contrary, all consideration paid under
this Agreement is exclusive of any sales, transfer, goods or services tax, VAT
or similar gross-receipts-based tax (including any such taxes that are required
to be withheld, but excluding all other taxes, including taxes based upon or
calculated by reference to income, gain or capital) imposed against or on
services provided (“Sales Taxes”) by a Provider hereunder and such Sales Taxes
will be added to the consideration to be paid to a Provider (or the Parent on
behalf of the Provider) where applicable. Such Sales Taxes shall be separately
stated on the relevant invoice submitted to the Recipient (or the Acquiror on
behalf of the Recipient) and in circumstances where VAT is chargeable in respect
of any supply made under this Agreement, the Provider shall promptly deliver a
valid VAT invoice in respect of such supply to the Recipient (or the Acquiror on
behalf of the Recipient). All taxable goods and services for which the Recipient
is compensating, or reimbursing, the Provider shall be set out separately from
non-taxable goods and services, if practicable. The Recipient (and the Acquiror
on behalf of the Recipient) shall be responsible for any such Sales Taxes and to
the extent such taxes are payable by a Provider (or the Parent, as the case may
be, on behalf of the Provider) to the relevant taxing authority, the Recipient
(or the Acquiror on behalf of the Recipient) shall either (i) remit an amount
equal to such Sales Taxes to the Provider (or the Parent on behalf of the
Provider), and the Provider (or the Parent on behalf of the Provider) shall
account for such amounts to the applicable taxing authority, or (ii) provide the
Provider (or the Parent on behalf of the Provider) with a certificate or other
acceptable proof evidencing an exemption from liability for such Sales Taxes of
the relevant Service provided hereunder. In the event the Provider (or the
Parent on behalf of the Provider) fails to invoice Sales Taxes on taxable goods
or services covered by this Agreement in a timely manner, the Provider (or the
Parent on behalf of the Provider) shall notify the Recipient (or the Acquiror on
behalf of the Recipient) in a timely manner and the Recipient (or the Acquiror
on behalf of the Recipient) shall remit an amount equal to such Sales Taxes
(where relevant following the provision of a valid VAT invoice) to the Provider
(or the Parent on behalf of the Provider); provided, however, that the Recipient
shall not be responsible for the payment of any additions to such Sales Taxes,
including penalties and interest imposed due to a failure by the Provider (or
the Parent on behalf of the Provider) to account for such Sales Taxes or

 

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cause them to be accounted for in a timely manner to the appropriate taxing
authority except where such failure was due to the Recipient’s breach of any
obligation herein. For the avoidance of doubt, except where determined or as
required by applicable Law, the Person responsible for remitting the Sales Tax
to the Tax Authority shall be determined in accordance with past practice as
between such Recipient and Provider. Notwithstanding any other proviso, the
Recipient shall not be required in any case to indemnify the Provider for any
(x) penalties, interest or additions to tax imposed with respect to a Sales Tax
to the extent such amounts are imposed due to a failure by the Provider (or the
Parent on behalf of the Provider) to collect, remit or account for any such
taxes to a taxing authority timely or timely file any tax return relating to
such taxes except where such failure was directly due to the Recipient’s breach
of any obligation herein or (y) taxes other than Sales Taxes and, to the extent
that any tax other than a Sales Tax is required to be withheld or deducted by
the Recipient, the Recipient (or the Acquiror on behalf of the Recipient) has
the right to withhold or deduct the amount of such tax from any consideration
under this Agreement and such amount shall be treated as paid for purposes of
this Agreement. For purposes of this Agreement, the amount required to be
remitted by or with respect to Sales Tax shall be reduced by the amount of any
such Sales Tax that is recoverable, refundable or creditable to the Provider (or
the Parent on behalf of the Provider) or for which the Provider (or the Parent
on behalf of the Provider) is reimbursed or held harmless against by another
party (other than an indemnity set forth under this Agreement). For the
avoidance of doubt, the amount required to be remitted by the Recipient (or the
Acquiror on behalf of the Recipient) with respect to VAT for purposes of this
Agreement shall not be reduced by reference to any amounts accounted for by or
on behalf of the Provider or an Affiliate of the Provider and which are
recoverable, refundable or creditable to the Provider or an Affiliate of the
Provider as input VAT.

Section 3.02 No Right to Set-Off; Disputed Invoice Amounts. The Acquiror shall
pay or cause the applicable Recipient that is its Affiliate to pay to the Parent
or the applicable Provider the full amount of undisputed Service Charges,
charges for Knowledge Transfer Services, Third-Party Vendor Services, Resumed
Services and Migration Services, Pass-Through Charges, other amounts required to
be paid on behalf of each Recipient under this Agreement and except as permitted
by this Section 3.02 or as otherwise agreed to by the Parties, shall not
set-off, counterclaim or otherwise withhold any amount owed or claimed to be
owed under this Agreement on account of any obligation owed by or on behalf of a
Provider, whether or not such obligation has been finally adjudicated, settled
or otherwise agreed upon in writing. Notwithstanding the foregoing, in the event
the Acquiror or its applicable Recipient disputes any specific amount on an
invoice, or the Acquiror reasonably and in good faith determines an amount to
compensate a Recipient for a Service Shortfall pursuant to Section 2.11, the
Acquiror shall notify the Parent and the applicable Provider in writing and
describe in detail the reason for disputing such specific amount or the amount
to so compensate Recipient, respectively, and the Acquiror shall have no
obligation to pay such amount during the pendency of the dispute with respect to
such amount and may withhold any such amount to compensate Recipient. The
Parties shall use, and shall cause the respective Recipient and Provider to use,
their commercially reasonable efforts to reach an agreement with respect to such
amounts. If the respective Recipient and Provider or the employees or their
designees at the Parent and the Acquiror responsible for preparing and reviewing
the invoices are unable to reach an agreement about any such amounts within ten
(10) Business Days after such written notification has been received, the matter
shall be rapidly and timely escalated and resolved in accordance with
Section 7.09(a)(i) hereof on an expedited basis. Upon resolution of the dispute,
including an amount to compensate a Recipient for a Service Shortfall, if any,
the Acquiror shall promptly pay, or cause its Affiliate that is the applicable
Recipient to promptly pay, the applicable amount, if any, as determined by the
process used in Section 7.09(a)(i).

ARTICLE IV

WARRANTIES AND COMPLIANCE

Section 4.01 Disclaimer of Warranties. Except as expressly set forth herein,
each Party (on behalf of itself and its Affiliates) acknowledges and agrees that
the Services and access to Facilities are provided as-is, that each Party (on
behalf of itself and its Affiliates) assumes all risks and liabilities arising
from or relating to its use of and reliance upon the Services and access to the
Facilities and that each Party (on behalf of itself and its Affiliates) makes no
additional representation or warranty with respect thereto. EXCEPT AS EXPRESSLY
SET FORTH HEREIN, EACH PARTY (ON BEHALF OF ITSELF AND ITS AFFILIATES) HEREBY
EXPRESSLY DISCLAIMS ALL REPRESENTATIONS, WARRANTIES AND CONDITIONS REGARDING THE
SERVICES AND THE FACILITIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY
REPRESENTATION OR

 

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WARRANTY IN REGARD TO QUALITY, PERFORMANCE, NONINFRINGEMENT, COMMERCIAL UTILITY,
MERCHANTABILITY OR FITNESS OF THE SERVICES AND THE FACILITIES FOR A PARTICULAR
PURPOSE.

Section 4.02 Compliance with Laws and Regulations. Each Party shall be
responsible for its own compliance with any and all Laws applicable to its
performance under this Agreement.

Section 4.03 Foreign Corrupt Practices Act. In connection with the provision of
any Service or access to any Facility pursuant to the terms of this Agreement,
the Parent shall, and shall cause any Provider directly or indirectly to, comply
with the U.S. Foreign Corrupt Practices Act (the “FCPA”), including maintaining
adequate internal controls as required by the FCPA and complying with the
record-keeping provisions of the FCPA.

ARTICLE V

LIMITED LIABILITY AND INDEMNIFICATION

Section 5.01 Indemnification.

(a) The Parent, on behalf of itself, its Affiliates and any other Person that
provides Services or access to Facilities on their behalf to a Recipient under
this Agreement, shall indemnify the Acquiror, its Affiliates and their
Representatives against, and defend and hold the Acquiror, its Affiliates and
their Representatives (the “Acquiror Indemnified Parties”) harmless from, any
and all Losses arising from third-party claims imposed on, sustained, incurred
or suffered by, or asserted against any Acquiror Indemnified Party arising from
or resulting out of any of the following: (i) any breach or non-fulfillment by
the Parent, its Affiliates or other Person that provides Services or access to
Facilities on their behalf to a Recipient under this Agreement of any covenants,
terms or conditions of, or duties or obligations set forth in, this Agreement;
(ii) infringement, misappropriation or other violation of or conflict with any
Intellectual Property right of any third party claimed or threatened against the
Acquiror, its Affiliates or their Representatives resulting from the Parent’s,
its Affiliates’ or such other Person’s provision or the Acquiror’s or its
Affiliates’ receipt of Services or access to Facilities hereunder; and (iii) the
Parent’s or its Affiliates’ or such other Person’s fraud, gross negligence or
willful misconduct; provided, in the case of each of clauses (i)-(iii) of this
Section 5.01(a) that the Parent shall have no obligation to indemnify any
Acquiror Indemnified Party to the extent that such Loss results from any claim
for which any Parent Indemnified Party (defined below) is entitled to
indemnification under Section 5.01(b).

(b) The Acquiror, on behalf of itself, its Affiliates shall indemnify the
Parent, its Affiliates and their Representatives against, and defend and hold
the Parent, its Affiliates and their Representatives (the “Parent Indemnified
Parties”) harmless from, any and all Losses arising from third-party claims
imposed on, sustained, incurred or suffered by, or asserted against any Parent
Indemnified Party arising from or resulting out of any of the following: (i) any
breach or nonfulfillment by the Acquiror or its Affiliates of any covenants,
terms or conditions of, or duties or obligations set forth in, this Agreement;
and (ii) the Acquiror’s or its Affiliates’ fraud, gross negligence or willful
misconduct; provided, in the case of each of clauses (i)-(ii) of this
Section 5.01(b) that Acquiror shall have no obligation to indemnify any Parent
Indemnified Party to the extent that such Loss results from any claim for which
any Acquiror Indemnified Party is entitled to indemnification under
Section 5.01(a).

Section 5.02 Additional Limitations on Liability.

(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO PARTY, NOR ANY
OF ITS AFFILIATES OR ITS OR THEIR REPRESENTATIVES (NOR ANY SUCCESSORS OR ASSIGNS
OF SUCH PERSONS) SHALL BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF PROFIT OR LOSS
OF REVENUE) OF THE OTHER PARTY, ITS SUCCESSORS, ASSIGNS OR THEIR RESPECTIVE
AFFILIATES AND REPRESENTATIVES, IN ANY WAY DUE TO, RESULTING FROM OR ARISING IN
CONNECTION WITH THIS AGREEMENT, REGARDLESS OF WHETHER SUCH LIABILITY ARISES IN
TORT (INCLUDING NEGLIGENCE), CONTRACT, BREACH OF WARRANTY, STRICT LIABILITY, OR
OTHERWISE AND REGARDLESS OF WHETHER ANY SUCH DAMAGES ARE FORESEEABLE OR WHETHER
AN INDEMNIFIED PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES,

 

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EXCEPT TO THE EXTENT SUCH DAMAGES (I) ARE AWARDED TO AN UNAFFILIATED THIRD PARTY
AND ARE SUBJECT TO A CLAIM FOR INDEMNITY HEREUNDER PURSUANT TO SECTION 5.01 OR
(II) ARISE OUT OF SUCH PARTY’S, OR ANY OF ITS AFFILIATE’S, GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR BREACH OF SECTION 7.01.

(b) The liability of a Party with respect to a Service or access to a Facility
provided pursuant to this Agreement or anything done in connection therewith,
whether in contract, tort or otherwise, shall not exceed $35,000,000 except with
respect to (A) third-party claims that are the subject of an indemnity hereunder
with respect to a Party’s negligence resulting in death or personal injury; or
(B) a Party’s fraud, gross negligence or willful misconduct.

(c) Each Party indemnified hereunder agrees that it shall use commercially
reasonable efforts to mitigate and otherwise minimize its respective Losses,
whether direct or indirect, due to, resulting from or arising in connection with
any failure by the other Party, its Affiliates or another Person that provides
Services or access to Facilities on behalf of such other Party, as applicable,
to perform fully any obligations under, and comply with, this Agreement.

(d) Any claim for indemnification by a Person entitled to indemnification
hereunder must be made in writing to the Parent or the Acquiror, as applicable,
before the day that is the twenty-one (21) month anniversary of the date the
Service or the access to the Facility giving rise to such claim was terminated.

Section 5.03 Procedures. The provisions of Sections 10.04 and 10.05 of the
Purchase Agreement shall govern indemnification procedures and payment under
this Article V.

Section 5.04 Exclusive Remedy. Each Party acknowledges and agrees that,
following the Closing, other than (a) in the case of actual fraud by the
Acquiror or the Parent or any of their respective Affiliates or Representatives,
(b) as expressly set forth in this Agreement and (c) with respect to equitable
relief available hereunder including Section 7.09(b), the indemnification
provisions of this Article V shall be the sole and exclusive remedy of the
Parent and the Acquiror, respectively, for any third-party claims arising from
or related to this Agreement. Any first-party claims arising from or related to
this Agreement, whether in contract, tort or otherwise, shall be subject to
Section 5.02.

ARTICLE VI

TERM AND TERMINATION

Section 6.01 Term and Termination.

(a) Each Scheduled Service and access to each Facility shall be provided for a
term (the “Initial Scheduled Term”, and together with any extended term as
provided in this Section 6.01(a), the “Scheduled Term”) commencing on the
Closing Date and ending, in each case, unless extended pursuant to this
Section 6.01, on the date set forth with respect to such Scheduled Service or
such scheduled access to a Facility in Schedule 2.01 (in the case of Services)
or Schedule 2.02 (in the case of access to Facilities), respectively, or such
shorter term if earlier terminated pursuant to the terms of this Agreement;
provided, that, notwithstanding any date on such Schedule, the Initial Scheduled
Term of any Service provided by American International Group K.K. shall be
twelve (12) months. Upon the provision of written notice to the applicable
service manager and the Contract Manager, Recipient may (i) with at least ninety
(90) days’(and forty-five (45) for any Service for which the Initial Scheduled
Term is three (3) months) written notice prior to the end of the Initial
Scheduled Term, extend any Initial Scheduled Term for an extended term
commencing from the last day of the Initial Scheduled Term for a number of
months up to and including the end of the eighteenth (18th) month after the
Closing Date (the “First Extended Term”), with no increase in the Service Charge
for such Scheduled Service or access to Facility during such First Extended
Term, (ii) with at least forty-five (45) days’ written notice prior to the end
of the First Extended Term, extend such First Extended Term for an additional
three (3) month term (the “Second Extended Term”) with the Service Charge for
such Scheduled Service or scheduled access to a Facility increasing by ten
percent (10%) from and after the date that is the last day of the eighteenth
(18th) month after the Closing Date, and (iii) with at least forty-five
(45) days’ written notice prior to the end of the Second Extended Term, extend
the Second Extended Term for an additional three (3)

 

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month term (“Third Extended Term”), with the Service Charge for such Scheduled
Service or scheduled access to a Facility during the Third Extended Term
increasing by another ten percent (10%) over the Service Charge charged during
the Second Extended Term (for a cumulative increase of twenty percent
(20%)) from and after the date that is last day of the twenty-first (21st) month
after the Closing Date. Notwithstanding the foregoing, for any Service for which
the Initial Scheduled Term is either three (3) or six (6) months, the First
Extended Term may not extend beyond the end of the twelfth (12th) month after
the Closing Date and no further extensions are permitted thereafter. Any
Additional Service or access to an Additional Facility shall terminate upon the
date (the “Initial Additional Service Term”) that is the earlier of (i) the
twelve (12) month anniversary of the Closing Date or (ii) such date as shall be
mutually agreed to in writing by the Parties on the Schedule reflecting such
Additional Service or access to an Additional Facility; provided, that, except
as otherwise agreed on such Schedule, the Initial Additional Service Term may be
extended in the same manner and subject to the same conditions, including
increases in Service Charges, as set forth in this Section 6.01(a) with respect
to Scheduled Services; provided, further, that the sum of the Initial Additional
Service Term and such Extended Additional Service term shall not exceed
twenty-four (24) months total. Notwithstanding the foregoing or any other
provision herein to the contrary, to the extent either Party’s (X) failure to
complete Migration or Knowledge Transfer Services in accordance with the time
frames agreed to by the Parties and the standards set forth herein or
(Y) failure to provide a Scheduled Service or scheduled access to a Facility in
accordance with the standards set forth herein prohibit or materially diminishes
the ability of a Recipient to terminate a Service or access to a Facility during
the Initial Scheduled Term, Initial Additional Service Term, or any extension of
such initial terms (the “Agreed Terms”), as applicable, such Agreed Term, as
well as the term for any related Migration Services, Knowledge Transfer Services
and Third Party Vendor Services shall be extended, without penalty to the
Recipient, for a reasonable amount of time, to be agreed to by the Parties, to
enable the Recipient to terminate such Service or access to a Facility. If the
Parties are unable to agree upon the length of such extension, the dispute shall
be rapidly and timely escalated and resolved in accordance with
Section 7.09(a)(i) on an expedited basis.

(b) Notwithstanding the term for providing any Service or access to any Facility
as set forth in Schedule 2.01 or Schedule 2.02, respectively, (i) a Service or
access to a Facility may be terminated earlier by the Parent if the Acquiror has
failed to pay Service Charges due and owing to the Parent or its Affiliate that
is a Provider (unless the Acquiror or Recipient is disputing an invoice pursuant
to Section 3.02) related to such Service or access to such Facility and the
Acquiror fails to cure such breach within thirty (30) days of the Parent
delivering a written notice of such breach to the Acquiror in accordance with
Section 7.03(b); (ii) a Service or access to a Facility may be terminated
earlier by the Acquiror if the Parent is in material breach of the terms of this
Agreement related to such Service or access to such Facility and the Parent
fails to cure such breach within thirty (30) days of the Acquiror delivering a
written notice of such breach to the Parent in accordance with Section 7.03(b);
(iii) the Acquiror may terminate this Agreement if the Parent commences a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors or shall take any corporate action to authorize any of
the foregoing; and (iv) the Parent may terminate this Agreement if the Acquiror
or all of the Acquiror Entities commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors or shall take any corporate action to authorize any of the foregoing.

(c) With respect to any Service or access to any Facility:

(i) Notwithstanding anything to the contrary in any Schedule, a Recipient may
terminate such Service or access to such Facility (A) upon mutual agreement of
the parties or (B) for any reason or no reason upon providing at least ninety
(90) days’ prior written notice to the applicable service manager and the
Contract Manager of the Provider of such Service or access to such Facility and
with no obligation to pay any applicable termination charges pursuant to
Section 6.02 or otherwise, provided, however, that as to any termination
pursuant to this clause (B), (1) Services that are collectively priced may only
be terminated as a

 

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whole and may not be terminated individually; and (2) a Recipient may not,
during the Initial Scheduled Term, terminate on ninety (90) days’ prior notice
such Service or access to such Facility, if, in accordance with the applicable
Schedule, it is provided by American International Group, K.K.. Nothing in this
Section 6.01(c)(i) affects Recipient’s right and ability to reduce, at any time
and for any reason, usage of any Service for which the Service Charges are
usage-based (e.g., email boxes) and that any such reduction shall result in an
immediate proportionate usage-based reduction in the Service Charges for such
Service;

(ii) a Provider may terminate such Service or access to such Facility, in whole
but not in part with respect to such Service or access to such Facility: within
ten (10) days after receipt by the Recipient of such Service or access to such
Facility of written notice to the applicable service manager and the Contract
Manager, if the continued performance of such Service or the provision of access
to such Facility would be a violation of any Law; provided, that during the ten
(10) days following such notification, the Contract Managers shall discuss in
good faith how to provide such Service or access to such Facility or an
equivalent service or equivalent access to a facility, equipment or software
without a violation of Law pursuant to Section 2.12(c).

If a Service or access to a Facility is terminated, the relevant Schedule, if
applicable, shall be updated to reflect such termination. In the event that the
effective date of the termination of any Service or access to any Facility is a
day other than at the end of a month, the Service Charge, charges for Knowledge
Transfer Services, Third-Party Vendor Services, Additional Services, Resumed
Services and Migration Services, the Pass-Through Charges and other amounts due
to a Provider associated with such Service or access to such Facility shall be
pro-rated appropriately. Within ten (10) Business Days following receipt of a
notice of termination in accordance with Section 6.01(c)(i), Provider shall send
to the applicable service manager and the Contract Manager for Recipient a
written notice that either (X) states that the Service or access to Facilities
for which termination is requested has no dependencies and can be terminated on
the requested date or (Y) to the extent that a Provider’s ability to provide a
Service or access to a Facility, as the case may be, is dependent on the
continuation of another Service or access to another Facility that the Recipient
seeks to terminate, describes any such dependency to such Recipient, in which
case the Service or access to a Facility sought to be terminated shall not
terminate and the Parties shall work in good faith to determine how and when
such Service or access to such Facility can be terminated.

(d) Each Recipient may from time to time request a reduction in part of the
scope or amount of any Service or access to any Facility or the partial
termination thereof by providing at least thirty (30) days’ prior written notice
to the applicable service manager and Contract Manager for the Provider of such
Service in access to such Facility, in which case the Parties shall cause the
applicable Provider and Recipient to discuss the feasibility of such a reduction
or partial termination in good faith and the appropriate reductions in scope or
amount to the relevant Service Charges or other applicable charges in light of
all relevant factors, including the costs and benefits to the Provider of any
such reductions. If the Recipient and the applicable Provider agree on the terms
of such reduction or partial termination, which terms shall be in writing and
approved by the Contract Managers, then the relevant Schedule, if applicable,
shall be updated to reflect any such reduced Service or access to such Facility
and the Provider shall provide the reduced or partially terminated Service or
access to Facility in accordance with the agreed-to terms.

Section 6.02 Termination Charges. Upon the early termination of any Additional
Service or Additional Facility pursuant to Section 6.01(c)(i), the Recipient
shall reimburse the Provider the amount of fifty percent (50%) of all “kill”
fees and other similar fees actually paid by the Provider or any of its
Affiliates to unaffiliated third parties that were engaged solely in order to
provide such Additional Service or Additional Facility, which fees were incurred
in connection with the early termination of the Additional Service or Additional
Facility and to the extent such “kill” fees and similar fees would not have been
incurred had Recipient continued to receive the applicable Additional Service or
Additional Facility for the originally contemplated Additional Service Term
thereof, as the case may be. Each Provider shall use commercially reasonable
efforts to minimize the existence and amount of such early termination charges,
“kill” fees and similar fees. All termination charges, “kill” fees and similar
fees due and payable under this Section 6.02 shall be due and payable to the
Provider in accordance with Article III.

 

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Section 6.03 Effect of Termination.

(a) Upon termination of any Service or access to any Facility in accordance with
this Agreement and subject to Section 6.02, the Provider of such terminated
Services or such terminated access to the applicable Facility will have no
further obligation to provide such terminated Service or such terminated access
to the applicable Facility, and the Recipient of such terminated Services or
such terminated access to the applicable Facility shall have no obligation to
pay any Service Charges, charges for Knowledge Transfer Services, Third-Party
Vendor Services, Additional Services, Resumed Services and Migration Services,
Pass-Through Charges and other amounts relating to any such terminated Service
or such terminated access to the applicable Facility; provided, that the
Recipient of such terminated Services or such terminated access to the
applicable Facility shall remain obligated to the Provider for any Service
Charges, charges for Knowledge Transfer Services, Third-Party Vendor Services,
Additional Services, Resumed Services and Migration Services, Pass-Through
Charges and other amounts owed and payable in respect of such terminated Service
or such terminated access to the applicable Facility that was provided prior to
the effective date of termination. Any and all rights to Intellectual Property
granted to a Recipient and/or Provider hereunder in connection with the
provision of a terminated Service or terminated access to the applicable
Facility shall immediately cease upon such termination, except to the extent
such Intellectual Property is needed for such Recipient to fulfill its
obligations under, or obtain the benefits under, this Agreement or the other
Transaction Agreements. In connection with the termination of any Service or
access to any Facility, the provisions of this Agreement not relating solely to
such terminated Service or such terminated access to the applicable Facility
shall survive any such termination.

(b) As promptly as practicable upon termination of this Agreement, or, if
applicable, upon earlier termination of any particular Service or access to a
Facility (i) each Party will deliver, or will cause to be delivered to the other
Party, all materials and property in its possession or control (or the
possession or control of an Affiliate) which is owned by or licensed to such
other Party or its Affiliates (including any Work Product owned by such Party or
its Affiliates in whatever state of completion as well as any data and
Confidential Information owned, licensed or leased by such Party), and (ii) the
Parties shall make a good faith effort to delete from their Systems (and use
commercially reasonable efforts to cause Providers that are not Affiliates to
delete from their Systems) all Work Product, data and Confidential Information
owned, licensed or leased by the other Party or its Affiliates that are no
longer needed for the Party to fulfill its obligations under, or obtain the
benefits under, this Agreement or the other Transaction Agreements.
Notwithstanding the foregoing, nothing herein shall require either Party to
delete any Confidential Information data or Work Product from any back-up or
disaster recovery media; provided, that such Work Product data and Confidential
Information is not accessed or used for any purpose other than restoration of
information and data of such Party commingled with such Work Product and
Confidential Information; provided, further, that such back-up or disaster
recovery media is securely disposed of or recycled in accordance with the
Party’s policies and practices, which in all cases shall be commercially
reasonable and meet industry standards.

(c) In the event that Provider or its Affiliates have purchased any resources in
the name of or on behalf of Recipient or its Affiliates and has fully charged
such purchase as a Pass-Through Charge or if Provider has licensed any resources
solely in connection with the provision of Services or access to Facilities for
Recipient or its Affiliates and fully charged such license as a Pass-Through
Charge (each, an “Acquired Resource”), then upon payment of such Pass-Through
Charge, Provider shall: (i) transfer to Recipient all right, title and interest
that Provider holds in such Acquired Resource and (ii) deliver such Acquired
Resource to such Recipient at no additional charge, except for any charges
incurred by Provider in transferring the Acquired Resource, which shall be paid
by the Recipient, upon the termination of the last Service or termination of
access to the last Facility hereunder for which such Acquired Resource is
necessary; provided, however, that for any Acquired Resource that is a license
for Intellectual Property, the Provider shall be obligated to transfer and
deliver such Acquired Resource to the Recipient only if it has licensed such
Acquired Resource in the name of or on behalf of Recipient or its Affiliates.
Provider agrees to exercise its commercially reasonable efforts to license any
such Acquired Resource in the name of or on behalf of Recipient or its
Affiliates and, in the event it is unable to do so or reasonably believes it
will not be able to do so, it shall so notify the Recipient in writing prior to
acquiring or attempting to acquire such license and the Provider and the
Recipient shall discuss in good faith commercially reasonable alternatives that
could be licensed in the name of or on behalf of the Recipient; provided,
however, that if the Provider and the Recipient do not agree to a commercially
reasonable alternative within fifteen (15) days of commencement of such good
faith discussions, the Recipient shall provide written notice to the Provider
that either (X) states that Provider may license such Acquired Resource in the
name of Provider or (Y) provides notice, under Section 6.01(c)(i), of
termination of the Service for

 

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which the Intellectual Property is required. The Provider shall not be liable
for any delay in the provision of a Service or access to Facility that occurs
during the fifteen (15)-day discussion period between the Parties solely to the
extent that such delay is caused by the inability to obtain the Acquired
Resource in the name of Recipient. Each Party shall from time to time, and shall
cause its Affiliates to, execute any documents and take any other actions
reasonably requested by the other Party to effectuate the intent of this
Section 6.03(c), and the Recipient shall reimburse such Provider or its
Affiliates their Agreed Price related to such actions.

(d) In connection with the termination of this Agreement, Article I, Article V,
Article VII, Section 2.20, Section 6.02, this Section 6.03 and Section 6.04, and
liability for all due and unpaid Service Charges, charges for Knowledge Transfer
Services, Third-Party Vendor Services, Additional Services, Resumed Services and
Migration Services, Pass-Through Charges and other amounts required by this
Agreement shall continue to survive indefinitely.

Section 6.04 Force Majeure.

(a) No Party (or any Person acting on its behalf) shall have any liability or
responsibility for any interruption, delay or other failure to fulfill any
obligation (other than a payment obligation) under this Agreement so long as and
to the extent to which the fulfillment of such obligation is prevented,
frustrated, hindered or delayed as a consequence of circumstances of a Force
Majeure, provided, that such Party (or such Person) shall have exercised
commercially reasonable efforts to minimize the effect of a Force Majeure on its
obligations, including, if applicable, implementing its disaster recovery and/or
business continuity plans. In the event of an occurrence of a Force Majeure, the
Party whose performance is affected thereby shall give notice (orally or in
writing) to the applicable service manager and Contract Manager of suspension as
soon as reasonably practicable to the other stating the date and extent of such
suspension and the cause thereof, and such non-performing Party shall resume the
performance of such obligations as soon as reasonably practicable upon the
cessation of such Force Majeure and its effects.

(b) During the period of a Force Majeure affecting the Provider, the Recipient
shall be entitled to seek an alternative service provider with respect to the
Services affected or access to the Facilities affected and the Provider and the
Recipient will split equally the incremental cost increase for any such
alternative service provider. If a Force Majeure shall continue to exist for
more than fifteen (15) consecutive days, the Recipient shall be entitled to
permanently terminate the Services affected or access to the Facilities affected
with no termination charges due pursuant to Section 6.02 or otherwise in
connection with such termination. The Recipient shall be relieved of the
obligation to pay any Service Charges, charges for Knowledge Transfer Services,
Third-Party Vendor Services, Additional Services and Resumed Services, Migration
Services Charges, Pass-Through Charges and other amounts for the provision of
the affected Services or access to the affected Facilities throughout the
duration of such Force Majeure.

ARTICLE VII

GENERAL PROVISIONS

Section 7.01 Treatment of Confidential Information.

(a) Each Party shall, and shall cause other Persons under its Control (including
Affiliates and Representatives) that are providing or receiving Services or
access to Facilities or that otherwise have access to information of the other
Party that is confidential or proprietary, including Personally Identifiable
Information and Work Product (“Confidential Information”) to, maintain in
confidence and not use, exploit or disclose to any other Person, except for
purposes of this Agreement, any Confidential Information of the other Party that
after the Closing is provided or that becomes known or available pursuant to or
as a result of the carrying out of the provisions of this Agreement; provided,
however, that each Party may disclose (subject to applicable Law) Confidential
Information of the other Party to Providers and Recipients and their respective
Representatives, in each case who (x) require such information in order to
perform their duties in connection with this Agreement and (y) have agreed to
maintain the confidentiality of such information consistent with the terms
hereof; and provided, further, that each Party may disclose (subject to
applicable Law) Confidential Information of the other Party (other than
Personally Identifiable Information) if (i) any such Confidential Information is
or becomes generally available to the public other than (A)

 

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in the case of the Acquiror, as a result of disclosure by the Parent or its
Affiliates or any of their respective Representatives and (B) in the case of the
Parent, as a result of disclosure by the Acquiror, any Acquiror Entity (after
the Closing Date) or any of their respective Affiliates or any of their
respective Representatives, (ii) any such Confidential Information (including
any report, statement, testimony or other submission to a Governmental
Authority) is required by professional standard, applicable Law, Governmental
Order, regulation, legal process (including, without limitation, by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) or such Governmental Authority to be disclosed, after prior
notice in accordance with Section 7.03(b) has been given to the other Party to
the extent such notice is permitted by applicable Law, provided, that no such
notice is required if prohibited by applicable Law, (iii) any such Confidential
Information was or becomes available to such Party on a non-confidential basis
and from a source (other than a Party to this Agreement or any Affiliate or
Representative of such Party) that is not known to be subject to a contractual,
legal, fiduciary or other obligation of confidentiality with respect to such
information or (iv) any such Confidential Information is independently developed
after the Closing without reference information that is to be kept confidential
under this Article VII.

(b) Notwithstanding anything to the contrary contained herein, the Parties
acknowledge and agree that the Parent and its Affiliates and their respective
Representatives may, without notifying Acquiror or any other person, share any
information relating to or obtained from the Acquiror and its Affiliates
(including the Acquiror Entities) with (i) the Federal Reserve Bank of New York
and its Representatives, subject to the terms and conditions of the
Nondisclosure Agreement dated September 25, 2008 between the Federal Reserve
Bank of New York and the Parent (the “FRBNY NDA”), (ii) the U.S. Department of
the Treasury and its Representatives and (iii) the Board of Governors of the
Federal Reserve System and its Representatives ((i), (ii) and
(iii) collectively, the “Government Recipients”), in each case as the Parent
deems may be reasonably necessary or advisable in its good faith judgment;
provided, that the Parent shall, to the extent permitted under applicable law,
request confidential treatment of any of information (the “Acquiror Confidential
Information”) relating to or obtained from the Acquiror and its Affiliates
(including the Acquiror Entities) which is Confidential Information and the
Parent shall exercise its reasonable best efforts to enforce the FRBNY NDA with
respect to any Acquiror Confidential Information that the Parent may disclose to
the Federal Reserve Bank of New York; provided, further, that this provision
shall not apply to any information regarding Taxes or any matter relating to
Taxes, other than with respect to the tax treatment or tax structure of the
transactions contemplated by this Agreement. The Parent shall promptly notify
Acquiror in the event the Parent learns that any Government Recipient has been
requested or required to disclose any Acquiror Confidential Information or has
taken any action that, if taken by the Parent, would be deemed a breach of this
Section 7.01.

(i) Each Party shall, and shall cause its Affiliates to, (A) comply with any
applicable Laws (including Privacy Laws), its respective internal policies and
any commitments in writing in its respective privacy policies, agreements with
or notices to its applicable past, present or prospective customers, claimants,
beneficiaries, employees or agents, or with respect to privacy or data security
relative to Personally Identifiable Information (including with respect to its
applicable past, present or prospective customers, claimants, beneficiaries,
employees or agents), including its use and transfer; (B) when acting as a Data
Processor, only process Personally Identifiable Information in accordance with
the instructions of the other Party and the applicable Recipient acting as
Controller; (C) take appropriate technical and organizational measures to
protect Personally Identifiable Information against accidental or unlawful
destruction or accidental loss, alteration or Processing; and (D) implement and
maintain adequate administrative, technical and physical safeguards and measures
in conformity with commercial standards, including a written information
security program to protect the security and confidentiality of such Personally
Identifiable Information in compliance with all applicable Privacy Laws and
other applicable Laws. At Acquiror’s request, the Parent shall, or shall cause
the Provider to, certify in writing to Acquiror its compliance with the terms of
this Section 7.01(b)(i).

(ii) The Parties shall cooperate to obtain all such consents, registrations and
notifications as may be required to enable the applicable Providers to Process
the Personally Identifiable Information to the extent necessary to provide the
Services or access to Facilities hereunder.

(iii) Upon or at any time after the termination of a Service or access to a
Facility or upon the written request of a Recipient that has provided Personally
Identifiable Information to a Provider, such Provider shall

 

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return to such Recipient any Personally Identifiable Information in the
Provider’s possession in connection with the provision of the terminated Service
or access to a Facility as requested by Recipient, except to the extent that the
Provider is required to retain such Personally Identifiable Information in
accordance with applicable Laws (including Privacy Laws) or Provider’s own data
retention policies.

Section 7.02 Security Incidents.

(a) In the event that either Party discovers (i) any material breach of its
security safeguards or measures or the Systems used to provide the Services or
access to Facilities including any incidents that are the subject of
Section 2.18(g) or (ii) any breach or threatened breach of its security
safeguards or measures that involves or may reasonably be expected to involve
unauthorized access, disclosure or use of the other Party’s Confidential
Information, including Personally Identifiable Information (each of (i) and
(ii), a “Security Incident”), such Party shall, at its cost, (X) promptly (both
orally, if practicable, and in any event in writing), but in no event later than
two (2) Business Days, notify the other Party of said Security Incident and
(Y) fully cooperate with the other Party (I) to take commercially reasonable
measures necessary to control and contain the security of such Personally
Identifiable Information, (II) to remedy any such Security Incident, including
using commercially reasonable best efforts to identify and address any root
causes for such Security Incident, (III) to furnish full details of the Security
Incident to and keep such other Party advised of all material measures taken and
other developments with respect to such Security Incident and (IV) in any
litigation or formal action with third parties or in connection with any
regulatory, investigatory or other action of any Governmental Authority.

(b) Each Provider shall take all reasonable and appropriate steps, in
consultation with the applicable Recipient, to protect Systems and Confidential
Information and to remediate unauthorized access to, disclosure of or use of any
Systems or Confidential Information arising from a Security Incident or
otherwise. Recipient shall pay all costs associated with any modifications made
to protect such Systems and Confidential Information that have been requested by
Recipient, other than those implemented to remediate a Security Incident, which
shall be at the sole cost of the Provider that experienced the Security
Incident.

(c) Subject to requirements of applicable Law (including Privacy Laws), the
Party whose Personally Identifiable Information is subject to a Security
Incident shall have the exclusive right, to provide notice of any Security
Incident as applicable and as determined by such Party to its past, present or
prospective customers, claimants, beneficiaries, employees or agents or any
other individuals whose Personally Identifiable Information was subject to the
Security Incident, and any law enforcement authority, Governmental Authority,
consumer reporting agencies or others, as required by applicable Law, at the
sole cost of the Provider that experienced the Security Incident; provided, that
if requirements of applicable Law (including Privacy Laws) prohibit the Party
whose core information is subject to the Security Incident from having the
exclusive right to provide such notice, the Parties shall cooperate to the
fullest extent permitted by requirements of applicable Law (including Privacy
Laws) to provide a mutually acceptable notice; provided, further, Acquiror
reserves the right to provide notice and make such disclosures (including of any
computer file or electronic mail messages) without prior notice to any
individuals who may have written, sent or received such file or message.

(d) Any disputes arising under this Section 7.02 shall be rapidly and timely
escalated and resolved in accordance with Section 7.09(a)(i) hereof on an
expedited basis.

Section 7.03 Notices. All notices, requests, claims, or demands provided for in
this Agreement shall be in writing (other than as explicitly stated herein,
including Section 2.18(g), Section 6.04(a) and Section 7.02(a)) and shall be
given or made (and shall be deemed to have been duly given or made upon receipt
except as otherwise set forth herein) (a) with respect to the service managers
and Contract Managers, by delivery in person, by overnight courier service, by
facsimile with receipt confirmed, by registered or certified mail (postage
prepaid, return receipt requested) or by e-mail, provided, that any written
notices (except for such notices or approvals required under Section 3.01(b)
with respect to approval of Pass-Through Charges in excess of fifty thousand
dollars ($50,000)) that are given or made by facsimile or email shall, in each
case, be followed by delivery of a hardcopy by delivery in person or overnight
courier service; provided, that the following shall not be deemed “notices”
under this Section 7.03 and, if delivered by facsimile or e-mail, shall not
require delivery of a hardcopy by delivery in person or overnight courier:
(i) communications concerning a disputed amount pursuant to Section 3.02, other
than the initial written notice of such disputed amount or (ii) communications
concerning a Dispute pursuant to Section 7.09(a)

 

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other than the Notice of Dispute; provided, further, that, with respect to any
notices given or made by facsimile or email, such notice shall be deemed duly
given or made upon the date of receipt of such facsimile or email; and (b) with
respect to notice to the Parties (other than the service managers or Contract
Managers), by delivery in person, by overnight courier service, by facsimile
with receipt confirmed (followed by delivery of an original via overnight
courier service) or by registered or certified mail (postage prepaid, return
receipt requested) to the respective Parties, with courtesy copies by e-mail, at
the following addresses (or at such other address for a Party as shall be
specified in a notice given in accordance with this Section 7.03(b)) (and with a
copy to the Contract Managers):

(i) if to the Parent:

American International Group, Inc.

70 Pine Street

New York, NY 10270

Attention: General Counsel

Facsimile: 212-425-2175

with a copy to:

American International Group, Inc.

80 Pine Street

New York, NY 10005

Attention: Mr. Chris Baker

Head of Divestiture Separation Team

Facsimile: 212-770-3637

with a copy to:

Simpson Thacher & Bartlett LLP

12-32 Akasaka, 1-chome

Minato-ku, Tokyo 107-6037

Attention: David Sneider

Facsimile: +81-3-5562-6202

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attention: Gary I. Horowitz

Patrick J. Naughton

Facsimile: 212-455-2502

(ii) if to the Acquiror:

Prudential Financial, Inc.,

Japan Representative Office

Prudential Tower

2-13-10 Nagatacho

Chiyoda-ku

Tokyo 100-0014

Japan

Attention: International Counsel

Facsimile: +813-3539-5645

 

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with a copy to:

Prudential Financial, Inc.

751 Broad Street

Newark, NJ 07102

USA

Attention: Anthony Torre

Facsimile: 1-973-802-2290

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, NY 10022

Attention: Jeffrey P. Cunard

Facsimile: (202) 383 8118

Section 7.04 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any Law or as a matter of
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to either Party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, 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 a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the greatest extent possible.

Section 7.05 Entire Agreement. Except as otherwise expressly provided in this
Agreement, this Agreement and the other Transaction Agreements constitute the
entire agreement of the Parties with respect to the subject matter of this
Agreement and supersede all prior agreements and undertakings, both written and
oral, between or on behalf of the Parent and/or its Affiliates, on the one hand,
and the Acquiror and/or its Affiliates, on the other hand, with respect to the
subject matter of this Agreement.

Section 7.06 Assignment. This Agreement shall not be assigned, in whole or in
part, by operation of law or otherwise without the prior written consent of the
Parties; provided, however, that either Party may assign any or all of its
rights and obligations under this Agreement to any of its Affiliates so long as
such assignment does not release such Party from any liability under this
Agreement incurred prior to such assignment. Any attempted assignment in
violation of this Section 7.06 shall be void. This Agreement shall be binding
upon, shall inure to the benefit of, and shall be enforceable by the Parties and
their successors and permitted assigns.

Section 7.07 No Third-Party Beneficiaries. Except as set forth in Article V with
respect to Indemnified Persons, this Agreement is for the sole benefit of the
Parties and their successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person (including any Client Company or any policyholder of the Company or any
of the Insurance Subsidiaries) any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement. Any Provider who
is an Affiliate or, immediately prior to the Closing, was an Affiliate of either
Party, shall be an express third-party beneficiary under this Agreement solely
with respect to such Provider’s rights and, as such, such Provider may instruct
the Parent, and the Parent shall, enforce this Agreement on Provider’s behalf as
if such Provider were a party hereto.

Section 7.08 Amendment; Waiver. No provision of this Agreement may be amended,
supplemented or modified except by a written instrument signed by all the
Parties. No provision of this Agreement may be waived except by a written
instrument signed by the Party against whom the waiver is to be effective. No
failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.

 

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Section 7.09 Dispute Resolution.

(a) Any dispute, controversy, or claim arising from, relating to, or in
connection with this Agreement, the transactions contemplated by this Agreement
and all claims and defenses arising out of or relating to any such transaction
or this Agreement or the formation, breach, termination, or validity thereof (a
“Dispute”) shall be resolved as follows: the service managers of the Parties
most immediately responsible for the issue giving rise to the Dispute shall seek
to resolve such Dispute through informal good faith negotiation. If the Dispute
is not resolved at that level of management, then the Dispute shall be escalated
to the Parent Contract Manager and the Acquiror Contract Manager for resolution
in good faith. In the event such Contract Managers fail to meet or, if they
meet, fail to resolve the Dispute within an additional ten (10) Business Days
(or such longer time as the Contract Managers may agree), then the claiming
Party will provide the other Party with a written “Notice of Dispute”,
describing the nature of the Dispute, and the Dispute shall be escalated to the
members of senior management at the Acquiror and the Parent set forth in
Schedule 7.09(a) for resolution in good faith. In the event such senior
executives fail to meet, or if they meet, fail to resolve the Dispute within
five (5) Business Days after such Dispute has been escalated to them by the
Contract Managers, then the Dispute shall be escalated to the senior
administrative executives at the Acquiror and the Parent set forth in Schedule
7.09(a), or their respective designees who shall meet within five (5) Business
Days and confer in a good faith effort to resolve the Dispute. If the senior
administrative executives, or their respective designees fail to resolve the
Dispute within five (5) Business Days, the Parties shall retain all rights under
applicable Law and this Agreement with respect to such Dispute. Except as
otherwise set forth in Section 7.09(b), the procedures set forth in this
Section 7.09(a) must be satisfied as a condition precedent to a Party commencing
any legal proceeding, and a Party’s failure to comply with such procedures shall
constitute cause for the dismissal without prejudice of any such legal
proceeding.

(i) Notwithstanding the foregoing, in the event of a Dispute arising under
Section 2.03(b), Section 2.11(a), Section 2.12(c), Section 2.18(g),
Section 2.24, Section 3.02, Section 6.01(a) or Section 7.02(d), or as otherwise
agreed to by the Parties in writing, the Dispute shall be immediately referred
to the Contract Managers, who shall have five (5) Business Days to resolve the
Dispute (or such shorter time if the Contract Managers agree that they cannot
resolve the Dispute) before escalation to the senior executives along with the
applicable Notice of Dispute. Thereafter, the procedures and time frames set out
beginning in the fourth sentence of Section 7.09(a) shall apply.

(ii) Each Party may replace the designated member of senior management or
executive level administrative officer with an employee or officer with
comparable knowledge, expertise and decision-making authority from time to time
upon written notice to the other Party pursuant to Section 7.03(b). The
applicable Party shall use commercially reasonable efforts to provide at least
thirty (30) days’ prior written notice of any such change.

(b) Notwithstanding any other provisions herein to the contrary, each Party
hereby acknowledges that money damages may be an inadequate remedy for a breach
or anticipated breach of this Agreement because of the difficulty of
ascertaining the amount of damage that will be suffered in the event that this
Agreement is breached. Therefore, in the event of a breach or anticipated breach
of this Agreement by the other Party or its Affiliates, and notwithstanding
anything to the contrary contained herein, each Party may, in addition to any
other remedies available to it, seek an injunction, on written notice to the
other Party in accordance with this Section 7.09(b) in a court described in
Section 7.10(b) to prohibit such breach or anticipated breach. Each Party
acknowledges and agrees that an injunction is a proper, but not exclusive,
remedy available to each Party and that the harm from any breach or anticipated
breach of the covenants set forth in this Agreement would be irreparable and
immediate.

Section 7.10 Governing Law; Waiver of Jury Trial.

(a) This Agreement, all transactions contemplated by this Agreement and all
claims and defenses arising out of or relating to any such transaction or this
Agreement or the formation, breach, termination or validity of this Agreement,
shall in all respects be governed by, and construed in accordance with, the Laws
of the State of New York without giving effect to any conflicts of Law
principles of such state that would apply the Laws of another jurisdiction.

 

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(b) Each of the Parent and the Acquiror irrevocably and unconditionally:

(i) submits for itself and its property to the exclusive jurisdiction of the
Courts of Chancery of the State of Delaware or, if under applicable Law,
exclusive jurisdiction is vested in the United States federal courts, the
federal courts of the United States located in the State of Delaware in any
Action directly or indirectly arising out of or relating to this Agreement, the
transactions contemplated by this Agreement, or the formation, breach,
termination or validity of this Agreement and agrees that all claims in respect
of any such Action shall be heard and determined solely in such courts;

(ii) consents that any such Action may and shall be brought in such courts and
waives any objection that it may now or hereafter have to the venue or
jurisdiction of any such Action in such court or that such court is an
inconvenient forum for the Action and agrees not to assert, plead or claim the
same;

(iii) agrees that the final judgment of such court shall be enforceable in any
court having jurisdiction over the relevant party or any of its assets;

(iv) agrees that service of process in any such Action may be effected by
mailing a copy of such process by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its
address as provided in Section 7.03(b); and

(v) agrees that nothing in this Agreement shall affect the right to effect
service of process in any other manner permitted by the applicable rules of
procedure.

(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY CLAIM OR DEFENSE ARISING OUT
OF OR RELATING TO ANY SUCH TRANSACTION OR THIS AGREEMENT OR THE FORMATION,
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS OF
THIS SECTION 7.10. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 7.11 Rules of Construction. Interpretation of this Agreement shall be
governed by the following rules of construction: (a) words in the singular shall
be held to include the plural and vice versa, and words of one gender shall be
held to include the other gender as the context requires; (b) references to the
terms Preamble, Recital, Article, Section, paragraph and Schedule are references
to the Preamble, Recitals, Articles, Sections, paragraphs and Schedules to this
Agreement unless otherwise specified; (c) references to “$” shall mean U.S.
dollars and references to “¥” shall mean Japanese yen; (d) the word “including”
and words of similar import when used in this Agreement shall mean “including
without limitation,” unless otherwise specified; (e) the word “or” shall not be
exclusive; (f) the words “herein,” “hereof”, “hereunder” or “hereby” and similar
terms are to be deemed to refer to this Agreement as a whole and not to any
specific section; (g) the headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement; (h) this Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted; (i) if a word or phrase is
defined, the other grammatical forms of such word or phrase have a corresponding
meaning; (j) references to any statute, listing rule, rule, standard, regulation
or other law include a reference to (1) the corresponding rules and regulations
and (2) each of them as amended, modified, supplemented, consolidated, replaced
or rewritten from time to time; and (k) references to any section of any
statute, listing rule, rule, standard, regulation or other law include any
successor to such section.

 

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Section 7.12 Obligations of Parties. Each obligation of a Provider under this
Agreement to take (or refrain from taking) any action hereunder shall be deemed
to include an undertaking, if the Provider is not the Parent or any of its
Affiliates, by the Parent to, and to cause such Provider to, take (or refrain
from taking) such action. Each obligation of a Recipient or any of its
Affiliates under this Agreement to take (or refrain from taking) any action
hereunder shall be deemed to include an undertaking, if the Recipient is not the
Acquiror or any of its Affiliates, by the Acquiror to, and to cause such
Recipient or such Affiliate to, take (or refrain from taking) such action.

Section 7.13 Additional Transition Services Agreements. In the event that a
Governmental Authority requires the Parties or the Acquiror Entities to enter
into a transition services agreement regarding only the Services or Facilities
provided to a Party or an Acquiror Entity or provided by a Party, the Parties
shall enter into a separate transition services agreement, substantially in the
form of this Agreement, with Schedules describing only those Services and
Facilities as the Parties agree in good faith are required by this Agreement to
be provided to or by such Party or Acquiror Entity. In such an event, and to the
extent possible, the Services or Facilities provided under such an additional
transition services agreement shall be removed from the relevant Schedules to
this Agreement.

Section 7.14 Counterparts. This Agreement may be executed in one or more
counterparts, and by each Party in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile or other means of electronic
transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the
date first written above by their respective duly authorized officers.

 

AMERICAN INTERNATIONAL GROUP, INC. By:  

 

  Name:   Title: [ACQUIROR] By:  

 

  Name:   Title:

 

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Schedules Omitted

 

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EXHIBIT C

FORM OF TRANSITIONAL TRADEMARK LICENSE AGREEMENT

This TRANSITIONAL TRADEMARK LICENSE AGREEMENT (this “Agreement”) is made as of
[—], 2011 (“Effective Date”)1 between American International Group, Inc., a
Delaware corporation (“Parent”), on the one hand, and AIG Financial Assurance
Japan K.K., AIG Star Life Insurance Co., Ltd., AIG Edison Life Insurance Company
and AIG Edison Service Co., Ltd., all Japanese corporations (the “Companies,”
and together with the entities listed in Schedule A (the “Transferred
Subsidiaries”), each a “Licensee” and together, the “Licensees”), on the other
hand. Parent and the Licensees are referred to herein collectively as the
“Parties” and individually as a “Party.”

RECITALS

WHEREAS, Prudential Financial, Inc., a New Jersey corporation and Parent have
entered into the Stock Purchase Agreement dated as of September 30, 2010 (the
“Purchase Agreement”), pursuant to which, inter alia, Parent will sell, and
cause certain of its subsidiaries to sell, the shares of the Companies to
Acquiror on the Effective Date;

WHEREAS, the Companies own, directly or indirectly, the capital stock or other
equity interests of the Transferred Subsidiaries; and

WHEREAS, the Companies and Transferred Subsidiaries will need to use certain
trademarks and service marks owned or controlled by Parent for a transitional
period after the Effective Date, and Article VIII of the Purchase Agreement
requires the execution of this Agreement in connection therewith;

NOW THEREFORE, in consideration of the premises and the mutual covenants and
undertakings contained herein and in Article VIII of the Purchase Agreement,
which requires the execution of this Agreement and for which receipt and
sufficiency is acknowledged, the Parties hereby agree as follows:

ARTICLE I. DEFINITIONS.

SECTION 1.1 Definitions. For the purposes of this Agreement, (a) unless
otherwise defined herein capitalized terms used herein shall have the meanings
assigned to them in the Purchase Agreement and (b) the following terms shall
have the meanings hereinafter specified:

“Edison License” means that certain Trademark License Agreement dated as of
August 29, 2003 (as amended [•], 2010) among General Electric Company, GE
Financial Assurance Japan K.K., GE Edison Life Insurance Company, GE Edison
Services Company and American International Reinsurance Company, Ltd.

 

1

This will be signed at Closing and the Effective Date is the Closing Date.

--------------------------------------------------------------------------------

“Edison Licensees” means AIG Edison Life Insurance Company and AIG Edison
Service Co., Ltd.

“License” means the license in Section 2.1.

“Licensed Marks” shall mean any trade, corporate or business names, trademarks,
tag-lines, identifying logos, monograms, slogans, service marks, domain names,
brand names, trade dress or any other names or source identifiers that (i) are
owned by Parent or one of its Subsidiaries (other than the Licensees),
(ii) contain the terms “AIG” or “American International” and (iii) were used by
the Licensees prior to the Effective Date. For the avoidance of doubt, nothing
in this Agreement grants Licensees any right to use the names “Star” or “Edison”
alone.

“Materials” has the meaning set forth in Section 3.2 of this Agreement.

“Quality Standards” has the meaning set forth in Section 4.1 of this Agreement.

“Redirected Domains” has the meaning set forth in Section 2.2 of this Agreement.

“Term” has the meaning set forth in Section 10.1 of this Agreement.

“Territory” means Japan.

SECTION 1.2 Interpretation. Interpretation of this Agreement shall be governed
by the following rules of construction: (a) words in the singular shall be held
to include the plural and vice versa; (b) references to the terms Article,
Section and Schedule are references to the Articles, Sections and Schedules to
this Agreement; (c) the word “including” and words of similar import when used
in this Agreement shall mean “including without limitation”; (d) the words
“herein,” “hereof” or “hereunder,” and similar terms are to be deemed to refer
to this Agreement as a whole and not to any specific section; (e) the headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement; (f) this Agreement
shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted; and (g) if a word or phrase is defined, the other
grammatical forms of such word or phrase have a corresponding meaning.

ARTICLE II. LICENSE.

SECTION 2.1 Grant of License. Subject to the terms and conditions of this
Agreement, Parent hereby grants to each Licensee a non-exclusive, royalty-free,
non-sublicensable,

 

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non-transferable license to use the Licensed Marks within the Territory, during
the Term, in connection with all current and future policies, goods and services
within the respective business of each Licensee as conducted as of the Effective
Date solely: (a) to the extent and in the exact form that the Licensed Marks
exist as of the Effective Date and were used by such Licensee prior to the
Effective Date in its business, provided, that inadvertent and immaterial
departures therefrom shall not be regarded as a material breach of the foregoing
license; and (b) for such Licensee’s corporate name, if applicable, solely in
the exact form used by such Licensee within the eighteen (18) months immediately
prior to the Effective Date. For clarity, a Licensee will not be deemed to use a
Licensed Mark outside the Territory if such use is on a website owned or
controlled by Licensee that is directed towards residents in the Territory, even
if such website may be accessed from outside the Territory.

SECTION 2.2 Domain Names. For clarity, any domain names containing the Licensed
Marks that are registered in any Licensee’s name as of the Effective Date are
not included within the definition of “Licensed Marks” in this Agreement, and
each Licensee agrees (i) promptly to transfer any of same (including all related
records) to Parent for no consideration and (ii) to maintain and renew all such
registrations until the time of such transfer. Further, any domain names
containing the Licensed Marks that are registered in Parent’s name and used by
any Licensee as of the Effective Date (as set forth on Exhibit E hereto) (the
“Redirected Domains”) are not included within the definition of “Licensed Marks”
in this Agreement, but Parent agrees that for the six (6)-month period from the
Closing Date, it will use the Redirected Domains solely to direct or redirect
Internet traffic (a) at Licensee’s request, to one or more Internet websites
designated and controlled by Acquiror and its Affiliates or (b) if Licensee does
not request such redirection, to an inactive web page. Throughout the Term,
Parent shall (a) maintain the registrations for each of the domain names
“stardirect.jp”, “starlife.jp”, “starlifedirect.com” and “starlifedirect.jp”;
(b) ensure that any Internet traffic to such domain names is directed or
redirected to an inactive web page; and (c) use such domain names solely for the
purpose of such direction or redirection. To the extent requested by Parent,
each Licensee shall reimburse Parent or its designee for all amounts paid by
Parent to renew and maintain the foregoing domain names, to the extent that such
renewal covers the Term, including any and all portions of renewal fees to the
extent covering the Term. Each Licensee shall pay or cause its Subsidiaries to
pay such fees in immediately available funds within thirty (30) days of such
Licensee’s receipt of an invoice therefor from Parent. Parent agrees that after
the Term, if Parent continues (in its sole discretion) to maintain or renew any
of the above domain names, Parent will use such domain names solely to direct or
redirect Internet traffic to an inactive page.

SECTION 2.3 No Modifications. Each Licensee hereby acknowledges and agrees that:

(a) Licensee shall not use the Licensed Marks other than as specified herein;

(b) Licensee shall not change, modify, or create any variation of the Licensed
Marks; and

(c) Licensee shall not join any trade, corporate or business names, trademarks,
tag-lines, identifying logos, monograms, slogans, service marks, domain names,
brand names, trade dress or any other names or source identifiers (“Source
Indicators”) with the Licensed Marks so as to form a composite or combined
Source Indicator.

 

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SECTION 2.4 Limited License. Each Licensee hereby acknowledges and agrees that
it has no right, title or interest, express or implied, in and to the Licensed
Marks, except as specifically provided herein and subject to the terms and
conditions stated in this Agreement. No license, either express or implied, is
granted by Parent to Licensees hereunder with respect to any Source Indicator or
otherwise, except as specifically stated herein.

ARTICLE III. ADDITIONAL REQUIREMENTS.

SECTION 3.1 Transition. The Parties acknowledge and agree that it is essential
for Licensees to transition from use of the Licensed Marks to use of their own
Source Indicators in a timely and expeditious manner after the Effective Date.
Thus, the Parties agree as follows:

(a) Each Licensee shall cease use of the Licensed Marks (the “Termination Date”)
(i) except as provided in (ii), on the earliest of (x) 365 days after the
Effective Date, (y) the termination date specified in Section 10.2 or
Section 10.3, or (z) the date such Licensee otherwise ceases all use of the
Licensed Marks and (ii) in the case of a Licensee that is an Insurance Company,
the earlier of (A) the date that is ninety (90) days after such Licensee
receives a name change approval from a Governmental Authority or (B) the
termination date specified in Section 10.2 or Section 10.3. In furtherance of
the foregoing, each Licensee agrees to take all actions set forth on Schedule B
within the timeframes set forth therein, which timeframes shall not be deemed to
extend the Termination Date. Notwithstanding Section 3.1(a)(i) and (ii), if a
Licensee, promptly after the Effective Date, makes all filings and takes all
actions required by any applicable governmental authorities to change its name
to names not including the Licensed Marks and so long as Licensee diligently
prosecutes such filings thereafter, if necessary, Parent shall agree to any
request by such Licensee to extend the Termination Date solely until such name
change has occurred. Each Licensee shall take all necessary actions, as promptly
as practicable after the Effective Date, to cease use of the Licensed Marks and
print and use new materials not bearing the Licensed Marks.

(b) Each category of materials that require approval by a Governmental Authority
shall be expeditiously assembled, submitted and diligently prosecuted by the
Licensees for approval in a timely fashion to allow for such approval as soon as
possible after the Effective Date, and in any event within 365 days of the
Effective Date. The Licensees shall inform Parent promptly of any Materials that
require such approval and any problems encountered or expected to be encountered
in receiving required approvals from a Governmental Authority prior to the end
of the relevant time frames.

(c) Within fifteen (15) Business Days after the Effective Date, each Licensee
shall prepare and distribute a memorandum explaining the trademark requirements
under this Agreement (including Schedule C) to all of its employees and shall
post such memorandum on all Intranet sites directed at its employees within
fifteen Business Days after such Intranet sites commence operation.

 

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(d) As soon as reasonably practicable, but in no event more than thirty Business
Days after the Effective Date, each Licensee shall prepare and distribute a
notice to its agents and subcontractors involved in the production and
distribution of each category of materials explaining the trademark requirements
under this Agreement (including Schedule C).

(e) Each Party hereby designates the individual identified below as its initial
representative who possesses the necessary knowledge and expertise in the
matters referred to in this Section 3.1 and Section 3.2 to oversee the
implementation of this Agreement. For Parent the initial representative is [—]
(“Parent Representative”) and for each Licensee the initial representative is
[—]. Each Party may replace such designated person by providing notice of such
replacement in accordance with Section 11.2 so long as such replacement
possesses the necessary knowledge and expertise.

SECTION 3.2 Destruction of Materials. Without limiting Section 3.1(a), as and
when Licensee no longer uses a Licensed Mark, but no later than promptly after
the Termination Date as may be extended pursuant to Section 3.1(a), each
Licensee shall use all commercially reasonable efforts to destroy or exhaust all
materials (including signage, advertising, promotional materials, software,
packaging, inventory, electronic materials, website content, collateral goods,
business cards, invoices, receipts, forms, product, training and service
literature and materials and other materials) in its possession or control
bearing the Licensed Marks (“Materials”), except to the extent any such
Materials must be retained to comply with applicable Laws or a Licensee’s
reasonable document retention policies.

SECTION 3.3 Certification of Destruction. As soon as is reasonably practicable
after the Termination Date, each Licensee shall send a written statement to
Parent verifying that it has complied with its obligations in Section 3.2.

SECTION 3.4 Obligation to Cease Use of the Mark. Each Licensee acknowledges that
any prior rights it had to use any of the Licensed Marks pursuant to any written
or oral contract, agreement, license, sublicense or other instrument executed or
in effect prior to the Effective Date were terminated, effective as of the
Effective Date, pursuant to Section 5.07 of the Purchase Agreement, and that it
has no right to use any of the Licensed Marks after the Effective Date, except
expressly subject to this Agreement. Each Licensee shall take all necessary
actions to ensure that it ceases use of the Licensed Marks by the Termination
Date.

SECTION 3.5 Representation in the Marketplace. Except as expressly permitted by
this Agreement, each Licensee agrees that after the Effective Date it will not
expressly, or by implication, do business as or represent itself as Parent or
one of its Affiliates, and shall use all reasonable efforts to ensure that there
is no confusion that it is no longer affiliated with Parent or its Affiliates
and/or, if any such confusion occurs, to promptly remediate same.

ARTICLE IV. QUALITY STANDARDS.

SECTION 4.1 Quality Control and Standards. Parent shall have the right to
exercise quality control over the use of the Licensed Marks by each Licensee to
the degree

 

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reasonably necessary or desirable, in the sole opinion of Parent, to maintain
the validity and enforceability of the Licensed Marks, to protect the goodwill
associated therewith. In furtherance of the foregoing, during the Term Parent
may establish and amend (a) quality standards and specifications for the goods
and services offered or provided by Licensees and (b) the “Graphics Standards”
for the use of the Licensed Marks, which are attached hereto as Schedule C, and
in each case, communicate them to the Licensees (subsections (a) and (b),
together, the “Quality Standards”). Each Licensee acknowledges and agrees that
it must comply with the Quality Standards, which will be, at a minimum, set at a
level of quality equal to the standards of quality associated with the Licensed
Marks as conducted prior to the Effective Date. Each Licensee agrees to
(x) comply with all applicable Laws in using the Licensed Marks, and
(y) identify to Parent the actual legal entities providing the products or
services in question whenever Materials bearing the Licensed Marks are
distributed to the public, published or otherwise disseminated.

SECTION 4.2 Samples. Beginning on the Effective Date, each Licensee shall submit
to Parent Representative samples of all publicly-distributed Materials using the
Licensed Marks 15 Business Days prior to their initial distribution if (i) such
Materials materially differ in their visual presentation of the Licensed Marks
from Materials previously distributed by such Licensee prior to the Effective
Date or approved by Parent before or after the Effective Date or (ii) such
Licensee has any question whether its use of the Licensed Marks on such
Materials complies with its obligations hereunder. In the event that Parent
reasonably finds that such Materials deviate from the Quality Standards or do
not comply with any other terms and conditions of this Agreement, or that, in
the reasonable opinion of Parent, such publicly-distributed Materials misuse the
Licensed Marks or misrepresent the relationship between Parent and Licensee,
Licensee shall, upon notice from Parent, at Parent’s option either (a) promptly
(or immediately in the case of (1) any misrepresentation of the relationship
between Parent and Licensee, or (2) material deviation from the Quality
Standards) take all necessary actions to correct the deviations or
misrepresentations in, or misuse of, the respective items prior to any
dissemination to the public, and provide Parent with representative samples of
the correction, or (b) as soon as practicable (or immediately in the case of
(1) any misrepresentation of the relationship between Parent and Licensee, or
(2) material deviation from the Quality Standards) cease dissemination of such
Materials. If Licensee fails to take such steps and nevertheless distributes
such Materials, and such distribution is likely to result in material harm to
Parent, Parent shall have the right to terminate this Agreement with respect to
such Licensee pursuant to the terms of Section 10.2 hereof.

SECTION 4.3 Record of Use. Each Licensee shall maintain such reasonable records
of its use of the Licensed Marks as it maintained prior to the Effective Date to
assist Parent in protecting and enforcing them.

SECTION 4.4 Quality Assurance. Each Licensee shall comply with such other
reasonable requests as are made by Parent to enable Parent to assure the quality
of the relevant business conducted by Licensee and the goods and services
offered or provided by Licensee in connection with the Licensed Marks.

 

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ARTICLE V. USE AND OWNERSHIP.

SECTION 5.1 Use of Licensed Marks. Each Licensee shall use the Licensed Marks in
accordance with all applicable Laws. Each Licensee shall not use the Licensed
Marks in any manner that might dilute, tarnish, disparage, or reflect adversely
on Parent or the Licensed Marks.

SECTION 5.2 Ownership of Licensed Marks. Parent or its Affiliate owns and has
registered and maintained, in each case, in Japan, all of the Licensed Marks and
has not granted an exclusive license for any Licensed Mark in Japan, pursuant to
any other agreement. Each Licensee acknowledges that the Licensed Marks and all
rights therein and thereto and the goodwill pertaining thereto belong
exclusively to Parent. Each Licensee’s use of the Licensed Marks and any and all
goodwill generated thereby or associated therewith shall inure solely to the
benefit of Parent. After the Effective Date, if either Party discovers that any
Licensee owns or holds any registrations, applications, reservations or other
rights in any Licensed Mark or any other Source Indicator containing the words
or terms “AIG” or “American International,” it shall promptly notify the other
Party, and such Licensee shall promptly transfer same to Parent for no
consideration.

SECTION 5.3 No Confusion or Registration. Without limiting the generality of
Section 5.2, each Licensee agrees and covenants that it shall not (a) seek to
register any Source Indicator that contains a Licensed Mark or is a derivation,
translation, adaptation, combination or variation of any Licensed Mark that uses
“AIG or American International” or that is otherwise confusingly similar to any
of the foregoing (a “Similar Mark”), (b) use a Similar Mark after the Term (or
during the Term, except as expressly permitted herein), (c) directly or
indirectly contest the ownership, validity or enforceability of, or any rights
of Parent or any of its Affiliates in or to, any of the Licensed Marks, or
(d) contest the fact that each Licensee’s rights under this Agreement are solely
those of a non-exclusive licensee and subject to all terms and conditions
herein.

SECTION 5.4 Statement. Each Licensee’s Materials shall bear all notices and
legends required by applicable Law, and that were used by Parent or its
Affiliate in the ordinary course of business prior to the Effective Date, and
shall indicate in a form reasonably satisfactory to Parent Representative that
use of the Licensed Marks is under license from Parent. The legal entity
statement set forth in Schedule D shall be satisfactory for purposes of this
Section 5.4 for all publicly distributed Materials with reasonable available
space to display it or is otherwise reasonably feasible. Any other such
statement proposed to be used by each Licensee shall be submitted to Parent
Representative for prior written approval, which shall not be unreasonably
withheld. Each Licensee shall not use such license and legal entity statement
prior to such written approval.

SECTION 5.5 Stuffer Letter. Upon Parent’s request, each Licensee shall include a
“stuffer letter” with form and content to be reasonably agreed upon between the
Parties and in compliance with Section 4.1, with all Materials bearing any of
the Licensed Marks disseminated during the Term.

 

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ARTICLE VI. PROTECTION OF LICENSED MARKS; LITIGATION.

SECTION 6.1 Enforcement. During the Term, Parent will have the sole right, but
not the obligation, to initiate any opposition, cancellation or Infringement
proceedings necessary to enforce the Licensed Marks. Parent shall have the right
but not the obligation to include Licensee as a party in any such enforcement
proceedings, and Licensee agrees to join in such proceedings, at Parent’s
expense, as a voluntary plaintiff or claimant, and each Licensee shall cooperate
fully with Parent in such proceedings, at Parent’s expense. Parent shall have
the sole right to control and settle any such proceedings.

SECTION 6.2 Recovery. Any recovery obtained as a result of any action pursuant
to Section 6.1 shall be retained by Parent.

ARTICLE VII. ASSIGNMENT.

SECTION 7.1 Assignment. Except as provided herein, neither this Agreement nor
any right or obligation hereunder may be directly or indirectly assigned,
sublicensed, assumed in bankruptcy, pledged, mortgaged or transferred by any
Licensee in whole or in part, to any person or entity (including a bankruptcy
trustee), by operation of law or otherwise, whether voluntarily or
involuntarily, without Parent’s prior written consent in its sole discretion,
and any attempt to do so by any Licensee shall be null and void at the outset
and shall be a material breach of this Agreement, provided that one or more
Licensees may merge with each other without consent and the surviving entity
shall continue as a “Licensee” hereunder. For clarity, any change of control,
merger or reorganization shall be deemed an “assignment” for purposes of this
Section 7.1, regardless of whether a Licensee is the surviving entity.
Notwithstanding the foregoing, a Licensee may assign any of its rights or
delegate any of its duties, in whole or in part, to an Affiliate as of the
Effective Date, provided that such Licensee shall notify Parent thirty (30) days
prior to such assignment.

SECTION 7.2 Binding on Successors and Assigns. In the event of a permitted
assignment, this Agreement shall be binding upon, shall inure to the benefit of,
and shall be enforceable by the Parties, and their successors and permitted
assigns.

ARTICLE VIII. REPRESENTATIONS; WARRANTY DISCLAIMER.

SECTION 8.1 Duly Authorized. Each Party represents and warrants to the other
that it has duly authorized, executed and delivered this Agreement, which,
subject to the due execution and delivery hereof by the other Parties,
constitutes the legal, valid and binding obligation of such person enforceable
against such person in accordance with its terms. Each Party represents and
warrants that it has the right and ability to perform the obligations and
covenants provided for herein in accordance with the terms and conditions of
this Agreement.

SECTION 8.2 DISCLAIMER. THE LICENSED MARKS ARE LICENSED HEREUNDER “AS IS,” AND
PARENT EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, QUALITY, VALUE, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, OWNERSHIP, TITLE AND NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

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ARTICLE IX. INDEMNIFICATION.

SECTION 9.1 Indemnification by Licensees. Each Licensee hereby agrees to
indemnify, defend and hold Parent and its Subsidiaries harmless from and against
any Losses arising out of any third-Person claim as a result of or in connection
with (i) the use of the Licensed Marks other than in accordance with the terms
of this Agreement; (ii) the marketing, offering, use, issuance, sale or
performance of any materials, policies, goods or services bearing the Licensed
Marks or offered in connection with or under the Licensed Marks, except for
claims identified in Section 9.2 below; (iii) any breach by such Licensee of
this Agreement or any representation, warranty, covenant or agreement herein; or
(iv) such Licensee’s use of the mark “Star” alone in connection with its
business.

SECTION 9.2 Indemnification by Parent.

(a) Parent hereby agrees to indemnify, defend and hold the Licensees harmless
from and against any Losses as a result of or in connection with any
third-Person claim (i) that Licensees’ use of the Licensed Marks in accordance
with the terms of this Agreement infringes such third-Person’s trademark rights;
or (ii) is a result of or in connection with any breach by Parent of this
Agreement or any representation, warranty, covenant or agreement herein.

(b) Parent hereby agrees to indemnify, defend and hold the Edison Licensees
harmless from and against any Losses as a result of or in connection with any
claim against them by General Electric Company to the extent that such claim
alleges that the Edison Sublicensees’ use of the “Licensed Edison Names and
Marks” (as defined in the Edison License) at any time prior to the earlier of
(i) the merger of the Edison Sublicensees into an Affiliate of Acquiror or
(ii) two (2) years from the Effective Date breaches the Edison License, except
to the extent that such use by the Edison Sublicensees is not in compliance with
the Edison License. The Edison Sublicensees hereby agree to indemnify, defend
and hold Parent and Sellers harmless from and against any Losses as a result of
or in connection with any claim by General Electric Company to the extent such
claim alleges that the Edison Sublicensees’ use of the “Licensed Edison Names
and Marks” (as defined in the Edison License) otherwise breaches the Edison
License (e.g., by use of the “Licensed Edison Names and Marks” outside the scope
of the grant in Section 2.1 therein).

SECTION 9.3 Procedures. An indemnified party under Section 9.1 or Section 9.2
shall promptly notify the indemnifying party in writing in reasonable detail of
any potential indemnifiable claim, provided, however, that any failure to
provide such notice shall not release the indemnifying party from its
obligations except to the extent it is prejudiced thereby. Upon receiving such
notice, the indemnifying party may, by notice to the indemnified party within a
reasonable time, assume the defense and control of such claim, with its own
counsel and at its own expense, but shall allow the indemnified party a
reasonable opportunity to participate with its own counsel and at its own
expense. The indemnified party may take any actions reasonably necessary to
defend such claim prior to receiving such notice. The indemnified party shall

 

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cooperate fully with the indemnifying party in its defense. Neither party shall,
without the prior written consent of the other party (which shall not be
unreasonably withheld), admit liability in, consent to a settlement, compromise
or discharge of, or the entry of any judgment arising from any indemnifiable
claim that adversely affects the other party in any manner, and the other party
will have no liability for any Losses arising out of the first party’s violation
of the foregoing.

ARTICLE X. TERM AND TERMINATION.

SECTION 10.1 Term. The term of this Agreement (the “Term”) shall commence on the
Effective Date and shall last until the Termination Date (as defined in
Section 3.1(a)).

SECTION 10.2 Termination Upon Breach. This Agreement may be terminated by
Parent, with respect to a particular Licensee, effective upon notice, if there
shall occur a material breach of this Agreement by such Licensee, and such
breach is not cured within thirty (30) days after notice.

SECTION 10.3 Termination Upon Certain Insolvency Events. This Agreement will
immediately terminate if: (a) Licensee shall admit in writing its inability to
pay its debt generally, or shall make a general assignment for the benefit of
creditors or any proceeding shall be instituted by or against any Licensee
seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property, and in the case of any proceeding
instituted against any Licensee, such proceeding shall not be stayed or
dismissed within 60 days from the date of institution thereof, or (b) any
Licensee shall take any corporate action to authorize any of the actions set
forth in clause (a) above.

SECTION 10.4 Rights and Remedies. The rights and remedies of Parent set forth in
this Article X are in addition to all other rights and remedies available at law
or equity.

ARTICLE XI. MISCELLANEOUS.

SECTION 11.1 Survival. Article IX of this Agreement, as well as the provisions
of Sections 3.4 (first sentence), 5.2, 5.3, 8.2, 10.4, 11.2, 11.7, 11.8, 11.10
and this Section 11.1, shall survive the termination of this Agreement for any
reason.

 

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SECTION 11.2 Notices. Except for matters that are to be referred to Parent
Representative, all notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be given or made (and shall
be deemed to have been duly given or made upon receipt) by delivery in person,
by overnight courier service, by facsimile with receipt confirmed (followed by
delivery of an original via overnight courier service), by e-mail (with
confirmation by any of the other methods herein) or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties at
the following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 11.2):

 

(i) if to Parent:   (ii) if to Licensees:

American International Group, Inc.

80 Pine Street

New York, NY 10005

 

Attention: General Counsel

Facsimile: 212-425-2175

  E-Mail:   with a copy to:   with a copy to:

Simpson Thacher & Bartlett LLP

12-32 Akasaka, 1-chome

Minato-ku, Tokyo 107-6037

 

Attention: David Sneider

Facsimile: +81-3-5562-6202

  E-Mail: dsneider@stblaw.com  

SECTION 11.3 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any Law or as a matter of
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to either Party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, 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 a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the greatest extent possible.

SECTION 11.4 Entire Agreement. Except as otherwise expressly provided in this
Agreement, this Agreement and the Purchase Agreement constitute the entire
agreement of the Parties hereto with respect to the subject matter of this
Agreement and supersede all prior agreements and undertakings, both written and
oral, between or on behalf of Parent, on the one hand, and the Licensees, on the
other hand, with respect to the subject matter of this Agreement. In the event
of any conflict between the terms of this Agreement and the terms of the
Purchase Agreement with respect to the subject matter of this Agreement, the
terms of this Agreement shall govern.

SECTION 11.5 No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the Parties and their successors and permitted assigns, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except that Sellers shall have
the right to enforce the provisions of Section 9.1(b) directly against the
indemnifying parties therein.

 

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SECTION 11.6 Amendment; Waiver. No provision of this Agreement may be amended,
supplemented or modified except by a written instrument signed by all the
Parties. No provision of this Agreement may be waived except by a written
instrument signed by the Party against whom the waiver is to be effective. No
failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 11.7 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Injunctive Relief.

(a) This Agreement shall in all respects be governed by, and construed in
accordance with, the Laws of the State of New York without giving effect to any
conflicts of law principles of such state that might refer the governance,
construction or interpretation of such agreements to the Laws of another
jurisdiction.

(b) Each of the Parent and the Companies irrevocably and unconditionally:

(i) agrees that the other Parties may bring an Action arising out of the
interpretation and enforcement of the provisions of this Agreement in (A) the
Courts of Chancery of the State of Delaware or, if under applicable Law,
jurisdiction is vested in the United States federal courts, any court of the
United States located in the State of Delaware, and (B) the courts in Japan;

(ii) acknowledges that money damages are an inadequate remedy for a breach or
anticipated breach of this Agreement and the difficulty of quantifying such
damages, and that, therefore, in such event, each of the other Party may, in
addition to any other remedies available to it, bring an Action in the courts
set forth in Section 11.7(b)(i) to obtain a restraining order and/or injunction
or other relief to prohibit or remedy such violation, without needing to secure
or post bond or other security;

(iii) agrees that service of process in any such Action may be effected by
mailing a copy of such process by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the applicable Parties
at the addresses provided in Section 11.2; and

(iv) ACKNOWLEDGES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT.

(c) Notwithstanding the thirty (30)-day remedial period set forth in
Section 10.2, if there is a dispute (“Dispute”) as to whether a breach of this
Agreement has occurred, such Dispute shall be resolved pursuant to this
Section 11.7(c). The non-breaching Party may

 

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request discussion and negotiations between senior executives of each Party with
the possibility of mediation. In the event that the Parties have not been able
to resolve the Dispute to their mutual satisfaction within a period of thirty
(30) days, either Party may request in writing (an “Escalation Notice”) that the
Dispute be escalated to the chief executive officers of the respective Parties
or to such other senior executives of the Parties as their respective chief
executive officers may delegate. The Parties and their chief executive officers
and other senior executives agree to use good faith efforts to resolve any
Dispute pertaining to whether a breach of this Agreement has occurred. If the
Dispute is not resolved by the chief executive officers or other senior
executives of the respective parties within thirty (30) days following receipt
of the Escalation Notice by the non-requesting Party, the Parties may pursue
remedies through litigation. Notwithstanding the foregoing, any Party may
immediately seek preliminary or temporary equitable or injunctive relief during
the pendency of the foregoing procedures pursuant to Section 11.7(b).

SECTION 11.8 Obligations of Parties. Each obligation of each Licensee under this
Agreement to take (or refrain from taking) any action hereunder shall be deemed
to include, with respect to any Transferred Subsidiary, an undertaking by its
owning Company, to cause such Transferred Subsidiary to take (or refrain from
taking) such action.

SECTION 11.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile or other means of electronic transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.

SECTION 11.10 Further Assurances. The Parties agree to take all further actions,
execute all further documents and otherwise cooperate in good faith to further
the intents and purposes of this Agreement. If either Party discovers an error
in a Schedule hereto, it shall notify the other Party, and such Schedule shall
be promptly corrected.

SECTION 11.11 Effectiveness. Notwithstanding anything to the contrary in this
Agreement, this Agreement shall only become effective as of the Closing and
shall not become effective if the Closing does not occur.

 

13

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
by its duly authorized officer, in each case as of the date first written above.

 

AMERICAN INTERNATIONAL GROUP, INC. (on behalf of itself and its retained
Subsidiaries)     AIG FINANCIAL ASSURANCE JAPAN K.K. By:  

 

    By:  

 

  Name:         Name:     Title:         Title:           AIG STAR LIFE
INSURANCE CO., LTD. (on behalf of itself and its Subsidiaries on Schedule A)    
    By:  

 

          Name:             Title:           AIG EDISON LIFE INSURANCE COMPANY
(on behalf of itself and its Subsidiaries on Schedule A)         By:  

 

          Name:             Title:           AIG EDISON SERVICE CO., LTD.      
  By:  

 

          Name:             Title:  

 

14

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Schedule A – Transferred Subsidiaries

Company: AIG Star Life Insurance Co., Ltd.

Transferred Subsidiaries: CLIS K.K., AIG Business Service K.K., Capital System
Service K.K.

Company: AIG Edison Life Insurance Company

Transferred Subsidiary: Toho Shinyo Hosho Company

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SCHEDULE B

 

CATEGORY

 

ACTIONS AND TIME FRAMES

Phones  

 

•

  

 

If, as of the Effective Date, any Licensee’s employee greets callers by stating
a Licensed Trademark (e.g., “Hello, this is AIG Star…”), such phone greeting
shall be replaced with a mutually-agreed greeting that reasonably conveys the
transition within 5 days after the Effective Date.

Letterhead  

 

•

  

 

All letterhead bearing any of the Licensed Marks must contain the statement in
Schedule D within 5 days after the Effective Date.

 

 

•

  

 

Within 5 days after the Effective Date, all relevant employees must have access
to letterhead bearing the statement in Schedule D and the stuffer letter.

 

 

•

  

 

Each Licensee shall promptly cease use of all envelopes and letterhead bearing
any of the Licensed Marks as soon as practicable, and in any event by the
Termination Date.

Internet Sites  

 

•

  

 

Within one Business Day after the Effective Date, Parent shall display a
mutually-agreed statement on a page of its public-facing website
www.AIGcorporate.com (or any successor site thereto), which shall include
link(s) directly to the public-facing website(s) of each Licensee located at the
following domain names: “Gibraltar-Star.com” and “Gibraltar-Edison.com” or
“Prudential-Star.com” and “Prudential-Edison.com”. Such statement shall be
displayed until the Termination Date. Each Licensee’s public-facing websites
shall prominently display the statement in Schedule D on the home page.

Signage  

 

•

  

 

A workplan to replace signage shall be completed within 5 days of the Effective
Date and each Licensee will comply with its terms and conditions.

Business Cards  

 

•

  

 

Each Licensee shall promptly cease use of all business cards bearing any of the
Licensed Marks as soon as practicable, and in any event by the Termination Date.

--------------------------------------------------------------------------------

CATEGORY

 

ACTIONS AND TIME FRAMES

Forms (not otherwise covered)  

 

•

  

 

Regulatory filings of replacement forms shall be made by each Licensee on a file
and use basis with the FSA as soon as practicable and in no event later than 15
days after the Effective Date.

 

 

•

  

 

Regulatory filings, such as tax filings, insurance reports, etc. that include
the Parent’s name shall include the statement in Schedule D in such filings or
in a cover letter accompanying such filings if the cover letter is deemed to be
part of the filings.

Stuffer Letter  

 

•

  

 

Stuffer letter shall be included in all mailings to customers as long as the
Licensed Marks appear on any such materials in the mailing. Within 5 days after
the Effective Date, all relevant employees must have access to the stuffer
letter.

Policies, Claims, Notices, Bills and Invoices  

 

 

•

 

 

 

  

 

Each Licensee shall promptly cease use of all policies, claims, notices, bills
and invoices bearing any of the Licensed Marks as soon as practicable, and in
any event by the Termination Date.

Check Stock  

 

•

  

 

Each Licensee shall promptly cease use of all check stock bearing any of the
Licensed Marks as soon as practicable, and in any event by the Termination Date.

Advertising/

Marketing

Materials

 

 

•

  

 

Advertising published by or on behalf of any Licensee after the Effective Date
bearing the Licensed Marks shall contain the statement in Schedule D.

 

 

•

 

  

 

Marketing materials bearing the Licensed Marks must include the stuffer letter
in the mailing or means of delivery to the customer.

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Schedule C – Graphics Standards

--------------------------------------------------------------------------------

Schedule D – Legal Entity Statement2

LOGO [g103217ex10_1cpg020new.jpg]

 

 

2

To be agreed before Closing.

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Schedule E – Domain Names

[NOTE: List to be confirmed before Closing]

aigedison.co.jp

aigfl.co.jp

aigfl.com

aiglife.jp

aig-life.jp

aiglifejapan.biz

aiglife-japan.biz

aig-life-japan.biz

aiglifejapan.com

aiglife-japan.com

aig-life-japan.com

aiglifejapan.info

aiglife-japan.info

aig-life-japan.info

aiglifejapan.jp

aiglife-japan.jp

aig-life-japan.jp

aiglifejapan.net

aiglife-japan.net

aig-life-japan.net

aiglifejapan.org

aiglife-japan.org

aig-life-japan.org

aigstar.biz

aigstar.info

aigstar.jp

aigstar.net

aigstar.org

aigstardirect.com

aigstardirect.jp

aigstarlife.asia

aigstar-life.biz

aigstar-life.co.jp

aigstarlife.com

aigstar-life.info

aigstarlife.jp

aigstarlife.net

aigstarlife.org

aigstarlifedirect.com

aigstarlifedirect.jp

--------------------------------------------------------------------------------

aigstarwoman.com

XN—AIG-0Y9DW8A892P001B.JP

XN—AIG-3K4BZEPEZE.JP

xn—aig-6j4buhle1e.com

XN—AIG-6J4BUHLE1E.JP

xn—aig-6j4buhle1e.net

XN—AIG-7K4B4AZ5A.JP

XN—AIG-7K4B4AZ5AX43SQTYC.JP

xn—aig-bm0e3143a.com

XN—AIG-BM0E3143A.JP

xn—aig-bm0e3143a.net

xn—aig-bm0ex63g.com

XN—AIG-BM0EX63G.JP

xn—aig-bm0ex63g.net

xn—aig-mh4ev50m.com

XN—AIG-MH4EV50M.JP

xn—aig-mh4ev50m.net

XN—AIG-TI4B3DOB9K7FUG.JP

XN—AIG-TI4B4B0C0BI8E8SXF.JP

xn—aig-ti4b4bufqc4q.com

XN—AIG-TI4B4BUFQC4Q.JP

xn—aig-ti4b4bufqc4q.net

xn—aig-ti4b4bufqc4qr93z3g8c.jp

xn—aig-ti4ba0e1fwc2fwilb.jp

XN—AIG-TI4BUJ8D.JP

xn—aig-ti4buj8d.net

--------------------------------------------------------------------------------

EXHIBIT D

FORM OF INTELLECTUAL PROPERTY AGREEMENT

This INTELLECTUAL PROPERTY AGREEMENT (this “Agreement”) is made as of [—], 2011
(“Effective Date”)1 between American International Group, Inc., a Delaware
corporation (“Parent”), on the one hand, and AIG Financial Assurance Japan K.K.,
AIG Star Life Insurance Co., Ltd., AIG Edison Life Insurance Company and AIG
Edison Service Co., Ltd., all Japanese corporations (the “Companies”), and, on
the other hand. Parent and the Companies are collectively the “Parties” and
individually a “Party.”

RECITALS

WHEREAS, Prudential Financial, Inc., a New Jersey corporation, and Parent have
entered into the Stock Purchase Agreement dated as of September 30, 2010 (the
“Purchase Agreement”), pursuant to which, inter alia, Parent will sell, and
cause certain of its Subsidiaries to sell, the shares of the Companies to
Acquiror on the Effective Date;

WHEREAS, certain of the Companies own, directly or indirectly, the capital stock
or other equity interests of the Subsidiaries set forth on Schedule A (the
“Transferred Subsidiaries”);

WHEREAS, Parent and its retained Subsidiaries may need to use certain
Intellectual Property of the Companies or the above Transferred Subsidiaries
after the Effective Date, and the Companies and the Transferred Subsidiaries may
need to use certain Intellectual Property of the Parent and its retained
Subsidiaries after the Effective Date;

NOW THEREFORE, in consideration of the premises and the mutual covenants and
undertakings contained herein and Article VIII of in the Purchase Agreement,
which requires the execution of this Agreement and for which receipt and
sufficiency is acknowledged, the Parties hereby agree as follows:

ARTICLE I. DEFINITIONS.

SECTION 1.1 Definitions. For the purposes of this Agreement, (a) unless
otherwise defined herein capitalized terms used herein shall have the meanings
assigned to them in the Purchase Agreement and (b) the following terms shall
have the meanings hereinafter specified:

“Affiliate” means, with respect to any specified person, any other person that,
at the time of determination, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with such
specified person, provided that, for the purposes of this Agreement, the Company
Parties and the Parent Parties shall not be deemed to be Affiliates of each
other.

“Company Parties” has the meaning set forth in Section 2.1.

 

1

To be the same as the Closing Date in the SPA.

--------------------------------------------------------------------------------

“Intellectual Property” means, for purposes of this Agreement only: all
intellectual property, industrial property and proprietary rights, including
without limitation: (a) patents, patent applications and statutory invention
registrations, including reissues, divisions, continuations, continuations in
part, renewals, extensions and reexaminations thereof, all patents that may
issue on such applications, documented unpatented invention disclosures, and all
rights therein provided by international treaties or conventions,
(b) copyrightable works and works of authorship, whether or not registered, and
registrations and applications for registration thereof, and all rights therein
provided by applicable Law international treaties or conventions, and
(c) confidential and proprietary information, including trade secrets,
processes, know-how, formulae, designs, methods, techniques, inventions or
procedures, in each case existing on the Effective Date, but excluding
(i) Software; and (ii) trademarks, service marks, trade dress, logos, Internet
domain names, any and all common law rights thereto, and registrations and
applications for registration thereof, all rights therein provided by
international treaties or conventions, and all reissues, extensions and renewals
of any of the foregoing, the rights to which are governed solely by the
Transitional Trademark License Agreement.

“Law” means any Japanese, U.S. federal, state, local or non-Japanese or non-U.S.
law, statute or ordinance, common law or any rule, regulation, standard,
judgment, order, writ, injunction, ruling, decree, arbitration award, agency
requirement, license or permit of any Governmental Authority.

“Licensed Company IP” has the meaning set forth in Section 2.2.

“Licensed IP” means Licensed Company IP and/or Licensed Parent IP, as determined
by context.

“Licensed Parent IP” has the meaning set forth in Section 2.1.

“Licensed Parent Software” has the meaning set forth in Section 2.3.

“Other Party” means, with respect to any Company Party, any of the Parent
Parties, and with respect to any Parent Party, any of the Company Parties.

“Parent Parties” has the meaning set forth in Section 2.1.

“Representative” of a Person means the directors, officers, employees, advisors,
agents, consultants, accountants, investment bankers or other representatives of
such person.

“Software” means any and all computer programs, including any and all software
implementation of algorithms, models and methodologies, whether in source code,
object code, human readable form or other form, but excluding any data stored
therein or stored thereby.

“Subsidiary” of any person means any corporation, general or limited
partnership, joint venture, limited liability company, limited liability
partnership or other person that is a legal entity, trust or estate of which (or
in which) (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the board of directors (or a majority of another
body performing similar functions) of such corporation or other person
(irrespective of whether at the time capital stock of any other class or classes
of such corporation or other person shall or might

 

2

--------------------------------------------------------------------------------

have voting power upon the occurrence of any contingency), (b) more than 50% of
the interest in the capital or profits of such partnership, joint venture or
limited liability company or (c) more than 50% of the beneficial interest in
such trust or estate, is at the time of determination directly or indirectly
owned or controlled by such person, provided that, for the purposes of this
Agreement, the Company Parties shall not be deemed to be Subsidiaries of any of
the Parent Parties.

SECTION 1.2 Interpretation. Interpretation of this Agreement shall be governed
by the following rules of construction: (a) words in the singular shall be held
to include the plural and vice versa; (b) references to the terms Article,
Section and Schedule are references to the Articles, Sections and Schedules to
this Agreement; (c) the word “including” and words of similar import when used
in this Agreement shall mean “including without limitation”; (d) the words
“herein,” “hereof” or “hereunder,” and similar terms are to be deemed to refer
to this Agreement as a whole and not to any specific section; (e) the headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement; (f) this Agreement
shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted; and (g) if a word or phrase is defined, the other
grammatical forms of such word or phrase have a corresponding meaning.

ARTICLE II. LICENSES/COVENANTS.

SECTION 2.1 Licensed Parent IP Grant. Subject to the terms hereof, Parent, on
behalf of itself and each of its Subsidiaries as of the Effective Date (which,
for clarity, shall exclude the Company Parties and any former Affiliates of
Parent) (the “Parent Parties”), hereby grants to the Companies and the
Transferred Subsidiaries (together, the “Company Parties”) a perpetual,
irrevocable, royalty-free, fully paid-up, non-exclusive, non-transferable
(except as set forth in Section 6.1) right and license under any Intellectual
Property that (i)(a) is owned by any Parent Party as of the Effective Date or
(b) is owned by any current or former Affiliate of a Parent Party as of the
Effective Date, and a Parent Party has the right to license hereunder as of the
Effective Date; and (ii) is used in the operation of the Company Parties’
respective businesses as of the Effective Date, but excluding any such
Intellectual Property that the Parent Parties are prevented from licensing
hereunder by applicable Law, including the Act on the Protection of Personal
Information in Japan (collectively, “Licensed Parent IP”), to exercise all
rights under the Licensed Parent IP in Japan in connection with all current and
future policies, goods and services within the respective businesses of the
Company Parties conducted as of the Effective Date.

SECTION 2.2 Licensed Company IP Grant. Subject to the terms hereof, the
Companies, on behalf of the Company Parties, hereby grant to the Parent Parties
a perpetual, irrevocable, royalty-free, fully paid-up, non-exclusive,
non-transferable (except as set forth in Section 6.1) right and license under
any Intellectual Property that (i)(a) is owned by any Company Party as of the
Effective Date or (b) is owned by any current or former Affiliate of a Company
Party as of the Effective Date, and a Company Party has the right to license
hereunder as of the Effective Date; and (ii) is used in the operation of the
Parent Parties’ respective businesses as of the Effective Date, including
without limitation the patents listed on Schedule B, but excluding any such
Intellectual Property that the Company Parties are prevented from

 

3

--------------------------------------------------------------------------------

licensing hereunder by applicable Law, including the Act on the Protection of
Personal Information in Japan (collectively, “Licensed Company IP”), to exercise
all rights under the Licensed Company IP in Japan in connection with all current
and future policies, goods and services within the respective businesses of the
Parent Parties conducted as of the Effective Date.

SECTION 2.3 Licensed Parent Software Grant. Subject to the terms hereof, Parent,
on behalf of itself and the parties listed on Schedule C, hereby grants to the
Company Parties a perpetual, irrevocable, fully paid-up, non-exclusive,
non-transferable (except as set forth in Section 6.1) right and license under
any Intellectual Property that (i) is owned by Parent or such listed parties and
(ii) subsists in the Software listed on Schedule C (the “Licensed Parent
Software”), solely to support the internal needs of their respective businesses
in Japan, as conducted as of the Effective Date, and not for the direct or
indirect use or benefit of, or the distribution to any other persons or
businesses. For clarity, absent a later agreement by the Parties, this license
does not include any other Software owned or used by any Parent Parties,
including the items listed on Schedule D. The Parties acknowledge that, to the
best of their knowledge, the Companies have received a copy of the source code
of the Licensed Parent Software (the “Source Code”) on or prior to the Effective
Date, and the Parent Parties are not required to provide or deliver any other
materials to the Company Parties with respect to the Licensed Parent Software
other than Source Code in existence prior to the Effective Date that was not
delivered to the Companies prior to the Effective Date.

SECTION 2.4 Limitations. All rights not licensed under Sections 2.1, 2.2 or 2.3
are specifically reserved by the licensor Parties. For clarity, the above
licenses do not include (i) any Intellectual Property or Software owned by a
third party (i.e., not a Party or any of its current or former Affiliates);
(ii) any Intellectual Property or Software created, invented or acquired by a
licensor Party after the Effective Date, provided that any patents that issue
after the Effective Date that arise from patent applications or inventions
within the Licensed IP as of the Effective Date shall also be included in the
“Licensed IP” of the owning party; or (iii) any obligations by the Parent
Parties to provide maintenance, support, training, assistance, bug fixes, virus
prevention or removal, corrections or improvements to the Licensed Parent
Software.

SECTION 2.5 Sublicensing. The Parent Parties and Company Parties may sublicense
their licenses in Sections 2.1 and 2.2 (but not 2.3) solely to parties in their
supply chain (e.g., vendors, distributors, resellers, customers and end-users)
to the extent a sublicense to such parties is implied or necessary to allow the
Parent Parties and Company Parties to conduct their respective businesses, but
not for the independent or unrelated use or benefit of any such sublicensees.

SECTION 2.6 Joint IP. The Parent Parties and Company Parties agree that, except
for the items listed on Schedule D, to the best of their knowledge, there is no
Intellectual Property or Software owned jointly between them as of the Effective
Date. If, after the Effective Date, any Party discovers any jointly-owned
Intellectual Property or Software that is not listed in Schedule D (“Additional
Joint IP”), it shall notify the other Parties. Absent an agreement by the
Parties to the contrary, any Additional Joint IP may be used and licensed by
each Party without an accounting to the other Party, and the Parties shall
cooperate in good faith to enforce any Additional Joint IP against third
parties.

 

4

--------------------------------------------------------------------------------

ARTICLE III. ACKNOWLEDGMENTS.

SECTION 3.1 Ownership. Parent represents that it or its Affiliate owns and, as
applicable, has registered and maintained registrations for Licensed Parent IP
licensed pursuant to Section 2.1(i)(a). The Parent Parties hereby acknowledge
and agree that, as between the Parties, the Company Parties are the sole and
exclusive owners of all right, title and interest in and to the Licensed Company
IP. The Company Parties hereby acknowledge and agree that, as between the
Parties, the Parent Parties are the sole and exclusive owners of all right,
title and interest in and to the Licensed Parent IP and the Licensed Parent
Software.

SECTION 3.2 No Ownership Claim. The Parent Parties hereby acknowledge and agree
that none of them shall at any time, anywhere in the world: (i) file any
application to register, or otherwise claim ownership of, the Licensed Company
IP anywhere in the world or (ii) challenge or contest the validity,
enforceability of or the Company Parties’ rights in the Licensed Company IP. The
Company Parties hereby acknowledge and agree that none of them shall at any
time, anywhere in the world: (i) file any application to register, or otherwise
claim ownership of, the Licensed Parent IP or Licensed Parent Software or
(ii) challenge or contest the validity, enforceability of or the Parent Parties’
rights in the Licensed Parent IP or Licensed Parent Software.

SECTION 3.3 Ownership of Derivative Works. If a Parent Party or Company Party
creates or invents any new Intellectual Property after the Effective Date that
is a modification, improvement or derivative work (a “Derivative Work”) of any
Intellectual Property owned by the Other Parties, Additional Joint IP or, with
respect to the Company Parties, the Licensed Parent Software, the Party creating
or inventing such Derivative Work shall exclusively own all rights in the new
subject matter and shall have no obligation to license it to the Other Parties.

ARTICLE IV. ENFORCEMENT.

The owner of any Licensed IP (and the applicable Parent Parties, with respect to
the Licensed Parent Software) shall have the sole right, but not the obligation,
to challenge, attempt to eliminate and or bring an Action against its
infringement, misappropriation or other violation by a third party. In the event
that such owner decides to bring such an Action, the licensee Parties hereunder
shall reasonably cooperate, at the owner’s expense. All proceeds recovered in
such Action shall be retained solely by the owner.

ARTICLE V. CONFIDENTIALITY.

SECTION 5.1 Source Code. The Company Parties acknowledge that the Source Code is
a trade secret, and agree to maintain the Source Code in the strictest
confidence. The Company Parties shall carefully restrict access to the Source
Code to a minimal number of employees (and contractors, subject to a written
agreement with legal duties at least as strict as those under this Agreement to
keep the Source Code in the strictest confidence) on a “need-to-know” basis and
shall otherwise protect its confidentiality with the same degree of care as they
would use for their own most valuable confidential information. The Company
Parties are liable hereunder for any unauthorized disclosure of or access to any
Source Code.

 

5

--------------------------------------------------------------------------------

SECTION 5.2 Confidential Information.

(a) Without limiting Section 5.1, each of the Parent Parties and the Company
Parties shall, and shall cause their respective Representatives to, maintain in
confidence and not use or exploit for any purpose other than in connection with
fulfilling their respective obligations under this Agreement, any written, oral
or other information relating to or obtained from the other Parties,
respectively, except with respect to (i) any such information that is or becomes
generally available to the public other than (A) as a result of disclosure by
the applicable receiving Party, its Affiliates, or any of its or any of their
Representatives, (ii) any such information that is required by applicable Law,
Governmental Order or a Governmental Authority to be disclosed after notice has
been given to the other Party as soon as practicable (including any report,
statement, testimony or other submission to such Governmental Authority),
(iii) any such information that is reasonably necessary to be disclosed in
connection with any Action or in any dispute with respect to this Agreement
(including in response to any summons, subpoena or other legal process or formal
or informal investigative demand issued to the disclosing party), or (iv) any
such information was or becomes available to such Party on a non-confidential
basis and from a source (other than a Party or any of its Affiliates or
Representatives) that is not bound by a confidentiality agreement with respect
to such information. Each Party shall instruct its Affiliates and
Representatives having access to such information of such obligation of
confidentiality.

(b) Notwithstanding anything in this Agreement to the contrary, the Parties
acknowledge and agree that any Parent Party may share any information relating
to or obtained from the other Parties with (i) the Federal Reserve Bank of New
York or the U.S. Department of the Treasury and their respective
Representatives, (ii) any insurance regulatory authority or (iii) any tax
authority, in each case as the applicable Parent Party deems necessary or
advisable in its good faith judgment.

(c) To the fullest extent permitted by applicable Law, including the Act on the
Protection of Personal Information in Japan, Section 5.2(a) shall not restrict
or limit the use of or disclosure by the Parent Parties of any customer, policy
or beneficiary information relating to the Company Parties if such information
was in the possession or control of the Parent Parties prior to the Effective
Date. For the avoidance of doubt, the foregoing shall apply regardless of
whether such information (i) was also possessed or controlled by the Company
Parties on or prior to the Effective Date and/or (ii) was originated by any
Company Parties.

SECTION 5.3 Unauthorized Actions. If, at any time, a Party becomes aware of a
breach or potential breach of Section 5.1 or 5.2, such Party shall immediately
notify the other Party and cooperate with any reasonable actions to prevent or
remedy any such breach.

ARTICLE VI. ASSIGNMENT.

SECTION 6.1 Assignment.

(a) Except as permitted in Section 2.5 or Section 6.1(b), (c) or (d), neither
this Agreement nor any right or obligation hereunder may be directly or
indirectly assigned, sublicensed, assumed in bankruptcy, pledged, mortgaged or
transferred by any Party, in whole or

 

6

--------------------------------------------------------------------------------

in part, to any person or entity (including a bankruptcy trustee), by operation
of law or otherwise, whether voluntarily or involuntarily, without the Other
Parties’ prior written consent in their sole discretion, and any attempt to do
so shall be null and void at the outset and shall be a material breach of this
Agreement, provided that one or more Company Parties may merge with each other
without consent and the surviving entity shall continue as a “Company”
hereunder. For clarity, any change of control, merger or reorganization shall be
deemed an “assignment” for purposes of this Section 6.1, regardless of whether a
Company Party is the surviving entity. Notwithstanding the foregoing, a Company
Party may assign any of its rights or delegate any of its duties, in whole or in
part, to an Affiliate as of the Effective Date, provided that such Company Party
shall notify Parent thirty (30) days prior to such assignment.

(b) Notwithstanding Section 6.1(a), if a Party (the “Divesting Party”) sells or
divests (whether by asset sale or otherwise) a business unit or any other
portion of its business that is covered by one or more of the licenses in
Section 2.1, 2.2 or 2.3 (as either a licensee or benefiting Party or a licensor
or granting Party thereunder) (a “Divested Business”), the Divesting Party may
sublicense or assign its applicable rights and obligations hereunder to the
acquiror or successor of such Divested Business, without limiting the rights or
obligations of the Divesting Party hereunder with respect to its retained
businesses, provided that (i) the acquiror or successor must assume in writing
all of the Divesting Party’s applicable obligations hereunder and (ii) the
benefits and burdens of the licenses and covenants applying to the Divested
Business shall continue to apply only to such Divested Business and shall not
extend to any separate or unrelated Affiliates or businesses of its acquiror or
successor. Any purported transaction in violation of the foregoing shall be
deemed null and void at the outset. The Divesting Party is not liable to an
Other Party hereunder for any act or omission committed by the acquiror or
successor of a Divested Business with respect to such Divested Business.

(c) Notwithstanding Section 6.1(a), if a Divesting Party sells or divests
(whether by stock sale, merger, or otherwise) a Subsidiary that is covered by
one or more of the licenses in Section 2.1, 2.2 or 2.3 (as either a licensee or
benefiting Party or a licensor or granting Party thereunder) (a “Divested
Subsidiary”), such Divested Subsidiary may retain its applicable rights and
obligations hereunder, without limiting the rights or obligations of the
Divesting Party hereunder with respect to its retained businesses, provided that
the Divested Subsidiary must assume in writing all of the Divesting Party’s
applicable obligations hereunder, and the benefits and burdens of the licenses
and covenants applying to the Divested Subsidiary shall continue to apply only
to such Divested Subsidiary and shall not extend to any separate or unrelated
Affiliates or businesses of its acquiror or successor. Any purported transaction
in violation of the foregoing shall be deemed null and void at the outset. The
Divesting Party is not liable to an Other Party hereunder for any act or
omission committed by a Divested Subsidiary after the divestiture date.

(d) Notwithstanding Section 6.1(a), if a Party (the “Assigning Party”) undergoes
a merger, reorganization or sale of all or substantially all of its equity or
assets, such Assigning Party may assign this Agreement to its acquiror or
successor, provided that (i) the acquiror or successor assumes in writing all of
the Assigning Party’s obligations hereunder and (ii) the rights and obligations
under this Agreement shall cover only the Assigning Party’s business and shall
not extend to any separate or unrelated Affiliates or businesses of its acquiror
or successor. Any purported transaction in violation of the foregoing shall be
deemed null and void at the outset.

 

7

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SECTION 6.2 Binding on Successors and Assigns. In the event of a permitted
assignment, this Agreement shall be binding upon, shall inure to the benefit of,
and shall be enforceable by the Parties and their permitted successors and
assigns.

ARTICLE VII. REPRESENTATIONS; DISCLAIMER; LIMITATION OF LIABILITY.

SECTION 7.1 Duly Authorized. Each Party represents and warrants to the other
that it has duly authorized, executed and delivered this Agreement, which,
subject to the due execution and delivery hereof by the other Parties,
constitutes the legal, valid and binding obligation of such person enforceable
against such person in accordance with its terms. Each Party represents and
warrants that it has the right and ability to perform the obligations and
covenants provided for herein in accordance with the terms and conditions of
this Agreement.

SECTION 7.2 DISCLAIMER. ALL LICENSED IP AND THE PARENT LICENSED SOFTWARE ARE
LICENSED HEREUNDER “AS IS,” AND EACH PARTY EXPRESSLY DISCLAIMS HEREUNDER ANY AND
ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF
DESIGN, QUALITY, VALUE, FREEDOM FROM BUGS, ERRORS OR VIRUSES, OPERABILITY,
MERCHANTABILITY, FITNESS FOR USE OR A PARTICULAR PURPOSE, SUITABILITY, ANY
RESULTS DERIVED THEREFROM, OWNERSHIP, TITLE AND NON-INFRINGEMENT OF THE
INTELLECTUAL PROPERTY OF THIRD PARTIES.

SECTION 7.3 LIMITATION OF LIABILITY. EXCEPT FOR A MATERIAL BREACH OF ARTICLE V,
NO PARTY SHALL BE LIABLE, WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND
STRICT LIABILITY), OR OTHERWISE, FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES UNDER THIS AGREEMENT, INCLUDING
LOSS OF PROFITS, LOST DATA, BUSINESS INTERRUPTIONS AND CLAIMS OF CUSTOMERS, EVEN
IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF THE SAME.

ARTICLE VIII. INDEMNIFICATION.

SECTION 8.1 Indemnification. Each party (the “Indemnifying Party”) agrees to
indemnify, defend and hold the other party and its affiliates and its and their
respective officers, directors, employees, agents, advisers and representatives
(the “Indemnified Parties”) harmless from and against any Losses resulting from
or arising out of any claims or actions of third parties based on or arising out
of any breach of any representation, warranty, covenant or obligation under this
Agreement.

SECTION 8.2 Procedures. An indemnified party under Section 8.1 shall promptly
notify the indemnifying party in writing in reasonable detail of any potential
indemnifiable claim, provided, however, that any failure to provide such notice
shall not release the indemnifying party from its obligations except to the
extent it is prejudiced thereby. Upon receiving such notice, the indemnifying
party may, by notice to the indemnified party within a reasonable time, assume
the defense and control of such claim, with its own counsel and at its

 

8

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own expense, but shall allow the indemnified party a reasonable opportunity to
participate with its own counsel and at its own expense. The indemnified party
may take any actions reasonably necessary to defend such claim prior to
receiving such notice. The indemnified party shall cooperate fully with the
indemnifying party in its defense. Neither party shall, without the prior
written consent of the other party (which shall not be unreasonably withheld),
admit liability in, consent to a settlement, compromise or discharge of, or the
entry of any judgment arising from any indemnifiable claim that adversely
affects the other party in any manner, and the other party will have no
liability for any Losses arising out of the first party’s violation of the
foregoing.

ARTICLE IX. TERM AND TERMINATION.

SECTION 9.1 Term. The term of this Agreement shall commence on the Effective
Date and lasts until Parent and each Company agree that the last item of
Licensed IP or the Licensed Parent Software is no longer protected by the
applicable intellectual property law. The Parties intend and agree that, in the
event of a breach of this Agreement, the aggrieved Party may seek all available
rights and remedies, except that this Agreement cannot be terminated as a
remedy.

SECTION 9.2 Survival. Articles III, V and X and Sections 7.2, 7.3 and 9.2, of
this Agreement shall survive the expiration of this Agreement.

ARTICLE X. MISCELLANEOUS.

SECTION 10.1 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, by facsimile with receipt
confirmed (followed by delivery of an original via overnight courier service),
), by e-mail (with confirmation by any of the other methods herein) or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this
Section 10.1):

 

if to one or more Parent Parties:

  if to one or more  

Company Parties:

American International Group, Inc.

 

80 Pine Street

 

New York, NY 10005

 

Attention: General Counsel

 

Facsimile: 212-425-2175

 

E-Mail:

 

with a copy to:

  with a copy to:

Simpson Thacher & Bartlett LLP

 

12-32 Akasaka, 1-chome

 

Minato-ku, Tokyo 107-6037

 

 

9

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Attention: David Sneider

 

Facsimile: +81-3-5562-6202

 

E-Mail: dsneider@stblaw.com

 

SECTION 10.2 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any Law or as a matter of
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any Party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, 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 a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the greatest extent possible.

SECTION 10.3 Entire Agreement. Except as otherwise expressly provided in this
Agreement, this Agreement and the Purchase Agreement constitute the entire
agreement of the Parties hereto with respect to the subject matter of this
Agreement and supersede all prior agreements and undertakings, both written and
oral, between or on behalf of the Parent, on the one hand, and the Companies, on
the other hand with respect to the subject matter of this Agreement. In the
event of any conflict between the terms of this Agreement and the terms of the
Purchase Agreement with respect to the subject matter of this Agreement, the
terms of this Agreement shall govern.

SECTION 10.4 No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the Parties and their successors and permitted assigns, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except that any non-signatory
Parent Party or Company Party shall have the right to enforce its rights under
this Agreement directly against the applicable Parties.

SECTION 10.5 Amendment; Waiver. No provision of this Agreement may be amended,
supplemented or modified except by a written instrument signed by all the
Parties. No provision of this Agreement may be waived except by a written
instrument signed by the Party against whom the waiver is to be effective. No
failure or delay by any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

SECTION 10.6 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Injunctive Relief.

(a) This Agreement shall in all respects be governed by, and construed in
accordance with, the Laws of the State of New York without giving effect to any
conflicts of law principles of such state that might refer the governance,
construction or interpretation of such agreements to the Laws of another
jurisdiction.

 

10

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(b) Each of the Parent and the Companies, on behalf of itself and the Parent
Parties and Company Parties, respectively, irrevocably and unconditionally:

(i) agrees that the Other Parties may bring an Action arising out of the
interpretation and enforcement of the provisions of this Agreement in (i) the
Courts of Chancery of the State of Delaware or, if under applicable Law,
jurisdiction is vested in the United States federal courts, any court of the
United States located in the State of Delaware, (ii) the courts in Japan, and
(iii) for breaches of Article V, in any other court of competent jurisdiction;

(ii) acknowledges that money damages are an inadequate remedy for a breach or
anticipated breach of this Agreement (including Article V) and the difficulty of
quantifying such damages, and that, therefore, in such event, each of the Other
Parties may, in addition to any other remedies available to it, bring an Action
in the courts set forth in Section 9.6(b)(i) to obtain a restraining order
and/or injunction or other relief to prohibit or remedy such violation, without
needing to secure or post bond or other security;

(iii) agrees that service of process in any such Action may be effected by
mailing a copy of such process by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the applicable Parties
at the addresses provided in Section 10.1; and

(iv) ACKNOWLEDGES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PERSON MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT.

(c) If there is a dispute (“Dispute”) as to whether a breach of this Agreement
has occurred, such Dispute shall be resolved pursuant to this Section 10.6(c).
The non-breaching Party may request discussion and negotiations between senior
executives of each Party with the possibility of mediation. In the event that
the Parties have not been able to resolve the Dispute to their mutual
satisfaction within a period of thirty (30) days, either Party may request in
writing (an “Escalation Notice”) that the Dispute be escalated to the chief
executive officers of the respective Parties or to such other senior executives
of the Parties as their respective chief executive officers may delegate. The
Parties and their chief executive officers and other senior executives agree to
use good faith efforts to resolve any Dispute pertaining to whether a breach of
this Agreement has occurred. If the Dispute is not resolved by the chief
executive officers or other senior executives of the respective parties within
thirty (30) days following receipt of the Escalation Notice by the
non-requesting Party, the Parties may pursue remedies through litigation.
Notwithstanding the foregoing, any Party may immediately seek preliminary or
temporary equitable or injunctive relief during the pendency of the foregoing
procedures pursuant to Section 10.6(b).

 

11

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SECTION 10.7 Obligations of Parties. Each obligation of Parent or each Company
under this Agreement to take (or refrain from taking) any action hereunder shall
be deemed to include an undertaking by the Party to cause the other Parent
Parties or the applicable Transferred Subsidiaries, respectively, to take (or
refrain from taking) such action. Subject to the provisions in Sections 6.1(b)
and (c) with respect to Divested Businesses and Divested Subsidiaries, Parent
and each Company is liable for any act or omission by the other Parent Parties
or its Transferred Subsidiaries, respectively, that would breach this Agreement
if committed by a Party hereto.

SECTION 10.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile or other means of electronic transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.

SECTION 10.9 Bankruptcy. The Parties intend and agree that the licenses in
Section 2.1, 2.2 or 2.3 shall be considered to be licenses to “intellectual
property” as defined in the U.S. Bankruptcy Code, 11 U.S.C. § 101(35A), and that
if a licensor Party hereunder enters into bankruptcy, the licensee parties
hereunder may fully exercise all of their rights and remedies under 11 U.S.C.
§ 365(n) with respect thereto.

SECTION 10.10 Further Assurances. The Parties agree to take all further actions,
execute all further documents and otherwise cooperate in good faith to further
the intents and purposes of this Agreement. If either Party discovers an error
in a Schedule hereto, it shall promptly notify the other Party, and such
Schedule shall be promptly corrected.

SECTION 10.11 Effectiveness. Notwithstanding anything to the contrary in this
Agreement, this Agreement shall only become effective as of the Closing and
shall not become effective if the Closing does not occur.

 

12

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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
by its duly authorized officer, in each case as of the date first written above.

 

AMERICAN INTERNATIONAL GROUP, INC. (on behalf of itself and its retained
Subsidiaries)     AIG FINANCIAL ASSURANCE JAPAN K.K.

By:

 

 

    By:  

 

 

Name:

      Name:  

Title:

      Title:       AIG STAR LIFE INSURANCE CO., LTD. (on behalf of itself and
its Subsidiaries on Schedule A)       By:  

 

        Name:         Title:       AIG EDISON LIFE INSURANCE COMPANY (on behalf
of itself and its Subsidiary on Schedule A)       By:  

 

        Name:         Title:       AIG EDISON SERVICE CO., LTD.       By:  

 

        Name:         Title:

 

13

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EXHIBIT D

Debevoixe Comments – September 23, 2010

Schedule A – Transferred Subsidiaries

Company: AIG Star Life Insurance Co., Ltd.

Transferred Subsidiaries: CLIS K.K., AIG Business Service K.K., Capital System
Service K.K.

Company: AIG Edison Life Insurance Company

Transferred Subsidiary: Toho Shinyo Hosho Company

--------------------------------------------------------------------------------

Schedule B – Licensed Company Patents

 

Patent

   Serial/Publication No.

System and Computer Program for Realizing Salary

Calculations for Seconded Staff

   2005-237242 Owner: AIG Edison Life Insurance Company    2007-52632

Processing Insurance Goods and Computer Program for

Realizing Insurance Goods

   2003-401765 Owner: AIG Edison Life Insurance Company    2005-165544

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Schedule C – Licensed Parent Software

 

Name

 

Granted By

AGESE

  AMERICAN INTERNATIONAL GROUP K.K.

QuickStart!

  AMERICAN INTERNATIONAL GROUP, INC.

GL Tool

  AMERICAN INTERNATIONAL GROUP K.K.

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Schedule D – Excluded Joint IP

ATLASnavi software program

(to be governed by ATLASNAVI Software Agreement dated March 23, 2009)

CSAP software program

(to be governed by CSAP Software Agreement dated April 1, 2009)

Quality Awake System software program

(to be governed by Quality Awake System Software Agreement dated April 1, 2009)

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EXHIBIT E

FORM OF BRIDGE LOAN ASSIGNMENT AGREEMENT

THIS ASSIGNMENT OF BRIDGE LOAN (this “Assignment”), is made and entered into as
of the [—] day of [—]1 , between AIG FUNDING, INC., a Delaware corporation (the
“Assignor”), and [—], [— ] (the “Assignee”).

WHEREAS, the Assignor is the present legal and equitable owner and holder of the
Second Amended and Restated Promissory Note, issued by AIG FINANCIAL ASSURANCE
JAPAN K.K., a Japanese corporation (the “Issuer”), dated March 31, 2009 and
payable to the Assignor in the principal amount of ¥31,937,996,556 as of
September 30, 2010 (the “Purchased Note”); and

WHEREAS, pursuant to a stock purchase agreement entered into between American
International Group, Inc. and Prudential Financial, Inc.2 dated as of
September 30, 2010, (the “Stock Purchase Agreement”) the Issuer will undergo a
change of control of its voting stock (the “Change of Control”); and

WHEREAS, pursuant to the terms of the Purchased Note the Assignor must consent
to a change of control of the Issuer; and

WHEREAS, the Assignor now desires to assign to the Assignee all of its rights
title and interest in and to the Purchased Note, effective as of [•]3; and

WHEREAS, the parties hereto would like to memorialize their intent and mutual
understanding by entering into this Assignment.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1. Assignment. The Assignor does hereby transfer, assign, grant and convey to
the Assignee, and the Assignee hereby irrevocably acquires and assumes, the
Purchased Note and all of the Assignor’s rights and interests thereunder,
including, without limitation, its rights to receive any accrued but unpaid
interest (including capitalized interest) under the Purchased Note. Pursuant to
the terms of the Purchased Note, the Assignee shall deliver a new note to the
Issuer, and the Issuer will issue a replacement note, dated [—]4 and payable to
the Assignee in the principal amount of ¥[—]5 of like tenor and terms as the
Purchased Note, and the Purchased Note shall be cancelled.

 

1

To match the Closing Date.

2

To be changed to “Assignee” if no Designated Acquiror is designated to enter
into this agreement.

3

To match the date of this Assignment.

4

To match the date of this Assignment.

5

To reflect the current outstanding balance of the note, including any accrued
and unpaid interest.

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2. Representation of the Assignor. The Assignor represents that the Purchased
Note, and its rights and interests thereunder are free from any pledge,
hypothecation, security interest, encumbrance, claim, lien or charge of any
kind.

3. Consent to Change of Control. To the extent the Assignor’s right under the
Purchased Note to consent to a change of control of the Issuer applies to the
Change of Control to be effected pursuant to the Stock Purchase Agreement, for
the avoidance of doubt, the Assignor hereby irrevocably consents to the Change
of Control.

4. Governing Law; Jurisdiction. This Assignment and all claims and defenses
arising out of or relating to this Agreement or the formation, breach,
termination or validity of this Assignment, shall in all respects be governed
by, and construed in accordance with, the laws of the State of New York without
giving effect any conflicts of law principles of such state that would apply the
laws of another jurisdiction. Each of the Assignor and Assignee irrevocably and
unconditionally:

 

  a. submits itself and its property to the exclusive jurisdiction of the Courts
of Chancery of the State of Delaware or, if under applicable law, exclusive
jurisdiction is vested in the United States federal courts, the federal courts
of the United States located in the State of Delaware in any action directly or
indirectly arising out of or relating to this Assignment, the transactions
contemplated by this Assignment, or the formation, breach, termination or
validity of this Assignment and agrees that all claims in respect of any such
action shall be heard and determined solely in such courts;

 

  b. consents that any such action may and shall be brought in such courts and
waives any objection that it may now or hereafter have to the venue or
jurisdiction of any such action in such court or that such court is an
inconvenient forum for the action and agrees not to assert, plead or claim the
same;

 

  c. agrees that the final judgment of such court shall be enforceable in any
court having jurisdiction over the relevant party or any of its assets; and

 

  d. agrees that nothing in this Assignment shall affect the right to effect
service of process in any other manner permitted by the applicable rules of
procedure.

5. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
THAT MAY ARISE UNDER THIS ASSIGNMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS ASSIGNMENT OR ANY CLAIM OR DEFENSE ARISING OUT OF OR RELATING TO THIS
ASSIGNMENT OR THE FORMATION, BREACH, TERMINATION OR VALIDITY OF THIS ASSIGNMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO

 

E-2

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REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY
AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS ASSIGNMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS OF SECTIONS 4 AND 5 OF THIS
ASSIGNMENT. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
ASSIGNMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

6. Successors and Assigns. This Assignment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

7. Headings. The headings of the paragraphs of this Assignment have been
included only for convenience, and shall not be deemed in any manner to modify
or limit any of the provisions of this Assignment or be used in any manner in
the interpretation of this Assignment.

8. Interpretation. Whenever the context so requires in this Assignment, all
words used in the singular shall be construed to have been used in the plural
(and vice versa), each gender shall be construed to include any other genders,
and the word “person” shall be construed to include a natural person, a
corporation, a firm, a partnership, a joint venture, a trust, an estate or any
other entity.

6. Partial Invalidity. Each provision of this Assignment shall be valid and
enforceable to the fullest extent permitted by law. If any provision of this
Assignment or the application of such provision to any person or circumstances
shall, to any extent, be invalid or unenforceable, then the remainder of this
Assignment, or the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected by such invalidity or unenforceability.

7. Further Agreements. The Assignor agrees to execute and deliver to the
Assignee such additional documents, instruments or agreements as may be
necessary or appropriate to effectuate the purposes of this Assignment.

8. Entire Agreement. This Assignment, the Stock Purchase Agreement and the
Seller Letter Agreement entered into by and between the Assignee and American
International Group, Inc., dated as of September 30, 2010, constitute the entire
agreement among the parties hereto with respect to the matters referred to
herein, and no other agreement, verbal or otherwise shall be binding between the
parties hereto with respect to the matters referred to herein unless it shall be
in writing and signed by the party against whom enforcement is sought.

9. Amendments; Waivers. This Assignment shall not be amended except by a writing
signed by all of the parties hereto. No waiver of any provision of this
Assignment shall be implied from any course of dealing between the parties
hereto or from any failure by any party hereto to assert its rights hereunder on
any occasion or series of occasions.

 

E-3

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10. Counterparts. This Assignment may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one
instrument.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

 

E-4

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IN WITNESS WHEREOF, the parties have executed this Assignment as of the date
first written above.

 

The Assignor:

AIG FUNDING, INC.

By:

 

 

Name:

 

Title:

 

The Assignee:

[—]

By:

 

 

  Name:   Title:

[Signature Page – Bridge Loan Assignment Agreement]

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EXHIBIT F

American International Group, Inc.

80 Pine Street

New York, NY 10005

 

American Home Assurance Company

[            ]

 

Lexington Insurance Company

[            ]

[Purchase Agreement Closing Date]

[ACQUIROR ENTITY]

[—]

[—]

 

  Re: Hold Harmless and Indemnification Under General Guarantee Agreement

Ladies and Gentlemen:

Reference is hereby made to that certain Stock Purchase Agreement, dated as of
September 30, 2010 (the “Purchase Agreement”), between American International
Group, Inc., a Delaware corporation (the “Parent”), and Prudential Financial,
Inc., a New Jersey corporation (the “Acquiror”). Capitalized terms used in this
agreement (the “Letter Agreement”) and not otherwise defined shall have the
meanings assigned to them in the Purchase Agreement.

Reference also is hereby made to (i) that certain general guarantee agreement,
dated as of August 29, 2003 (the “AHA Guarantee Agreement”), made by American
Home Assurance Company (“AHA”) on behalf of GE Edison Life Insurance Company (as
predecessor to AIG Edison Life Insurance Company, “Edison”), and (ii) that
certain general guarantee agreement, dated as of August 20, 2003 (the “Lexington
Guarantee Agreement”, and together with the AHA Guarantee Agreement, the
“Guarantee Agreements”), made by Lexington Insurance Company (“Lexington,” and
together with AHA, the “Guarantors”) on behalf of Edison, each of which
Guarantee Agreements was entered into for the benefit of certain parties insured
under policies issued by Edison. [Acquiror or Affiliate of Acquiror with
Parent’s Consent] hereby acknowledges that, in connection with the consummation
of the transactions contemplated by the Purchase Agreement on the Closing Date
thereof, the Acquiror is required to cause to be delivered this Letter Agreement
to the Parent and the Guarantors.

In consideration of the execution and delivery of the Purchase Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, (i) [Acquiror or Affiliate of Acquiror with Parent’s
Consent] (the “Indemnifying Party”) agrees, to the fullest extent permitted by
law, to defend, indemnify and hold harmless the Guarantors, against any
Liability (as such term is defined below) incurred by the Guarantors after the
Closing Date arising under their respective Guarantee Agreements (the
“Guaranteed Obligations”), (ii) the Indemnifying Party agrees, upon notice from
any of the Companies, the Transferred Subsidiaries, the Parent or any Guarantor,
to promptly pay, in immediately available funds, any and all Guaranteed
Obligations, on behalf of the relevant Guarantor and (iii) solely in the case of
the AHA Guarantee, AHA agrees to publish notice of termination of the AHA
Guarantee Agreement as soon as reasonably practicable after the Closing Date, in
accordance with the terms of the AHA Guarantee Agreement.

--------------------------------------------------------------------------------

For the purposes hereof, “Liability” shall mean any and all losses, costs,
claims, obligations, expenses (including reasonable attorneys’ fees), damages,
penalties, fines, or other liabilities (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due) arising
under the Guarantee Agreements.

The liability of the Indemnifying Party under this Letter Agreement is absolute,
direct and immediate, not subject to set-off or counterclaim, and not
conditional or contingent upon the pursuit of any remedies against the
Indemnifying Party or any other person. All the terms and provisions of this
Letter Agreement are recourse obligations of the Indemnifying Party.

Upon payment of any obligations owing to any Guarantor, the Indemnifying Party
shall be subrogated to the rights of such Guarantor under the Guarantee
Agreement; and such Guarantor agrees to take, at the Indemnifying Party’s
expense, such steps as the Indemnifying Party may reasonably request to
implement such subrogation.

In the event that the Indemnifying Party transfers, pledges or otherwise
disposes of all or substantially all its properties and assets (including
portfolio investments and capital stock of its Subsidiaries), whether in one
transaction or a series of related transactions, to one or more Persons, then,
and in each such case, proper provision shall be made prior to the consummation
of any such transaction so that each such Person shall assume the obligations of
the Indemnifying Party set forth in this Letter Agreement.

This Letter Agreement shall be binding on, and the term “Indemnifying Party,” as
used herein, shall include, the successors, assigns and other permitted
transferees of the Indemnifying Party. This Letter Agreement shall inure to the
benefit of the Guarantors and each of their respective successors, assigns and
other permitted transferees. The obligations of the Indemnifying Party under
this Letter Agreement shall be deemed to be continuing in nature and shall
remain in full force and effect and shall survive until there are no longer any
Guaranteed Obligations outstanding or contracted or committed for under any
Guarantee Agreement.

To the extent permitted by law, the Indemnifying Party hereby waives and agrees
not to assert or take advantage of any defense that may arise by reason of any
principle or provision of law, statutory or otherwise, which is or might be in
conflict with the terms and provisions of this Letter Agreement. The Guarantors
shall not be required to resort first to any other Persons, their properties or
estates, or to any collateral, property, liens or other rights or remedies
available to them, for indemnification as herein contemplated.

This Letter Agreement contains the entire agreement between the parties
respecting the matters herein set forth and supersedes all prior agreements,
whether written or oral, between the parties respecting such matters. Any
amendments or modifications hereto, to be effective, shall be in writing and
executed by the parties hereto. Notwithstanding anything to the contrary
contained herein, this Letter Agreement shall not limit, reduce or otherwise
affect the validity or enforceability of the terms of any Guarantee Agreement.

 

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This Letter Agreement shall in all respects be governed by, and construed and
interpreted in accordance with, the Laws of the State of New York without giving
effect to any conflicts of law principles of such state that might refer the
governance, construction or interpretation of this Letter Agreement to the Laws
of another jurisdiction. Each of the parties hereto irrevocably and
unconditionally (i) submits itself and its property in any Action arising out of
or relating to the interpretation and enforcement of the provisions of this
Letter Agreement and of the documents referred to herein and in respect of the
transactions contemplated hereby, to the exclusive jurisdiction of the Courts of
Chancery of the State of Delaware or, if under applicable Law, jurisdiction is
vested in the United States federal courts, the federal courts of the United
States located in the State of Delaware; (ii) consents that any such Action may
and shall be brought in such courts and waives any objection that it may now or
hereafter have to the venue or jurisdiction of any such Action in any such court
or that such Action was brought in an inconvenient court and agrees not to
assert, plead or claim the same; (iii) agrees that service of process in any
such Action may be effected by mailing a copy of such process by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such Party at its address as provided hereinafter; and (iv) agrees that nothing
in this Agreement shall affect the right to effect service of process in any
other manner permitted by the Laws of the State of New York.

All notices, requests, claims, demands and other communications under this
Letter Agreement shall be in writing and shall be given or made (and shall be
deemed to have been duly given or made upon receipt) by delivery in person, by
overnight courier service, by facsimile with receipt confirmed (followed by
delivery of an original via overnight courier service) or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this paragraph):

 

   if to AHA:    American Home Assurance Company    [—]    Attention:    [—]   
Facsimile:    [—]    if to Lexington:    Lexington Insurance Company    [—]   
Attention:    [—]    Facsimile:    [—]    in each case, with a copy to the
Parent:    American International Group, Inc.    80 Pine Street    New York, NY
10005

 

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   Attention: General Counsel    Facsimile: 212-425-2175    if to the
Indemnifying Party:    [—]    Attention:    [—]    Facsimile:    [—]    with a
copy to the Acquiror:    [—]    Attention:    [—]    Facsimile:    [—]

The failure of any party hereto to enforce any right or remedy hereunder, or to
promptly enforce any such right or remedy, shall not constitute a waiver thereof
nor give rise to any estoppel against such party nor excuse any of the parties
hereto from their respective obligations hereunder.

A separate right of action hereunder shall arise each time any Guarantor
acquires knowledge of any matter to be indemnified by the Indemnifying Party
under this Letter Agreement. Separate and successive actions may be brought
hereunder to enforce any of the provisions hereof at any time and from time to
time.

EACH PARTY TO THIS LETTERAGREEMENT ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS LETTER AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER AGREEMENT.

The parties agree that irreparable damage would occur in the event that any of
the terms or provisions of this Letter Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that, without posting a bond or other undertaking,
notwithstanding anything to the contrary contained in this Letter Agreement,
each of the parties hereto shall be entitled to injunctive or other equitable
relief to prevent breaches of this Letter Agreement and to enforce specifically
the terms and provisions hereof in any court having jurisdiction, such remedy
being in addition to any other remedy to which any party may be entitled at law
or in equity. In the event that any Action is brought in equity to enforce the
provisions of this Letter Agreement, no party will allege, and each party hereby
waives the defense or counterclaim, that there is an adequate remedy at law.

This Letter Agreement may be executed in several counterparts, each of which
when executed shall be deemed an original but all of which taken together shall
constitute one

 

F-4

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agreement, binding on all the parties hereto. Delivery of an executed
counterpart of a signature page of this Letter Agreement by facsimile or
electronic mail shall be as effective as delivery of a manually executed
counterpart of this Letter Agreement.

This Letter Agreement is entered into for the benefit of the Guarantors, the
Companies and the Transferred Subsidiaries, and executed and delivered, as of
the date first set forth above.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

 

F-5

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If the foregoing is acceptable to you, please sign where indicated below.
Executed as of the date first written above.

 

AMERICAN HOME ASSURANCE COMPANY

By:

 

 

Name:

 

Title:

 

LEXINGTON INSURANCE COMPANY

By:

 

 

Name:

 

Title:

 

AMERICAN INTERNATIONAL GROUP, INC.

By:

 

 

Name:

 

Title:

 

 

Accepted and Agreed as of the date first written above:

[ACQUIROR ENTITY]

By:

 

 

Name:

 

Title:

 

Acknowledged:

PRUDENTIAL FINANCIAL, INC.

By:

 

 

Name:

 

Title:

 

 

[Signature Page – Hold Harmless Agreement]

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EXHIBIT G

FORM OF PROVIDER LETTER AGREEMENT

American International Group, Inc.

80 Pine Street

New York, NY 10005

[Purchase Agreement Closing Date]

Prudential Financial, Inc.

751 Broad Street

Newark, NJ 07102

Ladies and Gentlemen:

We refer to that certain Stock Purchase Agreement, dated as of September 30,
2010 (the “Purchase Agreement”), between American International Group, Inc., a
Delaware corporation (the “Parent”) and Prudential Financial, Inc., a New Jersey
corporation (the “Acquiror”, “you” or “your”).

We also refer to that certain Transition Services Agreement, dated as of
[Purchase Agreement Closing Date] (the “Transition Services Agreement”), between
Parent and [Acquiror or Designated Acquiror].

Capitalized terms used in this letter agreement, if not otherwise defined
herein, shall have the meanings ascribed to them in the Purchase Agreement or
the Transition Services Agreement, as applicable.

In consideration of your agreement to enter into the Purchase Agreement and the
Transition Services Agreement, and to abide by your obligations thereunder,
[PROVIDER], a [—][corporation], (“we”, “us”, or “our”) hereby agree with you as
follows:

1. We shall abide by all covenants, undertake any transactions, and otherwise
perform our obligations as a Provider under the Transition Services Agreement.

2. This letter agreement shall terminate upon the termination of the Transition
Services Agreement in accordance with its terms. The provisions of this
Section 2 and Section 3 hereof and any of the other terms hereof with respect to
any provisions in the Transition Services Agreement that survive termination
thereof shall survive any termination of this letter agreement. Nothing herein
shall relieve any party hereto from any liability for the breach of any of the
agreements set forth in this letter agreement arising prior to such termination.

3. This letter agreement may not be amended, restated, supplemented or otherwise
modified, other than in a writing duly executed by the parties hereto. Any party
hereto may waive (in writing) the benefit of any provision of this letter
agreement with respect to itself for any purpose. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. The

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provisions of Article VII of the Transition Services Agreement (which shall be
deemed to apply to this letter agreement, and each of the parties hereto), are
incorporated herein by reference. This letter agreement shall be binding upon
and inure to the benefit of the parties hereto, and their respective heirs,
successors and permitted assigns.

4. We have full power and authority to enter into, consummate the transactions
contemplated by, and carry out our obligations under this letter agreement. The
execution and delivery of this letter agreement, our performance of our
obligations hereunder, and the consummation of the transactions contemplated by
this agreement have been duly authorized by the requisite limited liability
company, corporate, or similar organizational action. This letter agreement has
been duly executed and delivered by us. Assuming due authorization, execution
and delivery of this letter agreement by you, this letter agreement constitutes
a legal, valid, and binding obligation of ours, enforceable against us in
accordance with its terms, subject to the effect of any bankruptcy,
reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent
conveyance, preferential transfer, or similar Laws now or hereafter in effect
relating to or affecting creditors’ rights and remedies generally and subject,
as to enforceability, to the effect of general equitable principles (regardless
of whether enforcement is sought in a proceeding in equity or law.

This letter agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which counterparts when
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

 

G-2

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Please confirm that this letter agreement reflects our mutual understanding by
signing in the space provided below as of the date first written above.

 

Very truly yours,

 

[PROVIDER]

 

By:

 

 

 

Name:

   

Title:

 

 

Accepted and agreed as of the date first set forth above: PRUDENTIAL FINANCIAL,
INC. By:  

 

 

Name:

 

Title:

 

[Signature Page – Provider Letter Agreement – [Provider]]

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EXHIBIT H

DIRECTOR AND OFFICER INDEMNIFICATION POLICY

SECTION 1. DEFINITIONS.

For purposes of this Policy:

(1) “Person” means any person who is or was a director, officer or statutory
auditor of [•] (hereafter the “Company”).

(2) “Official Capacity” means:

(a) when used with respect to a director, the office of director in the Company;
and

(b) when used with respect to a person other than a director, the elective or
appointive office in the Company held by the officer or the employment or agency
relationship undertaken by the employee or agent on behalf of the Company, but

(c) in both paragraphs (a) and (b) does not include service for any other
foreign or domestic company or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise except to the
extent such service was at the request of the Company.

(3) “Proceeding” means any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, arbitrative, investigative,
or any appeal in such an action, suit, or proceeding.

(4) “Good Faith” means the Person acted in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Company, or, with
respect to any criminal action or proceeding, the Person had no reasonable cause
to believe his or her conduct was unlawful.

SECTION 2. STANDARD FOR INDEMNIFICATION.

The Company will indemnify a Person who was, is, or is threatened to be made a
named defendant or respondent in a Proceeding, by reason of the fact that such
Person was acting as a director or officer of the Company, against expenses
(including reasonable costs, disbursements and attorneys’ fees), judgments,
fines, penalties and amounts paid in settlement actually and reasonably incurred
by the Person in connection with the defense or settlement of such Proceeding
only if it is determined in accordance with Section 6 that the Person conducted
himself or herself in Good Faith.

SECTION 3. PROHIBITED INDEMNIFICATION.

A Person may not be indemnified under Section 2 in respect of any Proceeding in
which final adjudication adverse to such Person establishes that his or her acts
or omissions:

(1) resulted in receipt of an improper personal benefit, regardless of whether
the benefit resulted from an action taken in the Person’s Official Capacity; or

 

H-1

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(2) were in breach of his or her duty of loyalty to the Company. As used in this
subsection, breach of a Person’s duty of loyalty means an act or omission which
that person knows or believes to be contrary to the best interests of the
Company or its shareholders in connection with a matter in which he or she has a
material conflict of interest; or

(3) were not in Good Faith or involved a knowing violation of law.

In addition, a Person may not be indemnified under Section 2 in respect of any
Proceeding if indemnifying such Person would result in a violation of law.

SECTION 4. EFFECT OF TERMINATION OF PROCEEDING.

The termination of a Proceeding by judgment, order, settlement, or conviction,
or on a plea of no contest or its equivalent is not of itself determinative that
the Person did not meet the requirements set forth in Section 2.

SECTION 5. INDEMNIFICATION FOR A PROCEEDING BY OR ON BEHALF OF COMPANY.

Upon satisfying the standard for indemnification under Section 2, if the
Proceeding was brought by or on behalf of the Company, the indemnification will
be limited to expenses (including reasonable costs, disbursements and attorneys’
fees), judgments, fines, penalties and amounts paid in settlement actually and
reasonably incurred by the Person in connection with the defense or settlement
of such Proceeding. In addition, indemnification under this section is subject
to any additional restrictions or limitations as required by law or court order
with respect to a Proceeding by or on behalf of the Company.

SECTION 6. DETERMINATION OF INDEMNIFICATION.

A determination that indemnification of a Person is proper, and the Person has
met the applicable standard of conduct set forth in Section 2, or advancement of
expenses is appropriate pursuant to Section 7, must be made by the Chief Legal
Officer of the Company. In making any determination as to whether an
indemnification of a Person is proper, the Chief Legal Officer must first
consult with either the General Counsel of Prudential Financial, Inc. or the Law
Department of The Prudential Insurance Company of America, dependant upon the
following circumstances

(1) With respect to Persons that hold the title of either Chairman or President
of the Company or acts as the country president (i.e., the head of the business
in a given country) or its equivalent, or of higher rank, or if the amount to be
paid in indemnification to any Person exceeds the Japanese yen equivalent of
five hundred thousand dollars US ($ 500,000.00), prior consultation with the
General Counsel of Prudential Financial, Inc.; or

(2) With respect to all other determinations not required to be made pursuant to
(1) above, prior consultation with the Chief Legal Officer of the International
Law Department of The Prudential Insurance Company of America.

However, to the extent that a Person has been successful on the merits or
otherwise in the defense of a Proceeding, as described in Section 2 above, the
Company will indemnify such Person against expenses (including reasonable costs,
disbursements and attorneys’ fees) actually and reasonably incurred by him or
her in connection with such Proceeding without the necessity of a determination
as described in this Section 6.

 

H-2

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SECTION 7. ADVANCEMENT OF EXPENSES.

Reasonable expenses incurred by a Person defending or investigating a Proceeding
will be paid or reimbursed by the Company in advance of the final disposition of
the Proceeding (1) if it is more likely than not that the Person will meet the
standard for indemnification as set forth in Section 2, and (2) only after the
Company receives a written undertaking by or on behalf of the Person to repay
the amount paid or reimbursed if it is ultimately determined that he or she is
not entitled to be indemnified under this Policy; provided, however, the Person
may be required to cooperate with an investigation to be conducted at the
Company’s expense, by a law firm selected by the law department, and that such
law firm render an opinion that, based on its investigation, the firm has
concluded that it is more likely than not that the Person will meet the standard
for indemnification as set forth in Section 2 in connection with the Proceeding
for which advancements are sought.

SECTION 8. CONTINUATION OF INDEMNIFICATION.

The indemnification and advancement of expenses provided by this Policy will,
unless otherwise provided when determined, continue as to a Person who has
ceased to hold his or her position as a director, officer or statutory auditor,
and, in the event of the death of such director, officer or statutory auditor,
will inure to the benefit of his or her heirs, executors and administrators.

 

H-3

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Exhibit I

FORM OF AIGFAJ ARTICLES OF INCORPORATION

[Intentionally Omitted]

 

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Exhibit J

FORM OF EDISON ARTICLES OF INCORPORATION

[Intentionally Omitted]

 

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SCHEDULE I

LIST OF TRANSFERRED SUBSIDIARIES

 

Subsidiary

  

Owner

   Ownership Interest

Toho Shinyo Hosho Company

   Edison    100%

Capital System Service K.K.

   Star    100%

AIG Business Service K.K.

   Star    100%

CLIS K.K.

   Star    10%    Capital System Service K.K.    10%    AIG Business Service
K.K.    45%