Exhibit 10.1

 

 

 

TRANSITION SERVICES AGREEMENT

dated as of January 1, 2017

between

MetLife Services and Solutions, LLC

and Brighthouse Services, LLC

And for purposes of Article VIII only,

MetLife, Inc.

and

Brighthouse Financial, Inc.

 

 

 

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TABLE OF CONTENTS

Page

 

ARTICLE I DEFINITIONS      1  

Section 1.01.

    

Certain Defined Terms

     1  

ARTICLE II SERVICES AND ACCESS TO FACILITIES

     10  

Section 2.01.

    

Services

     10  

Section 2.02.

    

Access to Facilities

     11  

Section 2.03.

    

Omitted Services and Access to Omitted Facilities

     11  

Section 2.04.

    

Knowledge Transfer

     13  

Section 2.05.

    

Third-Party Vendor Services

     13  

Section 2.06.

    

Summary of Services and Access to Facilities

     14  

Section 2.07.

    

Resumed Services and Resumed Facilities

     14  

Section 2.08.

    

Exception to Obligation to Provide Services or Access to Facilities

     14  

Section 2.09.

    

Standard of the Provision of Services or Access to Facilities

     15  

Section 2.10.

    

Reports

     16  

Section 2.11.

    

Failure to Meet Standards for Services; Inability to Perform

     16  

Section 2.12.

    

Change in Services or Access to Facilities

     17  

Section 2.13.

    

Services and Access to Facilities Provided by Other Persons

     19  

Section 2.14.

    

Consents

     20  

Section 2.15.

    

Personnel

     21  

Section 2.16.

    

Cooperation

     21  

Section 2.17.

    

Security; Electronic and Other Access

     22  

Section 2.18.

    

No Agency

     24  

Section 2.19.

    

Ownership of Intellectual Property

     24  

Section 2.20.

    

Divestitures

     27  

Section 2.21.

    

Reorganization

     27  

Section 2.22.

    

Permits

     28  

Section 2.23.

    

Migration

     28  

Section 2.24.

    

Primary Points of Contact for this Agreement

     29  

Section 2.25.

    

TSA Records

     30  

 

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ARTICLE III COSTS AND DISBURSEMENTS      31  

Section 3.01.

    

Costs and Disbursements

     31  

Section 3.02.

    

No Right to Set-Off; Disputed Invoice Amounts

     33   ARTICLE IV WARRANTIES AND COMPLIANCE      34  

Section 4.01.

    

Disclaimer of Warranties

     34  

Section 4.02.

    

Compliance with Laws and Regulations

     34   ARTICLE V LIMITED LIABILITY AND INDEMNIFICATION      35  

Section 5.01.

    

Indemnification

     35  

Section 5.02.

    

Additional Limitations on Liability

     36  

Section 5.03.

    

Insurance

     39  

Section 5.04.

    

Procedures for Third-Party Claims

     39  

Section 5.05.

    

Indemnification Procedure other than for Third-Party Claims

     41  

Section 5.06.

    

Exclusive Remedy

     41   ARTICLE VI TERM AND TERMINATION      41  

Section 6.01.

    

Term and Termination

     41  

Section 6.02.

    

Termination Charges

     45  

Section 6.03.

    

Effect of Termination

     46  

Section 6.04.

    

Force Majeure

     47   ARTICLE VII GENERAL PROVISIONS      48  

Section 7.01.

    

Treatment of Confidential Information

     48  

Section 7.02.

    

Security Incidents

     51  

Section 7.03.

    

Notices

     52  

Section 7.04.

    

Severability

     53  

Section 7.05.

    

Entire Agreement

     53  

Section 7.06.

    

Assignment

     54  

Section 7.07.

    

No Third-Party Beneficiaries

     54  

Section 7.08.

    

Amendment; Waiver

     54  

Section 7.09.

    

Dispute Resolution

     54  

Section 7.10.

    

Governing Law

     55  

Section 7.11.

    

Rules of Construction

     55  

Section 7.12.

    

Obligations of Parties

     56  

 

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Section 7.13.

    

Counterparts

     56  

ARTICLE VIII OBLIGATIONS OF PARENT AND BHF

     57  

Section 8.01.

    

Obligations of Parent

     57  

Section 8.02.

     Obligations of BHF      57  

 

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EXHIBIT/SCHEDULE LIST

 

Exhibit/Schedule No.

 

Exhibit/Schedule Name

Exhibit 1   The Company Group Schedule 2.01-1   Company Received Services
Schedule 2.01-2   MSS Received Services Schedule 2.02-1   Company Received
Facilities Schedule 2.02-2   MSS Received Facilities Schedule 2.03(b) -1  
Services and Facilities MSS Has No Obligation to Provide Schedule 2.03(b)-2  
Services and Facilities the Company Has No Obligation to Provide
Schedule 2.03(c)-1   Services and Facilities MSS Has No Obligation to Provide
Post-Separation Schedule 2.03(c)-2   Services and Facilities the Company Has No
Obligation to Provide Post-Separation Schedule 2.03(d)-1   Services and
Facilities MSS Has No Obligation to Provide Post-Disaffiliation
Schedule 2.03(d)-2   Services and Facilities the Company Has No Obligation to
Provide Post-Disaffiliation Schedule 2.06   Summary of Services and Access to
Facilities Schedule 2.12(d)   Policy Administration Changes for 2017
Schedule 3.01(b)   Agreed Price

 

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TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this “Agreement”), dated and effective as of
January 1, 2017 (the “Effective Date”), is entered into by and between MetLife
Services and Solutions, LLC, a Delaware limited liability company (“MSS”), and
Brighthouse Services, LLC, a Delaware limited liability company (the “Company”),
and for purposes of Article VIII only, among MetLife, Inc., a corporation
organized under the laws of Delaware (the “Parent”) and Brighthouse Financial,
Inc., a corporation organized under the laws of Delaware (“BHF”).

RECITALS

WHEREAS, the Parent directly owns a one hundred percent (100%) interest in BHF;

WHEREAS, the Parties anticipate that some or all of the Shares will be
distributed to shareholders and/or sold in one or more offerings (“Separation”);

WHEREAS, the Parties anticipate that the Company Entities will no longer be
Affiliates of the Parent Group at some point in time (“Disaffiliation”); and

WHEREAS, in connection with the Separation and Disaffiliation (which may or may
not be the same day), MSS shall provide or cause to be provided to the Company
Group Members, and the Company shall provide or cause to be provided to the
Parent Group, certain services, access to facilities, equipment, software and
other assistance on a transitional basis commencing on the Effective Date 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) The following capitalized terms used in this Agreement have the meanings set
forth below:

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

“Affiliate” (and, with a correlative meaning, “affiliated”) means, with respect
to any Person, any other Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such first Person; provided, however, that from and after the Disaffiliation
Date, no member of the Company Group shall be deemed an Affiliate of any member
of the MetLife Group for purposes of this Agreement and no

 

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member of the MetLife Group shall be deemed an Affiliate of any member of the
Company Group for purposes of this Agreement. For purposes of this definition,
“control” (including with correlative meanings, “controlled by” and “under
common control with”) of a Person means the power to, directly or indirectly,
direct or cause the direction of the management and policies of such Person or
the power to appoint and remove a majority of the members of the board of
directors, whether through the ownership of voting securities or other ownership
interests, by contract or otherwise, including, with respect to a corporation,
partnership or limited liability company, the direct or indirect ownership of
more than fifty percent (50%) of the voting securities of such corporation or
the voting interest of such partnership or limited liability company.

“Agreed Price” has the meaning set forth in Schedule 3.01(b).

“Agreed Service Fee” has the meaning set forth in Schedule 3.01(b).

“Agreed Term” has the meaning set forth in Section 6.01(a).

“Agreement” has the meaning set forth in the Preamble.

“Applicable Rate Card” has the meaning set forth in Schedule 3.01(b).

“BHF” has the meaning set forth in the Preamble.

“Breakage” means the loss or gain resulting from an administrative transaction
involving a variable Insurance Contract for which the accumulation unit value on
the actual process date of the transaction is different from the accumulation
unit value on the date on which the transaction should have been processed under
applicable federal securities Laws.

“Business Day” means any day, other than a Saturday, Sunday or other day on
which banks located in the State of New York are authorized or required to
close.

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

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

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

“Commitment” has the meaning set forth in Section 2.08.

“Company” has the meaning set forth in the Preamble.

“Company Contract Manager” has the meaning set forth in Section 2.24(a)(i).

“Company Group” means the Company and the entities set forth on Exhibit 1; and
“Company Group Member” means any of the Company Group.

“Company Indemnified Parties” has the meaning set forth in Section 5.01(a).

“Company Indemnitors” has the meaning set forth in Section 5.01(b).

 

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“Company Received Omitted Facilities” has the meaning set forth in
Section 2.03(a).

“Company Received Omitted Services” has the meaning set forth in
Section 2.03(a).

“Company Received Facilities” has the meaning set forth in Section 2.02.

“Company Received Services” has the meaning set forth in Section 2.01.

“Company Work Product” has the meaning set forth in Section 2.19(b).

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

“Contract Managers” means the Company Contract Manager and the MSS Contract
Manager.

“Copyrights” means copyrights and copyrightable works, mask work rights,
database rights and design rights, whether or not registered, published or
unpublished, and registrations and applications for registration thereof and all
rights therein whether provided by international treaties or conventions or
otherwise.

“Covered Party” means the holder of an individual Insurance Contract (e.g., an
individual insured), the holder of a group Insurance Contract (e.g., an employer
or other entity or individual who holds a group Insurance Contract covering one
or more individuals) or an individual who is covered under a group Insurance
Contract, including the insured, annuitant, owner, payor, payee or beneficiary
under the Insurance Contract.

“Disaffiliation” has the meaning set forth in the Recitals.

“Disaffiliation Date” means the first date on which the Company Entities are no
longer Affiliates of Parent.

“Dispute” has the meaning set forth in Section 7.09(a).

“Effective Date” means January 1, 2017.

“Enabling Changes Anticipated Spend” has the meaning set forth in
Section 2.12(d).

“EP Amount” means an amount that would not have been paid or payable to (i) a
Covered Party, (ii) an insurance producer authorized by a Company Group Member
or a Parent Group Member, as applicable, to market, solicit, sell or negotiate
Insurance Contracts, or (iii) a Person claiming to be any of the foregoing, if
the relevant Provider had performed the applicable Services in accordance with
such Provider’s procedures, including: (a) insurance claims payments based upon
an Insurance Contract paid by a Provider to a Person other than the beneficiary
listed in such Insurance Contract; (b) loan proceeds based upon an Insurance
Contract paid by a Provider to a Person other than the owner listed in such
Insurance Contract; (c) surrenders or withdrawals based upon an Insurance
Contract paid by a Provider to a Person other than the owner of such Insurance
Contract; and (d) overpayments made to any Person in connection with a claim,
loan, surrender or withdrawal.

 

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“Extended Scheduled Term” has the meaning set forth in Section 6.01(a).

“Facilities” means the Scheduled Facilities, the Omitted Facilities, and the
Resumed Facilities.

“Force Majeure” means, with respect to a Party, an event (a) 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 Entities (including bank Effective Dates and
seizures and 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 (b) 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.

“Fully Burdened Cost” has the meaning set forth in Schedule 3.01(b).

“Governmental Entity” means any federal, state, local, domestic or foreign
agency, court, tribunal, regulatory or administrative body, arbitration panel,
department or other legislative, judicial, governmental, quasi-governmental
entity or self-regulatory organization (including FINRA) with competent
jurisdiction.

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

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996.

“Indemnified Party” means either a Company Indemnified Party or a MSS
Indemnified Party.

“Indemnitor” means a Party providing an indemnity hereunder pursuant to ARTICLE
V.

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

“Inspection” has the meaning set forth in Section 2.25(b).

“Insurance Contract” means a Company Group Member or a Parent Group Member, as
applicable, insurance policy or annuity contract, including certificates or any
other document confirming coverage, whether a stand-alone individual policy or a
group policy, and whether originally issued by the Company Group Member or
Parent Group Member or acquired by such Company Group Member or Parent Group
Member by assumption, transfer of ownership, reinsurance, coinsurance or
otherwise.

 

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“Intellectual Property” means all of the following, whether protected, created
or arising under the laws of the United States or any other foreign
jurisdiction, including: (i) patents, patent applications (along with all
patents issuing thereon), statutory invention registrations, divisions,
continuations, continuations-in-part, substitute applications of the foregoing
and any extensions, reissues, restorations and reexaminations thereof, and all
rights therein provided by international treaties or conventions;
(ii) trademarks, service marks, trademark and service mark applications and
registrations, trade names, service names, taglines, slogans, industrial
designs, brand names, brand marks, trade dress, identifying symbols, logos,
emblems, signs or insignia, monograms, domain names, domain name locators, meta
tags, website search terms and key words, and other identifiers of source,
including all goodwill associated therewith, and any and all common law rights,
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; (iii) Copyrights; (iv) trade secrets,
know-how, and other confidential and proprietary information including
confidential or proprietary data contained in databases, and confidential or
proprietary customer lists; (v) domain names and social media accounts; and
(vi) all other applications and registrations related to any of the intellectual
property rights set forth in the foregoing clauses (i) – (v) above.

“Interest Rate” means, on any date, two percent (2%) plus the “effective”
federal funds rates reported in the “Money Rates” section of the Eastern Edition
of The Wall Street Journal published for such date (or, if the “effective”
federal funds rate is not so reported on such date, on the immediately preceding
date for which such “effective” federal funds rate was so reported).

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

“Law” means, with respect to any Person, any statute, law, principle of common
law, code, treaty, ordinance, rule or regulation of any Governmental Entity,
including Privacy Laws.

“Licensee” has the meaning set forth in Section 2.19(a).

“Long-Term Data Access Agreement” means that certain letter agreement to be
entered into between MSS and the Company related to the process by which they
will agree to provide access to certain commingled information.

“Losses” means any actual loss, liability, claim, charge, action, suit,
proceeding, assessed interest, penalty, damage, Tax or expense.

“Master Separation Agreement” means that certain agreement to be entered into
between Parent and BHF, which will govern the parties’ relationship with respect
to operations as a result of the Separation.

“Migration Services” has the meaning set forth in Section 2.23(a).

“MSS” has the meaning set forth in the Preamble.

“MSS Contract Manager” has the meaning set forth in Section 2.24(a)(ii).

 

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“MSS Indemnified Parties” has the meaning set forth in Section 5.01(b).

“MSS Indemnitors” has the meaning set forth in Section 5.01(a).

“MSS Received Facilities” has the meaning set forth in Section 2.02.

“MSS Received Omitted Facilities” has the meaning set forth in Section 2.03(a).

“MSS Received Omitted Services” has the meaning set forth in Section 2.03(a).

“MSS Received Services” has the meaning set forth in Section 2.01.

“MSS Work Product” has the meaning set forth in Section 2.19(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 System or data so threatened.

“Notice of Claim” has the meaning set forth in Section 5.04(a).

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

“Omitted Facilities” has the meaning set forth in Section 2.03(a).

“Omitted Services” has the meaning set forth in Section 2.03(a).

“Overhead Cost” has the meaning set forth in Schedule 3.01(b).

“Panorama Related Services” has the meaning set forth in Section 6.01(e).

“Parent” has the meaning set forth in the Preamble.

“Parent Group” means the Parent and its Affiliates, including MSS but excluding
the Company Group; and “Parent Group Member” means any of the Parent Group.

“Party” means (i) other than for purposes of Article VIII, MSS and the Company
individually, and, in each case, their respective successors and permitted
assigns, and (ii) for purposes of Article VIII, Parent and BHF, their respective
successors and permitted assigns. “Parties” means (i) other than for purposes of
Article VIII, MSS and the Company collectively, and, in each case, their
respective successors and permitted assigns, and (ii) for purposes of Article
VIII, Parent and BHF, their respective successors and permitted assigns.

“Pass-Through Charges” has the meaning set forth in Section 3.01(c).

“Peanuts Characters” means the “Peanuts” cartoon characters licensed to
Metropolitan Life Insurance Company by Peanuts Worldwide LLC.

“Permits” has the meaning set forth in Section 2.22.

 

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“Person” means any natural person, corporation, trust, estate, general
partnership, limited partnership, limited liability company, proprietorship,
other business organization or Governmental Entity or other legal entity.

“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 Entity, (ii) the
fact that an individual has a relationship with such 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.

“PHI” or “Protected Health Information” means individually identifiable
information that is transmitted or maintained in any medium and relates to the
past, present or future physical or mental health or condition of an individual;
the provision of health care to an individual; or future payment for the
provision of health care to the individual. PHI includes demographic information
about individuals, including names, addresses, dates directly related to an
individual, including birth date, telephone numbers, fax numbers, e-mail
addresses, Social Security numbers, policy numbers, medical record numbers,
account numbers, and any other unique identifying number, characteristic, or
code. For purposes of this Agreement, PHI is limited to information related to
an individual who has or has had a long term care insurance policy or other
health care plan or product offered by or through one of the Parties or its
Affiliates.

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

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

 

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“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); regulatory policies,
guidelines (including guidelines published by a Governmental Entity 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.

“Project Panorama II” has the meaning set forth in Section 6.01(f).

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

“Provider Cost” has the meaning set forth in Schedule 3.01(b).

“Provider Work Product” has the meaning set forth in Section 2.19(d).

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

“Reports” has the meaning set forth in Section 2.10.

“Representative” means any officer, director, employee, auditor, accountant or
attorney of a Person.

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

“Required Technology” has the meaning set forth in Section 2.17(c).

“Resumed Facilities” has the meaning set forth in Section 2.07.

“Resumed Services” has the meaning set forth in Section 2.07.

“Sales Taxes” has the meaning set forth in Section 3.01(e)(i).

“Scheduled Facilities” has the meaning set forth in Section 2.02.

“Scheduled Service Charges” has the meaning set forth in Section 3.01(a).

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

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

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

“Security Regulations” has the meaning set forth in Section 2.17(c).

 

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“Separation” has the meaning set forth in the Recitals.

“Separation Date” means the date of the first distribution or sale of Shares to
the public.

“Service Charge” has the meaning set forth in Section 3.01(b).

“Services” means the Scheduled Services, the Omitted Services, the Third-Party
Vendor Services, the Knowledge Transfer Services, the Migration Services, and
the Resumed Services.

“Service Shortfall” has 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 Effective Date in contemplation of (a) providing
any Omitted Service or access to any Omitted Facility to a Recipient, which
costs are solely necessary to make changes to such service or access to such
facility as it was provided by such Provider to such Recipient during the
Pre-Effective Date Period, (b) as a result of a Change required by applicable
Law, made in response to a New Security Threat, or made or requested by such
Recipient which Change would affect the provision or receipt of the Service or
access to the Facility or (c) providing Resumed Services or access to any
Resumed Facility to a Recipient, which costs are solely necessary to make
changes to such service or access to such facility as it was provided by such
Provider to such Recipient before Recipient terminated such service or access to
such facility. For the avoidance of doubt, (i) to the extent any Set-Up Costs
include Pass-Through Charges for Acquired Resources, the provisions of
Section 6.03(c) shall apply and (ii) the costs of actually providing a Service
or access to a Facility shall be excluded from Set-Up Costs.

“Shares” means the authorized capital stock of BHF.

“Systems” means (a) 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, and back-ups of all the foregoing, (b) computer-based resources
(including third Person services, e-mail and access to computer networks,
databases and equipment), and (c) all other information technology, whether
tangible or intangible, infrastructure including interfacing infrastructure,
databases and related facilities.

“Tax” or “Taxes” means any federal, state, local, or foreign income, franchise,
profits, gross receipts, capital base, withholding, ad valorem, personal
property (tangible and intangible), employment, payroll, sales and use, Social
Security, disability, occupation, real property, real property transfer,
severance, excise and any other taxes or surcharges imposed by a taxing
authority, including any related interest, penalties, or addition thereto.

“Third-Party Claim” has the meaning set forth in Section 5.04(a).

“Third-Party Consents” has the meaning set forth in Section 2.14.

“Third-Party Defense” has the meaning set forth in Section 5.04(b).

 

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“Third-Party Vendors” means those unaffiliated third-Persons who are Providers
hereunder as of the Effective Date.

“Third-Party Vendor Services” has the meaning set forth in Section 2.05.

“TPA Services” has the meaning set forth in Section 2.01(b).

“Transaction Document” means any agreement between a Company Group Member and a
Parent Group Member in contemplation of Separation or Disaffiliation, including
the Master Separation Agreement, the Long-Term Data Access Agreement and any
other Transaction Document as defined in the Master Separation Agreement.

“TSA Broker-Dealer Services” has the meaning set forth in Section 2.01(c).

“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” has the meaning set forth in Section 2.19(b). All Work Product is
Company Work Product, MSS Work Product or Provider Work Product.

ARTICLE II

SERVICES AND ACCESS TO FACILITIES

Section 2.01. Services.

(a) On the terms and subject to the conditions set forth in this Agreement, from
and after the Effective Date and for the periods set forth in Schedule 2.01-1,
subject to Section 6.01, MSS shall provide or cause to be provided to the
Company Group the services set forth in Schedule 2.01-1 (collectively with any
Company Received Omitted Services, the “Company Received Services”). On the
terms and subject to the conditions set forth in this Agreement, from and after
the Effective Date and for the periods set forth in Schedule 2.01-2, subject to
Section 6.01, the Company shall provide or cause to be provided to the Parent
Group the services set forth in Schedule 2.01-2 (collectively with any MSS
Received Omitted Services, the “MSS Received Services”, and collectively with
the Company Received Services, the “Scheduled Services”).

(b) For services on or after the Separation Date that require the Provider to be
licensed as a third-party administrator under the applicable insurance laws that
require a license for the administration of insurance business by a party other
than the applicable insurance company writing such insurance business (“TPA
Services”), the Parties intend that the applicable

 

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insurance company and a Provider that is licensed to provide TPA Services as
required under applicable insurance law will enter into one or more separate
agreements that will set forth additional rights and obligations of such parties
with respect to such TPA Services. All charges for TPA Services provided under
any such agreement for TPA Services are included within the charges for policy
administration Services and will be paid pursuant to the terms of this
Agreement. To the extent of any inconsistency between the terms of any separate
agreement for TPA Services and the terms of this Agreement, the separate
agreement for TPA Services will control with respect to TPA Services.

(c) On or after the date that a subsidiary of BHF is a FINRA registered
broker-dealer, for any Services performed by MSS and its Affiliates that require
performance by a registered broker-dealer or its registered associated persons
on behalf of such subsidiary (the “TSA Broker-Dealer Services”), the Parties
intend that the BHF subsidiary broker-dealer and a MSS Affiliate that is also a
FINRA registered broker-dealer will enter into one or more separate agreements
that will set forth additional rights and obligations of such parties with
respect to such TSA Broker-Dealer Services. All charges for TSA Broker-Dealer
Services provided under any such agreement are included within the charges for
policy administration Services and will be paid pursuant to the terms of this
Agreement, except with respect to any registration and continuing education fees
paid to third parties for registered associated persons involved in providing
the TSA Broker-Dealer Services to the extent such costs are not included in the
charges hereunder (and also excluding any charges for services that are not TSA
Broker-Dealer Services). To the extent of any inconsistency between the terms of
any separate agreement for TSA Broker-Dealer Services and the terms of this
Agreement, the separate agreement for TSA Broker-Dealer Services will control
with respect to TSA Broker-Dealer Services.                

Section 2.02. Access to Facilities. On the terms and subject to the conditions
set forth in this Agreement, from and after the Effective Date and for the
periods set forth in Schedule 2.02-1, subject to Section 6.01, MSS shall provide
or cause to be provided to the Company Group access to the facilities and
Systems set forth in Schedule 2.02-1 (collectively with any Company Received
Omitted Facilities, the “Company Received Facilities”). On the terms and subject
to the conditions set forth in this Agreement, from and after the Effective Date
and for the periods set forth in Schedule 2.02-2, subject to Section 6.01, the
Company shall provide or cause to be provided to the Parent Group access to the
facilities and Systems set forth in Schedule 2.02-2 (collectively with any MSS
Received Omitted Facilities, the “MSS Received Facilities”, and collectively
with the Company Received Facilities, the “Scheduled Facilities”).

Section 2.03. Omitted Services and Access to Omitted Facilities.

(a) Any services or access to facilities or Systems not agreed upon in a
Schedule but provided during the Pre-Effective Date Period by a Parent Group
Member to a Company Group Member, or by a Company Group Member to a Parent Group
Member, can be requested in writing until the date that is one hundred twenty
(120) days after the Disaffiliation Date by a Party to this Agreement upon
reasonable notice to the other Party’s applicable service manager and Contract
Manager in accordance with Section 7.03(a); provided, that a service or access
to a facility or System provided only on a periodic basis not agreed upon in a
Schedule but provided during the Pre-Effective Date Period by a Parent Group
Member to a Company Group Member, or by a Company Group Member to a Parent Group
Member, can be so

 

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requested until the later of the date that is (x) one hundred twenty (120) days
after the Disaffiliation Date or (y) after the Disaffiliation Date, forty-five
(45) days after the date that such service or access to such facility or System
should have been provided by a Party to this Agreement if it were a Scheduled
Service or Scheduled Facility (e.g., 45 days after the first calendar year end
if the service was only provided at calendar year end). Upon receipt of such
notice, within a commercially reasonable period of time under the circumstances,
(I) MSS shall provide or cause to be provided to the Company Group such
additional services (the “Company Received Omitted Services”) and access to such
additional facilities and Systems (the “Company Received Omitted Facilities”),
and (II) the Company shall provide or cause to be provided to the Parent Group
such additional services (the “MSS Received Omitted Services”, and collectively
with the Company Received Omitted Services, the “Omitted Services”) and access
to such additional facilities and Systems (the “MSS Received Omitted
Facilities”, and collectively with the Company Received Omitted Facilities, the
“Omitted Facilities”), in each case (x) only to the extent such Provider owns or
has access on commercially reasonable terms to the assets and resources
necessary to provide such Omitted Services and access to Omitted Facilities, and
(y) on the terms and conditions (other than price) as were applicable to such
services or access to such facilities and Systems prior to the Effective Date
for a term determined pursuant to Section 6.01 and with any applicable Set-Up
Costs and any termination charges, determined pursuant to Section 6.02, which
price, terms and charges shall be (1) proposed in writing by the applicable
Provider within five (5) Business Days of the request from the applicable
Recipient for such Omitted Services or Omitted Facilities, or such longer time
as the Contract Managers may agree, and (2) agreed by the Parties on or about
the time the Provider begins to provide such Omitted Services or access to such
Omitted Facility. If the Parties fail to reach agreement on the amount of the
Agreed Price, Initial Scheduled Term, Extended Scheduled 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 Omitted Service or access to Omitted
Facilities. In the event a Provider does not provide an Omitted Service or
access to an Omitted Facility pursuant to the immediately preceding clause (x),
such Provider shall provide commercially reasonable alternative arrangements
reasonably acceptable to the applicable Recipient for the provision of such
Omitted Service or access to such Omitted Facility consistent with existing
service levels and the standards set forth in Section 2.09 and all out-of-pocket
costs related thereto shall be equally split between MSS and the Company. The
applicable Schedule 2.01-1, Schedule 2.01-2, Schedule 2.02-1 or Schedule 2.02-2
shall be deemed amended to include the Omitted Services and access to Omitted
Facilities (along with the Agreed Price, Initial Scheduled Term, and termination
charges, if any), which shall be provided in accordance with the terms and
conditions of this Agreement and the Omitted Services shall be deemed to be
Scheduled Services hereunder and the Omitted Facilities shall be deemed to be
Scheduled Facilities hereunder. Notwithstanding the foregoing, nothing in this
Section 2.03(a) shall require a Provider to retain any personnel, to maintain
any facilities or systems or to take, or refrain from taking, any other action
not otherwise expressly required hereunder.

(b) Notwithstanding anything to the contrary set forth herein, (i) MSS shall
have no obligation to provide the services or access to the facilities set forth
on Schedule 2.03(b)-1, (ii) the Company shall have no obligation to provide the
services or access to the facilities set forth on Schedule 2.03(b)-2, (iii) MSS
shall have no obligation to provide business-related services in connection with
a particular function or work stream for which, in accordance

 

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with Schedule 2.01-1, MSS is only providing IT support or for which MSS is only
providing access to facilities or Systems in accordance with Schedule 2.02-1,
and (iv) the Company shall have no obligation to provide business-related
services in connection with a particular function or work stream for which, in
accordance with Schedule 2.01-2, the Company is only providing IT support or for
which the Company is only providing access to facilities or Systems in
accordance with Schedule 2.02-2.

(c) Notwithstanding anything to the contrary set forth herein, following the
Separation Date, (i) MSS shall have no obligation to provide the Company
Received Services or access to the Company Received Facilities set forth on
Schedule 2.03(c)-1, and (ii) the Company shall have no obligation to provide the
MSS Received Services or access to the MSS Received Facilities set forth on
Schedule 2.03(c)-2.

(d) Notwithstanding anything to the contrary set forth herein, as of the
Disaffiliation Date, (i) MSS shall have no obligation to provide the Company
Received Services or access to the Company Received Facilities set forth on
Schedule 2.03(d)-1 and (ii) the Company shall have no obligation to provide the
MSS Received Services or access to the MSS Received Facilities set forth on
Schedule 2.03(d)-2.

Section 2.04. Knowledge Transfer. Each Party shall provide or cause its
Affiliates to provide, upon the reasonable request of the other Party, (a) the
knowledge transfer with respect to the MSS Received Services, the Company
Received Services, the MSS Received Facilities and the Company Received
Facilities respectively and (b) knowledge transfer (i) in the case of MSS, to
assist the Company Group in the migration and integration of the Company
Received Services and use of the Company Received Facilities and (ii) in the
case of the Company, to assist the Parent Group in the migration and integration
of the MSS Received Services and use of the MSS Received Facilities
(collectively, “Knowledge Transfer Services”). Knowledge Transfer Services shall
not be provided after the date that is 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 a facility that was provided during the Pre-Effective Date Period that
will not be provided hereunder following the Effective Date, thirty (30) days
following the Effective Date), except to the extent that the applicable
Recipient requests a longer period of time for such Knowledge Transfer Services
and the applicable Provider consents, such consent not to be unreasonably
withheld, conditioned or delayed. For Knowledge Transfer Services for a
particular Service or associated Facility that will exceed 40 hours in the
aggregate, such Knowledge Transfer Services will be provided at the Agreed
Price. For the avoidance of doubt, the termination of any or all Knowledge
Transfer Services as contemplated in the immediately preceding sentence shall
not affect any of the services and activities contemplated in connection with
any cooperation between the parties with respect to litigation matters.

Section 2.05. Third-Party Vendor Services. Upon the Company’s reasonable written
request, MSS and the Parent Group shall cooperate in the Company’s negotiation
for a direct agreement with any Third-Party Vendor (such negotiation and related
activity, “Third-Party Vendor Services”); provided, however, that MSS and the
Parent Group shall not be required to materially amend any contract, pay any
material amount of consideration or otherwise enter into any material
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 Service is being used.

 

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Section 2.06. Summary of Services and Access to Facilities. Schedule 2.06 sets
forth at a summary level the Services and Access to Facilities as set forth on
Schedule 2.01-1, Schedule 2.01-2, Schedule 2.02-1 and Schedule 2.02-2 as of the
Effective Date along with estimates of duration for such Services and Access to
Facilities. Immediately prior to the Separation Date, the Contract Managers
shall confer and shall make any revisions to the estimates of durations for such
Services and Access to Facilities as to which the Parties agree. Schedule 2.06
is not intended to and does not alter Schedule 2.01-1, Schedule 2.01-2, Schedule
2.02-1 and Schedule 2.02-2 nor does Schedule 2.06 create additional obligations
beyond what is set forth on Schedule 2.01-1, Schedule 2.01-2, Schedule 2.02-1
and Schedule 2.02-2. In the event of any conflict between Schedule 2.06, on the
one hand, and any of Schedule 2.01-1, Schedule 2.01-2, Schedule 2.02-1 or
Schedule 2.02-2 on the other hand, the descriptions and durations on of Schedule
2.01-1, Schedule 2.01-2, Schedule 2.02-1 or Schedule 2.02-2 shall control.

Section 2.07. Resumed Services and Resumed Facilities. 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), such Recipient concludes that such
Service or access to such Facility is still needed, the applicable Party, on
behalf of such Recipient, shall so notify the other Party, on behalf of the
applicable Provider, in writing, and such Provider shall promptly resume
providing such Service or access to such Facility, if commercially reasonable
and technologically feasible, which determination shall include consideration of
any increased expenses for Provider that cannot be or are not passed on to
Recipient (such resumed Services, the “Resumed Services” and such resumed access
to Facilities, the “Resumed Facilities”). The Recipient shall be responsible for
the Agreed Price, related Pass-Through Charges and any Set-Up Costs of Provider
associated with resuming such Services or access to such Facilities, and to the
extent practicable, such Provider shall provide such Recipient with an estimate
(with reasonably supportive detail) of such Agreed Price, Pass-Through Charges
and Set-Up Costs 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 or access to a
Facility in anticipation of or preparation for the possibility of such Service
or access being resumed pursuant to this Section 2.07. For the avoidance of
doubt, (a) no Service or access to a Facility resumed pursuant to this
Section 2.07 shall extend the term of such Service or access to such Facility
beyond the Scheduled Term thereof and (b) the Set-Up Costs may include
incremental increases in Provider commitments to third parties that shall be
solely borne by Recipient regardless of whether the duration of the Resumed
Service is shorter than the increased commitment to the third party.

Section 2.08. Exception to Obligation to Provide Services or Access to
Facilities. Notwithstanding anything to the contrary contained herein, no
Provider shall be obligated to (and no Party shall be obligated to cause any
Provider to) provide, or continue 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 documented
commitment to customers (“Commitment”); (c) result in the disclosure of
information subject to any applicable

 

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privileges (including the attorney-client or similar privilege), or (d) be used
by or for any line of business, or other material asset acquired by, assumed or
otherwise transferred to, such other Party following the Effective Date;
provided, however, that (i) the foregoing limitation with respect to agreements,
licenses and Commitments shall only apply to any such agreement, license or
Commitment entered into with an unaffiliated third party prior to the Effective
Date (each, a “Pre-Signing Agreement”) and Provider shall promptly notify
Recipient of any Service or access to any Facility affected thereby; (ii) with
respect to (a) and (b) above, Provider shall use commercially reasonable efforts
to obtain or cause to be obtained Third-Party Consents such that the Services or
access to the Facilities might be provided, or continue to be provided, without
violation of Law or any agreement, license or Commitment, including as of the
Disaffiliation Date, if applicable; (iii) with respect to (a), (b) and
(c) above, Provider shall (x) make any commercially reasonable changes with
respect to such Services or access to such Facilities such that they might be
provided, or continue to be provided, without violation of Law or any agreement,
license or Commitment, or disclosure of information subject to applicable
privileges (which changes, for the avoidance of doubt, shall be deemed to be
Required Changes), (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
(z) continue to be obligated to provide such Service or access to such 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; and
(iv) with respect to (d) above, the Recipient may request a Change to a Service
or access to a Facility in order for such Service or Facility to be used by or
for any line of business, or other material asset acquired by, assumed or
otherwise transferred to, the Recipient, and that such Provider will consider
such Change Request as contemplated in Section 2.12(b). 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 2.14.

Section 2.09. Standard of the Provision of Services or Access to Facilities.
Each Provider shall provide the Services, access to the Facilities and other
services and rights hereunder: (a) in accordance with applicable Law and with
such 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 such Facilities
during the Pre-Effective Date Period, to the extent applicable, (c) in a
competent and workmanlike manner, (d) as if such Provider were performing such
services for itself or its Affiliates, and (e) if applicable, in accordance with
the service levels identified on Schedule 2.01-1 or Schedule 2.01-2. In
instances where such Services or access to such Facilities were provided in
accordance with service level agreements or targets in effect during the
Pre-Effective Date Period, the Provider shall promptly provide the Recipient
with copies of the applicable service level agreements or targets in the event
of a written notice by such 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. If service or systems enhancements related to any Service or
access to any Facility (“Enhancements”) were performed at no additional cost to
Recipient during the Pre-Effective Date Period, Provider will continue to
provide such Enhancements to Recipient at no additional cost after the Effective
Date; provided, however, that with respect to any Enhancement, if Provider also
provides such Enhancement to one or more of its Affiliates and begins charging
such Affiliates an additional amount for such Enhancement, Recipient’s pro rata
portion of such

 

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additional amount shall be added to the Agreed Service Fee or Agreed Price, as
applicable, for the relevant Service or access to the relevant Facility. In
determining whether a Provider has complied with Section 2.09(b), the Parties
shall consider the timing of the delivery of the Service or access to the
Facility, the form of the deliverables resulting from the Service, the existing
obligations of the Recipient known to Provider with respect to third parties
(including regulators) in connection with the Service or deliverables resulting
from the Service, whether any Change or Enhancement has been made to the Service
or access to Facility, whether there has been a material change in the volume of
the Service and whether certain related services have been migrated to the
Recipient, its Affiliates or a third party.

Section 2.10. Reports. Each Provider shall provide to its corresponding
Recipient the same reports that it provided during the Pre-Effective Date Period
(subject to any limitations under contract, privilege or Law applicable upon
Disaffiliation) with respect to the Company Received Services, the MSS Received
Services, the access to Company Received Facilities and the access to the MSS
Received Facilities in the same form and at the same times as provided during
the Pre-Effective Date 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 Contract Manager, on behalf of a Party or its Affiliate that is a
Recipient, provides the applicable service manager of a Provider and the other
Party’s Contract Manager with a written notice of any purported failure to meet
any standard of the Services or access to the Facilities required by this
Agreement resulting in timing or quality of performance of any Service falling
materially below the standard set forth in Section 2.09 (“Service Shortfall”),
as determined by such Recipient and the applicable Contract Manager in good
faith, and if the other Party’s Contract Manager agrees that a Service Shortfall
exists, then the applicable Provider shall promptly rectify such failure at its
own expense, using commercially reasonable efforts. Any disagreement as to
whether a Service Shortfall has occurred or otherwise relating to any Service
Shortfall that is not promptly rectified to the Recipient’s reasonable
satisfaction shall be rapidly and timely escalated and resolved in accordance
with Section 7.09(a)(i) on an expedited basis. A failure to meet the service
level for a particular Service or portion of a Service for which a service level
is identified pursuant to Section 2.09(e) three (3) times in any six (6) month
period shall automatically be deemed a Service Shortfall; provided that where
any Service Shortfall arises from a failure to meet a services level pursuant to
Section 2.09(e) and such failure is due to a material change in the volume of
the Service, the issue shall be immediately escalated to the members of senior
management under Section 7.09(a) to address the Service Shortfall and the change
in volume. In no event will a Service Shortfall be the basis for any service
credits, financial penalties or other additional liability as between the
Parties (but excluding Losses payable to a third party in accordance with and
subject to ARTICLE V).    For the avoidance of doubt, the procedures set forth
in Section 7.09 shall be the exclusive procedures for determining disputes
regarding Service Shortfalls and any remedies for such Service Shortfalls.

 

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(b) To the extent that any Provider fails to provide, or fails to timely
provide, any Service or access to any Facility as required hereunder 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
the Recipient (even if such failure to provide a Service or access to a Facility
is excused by Force Majeure pursuant to Section 6.04), then such Recipient and
its Affiliates shall have no obligations or liability hereunder or under any
other Transaction Document for failure to meet their obligations hereunder or
under any other Transaction Document to the extent such failure by such
Recipient or its Affiliates is primarily attributable to the 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 such Recipient or its Affiliates
to resume fulfilling such obligations hereunder or under the other applicable
Transaction Documents.

Section 2.12. Change in Services or Access to Facilities.

(a) Subject to Section 2.09, a Provider may, from time to time, reasonably add,
supplement, modify, substitute or otherwise alter (“Change”) the Services and
access to the Facilities provided by it in a manner that does not (i) adversely
affect in any material respect (x) the quality or availability of such Services
or access to such Facilities or (y) with respect to Changes made by a Provider
that are not pursuant to a Change Request from a Recipient, the liability or
risk associated with receiving the applicable Services or access to the
Facilities, or (ii) increase the cost to the 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, the Provider
shall provide such Recipient with reasonable advance written notice to the
applicable service manager and Contract Manager of the implementation of the
Change.

(b) The Contract Manager, on behalf of a Party or its Affiliate that is a
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 (“Change Request”). The
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 the applicable Contract Manager with a written proposal (“Change Request
Proposal”), prepared at the Agreed Price at such Recipient’s expense. The
Provider, the Recipient and both Contract Managers shall then use commercially
reasonable efforts to negotiate in good faith reasonably practicable terms for
implementing the proposed Change, including the estimated time and price of
implementing the proposed Change (including any Set-Up Costs and Third-Party
Consents necessary to implement the proposed Change) and any potential impact of
the proposed Change on then-existing Services or access to Facilities. If the
Parties agree in writing upon a Change Request Proposal or a written variation
thereof, the Schedules (if applicable) shall be deemed amended to include the
terms and conditions of such agreed-upon Change Request (including the Agreed
Price for such Change and any related Pass-Through Charges and any modifications
to the Service Charge or to the Agreed Price and related Pass-Through Charges
for such Service or access to such Facility on account thereof).

(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 the Contract Manager for the Party or its
Affiliate that is the Recipient of the applicable Services or access to
Facilities of such Provider, any and all changes to the Services or the access
to the Facilities necessary to comply with applicable Law and any changes
thereto

 

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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 reasonable advance written notice to the applicable service
manager and Contract Manager for such Recipient 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 Set-Up Costs and Pass-Through Charges
incurred by such Provider in making any Required Changes and shall pay any
incremental Agreed Price and related Pass-Through Charges incurred by such
Provider in providing the Services or providing access to the Facilities after
implementation of the Required Change. The Recipient shall 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
Recipient, the Parties shall share on a pro rata basis in the Agreed Price and
related Set-Up Costs and Pass-Through Charges incurred by the Provider in making
any Required Change, the incremental Agreed Price and related Pass-Through
Charges incurred by such Provider in providing the Services after implementation
of the Required Change and the benefits of any incremental reduction in the
Agreed Price enjoyed by such 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.

(d) Notwithstanding the foregoing, Schedule 2.12(d) sets forth (1) the project
based Changes that the Parties currently anticipate that MSS will need to make
for the Company in 2017 relating to enabling functions to policy administration
related Services, including policy administration systems, related systems and
operations, (2) whether, for each Change thereon, such Change will be treated as
a Required Change and (3) the anticipated actual spend for such Changes (the
“Enabling Changes Anticipated Spend”). The actual charges will be determined
using the existing MSS/MetLife full-time employee rates then in effect in
addition to any applicable third-party costs. During the calendar year, the
Company will be invoiced on a monthly basis in accordance with Section 3.01 at
1/12 of the Enabling Changes Anticipated Spend, unless the Parties mutually
agree otherwise in writing. MSS shall provide monthly reports in a format
mutually agreed to by the Contract Managers showing the actual spend as compared
to the Enabling Changes Anticipated Spend. In the first month of the following
calendar year, MSS and the Company will reconcile the Enabling Changes
Anticipated Spend and the actual spend and any difference from the Enabling
Changes Anticipated Spend shall be invoiced and paid by or credited to the
Company as the case may be; provided that regardless of the actual spend, the
Company must pay for (A) no less than 90%, and no more than 110%, of the IT
component of the Enabling Changes Anticipated Spend and (B) no less than 100%,
and no more than 110%, of the non-IT component of the Enabling Changes
Anticipated Spend, in each case unless the Contract Managers otherwise agree in
writing. For the avoidance of doubt, if the work that MSS performs is going to
exceed 110% of the IT component of the Enabling Changes Anticipated Spend or
110% of the non-IT component of the Enabling Changes Anticipated Spend on an
annual basis, then it will confer with the Company and shall (x) not undertake
the work that will cause the maximum to be exceeded, (y) cease work once the
maximum is equaled or (z) exceed the maximum only with the written approval of
the Company and the Company will pay for any overage in excess of the maximum as
may be agreed upon by the Contract Managers in writing.

 

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(i) From time to time during a calendar year, the Parties may agree to modify
the contents of Schedule 2.12(d) but in no event shall the annual amount that
the Company is obligated to pay fall below 90%, of the IT component of the
Enabling Changes Anticipated Spend and 100% of the non-IT component of the
Enabling Changes Anticipated Spend. Such modification of Schedule 2.12(d) (A)
will require the mutual consent of the Contract Managers and (B) may include the
reallocation of the resources that would be used for such Changes for work in
connection with data migration, the charges for which shall be calculated in the
same manner as set forth in the second sentence of Section 2.12(d) and which
charges shall count towards the Company’s fulfilment of the Enabling Changes
Anticipated Spend. Any disputes in connection with such modification of Schedule
2.12(d), including whether a Change should be a Required Change, shall be timely
escalated and resolved in accordance with Section 7.09(a)(i).

(ii) For each year that MSS will provide to the Company enabling functions to
policy administration related Services hereunder, the Parties will meet and
revise Schedule 2.12(d) for the such year by no later than September 1 of the
previous year (including revising the Enabling Changes Anticipated Spend for the
upcoming year) and the Contract Managers will approve the revisions; provided,
that MSS will be required to provide Changes that constitute “BAU” (business as
usual) enabling functions (e.g., functional maintenance, operational
enhancements and regulatory requirements) for the duration of time that MSS
provides policy administration related Services to the Company; provided
further, that MSS will have no obligation to provide Changes that constitute
“discretionary” enabling functions (e.g., anything other than BAU enabling
functions, including any new product development work) after December 31, 2018.

(iii) Notwithstanding any other provision of this Agreement, including
Section 6.01, the Company may only cease receiving the Changes under this
Section 2.12(d) and cease paying the monthly portion of the applicable Enabling
Changes Anticipated Spend upon the Company giving MSS six (6) months’ prior
written notice of termination of receipt of such Changes (for the avoidance of
doubt, the Changes may continue through such six (6) month period).

Section 2.13. Services and Access to Facilities Provided by Other Persons. Any
Provider may cause any Person, including any Affiliate of such Provider, to
provide any Service or access to any Facility or any portion thereof; provided,
however, that such Person and all Services or access to Facilities provided by
such Person shall be subject to confidentiality provisions substantially similar
to those herein and to the terms and conditions set forth herein, including
service standards, and that MSS or the Company, as the Provider, 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 such Provider shall provide the
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 such Person shall be subject to the other
Party’s prior written consent, which consent shall not be

 

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unreasonably withheld, conditioned or delayed, but no consent shall be needed if
such Person (a) is an Affiliate of the Provider, either as of the date hereof or
as of the date such engagement occurs, or (b) provided the same or similar
Services or access to Facilities to either the Parent Group or the Company
Group, as the case may be, during the Pre-Effective Date Period, or (c) is
providing the Services or access to the Facilities after the Effective Date to a
Recipient and concurrently providing similar Services or access to Facilities to
an Affiliate of the Provider. MSS or the Company, as the case may be, shall
cause any such Person that is an Affiliate of MSS or the Company, as applicable,
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. Each Party shall obtain, or shall cause its Affiliates
and Persons providing the Services or providing access to the Facilities on its
behalf to obtain, any consents, licenses or approvals of any third party or
Governmental Entity (“Third-Party Consents”) necessary for: (a) the Services to
be provided to and received by the applicable Recipient; (b) the access to
Facilities to be provided to and received by the applicable Recipient; and
(c) the applicable Recipient to use any deliverables (including Work Product)
provided in connection therewith. In connection with the foregoing, such Party
shall, or shall cause its Affiliates or Persons to, use commercially reasonable
efforts to obtain any such necessary Third-Party Consent from any Person that is
not an Affiliate of such Party. In the event such Third-Party Consents are not
obtained, such Party shall, or shall cause its Affiliates or Persons to, provide
commercially reasonable alternative arrangements reasonably acceptable to the
applicable Recipient for the provision of such Services or access to such
Facilities consistent with existing service levels and the standards set forth
in Section 2.09. MSS shall bear all out-of-pocket costs of Third-Party Consents
with respect to the Scheduled Services and access to the Scheduled Facilities
(other than Omitted Services and Omitted Facilities). All out-of-pocket costs of
Third-Party Consents with respect to the Omitted Services and access to Omitted
Facilities and of providing such acceptable alternative arrangements with
respect to the Scheduled Services, access to the Scheduled Facilities, Omitted
Services and access to Omitted Facilities shall be equally split between MSS and
the Company except as otherwise set forth in Section 2.08. Notwithstanding the
foregoing, the applicable Recipient shall bear the costs of any Third-Party
Consents for Knowledge Transfer Services, Third-Party Vendor Services, Migration
Services, Resumed Facilities, Resumed Services, Changes made pursuant to a
Change Request, and term extensions pursuant to Section 6.01(a); 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). The Parties shall use
commercially reasonably efforts to cooperate in obtaining Third-Party Consents;
provided that the Party with the relationship with the applicable vendor or
Governmental Entity shall control all communications and negotiations with such
vendor or Governmental Entity with respect to the Third-Party Consent sought to
be obtained.

 

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Section 2.15. Personnel.

(a) MSS or the Company, as the case may be, 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, such 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; provided, however, that any such removal or replacement
shall not be the basis for any Service Charge payable hereunder or relieve the
Provider of its obligations to provide any Service or access to any Facility
hereunder. Subject to Section 2.09, nothing in this Agreement shall obligate a
Provider (or MSS or the Company, as the case may be, 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 Effective Date 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, 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. The Recipient of
any Service shall not have the ability to request that any Service be performed
by a particular employee of the Provider, and the Provider will use best efforts
to ensure that any Service is not provided by any employee of Provider on a
substantially full time basis.

Section 2.16. Cooperation.

(a) Each Party shall perform all obligations hereunder 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: (i) 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 access to the Facilities
or security and work with the other Party to minimize the effect of such
circumstances; (ii) each Party shall timely provide information and
documentation reasonably requested by the other Party to be used in the
provision or receipt of the Services and access to the Facilities hereunder; and
(iii) each Recipient and its Affiliates shall use commercially reasonable
efforts to (A) cooperate with the applicable Provider and its Affiliates with
respect to the provision of any Service and access to any Facility and
(B) 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 costs of a Provider’s
providing any of the Services or access to any of the Facilities without the
consent of the Provider, such consent not to be unreasonably withheld,
conditioned or delayed. In addition, each Recipient shall comply with any
restrictions in the applicable licenses and agreements that the applicable
Provider has with third parties that are used in the provision of Services of
which the Recipient is made aware of by the Provider.

 

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(b) In furtherance of such cooperation, the Parties shall work together to
create procedural documentation for those Services and such access to Facilities
as requested by the applicable Recipient to assist such Recipient in receiving
such Services and access to Facilities; provided that such documentation shall
not establish service levels pursuant to Section 2.09(e) or otherwise under this
Agreement; and provided further that if the creation of such documentation for a
particular Service or access to a Facility exceeds 40 hours in the aggregate,
such documentation will be provided as a Knowledge Transfer Service at the
Agreed Price.

Section 2.17. 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 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 action with the foregoing (ii) for any
Change requested by a Recipient other than a Required Change.

(b) As of the Disaffiliation Date, except as provided herein or agreed to in
writing by the Parties, each Party and its affiliated Recipients shall cease to
use and shall have no further access to, and the other Party and the Providers
shall have no obligation to provide or otherwise make available, any Systems,
whether owned, licensed, leased or used by such other Party and/or the
Providers, whether or not such resources require a password or are available on
a secured access basis or on a non-secured access basis.

(c) Notwithstanding anything to the contrary set forth herein (including in the
Schedules) or in the Long-Term Data Access Agreement, to the extent that (i) the
performance or receipt of the Services or access to the Facilities hereunder
requires any Party or its affiliated or third-party Providers to have access to
Systems owned, licensed, leased or used by the other Party or its Affiliates or
(ii) the Parties mutually agree that a Party or one or more of its Affiliates
otherwise has a business need for access to Systems owned, licensed, leased or
used by the other Party or its Affiliates (such Systems described in (i) and
(ii), “Required Technology”), the Party owning, licensing, leasing or using such
Required Technology shall use its commercially reasonable efforts to provide, or
to cause to be provided, access to such Required Technology in accordance with
applicable Law and subject to its policies and procedures (including those
related to security, use, access, Virus protection, disaster recovery,
confidentiality, privacy, and Processing of Personally Identifiable
Information), as they may be amended from time to time (the “Security
Regulations”). The Party accessing such Required Technology shall, and shall
cause its Affiliates and all of its and its Affiliates’ respective personnel
having access to the Required Technology to (1) comply with all Security
Regulations that are applicable to the relevant Service, Facility and/or
Required Technology, provided that such Security Regulations were in effect at
the time of such access and are made known to the Party seeking access prior to
such access; (2) not tamper with, compromise or circumvent any security or audit
measures employed by the Person whose Required Technology is being accessed;
(3) execute separate access agreements and/or business associate agreements,
upon commercially reasonable terms, with the Person whose Required Technology is
being accessed; (4) ensure that only those users who are specifically authorized
by the Person whose Required Technology is being accessed gain access to the
Required Technology, and that each such user accesses only that information

 

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for which such user has a business need to access; and (5) 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,
and shall not include privileged or higher level access rights or rights to
functionality, unless otherwise agreed to in writing by the Parties.

(d) While the 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 Affiliates and other
Providers 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 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
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.

(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 2.17 or any breach of the Security
Regulations or unauthorized access to Personally Identifiable Information, the
Required Technology, Facilities or other Systems of the other Party 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 the 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.

 

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(h) Each Provider shall use the same level of effort and services as used or
caused to be used, to recover or recreate such Provider’s own lost data prior to
the Effective 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 such Provider’s negligence, at such
Provider’s cost. In addition, each Provider shall, at the reasonable request of
the 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 2.18. 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 2.19. Ownership of Intellectual Property.

(a) Except as otherwise expressly provided herein, each of MSS and the Company
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 hereunder by
MSS, the Company 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 MSS and the Company, for itself and on behalf of
their respective Affiliates, hereby grants to the other (and their respective
Affiliates) a non-exclusive, fully paid up, royalty-free, world-wide, 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 that is provided by the granting Party to the other Party (“Licensee”)
in connection with this Agreement, 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 shall terminate; provided, however, that 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 MSS, the Company or their respective
Affiliates. For the avoidance of doubt, as of the Disaffiliation Date, the
Company Group shall have no rights to use the Peanuts Characters.

(b) All right, title and interest (including Intellectual Property rights) in
the results and proceeds of the Services performed hereunder and access to the
Facilities, including all materials, products, reports, computer programs
(source or object code), documentation, deliverables and inventions developed or
prepared by the Provider in performance of such services (the “Work Product”)
that is created exclusively on behalf of the Company or the

 

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Company Group (subject to Section 2.19(a)), including without limitation the
results and proceeds from the Company Received Services and the access to
Company Received Facilities (the “Company Work Product”) shall be owned
exclusively by the Company (as between the Company and the other Company Group
Members, on the one hand, and MSS and the other Parent Group Members on the
other), in whatever stage of completion such Company Work Product may exist from
time to time. All such Company Work Product shall be considered “works made for
hire” (within the meaning of the United States Copyright Law) of the Company. In
the event such Company Work Product is for any reason or in any jurisdiction
determined not to be “works made for hire” or that title to any such Company
Work Product may not vest in the Company or the other Company Group Members by
operation of applicable Law or otherwise, then MSS hereby assigns and shall
cause its Affiliates or applicable Providers to irrevocably assign all worldwide
right, title and interest (including Copyrights) in such Company Work Product to
the Company, and the Company shall reimburse MSS for its and the other Parent
Group Members’ expenses related to such actions, including the Hourly Rate for
time spent if more than a de minimis amount of time is spent on such actions.
All such Company Work Product, where practicable, shall bear the Company’s
Copyright and trademark notices, as specified by the Company, and the Company
shall reimburse MSS for its and the other Parent Group Members’ expenses related
to such actions, including Hourly Rate for time spent if more than a de minimis
amount of time is spent on such actions. No rights to Company Work Product
hereunder shall remain with the Parent Group following the end of the term.

(c) All right, title and interest (including Intellectual Property rights) in
Work Product that is created for the exclusive use of MSS and the Parent Group
(subject to Section 2.19(a)), including without limitation the results and
proceeds from the MSS Received Services and the access to the MSS Received
Facilities (the “MSS Work Product”) shall belong exclusively to MSS (as between
MSS and the Parent Group, on the one hand, and the Company and the other Company
Group Members on the other), in whatever stage of completion such MSS Work
Product may exist from time to time. All such MSS Work Product shall be
considered “works made for hire” (within the meaning of the United States
Copyright Law) of MSS. In the event such MSS Work Product is for any reason or
in any jurisdiction determined not to be “works made for hire” or that title to
any such MSS Work Product may not vest in MSS or the other Parent Group Members
by operation of applicable Law or otherwise, then the Company hereby assigns and
shall cause its applicable Providers to irrevocably assign all worldwide right,
title and interest (including Copyrights) in such MSS Work Product to MSS, and
MSS shall reimburse the Company for its and the other Company Group Members’
expenses related to such actions, including Hourly Rate for time spent if more
than a de minimis amount of time is spent on such actions. All such MSS Work
Product, where practicable, shall bear MSS’s Copyright and trademark notices, as
specified by MSS, and MSS shall reimburse the Company for its and the other
Company Group Members’ expenses related to such actions, including Hourly Rate
for time spent if more than a de minimis amount of time is spent on such
actions. No rights to the MSS Work Product shall remain hereunder with the
Company Group following the end of the term.

(d) All right, title and interest (including Intellectual Property rights) in
Work Product that is created hereunder and that is neither Company Work Product
nor the MSS Work Product shall belong to the Provider that created such Work
Product (the “Provider Work Product”) (as between such Provider and its
Affiliates, on the one hand, and the Recipient and its

 

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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 the Provider or its Affiliates by operation of
applicable Law or otherwise, then each Party, as the 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 applicable Party or
Parties for any and all expenses related to such actions, including Hourly Rate
for time spent if more than a de minimis amount of time is spent on such
actions. Each Recipient shall have a non-exclusive, fully paid-up, royalty-free,
transferable, worldwide, perpetual and irrevocable license for the 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.

(e) If a Provider hereunder that is not an Affiliate of either MSS or the
Company entered into agreements with the Parent Group or the Company Group prior
to the Effective Date, which agreements allocate title in work product to such
Provider or another third-party, then MSS or the Company, as applicable, shall
use commercially reasonable efforts to obtain for the applicable Recipient at
such Recipient’s expense, (i) in the case of Work Product to be owned by such
Recipient pursuant to Sections 2.19(b) or 2.19(c), a non-exclusive, fully
paid-up, royalty-free, transferable, worldwide, perpetual and irrevocable
license for such 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 the Provider pursuant to Sections 2.19(b) or 2.19(c), a
non-exclusive, fully paid-up, royalty-free, non-transferable, worldwide license
to use the work product in accordance with Section 2.19(a). In the event that
such licenses cannot be obtained, MSS or the Company, as applicable, shall use
commercially reasonable efforts to obtain an alternative at the relevant
Recipient’s expense.

(f) Each Party, as Provider, and its Affiliates shall, and shall take
commercially reasonable steps to cause non-Affiliate Providers acting on such
Party’s behalf to, (i) promptly provide each Recipient with written notice to
the applicable service manager and the Contract Manager of any restrictions,
terms and conditions on the Recipient’s rights in Work Product otherwise owned
by such Recipient (arising solely from third-party rights, and not rights of the
Provider or its Affiliates) and (ii) use commercially reasonable efforts, in
consultation with such Recipient, to remove or minimize such restrictions, terms
and conditions.

(g) During the term of this Agreement, the Provider shall make reasonable
efforts to provide the Recipient, upon such Recipient’s request, with access to
and delivery of the Work Product owned by such Recipient.

(h) Except as otherwise expressly provided herein or in any other Transaction
Document, as of the Disaffiliation Date, 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 Document 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 2.19.

 

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Section 2.20. Divestitures.

(a) If a Party sells or divests any Affiliate that provides the Services or
access to the Facilities hereunder or assets that are used to provide the
Services or access to the Facilities hereunder, such Party shall use
commercially reasonable efforts to provide, or cause the sold or divested
Affiliate or another Person to provide, for the continuity of the Services and
access to the 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 a Party sells or divests any Affiliate that receives the Services or
access to the Facilities hereunder, the other Party shall use commercially
reasonable efforts to provide and shall cause its Affiliates to use commercially
reasonable efforts to provide for continuity of the Services and access to the
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 to
the extent so requested by the transferee; provided that the Party providing, or
causing to be provided, the Services or access to the Facilities shall not be
required to incur any material additional costs or to make any material change
to the manner in which such other Party provides such Services and access to
such Facilities; provided, further, that the selling or divesting Party shall
remain responsible for all payment and other obligations hereunder with respect
to such Services and access to such Facilities.

Section 2.21. Reorganization. In the event that the Company Group internally
restructure, reorganize or transfer the business receiving the Services or
access to the Facilities hereunder to an Affiliate, MSS 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 MSS shall not be required to incur any material additional
costs or to make any material change to the manner in which MSS provides such
Services or access to such Facilities. In the event that the Parent Group
internally restructure, reorganize or transfer the businesses receiving the
Services or access to the Facilities hereunder to an Affiliate, the Company
shall be obligated to continue to provide, or cause to be provided, such
Services or access to such 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 Company shall not be
required to incur any material additional costs or to make any material change
to the manner in which the Company provides such Services or access to such
Facilities.

 

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Section 2.22. Permits.

(a) Each Party represents and warrants to the other Party that they and any of
their Affiliates that are Providers through which they provide a Service have
all material licenses, permits, rights and approvals of Governmental Entities
(“Permits”) necessary to provide such Service.

(b) Each Party shall be responsible for and bear the costs of keeping in force
all Permits necessary for such Party or its applicable Affiliates to provide the
applicable Services until the expiration of the respective Scheduled Term or
Extended Scheduled Term for such Service.

Section 2.23. Migration.

(a) The Parties shall use, and 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 Company Group
and their businesses from the Parent Group and their businesses, 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 (including
minimizing the financial impact of any volume or other discounts with
Third-Party Vendors). In furtherance thereof, to the extent that the Parties
have not already done so prior to the Effective 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 (“Migration Services”), (ii) agree upon the terms of such Provider
providing such Migration Services and (iii) agree to a schedule pursuant to
which the Migration Services are to be completed. The Migration Services shall
terminate on the date which is no later than three (3) months after the last
date of any Scheduled Term or Extended Scheduled Term with respect to any
Service or access to a Facility hereunder; provided that, upon request by the
Recipient for an extension of such period, the relevant Provider shall use its
commercially reasonable efforts to continue to provide such Migration Services
for an additional period of time as mutually agreed between the Parties, but
only to the extent such Provider continues to own or have access on commercially
reasonable terms to the assets and resources necessary to provide such Migration
Services. 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.

(b) The Parties acknowledge that Migration Services may include the provision of
services requested by a Contract Manager, on behalf of a Party or its Affiliate
that is 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.

 

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Section 2.24. 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 Company as the primary point of operational
contact pursuant to this Section 2.24(a) (the “Company Contract Manager shall
have overall operational responsibility for coordinating, on behalf of the
Company, all activities undertaken by the Company Group and their
Representatives hereunder, including the performance of the relevant Company
Group’ obligations, the coordination of the provision of the services and access
to the facilities with the relevant Parent Group, acting as a day-to-day contact
with the MSS Contract Manager, and making available to the Parent Group the
data, facilities, resources and other support services from the Company Group
required for the Parent Group to be able to provide the services and access to
the facilities in accordance with the terms of this Agreement. The Company may
replace the Company Contract Manager with an employee or officer with comparable
knowledge, expertise and decision-making authority from time to time upon
written notice to MSS pursuant to Section 7.03(b). The Company shall use
commercially reasonable efforts to provide at least 30 days prior written notice
of any such change, or for a shorter period of time, the amount of notice
reasonable under the circumstances.

(ii) The individual appointed by MSS as the primary point of operational contact
pursuant to this Section 2.24(a) (the “MSS Contract Manager” shall have overall
operational responsibility for coordinating, on behalf of MSS, all activities
undertaken by the Parent Group and their Representatives hereunder, including
the performance of the relevant Parent Group’ obligations, the coordination of
the provision of the services and access to the facilities with the relevant
Company Group, acting as a day-to-day contact with the Company Contract Manager
and making available to the Company Group the data, facilities, resources and
other support services from the Parent Group required for the Company Group to
be able to provide the services and access to the facilities in accordance with
the terms of this Agreement. MSS may replace the MSS Contract Manager with an
employee or officer with comparable knowledge, expertise and decision-making
authority from time to time upon written notice to the Company pursuant to
Section 7.03(b). MSS shall use commercially reasonable efforts to provide at
least 30 days prior written notice of any such change, or for a shorter period
of time, the amount of notice reasonable under the circumstances.

(iii) In addition to the responsibilities set forth in Section 2.24(a)(i) and
Section 2.24(a)(ii) and Section 7.09(a), the Contract Managers shall have the
authority to approve in writing modifications to the Services, access to the
Facilities, the terms on which the foregoing are provided and the Schedules.

(b) Unless otherwise mutually agreed between the Contract Managers, the Parties
shall ensure that the MSS Contract Manager and the Company Contract Manager meet
at least weekly, in person or telephonically, during the term of this Agreement.
In addition, at least once per quarter during the term of this Agreement, the
Contract Managers and the senior executives designated by the Parties shall meet
to discuss this Agreement and any issues arising hereunder.

 

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Section 2.25. TSA Records.

(a) During the term (including, if applicable, any extended term) of any Service
or access to any Facility and for a period thereafter equal to the greatest of
(i) any additional period required by applicable Law, (ii) any additional period
required by the Provider’s record retention policies that are provided to the
Recipient and (iii) six (6) months, MSS and the Company shall each maintain, and
shall use commercially reasonable efforts to cause their respective 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 MSS, the Company 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 the Contract Manager of a Recipient
for the purpose of verifying invoices submitted to such Recipient and/or any
Provider’s performance of Services, or by a Governmental Entity acting pursuant
to applicable Law, the Party acting as the Provider shall cause each applicable
Provider to permit at reasonable times and from time to time, but in no event
more than one inspection per calendar year, by such Recipient and/or its
external auditors (an “Inspection”) wherein such Provider shall (i) make books
and records concerning the calculation of any fees or Taxes, the performance of
the Services or access to the Facilities provided pursuant to this Agreement
(including IT infrastructure and general IT controls) and/or the invoices
submitted to MSS or the Company or its Affiliate which is a Recipient, available
for inspection by such Person(s) as such Recipient designates as its authorized
Representative(s) and (ii) give such 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 in any material respect of
the business operations of such Provider. There shall only be one Inspection per
year calendar, unless additional inspections are necessary to respond to a
regulatory or court demand, or are required under applicable Law; provided that
if an Inspection begun in a calendar year continues into the next calendar year,
such Inspection shall not count as the Inspection for the second year. The
Provider shall reasonably cooperate with the Recipient in terms of providing
access to information and people as is necessary for the Recipient to meet its
audit obligations, including the Recipient’s obligations to comply with a
request from a Governmental Entity. Notwithstanding the foregoing, the right of
Inspection under this Section 2.25(b) is subordinate to the Scheduled Services
for internal audit services and neither Party shall be entitled to an Inspection
to the extent that the same audit service has been conducted as a Scheduled
Service in the year at issue.

(c) Following the Separation Date, if it is determined pursuant to the dispute
resolution process in Section 7.09 or any arbitration proceeding between the
Parties, or the Parties otherwise agree (in mediation or otherwise), (i) that an
Inspection has revealed that a Provider has overcharged a Party or its
Affiliates for the Services or access to the Facilities, the Party acting as
Provider shall credit (or, if the applicable Provider has ceased providing the
Services or access to the Facilities, shall refund) promptly, the Party acting
as the Recipient or its Affiliate which is a Recipient for the amount of the
overcharge plus interest thereon calculated from the date of payment of the
overcharge using the applicable Interest Rate and (ii) that an

 

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Inspection has revealed that a Provider has undercharged a Party or its
Affiliates for the Services or access to the Facilities, the Party acting as the
Recipient or its Affiliate which is a Recipient for the amount of the
undercharge shall promptly pay the difference between the undercharge and the
amount that should have been charged. The costs and expenses incurred by the
Recipient, Provider and their respective Affiliates in connection with an
Inspection shall be borne by such Recipient.

(d) Following the Separation Date, to the extent that an Inspection identifies
any material deficiencies or issues (other than in connection with overcharges
or undercharges, which are addressed in Section 2.25(c)), such deficiencies or
issues shall be referred to the Contract Managers and, if necessary, resolved
pursuant to Section 7.09.

(e) Following the Disaffiliation Date, any issues with respect to the migration
and delivery of records under this Section 2.25 shall be handled in accordance
with the provisions of the Master Separation Agreement regarding Records and
Non-Records (as those terms are defined therein).

ARTICLE III

COSTS AND DISBURSEMENTS

Section 3.01. Costs and Disbursements.

As consideration for providing the Services and access to the Facilities:

(a) Scheduled Service Charges: Except as otherwise set forth on the applicable
Schedule, (i) the Company shall cause the Recipient of any Service set forth in
Schedule 2.01-1 or access to any Facility set forth in Schedule 2.02-1 to pay to
the applicable Provider the monthly portion of the annual amount specified next
to such Service or Facility in the applicable Schedule, and (ii) MSS shall cause
the Recipient of any Service set forth in Schedule 2.01-2 or access to any
Facility set forth in Schedule 2.02-2 to pay to the applicable Provider the
monthly portion of the annual amount specified next to such Service or Facility
in the applicable Schedule (with respect to a Service or Facility, the
“Scheduled Service Charge” for such Service or Facility) and any charges in
connection with any Changes thereto (including, for clarity, any minimum spend
agreed to pursuant to Section 2.12(d)); provided, however, that beginning on
January 1, 2018, and each subsequent January 1 thereafter during the term of
this Agreement, the Scheduled Service Charges (exclusive of any Pass-Through
Charges included therein) will be increased by 3% for the then-upcoming twelve
(12)-month period.

(b) Other Service Charges: For each Knowledge Transfer Service, Third-Party
Vendor Service, Migration Service, Resumed Facility, and Resumed Service, MSS or
the Company, as applicable, shall cause the Recipient to pay to the applicable
Provider an amount equal to the Agreed Price for such service or facility (such
amounts, together with Scheduled Service Charges, “Service Charges”); provided,
however, that there shall be no charge for de minimis Knowledge Transfer
Services (which, by way of example, includes meetings (without travel by the
Provider) or phone calls, in each case of thirty (30) minutes or less in
duration).

 

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(c) Pass-Through Charges: Except as otherwise set forth on the applicable
Schedule, in addition to any Service Charges, MSS or the Company, as applicable,
shall cause the Recipient to pay to the Provider actual out-of-pocket costs and
expenses paid to any unaffiliated third Person (less any Sales Tax recoverable
by such Provider or any of its Affiliates), incurred by a Provider or its
Affiliates in the provision of any Service or access to any Facility
(collectively, “Pass-Through Charges”) including Pass-Through Charges specified
on Schedule 2.01-1, Schedule 2.01-2, Schedule 2.02-1 or Schedule 2.02-2 (if any)
or otherwise agreed to in writing by the Parties; provided that (a) any such
cost that is materially inconsistent with historical practice and applicable
only to the Recipient (as compared with a cost applicable to both Provider and
Recipient) shall not be incurred without the prior written approval of the
applicable Recipient and (b) all travel expenses that are included as a
Pass-Through Charge shall only be reimbursed in accordance with such Recipient’s
travel policies previously provided in writing to the Provider. Pass-Through
Charges in excess of $50,000 for a single expense shall not be incurred without
the prior written approval of the applicable Recipient (but excluding any
Pass-Through Charges that are variable charges already included in Schedule
2.01-1, Schedule 2.01-2, Schedule 2.02-1 or Schedule 2.02-2, for which approval
is deemed given); provided that if such Recipient does not approve the
incurrence of such expense, MSS and the Company shall discuss in good faith
commercially reasonable alternatives to the incurrence of such expense; and
provided, further that if MSS and the Company do not agree to a commercially
reasonable alternative to the incurrence of such expense and such 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
Company or MSS in accordance with Section 7.03(b), as the case may be, and the
applicable Contract Manager, unless, during such fifteen (15) Business Day
period, such Recipient approves the incurrence of such expense.

(d) Invoices: Invoices for Service Charges and Pass-Through Charges for each
Recipient shall be invoiced to the Party that is such Recipient’s Affiliate
(e.g., all charges for an Affiliate of the Company shall be invoiced to the
Company). Each month’s Service Charges and Pass-Through Charges for each
Recipient shall be 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) from the applicable Party on behalf of all of its Providers that
are Affiliates and submitted in electronic format to the Person at MSS or the
Company, as the case may be, 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 U.S.
dollars, unless otherwise required by applicable Law, otherwise designated in
the applicable Schedule, or otherwise agreed to by the Parties in writing. The
applicable Party issuing the invoice shall do so by the fifth (5th) Business Day
following the end of a month and the Party receiving the invoice shall pay all
amounts set forth in such invoice and not disputed pursuant to Section 3.02 via
electronic funds transfer (instructions to be separately provided), by the last
Business Day in the month in which its Contract Manager received the invoice.
The Parties acknowledge that there may be a lag with respect to charges from
third-party vendors that provide or support a Service or access to a Facility;
the applicable Party issuing the invoice shall use commercially reasonable
efforts to include such third-party vendor charges promptly on the next invoice
to the applicable Party following receipt of documentation from the third-party
vendor of such charges.

 

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(e) Sales Tax Matters:

(i) Notwithstanding any provision to the contrary, all consideration paid
hereunder is exclusive of any sales, transfer, goods or services tax, or similar
gross-receipts-based Tax (including any such Taxes that are required to be
withheld, but excluding all other Taxes, including Taxes based upon or
calculated by reference to net income, gain or capital) imposed against or on
services provided (“Sales Taxes”) by a Provider hereunder and such Sales Taxes
shall be added to the consideration to be paid to a Provider where applicable.
The Parties shall cooperate in good faith to determine and to minimize the
amount of such Sales Taxes, including either Party providing reasonable
documentation that is necessary to evidencing an exemption from or reduced
liability for such Sales Taxes. To the extent practicable, the relevant invoice
submitted to the Recipient shall (a) state such Sales Taxes separately and
(b) state the taxable services separately from the non-taxable services. In
addition, the separately stated Sales Taxes shall not be charged in any case
more than six months after the end of the tax year of the date in which the
relevant invoice for the provision of services was sent; provided however, to
the extent the amount of such Sales Taxes is in dispute between the Parties or
with a taxing authority, the amount of such Sales Taxes shall be invoiced as
soon as practicable after the dispute is resolved.

(ii) To the extent such Sales Taxes are payable by the Provider to the relevant
taxing authority, the Recipient shall remit an amount equal to such Sales Taxes
to the Provider. Where the Law is unclear or the Law provides that either Party
may remit such Sales Taxes, the Person responsible for remitting the Sales Tax
to the tax authority shall be determined by the Provider under the same
methodologies Provider uses to determine taxation on services in its standard
administrative services agreements it enters into with customers.

(iii) 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 to timely collect or remit any such
taxes to a taxing authority 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 if the amount of such Sales Tax was timely and properly
contested 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 has the right to withhold or deduct the amount of such tax from
any consideration hereunder and such amount shall be treated as paid to the
Provider 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 (and if necessary, reimbursed by) the amount of any such Sales Tax that is
recoverable, refundable or creditable to the Provider or for which the Provider
is reimbursed or held harmless against by another party (other than an indemnity
set forth hereunder). For purposes of this subsection, any reference to the
Provider or Recipient includes MSS or the Company on behalf of the Provider or
Recipient, as the case may be.

Section 3.02. No Right to Set-Off; Disputed Invoice Amounts. Each applicable
Party shall pay or cause the applicable Recipient that is its Affiliate to pay
to the other Party or the applicable Provider in full all undisputed Service
Charges and other amounts due and payable hereunder and, except as permitted by
this Section 3.02 or as otherwise agreed to by the Parties,

 

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shall not set-off, counterclaim or otherwise withhold any amount owed or claimed
to be owed hereunder 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
a Party or its applicable Recipient disputes any specific amount on an invoice,
such Party shall notify the other Party and the applicable Provider in writing
and describe in detail the reason for disputing such specific amount and shall
have no obligation to pay such amount during the pendency of the dispute with
respect to such amount. 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 specific disputed amount. If the respective
Recipient and Provider or the employees or their designees at MSS and the
Company responsible for preparing and reviewing the invoices are unable to reach
an agreement about any such specific disputed 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)
on an expedited basis. Upon resolution of the dispute, the Party 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 the 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 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 hereunder.

 

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ARTICLE V

LIMITED LIABILITY AND INDEMNIFICATION

Section 5.01. Indemnification.

(a) MSS, on behalf of itself, any Person that is a Provider on behalf of MSS
hereunder and the other Parent Group Members (the “MSS Indemnitors”), shall
indemnify the Company, the other Company Group Members and their Representatives
(the “Company Indemnified Parties”) against, and defend and hold the Company
Indemnified Parties harmless from, any and all Losses (including Losses
resulting from Third-Party Claims) imposed on, sustained, incurred or suffered
by, or asserted against any Company Indemnified Party arising from or resulting
out of any of the following: (i) any breach or non-fulfillment by a MSS Provider
of any of its obligations hereunder or under any agreement for the provision of
TPA Services or TSA Broker-Dealer Services; (ii) infringement, misappropriation
or other violation of or conflict with any Intellectual Property right of any
third-party claimed or threatened against a Company Indemnified Party resulting
from a MSS Provider’s provision of, or the Company’s or any Company Group
Member’s receipt of, the Services or access to the Facilities hereunder, except
to the extent such claim of infringement, misappropriation or other violation or
conflict arises from a Company Indemnified Party’s failure to obtain a necessary
consent from a third-party to the extent required by this Agreement; or (iii) a
MSS Provider’s bad faith (other than allegations of a third party in connection
with the administration of products of a Company Group Member under this
Agreement or under any agreement for the provision of TPA Services or TSA
Broker-Dealer Services), fraud, gross negligence or willful misconduct;
provided, in the case of each of clauses (i) - (iii) of this Section 5.01(a)
that no MSS Provider shall have any obligation to indemnify any Company
Indemnified Party to the extent that such Loss results from any claim for which
any MSS Indemnified Party is entitled to indemnification under Section 5.01(b).

(b) The Company, on behalf of itself, any Person that is a Provider on behalf of
the Company hereunder and the other Company Group Members (the “Company
Indemnitors”), shall indemnify MSS, the other Parent Group Members and their
Representatives (“MSS Indemnified Parties”) against, and defend and hold
harmless the MSS Indemnified Parties from, any and all Losses arising from
third-party claims imposed on, sustained, incurred or suffered by, or asserted
against any MSS Indemnified Party arising from or resulting out of any of the
following: (i) any breach or nonfulfillment by a Company Provider of any of its
obligations hereunder or under any agreement for the provision of TPA Services
or TSA Broker-Dealer Services; (ii) infringement, misappropriation or other
violation of or conflict with any Intellectual Property right of any third-party
claimed or threatened against a MSS Indemnified Party resulting from a Company
Provider’s provision of, or a MSS Indemnified Party’s receipt of, the Services
or access to the Facilities hereunder, except to the extent such claim of
infringement, misappropriation or other violation or conflict arises from a MSS
Indemnified Party’s failure to obtain a necessary consent from a third-party to
the extent required by this Agreement; or (iii) a Company Provider’s bad faith
(other than allegations of a third party in connection with the administration
of products of a Parent Group Member under this Agreement or under any agreement
for the provision of TPA Services or TSA Broker-Dealer Services), fraud, gross
negligence or willful misconduct; provided, in the case of each of clauses (i) -
(iii) of this Section 5.01(b) that no Company Provider shall have any obligation
to indemnify any MSS Indemnified Party to the extent that such Loss results from
any claim for which any Company Indemnified Party is entitled to indemnification
under Section 5.01(a).

 

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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, EXCEPT
TO THE EXTENT (I) SUCH DAMAGES ARE AWARDED TO AN UNAFFILIATED THIRD-PARTY AND
ARE SUBJECT TO A CLAIM FOR INDEMNITY HEREUNDER PURSUANT TO SECTION 5.01, OR
(II) SUCH DAMAGES ARE AWARDED TO A PARTY IN CONNECTION WITH THE OTHER PARTY’S
BAD FAITH (OTHER THAN ALLEGATIONS OF A THIRD PARTY IN CONNECTION WITH THE
ADMINISTRATION OF PRODUCTS OF A SERVICE RECIPIENT UNDER THIS AGREEMENT OR UNDER
ANY AGREEMENT FOR THE PROVISION OF TPA SERVICES OR TSA BROKER-DEALER SERVICES),
FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, EXCEPT AS MAY BE OTHERWISE SET
FORTH IN SECTIONS 5.02(c) AND 5.02(d).

(b) (i) The liability of the Company (for itself and its Affiliates) pursuant to
this Agreement, whether in contract, tort or otherwise, shall not exceed
$50,000,000.

(ii) The liability of MSS (for itself and its Affiliates) pursuant to this
Agreement, whether in contract, tort or otherwise, shall not exceed the
following:

 

  (A) From the Effective Date until the day prior to the first anniversary of
the Effective Date: $125,000,000;

 

  (B) From the first anniversary of the Effective Date until the day prior to
second anniversary of the Effective Date: $100,000,000;

 

  (C) From the second anniversary of the Effective Date until the day prior to
the third anniversary of the Effective Date: $75,000,000; and

 

  (D) Thereafter $50,000,000.

 

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By way of clarification, in all cases, the overall liability limit does not
reset at each point in time and if the aggregate amount that MSS (on behalf of
itself and its Affiliates) has paid to the Company Indemnified Parties in
connection herewith exceeds the applicable liability limit in subsections
(B)-(D) above, MSS (on behalf of itself and its Affiliates) shall have no
further liability hereunder except as set forth in Sections 5.02(b)(iii) and
5.02(b)(iv).

(iii) Except as otherwise provided in Section 5.02(c)(i) and
Section 5.02(c)(ii), and subject to Section 5.02(d), notwithstanding the
foregoing, MSS shall have liability up to $25,000,000 with respect to any Losses
imposed by any self-regulatory organization, or any federal, state, or local
agency, in connection with a Service or access to a Facility relating to
administration of Recipient’s insurance products hereunder by a Party regardless
of when the Loss is incurred; provided that if such Losses are incurred during
the period between the Effective Date and the first anniversary of the Effective
Date, then the amount in Section 5.02(b)(ii)(A) for limitation of liability for
any other claims shall be reduced by the Losses incurred for such period (i.e.,
the aggregate limit of liability in the first year of this Agreement for MSS is
$125,000,000 and the overall limit of liability for MSS shall not exceed
$125,000,000 except for such liability that is excluded pursuant to
Section 5.02(b)(iv)); and provided further that if such Losses exceed
$25,000,000 at any point, the Party as Recipient may seek to collect any excess
subject to the liability limitation in Section 5.02(b)(ii)(A) through
Section 5.02(b)(ii)(D), but with respect to the amount of limitation in effect
when such a claim is made. For purposes of this subsection, MSS’s liability
includes Losses arising from putative class actions based on substantially the
same set of facts or circumstances that led or could lead to a Loss imposed by
any self-regulatory organization, or any federal, state, or local agency.

(iv) A Party’s limitation of liability under this Section 5.02(b) shall not
apply in the case of (x) Third-Party Claims with respect to a Party’s negligence
resulting in death or personal injury, (y) amounts owed pursuant to Section 3.01
or (z) a Party’s bad faith (other than allegations of a third party in
connection with the administration of products of the other Party under this
Agreement or under any agreement for the provision of TPA Services or TSA
Broker-Dealer Services), fraud, gross negligence or willful misconduct,
including with respect to a Party’s obligations pursuant to Section 2.17(c) and
Section 7.01, but excluding Section 5.02(c)(ii) with respect to willful
misconduct. The Parties agree that any indemnification payments made under any
agreement for TPA Services and TSA Broker-Dealer Services between Parent Group
Members and Company Group Members shall be applied against the relevant Party’s
limitation of liability set forth under this Section 5.02(b).

(c) In connection with any with any claim or demand for benefits, and related
extra-contractual damages, under a policy or contract issued by a Company Group
Member:

(i) the applicable Company Group Member remains liable for the contract benefits
for the applicable products in all cases;

(ii) the applicable Company Group Member remains liable for any
extra-contractual payments paid to a claimant pursuant to a settlement or
judgment, including amounts in excess of the contract limits, awards of bad
faith, punitive damages and the claimant’s attorneys’ fees and costs, except in
the event that any extra-contractual payment is attributable to MSS’s willful
misconduct, in which case MSS shall have liability up to an annual cap of
$1,500,000;

 

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(iii) the applicable Company Group Member has the right to assume the initiation
or defense of all litigations, arbitrations or other formal dispute resolution
proceedings with respect to any applicable products, and is responsible for all
defense costs and attorneys’ fees;

(iv) any extra-contractual payments as set forth in Section 5.02(c)(ii) borne by
MSS shall constitute a liability of MSS as a Provider that is subject to the
liability limitations of Section 5.02(b) in effect on the day the amount of
extra-contractual payments or method of calculating such payments are set,
whether by settlement, adjudication or otherwise; the outside counsel fees and
costs shall be subject to the liability limitations in effect on the day such
fees and costs are incurred; and

(v) Other than as permitted in Section 5.02(b)(iii) with respect to regulatory
fines and penalties incurred, neither MSS nor the Company shall have liability
for any claim or demand, or other circumstance or state of facts that could give
rise to any claim or demand under Section 5.02(c) made after the day that is the
three (3) year anniversary of the date the Service or the access to the Facility
giving rise to such claim or demand or other circumstance was terminated.

(d) For the period of time that MSS or its Providers provide Services for the
administration of Company Group Member products under this Agreement or under
any agreement for the provision of TPA Services or TSA Broker-Dealer Services,
MSS shall use commercially reasonable efforts to deliver, within 30 days of the
end of each quarter starting with the quarter ending March 31, 2017, a statement
showing (i) with respect to variable Insurance Contracts, the net amount of all
Breakage during the prior calendar year for the variable Insurance Contract of
the Company Group Members arising from the Services and the TPA Services during
such calendar year and (ii) the net EP Amount for the Company Group Members
taking into account any recovery of overpayments by MSS or its Providers or
their Affiliates in connection with the applicable Insurance Contracts during
such calendar year. The Company shall be liable for all such amounts up to
$2,500,000 annually, with any excess of that amount constituting an
indemnifiable claim hereunder, subject to the limitations of liability set forth
in Section 5.02(b) in effect for the year in which the Breakage and EP Amount
occurred.

(e) Any claim for indemnification by an Indemnified Person must be made in
writing to MSS or the Company pursuant to Section 5.04 or 5.05, as applicable,
and, other than as permitted in Section 5.02(c)(iii) with respect to regulatory
fines and penalties incurred, the limitation on liability applicable to such
claim pursuant to Section 5.02(b) shall be the limitation in effect on the day
of receipt by MSS or the Company of such Notice of Claim or other written
notice. Other than as permitted in Section 5.02(b)(iii) with respect to
regulatory fines and penalties incurred or as permitted in Section 5.02(c)(v),
all claims for indemnification must be made before the day that is the eighteen
(18) month anniversary of the date the Service or the access to the Facility
giving rise to such claim was terminated; provided, that where such claim is
made in connection with the last Services or access to Facilities terminated
under this Agreement, the applicable limitation of liability pursuant to
Section 5.02(b) shall be the one in effect as of the date of the termination of
such Services or access to Facilities.

 

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(f) Any claim for indemnification hereunder and any liability of MSS pursuant to
Section 5.02(c) or Section 5.02(d) shall be limited to Services or access to
Facilities provided on or after the Effective Date.

(g) In connection with Services for commission payments to third parties, the
Provider will use commercially reasonable efforts to collect any overpayments.
If attempts to collect the overpayment are unsuccessful, the Provider shall be
liable for the overpayment and such overpayment shall be subject to the
limitations of liability set forth in Section 5.02(b); provided, that if the
Recipient of such Service directs the Provider to forego collection efforts for
an overpayment, in which case the Recipient shall be liable for the overpayment,
and such overpayment shall not be subject to any limitation on liability in
Section 5.02(b).

(h) At or prior to the transfer of laptop or desktop computers from MSS or its
Affiliates to the Company or its Affiliates, MSS or its Providers may scan such
computers to identify software that was not downloaded by means of the “MetLife
SCCM” and shall identify all such software to the Company. MSS shall remove all
such software for which MSS or its Affiliates or the Company Group does not has
a license or consent unless otherwise directed by the Company and, in such case,
the Company shall indemnify MSS and its Providers for any Losses arising from a
Third-Party Claim related to the software that was not removed due to the
direction by the Company, subject to the limitation of liability in
Section 5.02(b)(i).

(i) A Party and its Providers shall have no liability for Losses arising from
Services hereunder or under any agreement for the provision of TPA Services or
TSA Broker-Dealer Services to the extent that such Losses (including regulatory
fines and penalties) arise from a direction by the Recipient as to (i) how to
make a Change, (ii) a change to a TPA Services or TSA Broker-Dealer Service,
(iii) training (whether on a new product or process or a modification of an
existing product or process) or (iv) whether the Provider should act or not act,
in each case solely to the extent that such Losses result from such direction,
and the Recipient shall indemnify such Party and its Providers against any
Third-Party Claim resulting from such direction, subject to the limitations of
liability set forth in Section 5.02(b).

(j) Each Party indemnified hereunder shall use commercially reasonable efforts
to mitigate and otherwise minimize its respective Losses, whether direct or
indirect.

Section 5.03. Insurance. Notwithstanding anything to the contrary contained
herein, no Party indemnified under this ARTICLE V shall be indemnified or held
harmless hereunder to the extent such Losses are covered by insurance provided
by a third Person.

Section 5.04. Procedures for Third-Party Claims.

(a) In the event that any claim or demand, or other circumstance or state of
facts that could give rise to any claim or demand, for which an Indemnitor may
be liable to an Indemnified Party hereunder is asserted or sought to be
collected, in each case, in writing, by a third-party (“Third-Party Claim”), the
Indemnified Party shall promptly, but in no event more than ten (10) days
following such Indemnified Party’s receipt of a Third-Party Claim, notify the

 

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Indemnitor in writing of such Third-Party Claim (“Notice of Claim”); provided,
however, that a failure by an Indemnified Party to provide timely notice shall
not affect the rights or obligations of such Indemnified Party other than if the
Indemnitor shall have been actually prejudiced as a result of such failure. The
Notice of Claim shall (i) state that the Indemnified Party has paid or properly
accrued Losses or anticipates that it will incur liability for Losses for which
such Indemnified Party is entitled to indemnification pursuant to this
Agreement, and (ii) specify in reasonable detail each individual item of Loss
included in the amount so stated, the date such item was paid or properly
accrued, the basis for any anticipated Loss and the nature of the
misrepresentation, breach of warranty, breach of covenant or claim to which each
such item is related and the computation of the amount to which such Indemnified
Party claims to be entitled hereunder. The Indemnified Party shall enclose with
the Notice of Claim a copy of all papers served with respect to such Third-Party
Claim, if any, and any other documents evidencing such Third-Party Claim.

(b) The Indemnitor shall have the right, but not the obligation, to assume the
defense or prosecution of such Third-Party Claim and any litigation resulting
therefrom with counsel of its choice and at its sole cost and expense (a
“Third-Party Defense”). If the Indemnitor assumes the Third-Party Defense in
accordance herewith, (i) the Indemnified Party may retain separate co-counsel at
its sole cost and expense and participate in the defense of the Third-Party
Claim, but the Indemnitor shall control the investigation, defense and
settlement thereof, (ii) the Indemnified Party shall not file any papers or
consent to the entry of any judgment or enter into any settlement with respect
to the Third-Party Claim without the prior written consent of the Indemnitor and
(iii) the Indemnitor shall not consent to the entry of any judgment or enter
into any settlement with respect to the Third-Party Claim to the extent such
judgment or settlement provides for equitable relief or includes an admission of
liability or fault without the prior written consent of the Indemnified Party,
such consent not to be unreasonably withheld, conditioned or delayed. The
Parties shall act in good faith in responding to, defending against, settling or
otherwise dealing with such claims. The Parties shall also cooperate in any such
defense and give each other reasonable access to all information relevant
thereto. Whether or not the Indemnitor has assumed the Third-Party Defense, such
Indemnitor shall not be obligated to indemnify the Indemnified Party hereunder
for any settlement entered into or any judgment that was consented to without
the Indemnitor’s prior written consent.

(c) If the Indemnitor does not assume the Third-Party Defense, the Indemnified
Party shall be entitled to assume the Third-Party Defense, at the expense of the
Indemnitor, upon delivery of notice to such effect to the Indemnitor; provided
that (i) the Indemnitor shall have the right to participate in the Third-Party
Defense at its sole cost and expense, but the Indemnified Party shall control
the investigation, defense and settlement thereof, (ii) the Indemnitor may at
any time thereafter assume the Third-Party Defense, in which event the
Indemnitor shall bear the reasonable fees, costs and expenses of the Indemnified
Party’s counsel incurred prior to the assumption by the Indemnitor of the
Third-Party Defense and (iii) the Indemnitor shall not be obligated to indemnify
the Indemnified Party hereunder for any settlement entered into or any judgment
that was consented to without the Indemnitor’s prior written consent, such
consent not to be unreasonably withheld, conditioned or delayed.

 

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Section 5.05. Indemnification Procedure other than for Third-Party Claims. An
Indemnified Party shall notify the Indemnitor in writing promptly, of its
discovery of any matter that does not involve a Third-Party Claim; provided that
a failure by a Party to provide timely notice shall not affect the rights or
obligations of such Party other than if the other Party or its Affiliates shall
have been actually prejudiced as a result of such failure. Such notice shall
(a) state that the Indemnified Party has paid Losses or anticipates that it
shall incur liability for Losses for which such Indemnified Party is entitled to
indemnification pursuant to this Agreement and (b) specify to the extent
practicable in reasonable detail each individual item of Loss included in the
amount so stated, the date such item was paid, the basis for any anticipated
liability and the nature of the misrepresentation, breach of warranty, breach of
covenant or claim to which each such item is related and the computation of the
amount to which such Indemnified Party claims to be entitled hereunder. The
Indemnified Party shall reasonably cooperate and assist the Indemnitor in
determining the validity of any claim for indemnity by the Indemnified Party and
in otherwise resolving such matters. Such reasonable assistance and cooperation
shall include providing reasonable access to and copies of information, records
and documents relating to such matters, furnishing employees to assist in the
investigation, defense and resolution of such matters and providing legal and
business assistance with respect to such matters.

Section 5.06. Exclusive Remedy. Each Party acknowledges and agrees that,
following the Effective Date, other than (a) in the case of actual fraud by the
Company or MSS 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 such Party 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 Scheduled Facility shall be
provided for a term (the “Initial Scheduled Term”) commencing and ending, in
each case, on the dates set forth for such Scheduled Service or such Scheduled
Facility in Schedule 2.01-1 and Schedule 2.01-2 (in the case of the Services) or
Schedule 2.02-1 and Schedule 2.02-2 (in the case of access to the Facilities),
respectively, or such shorter term if earlier terminated pursuant to the terms
of this Agreement. As Recipients, the Parties agree to use, and to cause their
Affiliates to use, their reasonable best efforts to avoid extending the Initial
Scheduled Terms; however, upon the provision of written notice to the applicable
service manager and the Contract Manager of the Provider at least three
(3) months prior to the end of the Initial Scheduled Term where such Initial
Scheduled Term ends in 2017 and at least four (4) months prior to the end of the
Initial Scheduled Term where such Initial Scheduled Term ends in 2018 or later,
in each case with respect to any such Scheduled Service or Scheduled Facility,
the Recipient may request the Provider to extend such Initial Scheduled Term up
to two separate three (3) month terms (the “Extended Scheduled Term”, and
together with the Initial Scheduled Term, the “Scheduled Term”) on terms as
shall be mutually agreed to in writing by the Parties, (i) with the Scheduled

 

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Service Charge for such Scheduled Service or Scheduled Facility increasing by
10% (i.e., 1.1 times the Scheduled Service Charge then in effect, which, by way
of clarification, includes any increases contemplated in Section 3.01(a)) from
and after the last day of the Initial Scheduled Term for such Scheduled Service
or Scheduled Facility and (ii) with the Scheduled Service Charge for such
Scheduled Service or Scheduled Facility increasing by an additional 10% (i.e.,
1.1 times the Scheduled Service Charge then in effect (which, by way of
clarification, includes any increases contemplated in Section 3.01(a) and in
sub-clause (i) above) from and after the date that is the three (3) month
anniversary of the last day of such Initial Scheduled Term, unless otherwise
specified in the relevant Schedule for such Service or Facility. A Provider will
have no obligation to provide a Service or access to a Facility beyond the
Scheduled Term unless otherwise agreed in writing, including as to an increase
in Service Charges, if any, for providing such Service or access to a Facility.
For any Service or access to a Facility for which the Initial Scheduled Term is
twenty-four (24) months or more, a Recipient shall not be entitled to an
Extended Scheduled Term for such Service or access to a Facility if the plan for
Migration Services in connection with such Service or access to such Facility
has not been completed in all material respects six (6) months prior to the end
of the Initial Scheduled Term or the Parties have agreed that such plan cannot
be completed at such time. Notwithstanding the foregoing or any other provision
herein to the contrary, to the extent either Party’s (i) failure to complete
Knowledge Transfer Services in accordance with the time frames agreed to by
Parties and the standards set forth herein or (ii) failure to provide a
Scheduled Service or Scheduled 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 or
Extended Scheduled Term (the “Agreed Term”), as applicable, such Agreed Term, as
well as the term for any related Knowledge Transfer Services, Third-Party Vendor
Services, Migration Services, Resumed Facility, and Resumed Services shall be
extended, without penalty to the Recipient, for a reasonable amount of time, to
be agreed to by the Parties, to enable such 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 2.01-1, Schedule 2.01-2, Schedule 2.02-1 or Schedule
2.02-2, respectively, (i) a Service or access to a Facility may be terminated
earlier by MSS if the Company is in material breach of the terms of this
Agreement related to such Service or access to such Facility and the Company
fails to cure such breach within thirty (30) days of MSS delivering a written
notice of such breach to the Company in accordance with Section 7.03 (it being
understood and agreed that the failure of the Company or a Recipient that is an
Affiliate of the Company to pay any outstanding Scheduled Service Charge or
other amount due, and not subject at the time of termination to a dispute
pursuant to Section 3.02, to MSS or the applicable Provider shall be a material
breach of the terms of this Agreement with respect to the Service or Facility
for which the Company has not paid such Scheduled Service Charge); (ii) a
Service or access to a Facility may be terminated earlier by the Company if MSS
is in material breach of the terms of this Agreement related to such Service or
access to such Facility and MSS fails to cure such breach within thirty
(30) days of the Company delivering a written notice of such breach to MSS in
accordance with Section 7.03 (it being understood and agreed that the failure of
MSS or a Recipient that is an Affiliate of MSS to pay any outstanding Scheduled
Service Charge or other amount due, and not subject at the time of termination
to a dispute pursuant to Section 3.02, to

 

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the Company or the applicable Provider shall be a material breach of the terms
of this Agreement with respect to the Service or Facility for which MSS has not
paid such Scheduled Service Charge); (iii) the Company may terminate this
Agreement if MSS or 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) MSS may terminate this Agreement if the Company or BHF 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.

(c) (i) With respect to any Service or access to any Facility (but excluding
Changes set forth in Section 2.12(d)), a Party in its capacity as, or on behalf
of its Affiliate which is, a Recipient may terminate such Service or access to
such Facility, in whole, or in part (in accordance with Section 6.01(d)): (A)
for any reason or no reason upon its Contract Manager providing at least thirty
(30) days’ prior written notice to the applicable service manager and the
Contract Manager of the Provider of such Service or access to such Facility
(unless a longer notice period is specified in the Schedules), in each case,
subject to the obligation to pay any applicable termination charges pursuant to
Section 6.02 including Section 6.02(b); provided, that in the event that such
termination of a Service or access to a Facility is likely to cause the
applicable Provider to provide notices to affected employees under the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101–2109, or
applicable state law acts, then the Contract Manager of the Recipient shall
provide the Contract Manager of the Provider with prior written notice of
termination at least as long as the sum of (1) the longest applicable time
period under the applicable acts for the Provider to provide notices to affected
persons under those acts plus (2) one month (e.g., a 60 day WARN Act requirement
for one affected location and a 90 day WARN Act requirement for a second
affected location would require termination notice from the Contract Manager of
the Recipient at least 90 days + one month before the last date of a Service or
access to a Facility); (B) at any time if a related Service or access to a
Facility has been terminated; provided that the Service or access to such
Facility does not provide a dependency for non-terminating Services or access to
Facilities; and (C) upon mutual agreement of the Parties. Any Party in its
capacity as, or on behalf of a third-party or Affiliate that is, a Provider may
terminate any Service or access to any Facility pursuant to Section 2.08,
subject to Recipient’s obligation to pay any applicable termination charges
pursuant to Section 6.02.

(ii) If a Service or access to a Facility is terminated, the relevant Schedule,
if applicable, shall be updated to reflect such termination. The effective date
for termination of any Service (other than Knowledge Transfer) or access to any
Facility shall be the last day of a calendar month. Within ten (10) Business
Days following receipt of a notice of termination in

 

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accordance with Section 6.01(c), the applicable Contract Manager, on behalf of
such Provider, shall send to the applicable service manager and the Contract
Manager for the Recipient a written notice that either (x) states that the
Service or access to the Facility for which termination is requested has no
dependencies and can be terminated on the requested date or (y) to the extent
that such Party’s ability to provide or cause to be provided 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) A Contract Manager, on behalf of a Party or its Affiliate that is a
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 and the applicable charges pursuant to Section 6.02(b). If the
applicable Recipient, Provider, and Contract Managers 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.

(e) Notwithstanding the foregoing in this Section 6.01, the Parties acknowledge
and agree that there are certain Services on Schedule 2.01-1 related to policy
administration systems, some of which are the subject of an outsourcing
agreement known as “Project Panorama” (all such Services, whether or not related
to Project Panorama, are the “Panorama Related Services” and are designated as
such on Schedule 2.01-1) and all such Services are currently expected to have an
Initial Term of at least 36 months, although the scope and amount of such
Services may vary over the 36 months in accordance with Section 6.01(d). By the
end of 2018, the Parties will evaluate the duration of the Initial Term for each
of the Panorama Related Services and decide whether to extend or modify the
Initial Term, taking into account the progress on the implementation of Project
Panorama and the migration of certain systems to a third-party vendor and the
migration plans of BHS.

(f) In the event that the Parties or their Affiliates elect to outsource one or
more of the policy administration systems not already a part of the outsourcing
transaction commonly known by the Parties as “Project Panorama” as it exists on
the Effective Date (e.g., the Parties enter into “Project Panorama II”), both
Parties will work in good faith to find a solution for Services and Facilities
impacted by such outsourcing transaction. As part of such a solution, the
Parties shall consider the timing of the termination of such Services and
Facilities and the allocation between the Parties, if any, of (i) costs to
decommission systems, (ii) direct and indirect costs of the administration of
the subject policies, (iii) costs to eliminate stranded assets (other than
allocated corporate overhead) and (iv) other related expenses in connection

 

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with ceasing such Services and Facilities. Neither Party shall have any
obligation to enter into such an outsourcing transaction. If the Company or its
Affiliates enter into such an outsourcing transaction but MSS or its Affiliates
do not, then migration assistance, if any, to be provided by MSS and its
Affiliates shall be determined in accordance with Section 2.23.

Section 6.02. Termination Charges.

(a) Upon early termination of any Scheduled Service or Scheduled Facility
pursuant to Section 6.01(c), the Recipient shall reimburse the Provider the
following amounts of all “kill” fees and other similar fees actually paid by
such Provider or any of its Affiliates to unaffiliated third-parties that were
engaged solely in order to provide such Scheduled Service or Scheduled Facility,
which fees were incurred in connection with the early termination of the
Scheduled Service or Scheduled Facility and to the extent such “kill” fees and
similar fees would not have been incurred had the Recipient continued to receive
the applicable Scheduled Service or Scheduled Facility for the originally
contemplated Scheduled Term thereof: (i) during the Initial Scheduled Term –
fifty percent (50%) of all such fees; and (ii) during the Extended Scheduled
Term – one hundred percent (100%) of all such fees. In addition, upon early
termination of any Scheduled Service or Scheduled Facility pursuant to
Section 6.01(c), the Recipient shall reimburse the Provider for any costs that
would not have been incurred had the Recipient continued to receive the
applicable Scheduled Service or Scheduled Facility for the originally
contemplated Scheduled Term or Extended Scheduled 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 other
amounts otherwise due and payable under this Section 6.02. All termination
charges, “kill” fees and other amounts due and payable under this Section 6.02
shall be due and payable to the Provider in accordance with Article III.

(b) If all or a portion of the Scheduled Service Charge for a Scheduled Service
or access to a Scheduled Facility is a Pass-Through Charge or includes a payment
to an unaffiliated third-party, which payment can be reduced by the early
reduction or early termination of the Scheduled Service or access to the
Scheduled Service, then if a Recipient reduces or terminates such Scheduled
Service or access to a Scheduled Facility pursuant to Section 6.01(c)(i) and the
notice period for reduction or termination by the Provider or its Affiliate of
such unaffiliated third party is greater than 30 days but less than 181 days,
then (i) the Recipient shall provide a notice of termination pursuant to
Section 6.01(c)(i) that is greater than such notice period for termination by
Provider or (ii) the Recipient shall pay the difference in Pass-Through Charges
or payments to the unaffiliated third-party attributable to the difference in
notice that the Recipient provided to the Provider and the amount of notice that
the Provider or its Affiliate would need to give to the third party so as to
attain the reduction or cancelation. For example, if a vendor of a Pass-Through
Service requires the Provider to provide 90 days’ prior notice to reduce or
terminate a service that Recipient receives hereunder, then Recipient would
either need to give 91 days’ advance notice to terminate such Service and bear
no additional Pass-Through Charge for such Service upon termination or the
Recipient could provide 30 days’ prior notice of termination and would pay 61
additional days of Pass-Through Charges after termination of the Service.

 

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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
Service or access to the applicable Facility shall have no further obligation to
provide such terminated Service or access to the applicable Facility, and the
Recipient of such terminated Service or access shall have no obligation to pay
any Service Charges, Pass-Through Charges and other amounts thereto; provided
that such Recipient shall remain obligated to the Provider for any and all
amounts due and payable in respect of such terminated Service or access provided
prior to the effective date of termination. Any and all licenses to Intellectual
Property granted to a Recipient and/or Provider hereunder in connection with the
provision of a terminated Service or terminated access to a Facility shall
immediately cease upon such termination, except to the extent such Intellectual
Property is needed for the relevant Recipient to fulfill its obligations under,
or obtain the benefits under, this Agreement or the other Transaction Documents.

(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 shall deliver, or shall 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) that are owned by or licensed to the
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) subject to any Transaction Document to the contrary, each Party shall make
a good faith effort to delete from its Systems (and use commercially reasonable
efforts to cause Providers that are not its 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 such
Party to fulfill its obligations under, or obtain the benefits under, this
Agreement or the other Transaction Documents. 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 a Provider or its Affiliates have purchased any resources
in the name of or on behalf of the Recipient or its Affiliates and has fully
charged such purchase as a Pass-Through Charge or if a Provider has licensed any
resources solely in connection with the provision of the Services or access to
the Facilities for the 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, the Provider shall: (i) transfer to the
Recipient all right, title and interest that such Provider holds in such
Acquired Resource, including any necessary documentation to evidence transfer of
ownership, and (ii) deliver such Acquired Resource to such Recipient at no
additional charge, except for any charges, if any, incurred by such Provider in
transferring such Acquired Resource, which shall be paid by such 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

 

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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 such Recipient or its
Affiliates. The Provider shall exercise its commercially reasonable efforts to
license any Acquired Resource in the name of or on behalf of the 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 such Recipient in writing prior to
acquiring or attempting to acquire such license and such Provider and Recipient
shall discuss in good faith commercially reasonable alternatives that could be
licensed in the name of or on behalf of such Recipient or its Affiliates;
provided, however, that if such Provider and 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 the Provider may license such Acquired
Resource in the name of the Provider or (y) provides notice, under
Section 6.01(c), of termination of the Service for 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
the 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 the Provider or its Affiliates the Agreed
Price related to such actions.

(d) In connection with the termination of this Agreement, Article I, Article V,
Article VII, Section 2.19, Section 6.02, this Section 6.03 and Section 6.04, and
liability for all amounts due and payable under 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) hereunder 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 any suspension of the
Services or access to the Facilities 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 incremental cost
increase for any such alternative service provider shall be split equally by
such Provider and Recipient during the Initial Scheduled

 

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Term and shall be paid by such Recipient during any Extended Scheduled Term. If
a Force Majeure shall continue to exist for more than fifteen (15) consecutive
days during an Initial Scheduled Term, the Recipient shall be entitled to
permanently terminate the Services affected or access to the Facilities affected
upon notice in accordance with Section 7.03 and with no termination charges due
pursuant to Section 6.02 or otherwise in connection with such termination; if a
Force Majeure shall continue to exist for more than fifteen (15) consecutive
days during an Extended Scheduled Term, either Party shall be entitled to
permanently terminate the Services affected or access to the Facilities affected
upon notice in accordance with Section 7.03 and, if Recipient terminates the
Services or access to the Facilities, Recipient shall pay the termination
charges due pursuant to Section 6.02. The Recipient shall be relieved of the
obligation to pay any Service Charges, Pass-Through Charges and other amounts
for the provision of the affected Services or access to the affected Facilities
that accrued for the period that such Services and access were suspended.

ARTICLE VII

GENERAL PROVISIONS

Section 7.01. Treatment of Confidential Information.

(a) Each Party shall not, and shall cause other Persons under its control
(including Affiliates and Representatives) that are providing or receiving the
Services or access to the 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”), not to, disclose to any other Person or use, except for purposes
of this Agreement, any Confidential Information of the other Party that after
the Effective Date (other than such Confidential Information that is generated
between the Effective Date and the Disaffiliation Date which is known to the
other Party because of their status as Affiliates and which relates to such
status) 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 the Providers and the 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) in the case of the
Company, as a result of disclosure by MSS or the other Parent Group Members or
any of their respective Representatives and (B) in the case of MSS, as a result
of disclosure by the Company, any other Company Group Member (after the
Effective Date) or any of their respective Representatives, (ii) any such
Confidential Information (including any report, statement, testimony or other
submission to a Governmental Entity) is required by applicable Law, Governmental
Order, professional standard of an organization to which the Person is a member
(such as FINRA), legal process (including, without limitation, by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) or such Governmental Entity 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

 

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Agreement or any Affiliate or Representative of such Party) that is not known to
you to be subject to a contractual, legal, fiduciary or other obligation of
confidentiality with respect to such information, (iv) any such Confidential
Information is independently developed after the Effective Date without
reference information that is to be kept confidential under this Article VII or
(v) the other Party has provided prior written consent that the disclosing Party
may disclose such Confidential Information.

(b) Notwithstanding anything to the contrary contained herein, regardless of
whether the Company is still an Affiliate of the Parent, the Parties acknowledge
and agree that the Parent Group and their respective Representatives may,
without notifying the Company or any other Person, share any information
relating to or obtained from the Company Group (or any Affiliates of the Company
Group) with (1) the Federal Reserve Bank of New York and its Representatives,
(2) the Board of Governors of the Federal Reserve System and its
Representatives, (3) the Federal Deposit Insurance Corporation and its
Representatives and (4) the Financial Stability Oversight Council and its
Representatives, (5) the Internal Revenue Service or any other US taxing
authority ((1), (2), (3), (4) and (5) collectively, the “Government
Recipients”), in each case as MSS or the other Parent Group Members deem may be
reasonably necessary or advisable in its good faith judgment; provided that MSS
shall, to the extent permitted under applicable law, request or cause to be
requested confidential treatment of any of information (the “Company
Confidential Information”) relating to or obtained from the Company Group (or
any Affiliates of the Company Group) which is Confidential Information. Subject
to applicable Law, MSS shall promptly notify the Company in the event MSS learns
that any Government Recipient has been requested or required to disclose any
Company Confidential Information or has taken any action that, if taken by MSS
or the other Parent Group Members, 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, 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) take appropriate technical and
organizational measures to protect Personally Identifiable Information against
accidental or unlawful destruction or accidental loss, alteration or processing;
and (C) 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.

(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.

 

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(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, the Provider shall return to such
Recipient any Personally Identifiable Information in such Provider’s possession
in connection with the provision of the terminated Service or access to a
Facility as requested by such Recipient, except to the extent that such Provider
is required to retain such Personally Identifiable Information in accordance
with applicable Laws or such Provider’s own data retention policies.

(c) To the extent that a Provider receives, creates, has access to, uses or
maintains Protected Health Information of a Recipient regarding individuals who
are applicants for, owners of, or eligible for benefits under certain health
insurance products and optional riders offered by or through a Recipient or its
Affiliates in accordance with requirements of HIPAA and related regulations, as
may be amended from time to time, such Provider agrees to the following
requirements:

(i) Provider shall not use or disclose PHI except (i) to perform functions,
activities, or Services for, or on behalf of, such Recipient as specified in
this Agreement and consistent with applicable Law, or (ii) for proper management
or administration of Provider or its Affiliates, to the extent that such use or
disclosure is permitted or required by applicable Law.

(ii) Provider shall use appropriate safeguards to prevent use or disclosure of
PHI other than as permitted by this Agreement, and to implement administrative,
physical, and technical safeguards that reasonably and appropriately protect the
confidentiality, integrity, and availability of the electronic PHI that Provider
creates, receives, maintains, or transmits on such Recipient’s behalf. Provider
shall comply with all applicable privacy and security provisions of 45 C.F.R.
part 164.

(iii) Provider shall promptly report to such Recipient any use or disclosure of,
or any security incident relating to PHI not permitted by this Agreement of
which Provider becomes aware and, to the extent caused by Provider’s breach,
cure the breach and end the violation.

(iv) Provider shall ensure that any vendor who may receive or have access to
such Recipient’s PHI agrees to the same restrictions and conditions that apply
to Provider with respect to PHI hereunder and agrees to implement reasonable and
appropriate safeguards to protect it.

(v) Provider shall promptly, upon such Recipient’s request, provide such
Recipient with any PHI or information relating to PHI, as is necessary to
provide individuals with access to, amendment of, and an accounting of
disclosures of their PHI.

(vi) Provider shall make internal practices, books, and records (including
policies and procedures) about the use and disclosure of such Recipient’s PHI
available to the Secretary of the Department of Health and Human Services, in a
time and manner mutually agreed to or designated by the Secretary of the
Department of Health and Human Services, to determine such Recipient’s
compliance with the HIPAA Privacy Rule (located at 45 C.F.R. Part 160 and
Subparts A and E of Part 164).

 

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(vii) Upon termination of this Agreement, at such Recipient’s direction,
Provider will either return or destroy all of such Recipient’s PHI that Provider
maintains in any form and retain no copies. If such return or destruction is not
feasible, Provider shall extend the confidentiality protections of this
Agreement to the PHI beyond such termination, in which case any further use or
disclosure of the PHI will be solely for the purposes that make return or
destruction infeasible. Destruction without retention of copies is deemed
“infeasible” if prohibited by applicable Law or if not practicably removed from
backup media.

Section 7.02. Security Incidents.

(a) In the event that either Party discovers a (i) any material breach of its
security safeguards or measures or the Systems used to provide the Services or
access to the Facilities including any incidents that are the subject of
Section 2.17(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) 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 and (III) to keep such other
Party advised of all material measures taken and other developments with respect
to such Security Incident.

(b) Each Provider shall take all reasonable and appropriate steps, in
consultation with the applicable Recipient, to protect the 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. Each modification requested by a Recipient to protect its
System and/or Confidential Information shall be deemed a Change subject to the
provisions of Section 2.12; provided, however, that any such approved
modification request implemented to remediate a Security Incident shall be
implemented at the sole cost of the Provider that experienced the Security
Incident.

(c) Subject to requirements of applicable Law, 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 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 or
Governmental Entity at the sole cost of the Provider that experienced the
Security Incident; provided that if requirements of applicable Law 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 to provide a mutually
acceptable notice.

(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) on an expedited
basis.

 

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Section 7.03. Notices. Except as otherwise expressly provided herein, all
notices, requests, claims, or demands provided for hereunder 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 or by
registered or certified mail (postage prepaid, return receipt requested) to the
relevant Persons at the applicable address(es) below (or at such other address
as shall be specified in a notice given in accordance with this Section 7.03),
along with a copy via e-mail to [TBD]@metlife.com (in the case of notices,
requests, claims, or demands to MSS and/or the Parent) and
[TBD]@brighthousefinancial.com (in the case of notices, requests, claims, or
demands to the Company and/or BHF) and with optional courtesy copies to such
Persons and the Contract Managers by e-mail; provided, however, that the
following shall not be deemed “notices” under this Section 7.03: (i)
communications concerning a disputed amount pursuant to Section 3.02, other than
the initial written notice of such disputed amount and (ii) communications
concerning a Dispute pursuant to Section 7.09(a) other than the Notice of
Dispute).

 

  (i) if to MSS:

MetLife Services and Solutions, LLC

200 Park Avenue

New York, NY 10166

Attention: Joseph Cohen, Senior Vice President

with a copy to:

MetLife

200 Park Avenue

New York, NY 10166

Attention: General Counsel

 

  (ii) if to the Parent:

MetLife

200 Park Avenue

New York, NY 10166

Attention: Adam Hodes, Executive Vice President, Mergers & Acquisitions

with a copy to:

MetLife

200 Park Avenue

New York, NY 10166

Attention: General Counsel

 

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  (iii) if to the Company:

Brighthouse Services, LLC

Gragg Building

11225 North Community House Road

Charlotte, NC 28277

Attention: Eric T. Steigerwalt, Chief Executive Officer

with a copy to:

Brighthouse Services, LLC

Gragg Building

11225 North Community House Road

Charlotte, NC 28277

Attention: Christine M. DeBiase, Senior Vice President and Secretary

 

  (iv) if to BHF:

Brighthouse Financial, Inc.

Gragg Building

11225 North Community House Road

Charlotte, NC 28277

Attention: Eric T. Steigerwalt, President and Chief Executive Officer

with a copy to:

Brighthouse Financial, Inc.

Gragg Building

11225 North Community House Road

Charlotte, NC 28277

Attention: Christine M. DeBiase, General Counsel and Secretary

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 herein,
this Agreement, any agreement for the provision of TPA Services or TSA
Broker-Dealer Services, and the other Transaction Documents 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 MSS and/or its Affiliates, on the one hand, and
the Company and/or its Affiliates, on the other hand, with respect to the
subject matter of this Agreement.

 

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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 hereunder to any of its Affiliates so long as such
assignment does not release such Party from any liability hereunder 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 MSS Indemnified Parties and Company Indemnified Parties, 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 policyholder of
the Parent Group or the Company Group) any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.

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.

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”) other than indemnity claims which are addressed in Section 5.04 and
Section 5.05 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 MSS Contract Manager and the Company 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 ten (10) Business Days (or such longer time
as the Contract Managers may agree), then the claiming Party shall 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
of the Parties for resolution in good faith. In the event such members of senior
management fail to meet, or if they meet, fail to resolve the Dispute within ten
(10) Business Days after such Dispute has been escalated to them by the Contract
Managers, then the Dispute shall be escalated to the Executive Vice President
and Head of Global Technology and Operations for Parent and the Chief Executive
Officer and President for BHF, or their respective designees for resolution in a
good faith. If such 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 dispute resolution procedures pursuant to Section 7.09(c), and a Party’s
failure to comply with such procedures shall constitute cause for the dismissal
without prejudice of any such proceeding.

 

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(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 2.12(d),
Section 2.17(g), Section 2.23, 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 management
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 Section 7.03(b) in a state or federal court
located in the county of New York 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.

(c) Except as provided by Section 7.09(b), and subject to complying with
Section 7.09(a), the provisions of Sections 6.3 and 6.4 of the Master Separation
Agreement shall apply mutatis mutandis to this Agreement.

Section 7.10. Governing Law. 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 any
conflicts of Law to the extent such principles or rules would require or permit
the application of the Laws of another jurisdiction.

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 any other gender as the context requires; (b) references to the
terms Preamble, Recital, Article, Section,

 

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paragraph, Schedule and Exhibit are references to the Preamble, Recitals,
Articles, Sections, paragraphs, Schedules and Exhibits to this Agreement unless
otherwise specified; (c) references to “$” means U.S. dollars; (d) the word
“including” and words of similar import when used in this Agreement means
“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 unless expressly stated otherwise; (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; (k) references to any section of any statute,
listing rule, rule, standard, regulation or other law include any successor to
such section; and (l) for the avoidance of doubt, the Separation Date and
Disaffiliation Date may be the same day or may be two distinct days.

Section 7.12. Obligations of Parties. Each obligation of a Provider hereunder to
take (or refrain from taking) any action hereunder shall be deemed to include an
undertaking (a) if the Provider is not the Company or any of its Affiliates, by
MSS to, and to cause such Provider to, take (or refrain from taking) such action
and (b) if the Provider is not MSS or any of its Affiliates, by the Company to,
and to cause such Provider to, take (or refrain from taking) such action. Each
obligation of a Recipient or any of its Affiliates hereunder to take (or refrain
from taking) any action hereunder shall be deemed to include an undertaking
(i) if the Recipient is not MSS or any of its Affiliates, by the Company to, and
to cause such Recipient or such Affiliate to, take (or refrain from taking) such
action, and (ii) if the Recipient is not the Company or any of its Affiliates,
by MSS to, and to cause such Recipient or such Affiliates to, take (or refrain
from taking) such action.

Section 7.13. 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.

 

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ARTICLE VIII

OBLIGATIONS OF PARENT AND BHF

Section 8.01. Obligations of Parent. Parent shall cause each Parent Group Member
to take all necessary actions (a) for such Parent Group Member to perform its
obligations hereunder to the extent that MSS is unable to cause such Parent
Group Member to do so or (b) to perform MSS’s obligations to the extent MSS is
unable to do so, in either case, including requiring such Parent Group Member to
make payments due from any Parent Group Member pursuant to Articles III and V
hereunder.

Section 8.02. Obligations of BHF. BHF shall cause each Company Group Member to
take all necessary actions (a) for such Company Group Member to perform its
obligations hereunder to the extent that the Company is unable to cause such
Company Group Member to do so or (b) to perform the Company’s obligations to the
extent that the Company is unable to do so, in either case, including requiring
such Company Group Member to make payments due from any Company Group Member
pursuant to Articles III and V hereunder.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

 

57

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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.

 

METLIFE SERVICES AND SOLUTIONS, LLC By:  

/s/ Joseph B. Cohen

Name:   Joseph B. Cohen Title:   SVP and GC FOR PURPOSES OF ARTICLE VIII ONLY
METLIFE, INC. By:  

/s/ John D. McCallion

Name:   John D. McCallion Title:   EVP and Treasurer

Signature Page of

Transition Services Agreement

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BRIGHTHOUSE SERVICES, LLC

By:

 

/s/ Jin Chang

Name:

 

Jin Chang

Title:

 

VP and Treasurer

FOR PURPOSES OF ARTICLE VIII ONLY

BRIGHTHOUSE FINANCIAL, INC.

By:

 

/s/ Jin Chang

Name:

 

Jin Chang

Title:

 

Treasurer

Signature Page of

Transition Services Agreement

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Schedule 2.06

Summary of Services and Access to Facilities

 

Function

  

Description of Services

   Expected
Duration
(months)1 Actuarial    Information Technology and other support for matters such
as valuation, reserves, projections, and similar determinations.    24 Audit   
Assessment of controls regarding services under this agreement.    36 Compliance
   Support for matters such as licensing, sales material review, and prohibited
transaction prevention.    12-36 Finance    Support for matters such as
accounting, reconciliations, financial reporting, and information technology
systems.    6-36 Technology and Operations    Support for matters such as
information technology, call centers operations, policy administration, and
vendor management. Claims analytics and remittance.    12-36 Human Resources   
Support for matters such as employee data management, recruiting and staffing
processes, employee relations, payroll, employee relocation, and employee exit
transactions. Benefit Plan administration.    12 Legal Affairs    Support for
matters such as records management, garnishments, third-party subpoenas,
subsidiary entity management, document holds and production, intellectual
property management.    6-36 Marketing    Support for matters such as client
demographic information management, vendor management, web site management.   
12-24 Procurement    Support for matters such as vendor management, contract
negotiation support, corporate credit cards, and contingent labor management.
Manage P.O. requisition process.    24 Risk    Support for matters such as
economic scenario calculations and risk reports.    6- 12 Tax    Support for
matters such as calculation of valuation and liabilities for tax purposes,
production of tax returns and reports, tax aspects of financial reporting and
information technology systems.    24 Treasury    Support for matters such as
data management, information technology, checking and other payment systems.   
12-24 U.S. Business    Support for matters such as client services and
relationship management, rate and other calculations, testing, tax matters,
agent compensation administration, product documentation and recordkeeping,
vendor management, print services cost allocation, underwriting, examinations.
   12-36

 

1  Duration represents the Parties’ expectations of the duration of services in
each function as of the execution of this Agreement. Their expectations are
subject to change and adjustment thereafter pursuant to the terms of this
Agreement without amendment of this schedule, other than as set forth in the
second sentence of Section 2.06.