Document:

exv4w2

 

 

    Exhibit 4.2

 

    AMENDED
    AND RESTATED BYLAWS

     

    OF

     

    Exterran Holdings, INC.

     

     
A
    Delaware Corporation

 

     
 
 
Date
    of Adoption:

              ,
    2007

 

    

     

 

    TABLE OF
    CONTENTS

 

	 	 	 	 	 	 	 
	
    ARTICLE I
    STOCKHOLDERS
    
	
 
	
	
    1
    
	

	

    Section 1.1
    

	
 
	
    Annual Meeting
    
	
 
	
	
    1
    
	

	

    Section 1.2
    

	
 
	
    Special Meetings
    
	
 
	
	
    1
    
	

	

    Section 1.3
    

	
 
	
    Notice of Meetings
    
	
 
	
	
    1
    
	

	

    Section 1.4
    

	
 
	
    Quorum
    
	
 
	
	
    1
    
	

	

    Section 1.5
    

	
 
	
    Organization
    
	
 
	
	
    1
    
	

	

    Section 1.6
    

	
 
	
    Conduct of Business
    
	
 
	
	
    2
    
	

	

    Section 1.7
    

	
 
	
    Proxies and Voting
    
	
 
	
	
    2
    
	

	

    Section 1.8
    

	
 
	
    Stock List
    
	
 
	
	
    2
    
	

	

    Section 1.9
    

	
 
	
    Notice of Stockholder Business and
    Nominations
    
	
 
	
	
    2
    
	

	
 
	
 
	
 
	
 
	
	
 
	

	
 
	
 
	
	
 
	 
	
    ARTICLE II
    BOARD OF DIRECTORS
    
	
 
	
	
    4
    
	

	

    Section 2.1
    

	
 
	
    Number, Election and Term of
    Directors
    
	
 
	
	
    4
    
	

	

    Section 2.2
    

	
 
	
    Newly Created Directorships and
    Vacancies
    
	
 
	
	
    4
    
	

	

    Section 2.3
    

	
 
	
    Regular Meetings
    
	
 
	
	
    5
    
	

	

    Section 2.4
    

	
 
	
    Special Meetings
    
	
 
	
	
    5
    
	

	

    Section 2.5
    

	
 
	
    Quorum
    
	
 
	
	
    5
    
	

	

    Section 2.6
    

	
 
	
    Participation in Meetings By
    Conference Telephone
    
	
 
	
	
    5
    
	

	

    Section 2.7
    

	
 
	
    Conduct of Business
    
	
 
	
	
    5
    
	

	

    Section 2.8
    

	
 
	
    Compensation of Directors
    
	
 
	
	
    5
    
	

	

    Section 2.9
    

	
 
	
    Powers and Duties of the Chairman
    of the Board
    
	
 
	
	
    5
    
	

	
 
	
 
	
 
	
 
	
	
 
	

	
 
	
 
	
	
 
	 
	
    ARTICLE III
    COMMITTEES
    
	
 
	
	
    5
    
	

	

    Section 3.1
    

	
 
	
    Committees of the Board of
    Directors
    
	
 
	
	
    5
    
	

	

    Section 3.2
    

	
 
	
    Conduct of Business
    
	
 
	
	
    6
    
	

	
 
	
 
	
 
	
 
	
	
 
	

	
 
	
 
	
	
 
	 
	
    ARTICLE IV
    OFFICERS
    
	
 
	
	
    6
    
	

	

    Section 4.1
    

	
 
	
    Generally
    
	
 
	
	
    6
    
	

	

    Section 4.2
    

	
 
	
    Resignation and Removal
    
	
 
	
	
    6
    
	

	

    Section 4.3
    

	
 
	
    Powers and Duties of the Chief
    Executive Officer
    
	
 
	
	
    6
    
	

	

    Section 4.4
    

	
 
	
    Powers and Duties of the President
    
	
 
	
	
    6
    
	

	

    Section 4.5
    

	
 
	
    Vice Presidents
    
	
 
	
	
    7
    
	

	

    Section 4.6
    

	
 
	
    Treasurer
    
	
 
	
	
    7
    
	

	

    Section 4.7
    

	
 
	
    Assistant Treasurers
    
	
 
	
	
    7
    
	

	

    Section 4.8
    

	
 
	
    Secretary
    
	
 
	
	
    7
    
	

	

    Section 4.9
    

	
 
	
    Assistant Secretaries
    
	
 
	
	
    7
    
	

	

    Section 4.10
    

	
 
	
    Delegation of Authority
    
	
 
	
	
    7
    
	

	

    Section 4.11
    

	
 
	
    Action with Respect to Securities
    of Other Corporations
    
	
 
	
	
    7
    
	

	
 
	
 
	
 
	
 
	
	
 
	

	
 
	
 
	
	
 
	 
	
    ARTICLE V
    STOCK
    
	
 
	
	
    7
    
	

	

    Section 5.1
    

	
 
	
    Certificates of Stock
    
	
 
	
	
    7
    
	

	

    Section 5.2
    

	
 
	
    Transfers of Stock
    
	
 
	
	
    8
    
	

	

    Section 5.3
    

	
 
	
    Record Date
    
	
 
	
	
    8
    
	

	

    Section 5.4
    

	
 
	
    Lost, Stolen or Destroyed
    Certificates
    
	
 
	
	
    8
    
	

	

    Section 5.5
    

	
 
	
    Regulations
    
	
 
	
	
    8
    
	

	
 
	
 
	
 
	
 
	
	
 
	

    

    -i-

 

	 	 	 	 	 	 	 
	
    ARTICLE VI
    NOTICES
    
	
 
	
	
    8
    
	

	

    Section 6.1
    

	
 
	
    Notices
    
	
 
	
	
    8
    
	

	

    Section 6.2
    

	
 
	
    Waivers
    
	
 
	
	
    8
    
	

	
 
	
 
	
 
	
 
	
	
 
	

	
 
	
 
	
	
 
	 
	
    ARTICLE VII
    MISCELLANEOUS
    
	
 
	
	
    9
    
	

	

    Section 7.1
    

	
 
	
    Facsimile Signatures
    
	
 
	
	
    9
    
	

	

    Section 7.2
    

	
 
	
    Corporate Seal
    
	
 
	
	
    9
    
	

	

    Section 7.3
    

	
 
	
    Reliance upon Books, Reports and
    Records
    
	
 
	
	
    9
    
	

	

    Section 7.4
    

	
 
	
    Fiscal Year
    
	
 
	
	
    9
    
	

	

    Section 7.5
    

	
 
	
    Time Periods
    
	
 
	
	
    9
    
	

	
 
	
 
	
 
	
 
	
	
 
	

	
 
	
 
	
	
 
	 
	
    ARTICLE VIII
    INDEMNIFICATION OF DIRECTORS AND OFFICERS
    
	
 
	
	
    9
    
	

	

    Section 8.1
    

	
 
	
    Mandatory Indemnification of
    Directors and Officers
    
	
 
	
	
    9
    
	

	

    Section 8.2
    

	
 
	
    Right of Indemnitee to Bring Suit
    
	
 
	
	
    10
    
	

	

    Section 8.3
    

	
 
	
    Permissive Indemnification of
    Non-Officer Employees and Agents
    
	
 
	
	
    10
    
	

	

    Section 8.4
    

	
 
	
    General Provisions
    
	
 
	
	
    10
    
	

	
 
	
 
	
 
	
 
	
	
 
	

	
 
	
 
	
	
 
	 
	
    ARTICLE IX
    AMENDMENTS
    
	
 
	
	
    11
    
	

    
-ii-

 

    AMENDED
    AND RESTATED BYLAWS

    OF

    EXTERRAN HOLDINGS, INC.

    Incorporated under the Laws of the State of Delaware

 

    ARTICLE I

    

 

    STOCKHOLDERS
    

 

    Section 1.1  Annual
    Meeting.  An annual meeting of the
    stockholders, for the election of directors to succeed those
    whose terms expire and for the transaction of such other
    business as may properly come before the meeting, shall be held
    at such place, on such date, and at such time as the Board of
    Directors shall each year fix.

 

    Section 1.2  Special
    Meetings.  Special meetings of the
    stockholders, other than those required by statute, may be
    called only by the Chairman of the Board, if any, or the
    President or by the Board of Directors acting pursuant to a
    resolution adopted by a majority of the Whole Board. For
    purposes of these Bylaws, the term “Whole
    Board” shall mean the total number of authorized
    directors regardless of whether there exist any vacancies in
    such authorized directorships. The Board of Directors may
    postpone or reschedule any previously scheduled special meeting.

 

    Section 1.3  Notice
    of Meetings.  Notice of the place, if any,
    date, and time of all meetings of the stockholders, and the
    means of remote communications, if any, by which stockholders
    and proxyholders may be deemed to be present in person and vote
    at such meeting, and, in the case of a special meeting, the
    purpose for which the meeting is called, shall be given, not
    less than ten (10) nor more than sixty (60) days
    before the date on which the meeting is to be held, to each
    stockholder entitled to vote at such meeting, except as
    otherwise provided herein or required by law (meaning, here and
    hereinafter, as required from time to time by the Delaware
    General Corporation Law (the “GCL”) or the
    Restated Certificate of Incorporation of the Corporation).

 

    When a meeting is adjourned to another time or place, notice
    need not be given of the adjourned meeting if the time and
    place, if any, thereof, and the means of remote communications,
    if any, by which stockholders and proxyholders may be deemed to
    be present in person and vote at such adjourned meeting are
    announced at the meeting at which the adjournment is taken;
    provided, however, that if the date of any adjourned
    meeting is more than thirty (30) days after the date for
    which the meeting was originally noticed, or if a new record
    date is fixed for the adjourned meeting, notice of the place, if
    any, date, and time of the adjourned meeting and the means of
    remote communications, if any, by which stockholders and
    proxyholders may be deemed to be present in person and vote at
    such adjourned meeting, shall be given in conformity herewith.
    At any adjourned meeting, any business may be transacted which
    might have been transacted at the original meeting.

 

    Section 1.4  Quorum.  At
    any meeting of the stockholders, the holders of a majority of
    the voting power of all of the shares of the stock entitled to
    vote at the meeting, present in person or by proxy, shall
    constitute a quorum for all purposes, unless or except to the
    extent that the presence of a larger number may be required by
    law. Where a separate vote by a class or classes or series is
    required, a majority of the voting power of the shares of such
    class or classes or series present in person or represented by
    proxy shall constitute a quorum entitled to take action with
    respect to that vote on that matter.

 

    If a quorum shall fail to attend any meeting, the chairman of
    the meeting may adjourn the meeting to another place, if any,
    date, or time.

 

    Section 1.5  Organization.  Such
    person as the Board of Directors may have designated or, in the
    absence of such person, the Chairman of the Board or, in his or
    her absence, the President of the Corporation or, in his or her
    absence, such person as may be chosen by the holders of a
    majority of the voting power of the shares entitled to vote who
    are present, in person or by proxy, shall call to order any
    meeting of the

    
-1-

 

    stockholders and act as chairman of the meeting. In the absence
    of the Secretary or an Assistant Secretary of the Corporation,
    the secretary of the meeting shall be such person as the
    chairman of the meeting appoints.

 

    Section 1.6  Conduct
    of Business.  The chairman of any meeting of
    stockholders shall determine the order of business and the
    procedure at the meeting, including such regulation of the
    manner of voting and the conduct of discussion as seem to him or
    her in order. The chairman shall have the power to adjourn the
    meeting to another place, if any, date and time. The date and
    time of the opening and closing of the polls for each matter
    upon which the stockholders will vote at the meeting shall be
    announced at the meeting.

 

    Section 1.7  Proxies
    and Voting.  At any meeting of the
    stockholders, every stockholder entitled to vote may vote in
    person or by proxy authorized by an instrument in writing or by
    a transmission permitted by law filed in accordance with the
    procedure established for the meeting. Any copy, facsimile
    telecommunication or other reliable reproduction of the writing
    or transmission created pursuant to this paragraph may be
    substituted or used in lieu of the original writing or
    transmission for any and all purposes for which the original
    writing or transmission could be used, provided that such copy,
    facsimile telecommunication or other reproduction shall be a
    complete reproduction of the entire original writing or
    transmission.

 

    The Corporation may, and to the extent required by law, shall,
    in advance of any meeting of stockholders, appoint one or more
    inspectors to act at the meeting and make a written report
    thereof. The Corporation may designate one or more alternate
    inspectors to replace any inspector who fails to act. If no
    inspector or alternate is able to act at a meeting of
    stockholders, the person presiding at the meeting may, and to
    the extent required by law, shall, appoint one or more
    inspectors to act at the meeting. Each inspector, before
    entering upon the discharge of his or her duties, shall take and
    sign an oath faithfully to execute the duties of inspector with
    strict impartiality and according to the best of his or her
    ability. Every vote taken by ballots shall be counted by a duly
    appointed inspector or inspectors.

 

    All elections shall be determined by a plurality of the votes
    cast, and except as otherwise required by law or these Bylaws,
    all other matters shall be determined by a majority of the votes
    cast affirmatively or negatively.

 

    Section 1.8  Stock
    List.  A complete list of stockholders
    entitled to vote at any meeting of stockholders, arranged in
    alphabetical order for each class of stock and showing the
    address of each such stockholder and the number of shares
    registered in his or her name, shall be open to the examination
    of any such stockholder for a period of at least ten
    (10) days prior to the meeting in the manner provided by
    law.

 

    The stock list shall also be open to the examination of any
    stockholder during the whole time of the meeting as provided by
    law. This list shall presumptively determine the identity of the
    stockholders entitled to vote at the meeting and the number of
    shares held by each of them.

 

    Section 1.9  Notice
    of Stockholder Business and Nominations.

 

    (A) Annual Meetings of Stockholders.

 

    (1) Nominations of persons for election to the Board of
    Directors of the Corporation and the proposal of business to be
    considered by the stockholders may be made at an annual meeting
    of stockholders (a) pursuant to the Corporation’s
    notice of meeting delivered pursuant to Section 1.3
    of these Bylaws (or any supplement thereto), (b) by or at
    the direction of the Board of Directors or any committee thereof
    or (c) by any stockholder of the Corporation who is
    entitled to vote at the meeting, who complied with the notice
    procedures set forth in clauses (2) and (3) of
    paragraph (A) of this Section 1.9 and who
    was a stockholder of record at the time such notice was
    delivered to the Secretary of the Corporation.

 

    (2) For nominations or other business to be properly
    brought before an annual meeting by a stockholder pursuant to
    clause (c) of paragraph (A) (1) of this
    Section 1.9, (1) the stockholder must have
    given timely notice thereof in writing to the Secretary of the
    Corporation, (2) such business must be a proper matter for
    stockholder action under the GCL, (3) if the stockholder,
    or the beneficial owner on whose behalf any such proposal or
    nomination is made, has provided the Corporation with a
    Solicitation Notice, as that term is defined in
    subclause (c)(iii) of this paragraph, such stockholder or
    beneficial owner must, in the case of a proposal, have delivered
    a proxy statement and form of proxy to holders of at least the
    percentage of the

    
-2-

 

    Corporation’s voting shares required under applicable law
    or these Bylaws to carry any such proposal, or, in the case of a
    nomination or nominations, have delivered a proxy statement and
    form of proxy to holders of a percentage of the
    Corporation’s voting shares reasonably believed by such
    stockholder or beneficial holder to be sufficient to elect the
    nominee or nominees proposed to be nominated by such
    stockholder, and must, in either case, have included in such
    materials the Solicitation Notice and (4) if no
    Solicitation Notice relating thereto has been timely provided
    pursuant to this Section, the stockholder or beneficial owner
    proposing such business or nomination must not have solicited a
    number of proxies sufficient to have required the delivery of
    such a Solicitation Notice under this Section. To be timely, a
    stockholder’s notice shall be delivered to the Secretary at
    the principal executive offices of the Corporation not less than
    forty-five (45) or more than seventy-five (75) days
    prior to the first anniversary (the
    “Anniversary”) of the date on which the
    Corporation first mailed its proxy materials for the preceding
    year’s annual meeting of stockholders; provided,
    however, that in the event that the date of the annual
    meeting is advanced more than thirty (30) days prior to or
    delayed by more than thirty (30) days after the anniversary
    of the preceding year’s annual meeting, notice by the
    stockholder to be timely must be so delivered not later than the
    close of business on the later of (i) the ninetieth day
    prior to such annual meeting or (ii) the tenth day
    following the day on which public announcement of the date of
    such meeting is first made. Such stockholder’s notice shall
    set forth: (a) as to each person whom the stockholder
    proposes to nominate for election or reelection as a Director
    all information relating to such person that is required to be
    disclosed in solicitations of proxies for election of Directors,
    or is otherwise required, in each case pursuant to
    Regulation 14A under the Securities Exchange Act of 1934,
    as amended (the “Exchange Act”), including such
    person’s written consent to being named in the proxy
    statement as a nominee and to serving as a Director if elected;
    (b) as to any other business that the stockholder proposes
    to bring before the meeting, a brief description of the business
    desired to be brought before the meeting, the reasons for
    conducting such business at the meeting and any material
    interest in such business of such stockholder and the beneficial
    owner, if any, on whose behalf the proposal is made; and
    (c) as to the stockholder giving the notice and the
    beneficial owner, if any, on whose behalf the nomination or
    proposal is made (i) the name and address of such
    stockholder, as they appear on the Corporation’s books, and
    of such beneficial owner, (ii) the class and number of
    shares of the Corporation which are owned beneficially and of
    record by such stockholder and such beneficial owner,
    (iii) a representation that the stockholder is a holder of
    record of stock of the Corporation entitled to vote at such
    meeting and intends to appear in person or by proxy at the
    meeting to propose such business and nomination and
    (iv) whether either such stockholder or beneficial owner
    intends to deliver a proxy statement and form of proxy to
    holders of, in the case of a proposal, at least the percentage
    of the Corporation’s voting shares required under
    applicable law to carry the proposal or, in the case of a
    nomination or nominations, a sufficient number of holders of the
    Corporation’s voting shares to elect such nominee or
    nominees (an affirmative statement of such intent, a
    “Solicitation Notice”). The foregoing notice
    requirements of this Section 1.9(A)(2) shall be
    deemed satisfied by a stockholder if the stockholder has
    notified the Corporation of his, her or its intention to present
    a proposal or nomination at an annual meeting in compliance with
    applicable rules and regulations promulgated under the Exchange
    Act and such stockholder’s proposal or nomination has been
    included in a proxy statement that has been prepared by the
    Corporation to solicit proxies for such annual meeting. The
    Corporation may require any proposed nominee to furnish such
    other information as it may reasonably require to determine the
    eligibility of such proposed nominee to serve as a director of
    the Corporation.

 

    (3) Notwithstanding anything in the second sentence of
    paragraph (A) (2) of this Section 1.9 to
    the contrary, in the event that the number of Directors to be
    elected to the Board of Directors is increased and there is no
    public announcement naming all of the nominees for Director or
    specifying the size of the increased Board of Directors made by
    the Corporation at least fifty-five (55) days prior to the
    Anniversary, a stockholder’s notice required by this
    Section 1.9 shall also be considered timely, but
    only with respect to nominees for any new positions created by
    such increase, if it shall be delivered to the Secretary at the
    principal executive offices of the Corporation not later than
    the close of business on the tenth day following the day on
    which such public announcement is first made by the Corporation.

 

    (B) Special Meeting of
    Stockholders.  Only such business shall be
    conducted at a special meeting of stockholders as shall have
    been brought before the meeting pursuant to the
    Corporation’s notice of meeting pursuant to
    Section 1.3 of these Bylaws. Nominations of persons
    for election to the Board of Directors may be

    

    -3-

 

    made at a special meeting of stockholders at which Directors are
    to be elected pursuant to the Corporation’s notice of
    meeting (i) by or at the direction of the Board of
    Directors or (ii) by any stockholder of the Corporation who
    is entitled to vote at the meeting, who complies with the notice
    procedures set forth above in this Section 1.9 and
    who is a stockholder of record at the time such notice is
    delivered to the Secretary of the Corporation. Nominations by
    stockholders of persons for election to the Board of Directors
    may be made at such a special meeting of stockholders if the
    stockholder’s notice as required by paragraph (A)
    (2) of this Section 1.9 shall be delivered to
    the Secretary at the principal executive offices of the
    Corporation not earlier than the ninetieth day prior to such
    special meeting and not later than the close of business on the
    later of the seventieth day prior to such special meeting or the
    tenth day following the day on which public announcement is
    first made of the date of the special meeting and of the
    nominees proposed by the Board of Directors to be elected at
    such meeting.

 

    (C) General.

 

    (1) Only persons who are nominated in accordance with the
    procedures set forth in this Section 1.9 shall be
    eligible to serve as Directors and only such business shall be
    conducted at a meeting of stockholders as shall have been
    brought before the meeting in accordance with the procedures set
    forth in this Section 1.9. Except as otherwise
    provided herein or required by law, the chairman of the meeting
    shall have the power and duty to determine whether a nomination
    or any business proposed to be brought before the meeting was
    made in accordance with the procedures set forth in this
    Section 1.9 and, if any proposed nomination or
    business is not in compliance with this Section 1.9,
    to declare that such defective proposal or nomination shall be
    disregarded. Notwithstanding the foregoing provisions of this
    Section 1.9, unless otherwise required by law, if
    the stockholder (or a qualified representative of the
    stockholder) does not appear at the annual or special meeting of
    stockholders of the Corporation to present a nomination or
    proposed business, such nomination shall be disregarded and such
    proposed business shall not be transacted, notwithstanding that
    proxies in respect of such vote may have been received by the
    Corporation. For purposes of this Section 1.9, to be
    considered a qualified representative of the stockholder, a
    person must be a duly authorized officer, manager or partner of
    such stockholder or must be authorized by a writing executed by
    such stockholder or an electronic transmission delivered by such
    stockholder to act for such stockholder as proxy at the meeting
    of stockholders and such person must produce such writing or
    electronic transmission, or a reliable reproduction of the
    writing or electronic transmission, at the meeting of
    stockholders.

 

    (2) For purposes of this Section 1.9,
    “public announcement” shall mean disclosure in
    a press release reported by the Dow Jones News Service,
    Associated Press or comparable national news service or in a
    document publicly filed by the Corporation with the Securities
    and Exchange Commission pursuant to Section 13, 14 or 15(d)
    of the Exchange Act.

 

    (3) Notwithstanding the foregoing provisions of this
    Section 1.9, a stockholder shall also comply with
    all applicable requirements of the Exchange Act and the rules
    and regulations thereunder with respect to the matters set forth
    in this Section 1.9. Nothing in this
    Section 1.9 shall be deemed to affect any rights
    (a) of stockholders to request inclusion of proposals in
    the Corporation’s proxy statement pursuant to
    Rule 14a-8
    under the Exchange Act or (b) of the holders of any series
    of Preferred Stock to elect directors pursuant to any applicable
    provisions of the Restated Certificate of Incorporation.

 

    ARTICLE II

    

 

    BOARD OF
    DIRECTORS
    

 

    Section 2.1  Number,
    Election and Term of Directors.  The number,
    election and term of directors shall be as, or shall be
    determined in the manner, set forth in the Restated Certificate
    of Incorporation of the Corporation or, to the extent not set
    forth therein, in a resolution adopted by a majority of the
    Whole Board.

 

    Section 2.2  Newly
    Created Directorships and Vacancies.  Subject
    to the rights of the holders of any series of Preferred Stock,
    newly created directorships resulting from any increase in the
    authorized number of directors or any vacancies in the Board of
    Directors resulting from death, resignation, retirement,

    

    -4-

 

    disqualification, removal from office or other cause shall be
    filled only by a majority vote of the Whole Board (and not by
    stockholders).

 

    Section 2.3  Regular
    Meetings.  Regular meetings of the Board of
    Directors shall be held at such place or places, on such date or
    dates, and at such time or times as shall have been established
    by the Board of Directors and publicized among all directors. A
    notice of each regular meeting shall not be required.

 

    Section 2.4  Special
    Meetings.  Special meetings of the Board of
    Directors may be called by the Chairman of the Board, the
    President or by a majority of the Whole Board and shall be held
    at such place, on such date, and at such time as they, he or she
    shall fix. Notice of the place, date, and time of each such
    special meeting shall be given to each director by whom it is
    not waived by mailing written notice not less than five
    (5) days before the meeting or by telephone or by
    telegraphing or telexing or by facsimile or electronic
    transmission of the same not less than twenty-four
    (24) hours before the meeting. Unless otherwise indicated
    in the notice thereof, any and all business may be transacted at
    a special meeting.

 

    Section 2.5  Quorum.  At
    any meeting of the Board of Directors, a majority of the total
    number of the Whole Board shall constitute a quorum for all
    purposes. If a quorum shall fail to attend any meeting, a
    majority of those present may adjourn the meeting to another
    place, date, or time, without further notice or waiver thereof.

 

    Section 2.6  Participation
    in Meetings By Conference Telephone.  Members
    of the Board of Directors, or of any committee thereof, may
    participate in a meeting of such Board of Directors or committee
    by means of conference telephone or other communications
    equipment by means of which all persons participating in the
    meeting can hear each other and such participation shall
    constitute presence in person at such meeting.

 

    Section 2.7  Conduct
    of Business.  At any meeting of the Board of
    Directors, business shall be transacted in such order and manner
    as the Board of Directors may from time to time determine, and
    all matters shall be determined by the vote of a majority of the
    directors present, except as otherwise provided herein or
    required by law. Action may be taken by the Board of Directors
    without a meeting if all members thereof consent thereto in
    writing or by electronic transmission, and the writing or
    writings or electronic transmission or transmissions are filed
    with the minutes of proceedings of the Board of Directors. Such
    filing shall be in paper form if the minutes are maintained in
    paper form and shall be in electronic form if the minutes are
    maintained in electronic form.

 

    Section 2.8  Compensation
    of Directors.  Unless otherwise restricted by
    law, the Board of Directors shall have the authority to fix the
    compensation of the directors. The directors may be paid their
    expenses, if any, of attendance at each meeting of the Board of
    Directors and may be paid a fixed sum for attendance at each
    meeting of the Board of Directors or paid a stated salary or
    paid other compensation as director. No such payment shall
    preclude any director from serving the Corporation in any other
    capacity and receiving compensation therefor. Members of special
    or standing committees may also be paid their expenses, if any,
    of and allowed compensation for attending committee meetings.

 

    Section 2.9  Powers
    and Duties of the Chairman of the Board.  If
    elected, the Chairman of the Board shall preside at all meetings
    of the stockholders and of the Board of Directors; and shall
    have such other powers and duties as designated in these Bylaws
    and as from time to time may be assigned to him or her by the
    Board of Directors.

 

    ARTICLE III

    

 

    COMMITTEES
    

 

    Section 3.1  Committees
    of the Board of Directors.  The Board of
    Directors may from time to time designate committees of the
    Board of Directors, with such lawfully delegable powers and
    duties as it thereby confers and to the full extent permitted by
    Section 141(c)(2) of the GCL, to serve at the pleasure of
    the Board of Directors and shall, for those committees and any
    others provided for herein, elect a director or directors to
    serve as the member or members, designating, if it desires,
    other directors as alternate members who may replace any absent
    or disqualified member at any meeting of the committee. In the
    absence or disqualification

    

    -5-

 

    of any member of any committee and any alternate member in his
    or her place, the member or members of the committee present at
    the meeting and not disqualified from voting, whether or not he,
    she or they constitute a quorum, may by unanimous vote appoint
    another member of the Board of Directors to act at the meeting
    in the place of the absent or disqualified member.

 

    Section 3.2  Conduct
    of Business.  Each committee may determine the
    procedural rules for meeting and conducting its business and
    shall act in accordance therewith, except as otherwise provided
    herein or required by law. Adequate provision shall be made for
    notice to members of all meetings; one-third (1/3) of the
    members shall constitute a quorum unless the committee shall
    consist of one (1) or two (2) members, in which event
    one (1) member shall constitute a quorum; and all matters
    shall be determined by a majority vote of the members present.
    Action may be taken by any committee without a meeting if all
    members thereof consent thereto in writing or by electronic
    transmission, and the writing or writings or electronic
    transmission or transmissions are filed with the minutes of the
    proceedings of such committee. Such filing shall be in paper
    form if the minutes are maintained in paper form and shall be in
    electronic form if the minutes are maintained in electronic form.

 

    ARTICLE IV

    

 

    OFFICERS
    

 

    Section 4.1  Generally.  The
    officers of the Corporation shall include a Chief Executive
    Officer, a President, and a Secretary, and may also include a
    Vice Chairman, Chief Financial Officer, Chief Operating Officer,
    a Treasurer, one or more Vice Presidents (who may be further
    classified by such descriptions as “executive,”
    “senior,” “assistant,” “staff” or
    otherwise, as the Board of Directors shall determine), one or
    more Assistant Secretaries and one or more Assistant Treasurers.
    Officers shall be elected by the Board of Directors, which shall
    consider that subject at its first meeting after every annual
    meeting of stockholders. Each officer shall hold office until
    his or her successor is elected and qualified or until his or
    her earlier resignation or removal. Any number of offices may be
    held by the same person. The salaries of officers elected by the
    Board of Directors shall be fixed from time to time by the Board
    of Directors or a committee thereof or by such officers as may
    be designated by resolution of the Board of Directors or a
    committee thereof.

 

    Section 4.2  Resignation
    and Removal.  Any officer may resign at any
    time upon written notice to the Corporation. Any officer, agent
    or employee of the Corporation may be removed by the Board of
    Directors with or without cause at any time. The Board of
    Directors may delegate the power of removal as to officers,
    agents and employees who have not been appointed by the Board of
    Directors. Such removal shall be without prejudice to a
    person’s contract rights, if any, but the appointment of
    any person as an officer, agent or employee of the Corporation
    shall not of itself create contract rights.

 

    Section 4.3  Powers
    and Duties of the Chief Executive
    Officer.  The President shall be the Chief
    Executive Officer of the Corporation unless the Board of
    Directors designates the Chairman of the Board as Chief
    Executive Officer. Subject to the control of the Board of
    Directors and the executive committee (if any), the Chief
    Executive Officer shall have general executive charge,
    management and control of the properties, business and
    operations of the Corporation with all such powers as may be
    reasonably incident to such responsibilities; he or she may
    employ and discharge employees and agents of the Corporation,
    except such as shall be appointed by the Board of Directors, and
    he or she may delegate these powers; he or she may agree upon
    and execute all leases, contracts, evidences of indebtedness and
    other obligations in the name of the Corporation; and shall have
    such other powers and duties as designated in accordance with
    these Bylaws and as from time to time may be assigned to him or
    her by the Board of Directors.

 

    Section 4.4  Powers
    and Duties of the President.  Unless the Board
    of Directors otherwise determines, the President shall have the
    authority to agree upon and execute all leases, contracts,
    evidences of indebtedness and other obligations in the name of
    the Corporation; and, unless the Board of Directors otherwise
    determines, shall, in the absence of the Chairman of the Board
    or if there be no Chairman of the Board, preside at all meetings
    of the stockholders and (should he or she be a director) of the
    Board of Directors; and he or she

    

    -6-

 

    shall have such other powers and duties as designated in
    accordance with these Bylaws and as from time to time may be
    assigned to him or her by the Board of Directors.

 

    Section 4.5  Vice
    Presidents.  In the absence of the President,
    or in the event of his or her inability or refusal to act, a
    Vice President designated by the Board of Directors shall
    perform the duties of the President, and when so acting shall
    have all the powers of and be subject to all the restrictions
    upon the President. In the absence of a designation by the Board
    of Directors of a Vice President to perform the duties of the
    President, or in the event of his or her absence or inability or
    refusal to act, the Vice President who is present and who is
    senior in terms of time as a Vice President of the Corporation
    shall so act. The Vice Presidents shall perform such other
    duties and have such other powers as the Board of Directors may
    from time to time prescribe. Unless otherwise provided by the
    Board of Directors, each Vice President will have authority to
    act within his or her respective areas and to sign contracts
    relating thereto.

 

    Section 4.6  Treasurer.  If
    elected, the Treasurer shall have responsibility for the custody
    and control of all the funds and securities of the Corporation,
    and shall have such other powers and duties as designated in
    these Bylaws and as from time to time may be assigned to the
    Treasurer by the Board of Directors. The Treasurer shall perform
    all acts incident to the position of Treasurer, subject to the
    control of the Chief Executive Officer and the Board of
    Directors; and shall, if required by the Board of Directors,
    give such bond for the faithful discharge of his or her duties
    in such form as the Board of Directors may require.

 

    Section 4.7  Assistant
    Treasurers.  Each Assistant Treasurer shall
    have the usual powers and duties pertaining to his or her
    office, together with such other powers and duties as designated
    in these Bylaws and as from time to time may be assigned to him
    or her by the Chief Executive Officer or the Board of Directors.
    The Assistant Treasurers shall exercise the powers of the
    Treasurer during that officer’s absence or inability or
    refusal to act.

 

    Section 4.8  Secretary.  The
    Secretary shall issue all authorized notices for, and shall keep
    minutes of, all meetings of the stockholders and the Board of
    Directors. He or she shall have charge of the corporate books
    and shall perform such other duties as the Board of Directors
    may from time to time prescribe.

 

    Section 4.9  Assistant
    Secretaries.  In the absence or inability to
    act of the Secretary, any Assistant Secretary may perform all
    the duties and exercise all the powers of the Secretary. The
    performance of any such duty shall, in respect of any other
    person dealing with the Corporation, be conclusive evidence of
    his or her power to act. An Assistant Secretary shall also
    perform such other duties as the Secretary or the Board of
    Directors may assign to him or her.

 

    Section 4.10  Delegation
    of Authority.  The Board of Directors may from
    time to time delegate the powers or duties of any officer to any
    other officers or agents, notwithstanding any provision hereof.

 

    Section 4.11  Action
    with Respect to Securities of Other
    Corporations.  Unless otherwise directed by
    the Board of Directors, the Chief Executive Officer, the
    President, the Treasurer or any officer of the Corporation
    authorized by the Chief Executive Officer shall have power to
    vote and otherwise act on behalf of the Corporation, in person
    or by proxy, at any meeting of stockholders of or with respect
    to any action of stockholders of any other corporation in which
    this Corporation may hold securities and otherwise to exercise
    any and all rights and powers which this Corporation may possess
    by reason of its ownership of securities in such other
    corporation.

 

    ARTICLE V

    

 

    STOCK
    

 

    Section 5.1  Certificates
    of Stock.  Each holder of stock represented by
    certificates shall be entitled to a certificate signed by, or in
    the name of the Corporation by, the Chairman of the Board or
    Vice Chairman of the Board, the President or a Vice President,
    and by the Secretary or an Assistant Secretary, or the Treasurer
    or an Assistant Treasurer, certifying the number of shares owned
    by him or her. Any or all of the signatures on the certificate
    may be by facsimile.

    

    -7-

 

 

    Section 5.2  Transfers
    of Stock.  Transfers of stock shall be made
    only upon the transfer books of the Corporation kept at an
    office of the Corporation or by transfer agents designated to
    transfer shares of the stock of the Corporation. Except where a
    certificate is issued in accordance with Section 5.4
    of these Bylaws, an outstanding certificate for the number of
    shares involved shall be surrendered for cancellation before a
    new certificate is issued therefor.

 

    Section 5.3  Record
    Date.  In order that the Corporation may
    determine the stockholders entitled to notice of or to vote at
    any meeting of stockholders, or to receive payment of any
    dividend or other distribution or allotment of any rights or to
    exercise any rights in respect of any change, conversion or
    exchange of stock or for the purpose of any other lawful action,
    the Board of Directors may, except as otherwise required by law,
    fix a record date, which record date shall not precede the date
    on which the resolution fixing the record date is adopted and
    which record date shall not be more than sixty (60) nor
    less than ten (10) days before the date of any meeting of
    stockholders, nor more than sixty (60) days prior to the
    time for such other action as hereinbefore described;
    provided, however, that if no record date is fixed by the
    Board of Directors, the record date for determining stockholders
    entitled to notice of or to vote at a meeting of stockholders
    shall be at the close of business on the day next preceding the
    day on which notice is given or, if notice is waived, at the
    close of business on the day next preceding the day on which the
    meeting is held, and, for determining stockholders entitled to
    receive payment of any dividend or other distribution or
    allotment of rights or to exercise any rights of change,
    conversion or exchange of stock or for any other purpose, the
    record date shall be at the close of business on the day on
    which the Board of Directors adopts a resolution relating
    thereto.

 

    A determination of stockholders of record entitled to notice of
    or to vote at a meeting of stockholders shall apply to any
    adjournment of the meeting; provided, however, that the
    Board of Directors may fix a new record date for the adjourned
    meeting.

 

    Section 5.4  Lost,
    Stolen or Destroyed Certificates.  In the
    event of the loss, theft or destruction of any certificate of
    stock, another may be issued in its place pursuant to such
    regulations as the Board of Directors may establish concerning
    proof of such loss, theft or destruction and concerning the
    giving of a satisfactory bond or bonds of indemnity.

 

    Section 5.5  Regulations.  The
    issue, transfer, conversion and registration of certificates of
    stock shall be governed by such other regulations as the Board
    of Directors may establish.

 

    ARTICLE VI

    

 

    NOTICES
    

 

    Section 6.1  Notices.  If
    mailed, notice to stockholders shall be deemed given when
    deposited in the mail, postage prepaid, directed to the
    stockholder at such stockholder’s address as it appears on
    the records of the Corporation. Without limiting the manner by
    which notice otherwise may be given effectively to stockholders,
    any notice to stockholders may be given by electronic
    transmission in the manner provided in Section 232 of the
    GCL.

 

    Section 6.2  Waivers.  A
    written waiver of any notice, signed by a stockholder or
    director, or waiver by electronic transmission by such person,
    whether given before or after the time of the event for which
    notice is to be given, shall be deemed equivalent to the notice
    required to be given to such person. Neither the business nor
    the purpose of any meeting need be specified in such a waiver.
    Attendance at any meeting shall constitute waiver of notice
    except if the person attends a meeting for the express purpose
    of objecting at the beginning of the meeting to the transaction
    of any business at the meeting because it has not been lawfully
    called or convened.

    

    -8-

 

 

    ARTICLE VII

    

 

    MISCELLANEOUS
    

 

    Section 7.1  Facsimile
    Signatures.  In addition to the provisions for
    use of facsimile signatures elsewhere specifically authorized in
    these Bylaws, facsimile signatures of any officer or officers of
    the Corporation may be used whenever and as authorized by the
    Board of Directors or a committee thereof.

 

    Section 7.2  Corporate
    Seal.  The Board of Directors may provide a
    suitable seal, containing the name of the Corporation, which
    seal shall be in the charge of the Secretary. If and when so
    directed by the Board of Directors or a committee thereof,
    duplicates of the seal may be kept and used by the Treasurer or
    by an Assistant Secretary or Assistant Treasurer.

 

    Section 7.3  Reliance
    upon Books, Reports and Records.  Each
    director, each member of any committee designated by the Board
    of Directors, and each officer of the Corporation shall, in the
    performance of his or her duties, be fully protected in relying
    in good faith upon the books of account or other records of the
    Corporation and upon such information, opinions, reports or
    statements presented to the Corporation by any of its officers
    or employees, or committees of the Board of Directors so
    designated, or by any other person as to matters which such
    director or committee member reasonably believes are within such
    other person’s professional or expert competence and who
    has been selected with reasonable care by or on behalf of the
    Corporation.

 

    Section 7.4  Fiscal
    Year.  The fiscal year of the Corporation
    shall be the calendar year unless otherwise fixed by the Board
    of Directors.

 

    Section 7.5  Time
    Periods.  In applying any provision of these
    Bylaws which requires that an act be done or not be done a
    specified number of days prior to an event or that an act be
    done during a period of a specified number of days prior to an
    event, calendar days shall be used, the day of the doing of the
    act shall be excluded, and the day of the event shall be
    included.

 

    ARTICLE VIII

    

 

    INDEMNIFICATION
    OF DIRECTORS AND OFFICERS
    

 

    Section 8.1  Mandatory
    Indemnification of Directors and
    Officers.  The Corporation shall indemnify and
    hold harmless to the full extent permitted by the laws of the
    State of Delaware as from time to time in effect any person who
    was or is a party or is threatened to be made a party to, or is
    otherwise involved in, any threatened, pending or completed
    action, suit or proceeding, whether civil, criminal,
    administrative or investigative (whether or not an action by or
    in the right of the Corporation) (hereinafter a
    “proceeding”), by reason of the fact that he or
    she is or was a director or officer of the Corporation, or,
    while serving as a director or officer of the Corporation, is or
    was serving at the request of the Corporation as a director,
    officer, employee or agent of another corporation, partnership,
    joint venture, trust or other enterprise (hereinafter an
    “indemnitee”), or by reason of any action
    alleged to have been taken or omitted in such capacity against
    all expense, liability and loss (including attorneys’ fees,
    judgments, fines, ERISA excise taxes or penalties and amounts
    paid in settlement) reasonably incurred or suffered by such
    indemnitee in connection therewith; provided, however, that,
    except as provided in Section 8.2 with respect to
    proceedings to enforce rights to indemnification, the
    Corporation shall indemnify any such indemnitee in connection
    with a proceeding (or part thereof) initiated by such indemnitee
    only if such proceeding (or part thereof) was authorized by the
    Board of Directors of the Corporation. The right to
    indemnification conferred by this Section 8.1 also
    shall include the right of such persons described in this
    Section 8.1 to be paid in advance by the Corporation
    for their expenses (including attorneys’ fees) incurred in
    defending any such proceeding in advance of its final
    disposition (hereinafter an “advancement of
    expenses”) to the full extent permitted by the laws of
    the State of Delaware, as from time to time in effect;
    provided, however, that, if the GCL requires, an
    advancement of expenses incurred by an indemnitee in his or her
    capacity as a director or officer (and not in any other capacity
    in which service was or is rendered by such indemnitee) shall be
    made only upon delivery to the Corporation of an undertaking
    (hereinafter an ‘‘undertaking”), by or on
    behalf of such indemnitee, to repay all amounts so

    

    -9-

 

    advanced if it shall ultimately be determined by final judicial
    decision from which there is no further right to appeal
    (hereinafter a “final adjudication”) that such
    indemnitee is not entitled to be indemnified for such expenses
    under this Section 8.1 or otherwise. The right to
    indemnification conferred on such persons by this
    Section 8.1 shall be a contract right.

 

    Section 8.2  Right
    of Indemnitee to Bring Suit.  If a claim under
    Section 8.1 of these Bylaws is not paid in full by
    the Corporation within sixty (60) days after a written
    claim has been received by the Corporation, except in the case
    of a claim for an advancement of expenses, in which case the
    applicable period shall be twenty (20) days, the indemnitee
    may at any time thereafter bring suit against the Corporation to
    recover the unpaid amount of the claim. If successful in whole
    or in part in any such suit, or in a suit brought by the
    Corporation to recover an advancement of expenses pursuant to
    the terms of an undertaking, the indemnitee shall be entitled to
    be paid also the expense of prosecuting or defending such suit.
    In (i) any suit brought by the indemnitee to enforce a
    right to indemnification hereunder (but not in a suit brought by
    the indemnitee to enforce a right to an advancement of expenses)
    it shall be a defense that, and (ii) in any suit brought by
    the Corporation to recover an advancement of expenses pursuant
    to the terms of an undertaking, the Corporation shall be
    entitled to recover such expenses upon a final adjudication
    that, the indemnitee has not met any applicable standard for
    indemnification set forth in the GCL. Neither the failure of the
    Corporation (including its directors who are not parties to such
    action, a committee of such directors, independent legal
    counsel, or its stockholders) to have made a determination prior
    to the commencement of such suit that indemnification of the
    indemnitee is proper in the circumstances because the indemnitee
    has met the applicable standard of conduct set forth in the GCL,
    nor an actual determination by the Corporation (including its
    directors who are not parties to such action, a committee of
    such directors, independent legal counsel, or its stockholders)
    that the indemnitee has not met such applicable standard of
    conduct, shall create a presumption that the indemnitee has not
    met the applicable standard of conduct or, in the case of such a
    suit brought by the indemnitee, be a defense to such suit. In
    any suit brought by the indemnitee to enforce a right to
    indemnification or to an advancement of expenses hereunder, or
    brought by the Corporation to recover an advancement of expenses
    pursuant to the terms of an undertaking, the burden of proving
    that the indemnitee is not entitled to be indemnified, or to
    such advancement of expenses, under this
    Article VIII or otherwise shall be on the
    Corporation.

 

    Section 8.3  Permissive
    Indemnification of Non-Officer Employees and
    Agents.  The Corporation may indemnify any
    person who was or is a party or is threatened to be made a party
    to any threatened, pending or completed action, suit or
    proceeding, whether civil, criminal, administrative or
    investigative (whether or not an action by or in the right of
    the Corporation) by reason of the fact that the person is or was
    an employee (other than an officer) or agent of the Corporation,
    or, while serving as an employee (other than an officer) or
    agent of the Corporation, is or was serving at the request of
    the Corporation as a director, officer, employee or agent of
    another corporation, partnership, joint venture, trust or other
    enterprise, to the extent (i) permitted by the laws of the
    State of Delaware as from time to time in effect, and
    (ii) authorized in the sole discretion of the Chief
    Executive Officer and at least one other of the following
    officers: the President, the Chief Financial Officer, or the
    General Counsel of the Corporation (the Chief Executive Officer
    and any of such other officers so authorizing such
    indemnification, the “Authorizing Officers”).
    The Corporation may, to the extent permitted by Delaware law and
    authorized in the sole discretion of the Authorizing Officers,
    pay expenses (including attorneys’ fees) reasonably
    incurred by any such employee or agent in defending any civil,
    criminal, administrative or investigative action, suit or
    proceeding in advance of the final disposition of such action,
    suit or proceeding, upon such terms and conditions as the
    Authorizing Officers authorizing such expense advancement
    determine in their sole discretion. The provisions of this
    Section 8.3 shall not constitute a contract right
    for any such employee or agent.

 

    Section 8.4  General
    Provisions.  The rights and authority
    conferred in any of the Sections of this
    Article VIII shall not be exclusive of any other
    right which any person seeking indemnification or advancement of
    expenses may have or hereafter acquire under any statute,
    provision of the Restated Certificate of Incorporation or these
    Bylaws, agreement, vote of stockholders or disinterested
    Directors or otherwise, both as to action in his or her official
    capacity and as to action in another capacity while holding such
    office and shall continue as to a person who has ceased to be a
    Director, officer, employee or agent and shall inure to the

    

    -10-

 

    benefit of the heirs, executors and administrators of such a
    person. Neither the amendment or repeal of this
    Article VIII or any of the Sections thereof nor the
    adoption of any provision of the Restated Certificate of
    Incorporation or these Bylaws or of any statute inconsistent
    with this Article VIII or any of the Sections
    thereof shall eliminate or reduce the effect of this
    Article VIII or any of the Sections thereof in
    respect of any acts or omissions occurring prior to such
    amendment, repeal or adoption or an inconsistent provision.

 

    ARTICLE IX

    

 

    AMENDMENTS
    

 

    In furtherance and not in limitation of the powers conferred by
    law, the Board of Directors is expressly authorized to adopt,
    amend and repeal these Bylaws by the approval of a majority of
    the Whole Board, subject to the power of the holders of capital
    stock of the Corporation to adopt, amend or repeal the Bylaws;
    provided, however, that, with respect to the power of
    holders of capital stock to adopt, amend and repeal Bylaws of
    the Corporation, in addition to any affirmative vote of the
    holders of any particular class or series of the capital stock
    of the Corporation required by law or the Restated Certificate
    of Incorporation, the affirmative vote of the holders of a
    majority of the voting power of all of the then outstanding
    shares entitled to vote generally in the election of directors,
    voting together as a single class, shall be required to adopt,
    amend or repeal any provision of these Bylaws.

    

    -11-exv10w1

 

EXHIBIT 10.1

 

 

 

 

PURCHASE AGREEMENT

among

MERRILL LYNCH INSURANCE GROUP, INC.,

MERRILL LYNCH & CO., INC.,

and

AEGON USA, INC.

as of

August 13, 2007

 

 

 

 

 

ARTICLE I

PURCHASE OF SHARES AND TRANSFERRED ASSETS; ASSIGNMENT OF TRANSFERRED LIABILITIES

	 	 	 	 	 	 	 
	Section 1.1

	 	Purchase and Sale
	 	 	2	 
	 
	 

	 	ARTICLE II	 	 	 	 
	 
	REPRESENTATIONS AND WARRANTIES OF THE SELLER PARENT AND THE SELLER
	 
	Section 2.1

	 	Corporate Authorization
	 	 	3	 
	Section 2.2

	 	Corporate Status
	 	 	4	 
	Section 2.3

	 	Non-Contravention
	 	 	4	 
	Section 2.4

	 	Capitalization; Title to Shares
	 	 	5	 
	Section 2.5

	 	Governmental Authorization	 	 	5	 
	Section 2.6

	 	Financial Statements	 	 	6	 
	Section 2.7

	 	No Undisclosed Material Liabilities
	 	 	7	 
	Section 2.8

	 	Absence of Certain Changes	 	 	7	 
	Section 2.9

	 	Contracts
	 	 	8	 
	Section 2.10

	 	Assets and Properties	 	 	9	 
	Section 2.11

	 	Insurance Business	 	 	10	 
	Section 2.12

	 	Separate Accounts
	 	 	13	 
	Section 2.13

	 	Intellectual Property	 	 	13	 
	Section 2.14

	 	Litigation
	 	 	14	 
	Section 2.15

	 	Compliance with Laws
	 	 	15	 
	Section 2.16

	 	Environmental Matters
	 	 	15	 
	Section 2.17

	 	Employees
	 	 	15	 
	Section 2.18

	 	Employee Benefit Plans and Related Matters; ERISA	 	 	15	 
	Section 2.19

	 	Tax Matters	 	 	16	 
	Section 2.20

	 	Insurance Policies of the Companies	 	 	18	 
	Section 2.21

	 	Finders’ Fees
	 	 	18	 
	Section 2.22

	 	Intercompany Accounts; Transactions with Affiliates	 	 	18	 
	Section 2.23

	 	Records
	 	 	19	 
	Section 2.24

	 	Reinsurance Agreements
	 	 	19	 
	ARTICLE III
	 
	REPRESENTATIONS AND WARRANTIES OF THE BUYER
	 
	Section 3.1

	 	Corporate Authorization
	 	 	20	 
	Section 3.2

	 	Corporate Status
	 	 	20	 

i

 

	 	 	 	 	 	 	 
	Section 3.3

	 	Non-Contravention
	 	 	21	 
	Section 3.4

	 	Finders’ Fees
	 	 	21	 
	Section 3.5

	 	Financial Ability to Perform
	 	 	21	 
	Section 3.6

	 	Inspections; No Other Representations
	 	 	21	 
	Section 3.7

	 	Tax Matters
	 	 	22	 
	Section 3.8

	 	Litigation
	 	 	22	 
	Section 3.9

	 	Financial Statements
	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 
	 	 	 	 	 	 
	CERTAIN COVENANTS AND AGREEMENTS
	 
	 	 	 	 	 	 
	Section 4.1

	 	Access; Information and Records; Confidentiality	 	 	22	 
	Section 4.2

	 	Conduct of the Business of the Companies Prior
to the Closing Date
	 	 	23	 
	Section 4.3

	 	Filings	 	 	27	 
	Section 4.4

	 	Public Announcements
	 	 	28	 
	Section 4.5

	 	Further Actions
	 	 	28	 
	Section 4.6

	 	Termination of Affiliate Relations	 	 	29	 
	Section 4.7

	 	Insurance
	 	 	29	 
	Section 4.8

	 	Keepwell Agreement
	 	 	29	 
	Section 4.9

	 	Director and Officer Resignations
	 	 	29	 
	Section 4.10

	 	Parent Undertaking
	 	 	30	 
	Section 4.11

	 	Non-Competition
	 	 	30	 
	Section 4.12

	 	Use of Name
	 	 	32	 
	Section 4.13

	 	Practices and Procedures	 	 	33	 
	Section 4.14

	 	Indemnification and Insurance
	 	 	34	 
	Section 4.15

	 	Transition Assistance
	 	 	35	 
	Section 4.16

	 	Intellectual Property License
	 	 	35	 
	Section 4.17

	 	Distribution Agreements
	 	 	35	 
	Section 4.18

	 	Ancillary Transaction Agreements
	 	 	35	 
	Section 4.19

	 	Roszel Agreements	 	 	36	 
	Section 4.20

	 	Third Party Consents
	 	 	36	 
	Section 4.21

	 	Reinsurance Disputes
	 	 	36	 
	Section 4.22

	 	Closing Announcement
	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 
	 	 	 	 	 	 
	INDEMNIFICATION
	 
	 	 	 	 	 	 
	Section 5.1

	 	Survival
	 	 	37	 
	Section 5.2

	 	Indemnification	 	 	37	 
	Section 5.3

	 	Certain Limitations	 	 	39	 
	Section 5.4

	 	Calculation of Losses	 	 	41	 

ii

 

	 	 	 	 	 	 	 
	Section 5.5

	 	Indemnification Notice Procedures	 	 	42	 
	Section 5.6

	 	Indemnification Procedures for Claims by an
Indemnified Party	 	 	43	 
	Section 5.7

	 	Indemnification Procedures for Third Party Claims
	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE VI
	 
	 	 	 	 	 	 
	CONDITIONS PRECEDENT
	 
	 	 	 	 	 	 
	Section 6.1

	 	Conditions to Each Party’s Obligations
	 	 	45	 
	Section 6.2

	 	Conditions to Obligations of the Buyer
	 	 	45	 
	Section 6.3

	 	Conditions to Obligations of the Seller
	 	 	46	 
	 
	 	 	 	 	 	 
	ARTICLE VII
	 
	 	 	 	 	 	 
	[Intentionally omitted.]
	 
	 	 	 	 	 	 
	ARTICLE VIII
	 
	 	 	 	 	 	 
	TAX MATTERS
	 
	 	 	 	 	 	 
	Section 8.1

	 	Liability for Taxes.
	 	 	47	 
	Section 8.2

	 	Tax Sharing Agreements
	 	 	49	 
	Section 8.3

	 	Tax Returns, Elections, etc.
	 	 	49	 
	Section 8.4

	 	Tax Payments
	 	 	50	 
	Section 8.5

	 	Tax Audits, Assistance and Cooperation.
	 	 	50	 
	Section 8.6

	 	Refunds and Tax Credits
	 	 	52	 
	Section 8.7

	 	Carrybacks
	 	 	53	 
	Section 8.8

	 	Transfer Taxes
	 	 	53	 
	Section 8.9

	 	Tax Treatment of Indemnity Payments
	 	 	53	 
	Section 8.10

	 	Section 338 Elections
	 	 	53	 
	Section 8.11

	 	Survival
	 	 	55	 
	Section 8.12

	 	Coordination
	 	 	55	 
	Section 8.13

	 	Effective Date
	 	 	55	 
	 
	 	 	 	 	 	 
	ARTICLE IX
	 
	 	 	 	 	 	 
	DEFINITIONS
	 
	ARTICLE X
	 
	MISCELLANEOUS
	 
	Section 10.1

	 	Termination and Abandonment
	 	 	67	 

iii

 

	 	 	 	 	 	 	 
	Section 10.2

	 	Expenses
	 	 	68	 
	Section 10.3

	 	Notices
	 	 	68	 
	Section 10.4

	 	Entire Agreement
	 	 	70	 
	Section 10.5

	 	No Third Party Beneficiaries
	 	 	70	 
	Section 10.6

	 	Assignability
	 	 	71	 
	Section 10.7

	 	Amendment and Modification; Waiver
	 	 	71	 
	Section 10.8

	 	Severability
	 	 	71	 
	Section 10.9

	 	Section Headings
	 	 	71	 
	Section 10.10

	 	Interpretation
	 	 	71	 
	Section 10.11

	 	Counterparts
	 	 	72	 
	Section 10.12

	 	Facsimile
	 	 	72	 
	Section 10.13

	 	Enforcement
	 	 	72	 
	Section 10.14

	 	Release of Section 5.2(b)(iv)
	 	 	73	 
	Section 10.15

	 	Governing Law
	 	 	73	 
	Section 10.16

	 	FIRPTA
	 	 	74	 
	 
	 	 	 	 	 	 
	SCHEDULES
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Schedule A

	 	Transferred Assets and Transferred Liabilities	 	 	 	 
	 
	EXHIBITS
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Exhibit A

	 	Distribution Agreement	 	 	 	 
	Exhibit B

	 	Trademark License Agreement	 	 	 	 
	Exhibit C

	 	Transition Services Agreement	 	 	 	 
	Exhibit D-1

	 	Purchase Price Adjustment	 	 	 	 
	Exhibit D-2

	 	Purchase Price Adjustment	 	 	 	 
	Exhibit E

	 	Bill of Sale and Assignment	 	 	 	 
	Exhibit F

	 	Assumption Agreement	 	 	 	 
	Exhibit G

	 	Roszel Administrative Services Agreement	 	 	 	 
	Exhibit H

	 	Roszel Investment Management Term Sheet	 	 	 	 

SELLER DISCLOSURE LETTER

BUYER DISCLOSURE LETTER

iv

 

PURCHASE AGREEMENT

     PURCHASE AGREEMENT, dated as of August 13, 2007 (this “Agreement”), by and among
Merrill Lynch Insurance Group, Inc., a Delaware corporation (the “Seller”), Merrill Lynch &
Co., Inc., a Delaware corporation (the “Seller Parent”), and AEGON USA, Inc., an Iowa
corporation (the “Buyer”).

RECITALS

     WHEREAS, Merrill Lynch Life Insurance Company, an Arkansas domiciled stock life insurance
company (“MLLIC”), and ML Life Insurance Company of New York, a New York domiciled stock
life insurance company (“MLLICNY”) (each sometimes referred to herein as a
“Company” and collectively as the “Companies”), are direct, wholly-owned
subsidiaries of the Seller that conduct the business of manufacturing annuity products and
maintaining closed blocks of life insurance and annuity products;

     WHEREAS, upon the terms and subject to the conditions set forth herein, the Seller desires to
sell to the Buyer, and the Buyer desires to purchase from the Seller, all of the outstanding shares
of common stock of MLLIC, par value $10.00 (“MLLIC Shares”), and all of the outstanding
shares of common stock of MLLICNY, par value $10.00 (“MLLICNY Shares” and together with the
MLLIC Shares, the “Shares”);

     WHEREAS, upon the terms and subject to the conditions set forth herein, the Seller also
desires to sell and assign to the Buyer, or to cause one or more of the Seller Affiliates to sell
and assign to the Buyer, and the Buyer desires to purchase and assume from the Seller and/or such
Seller Affiliates, the assets set forth on Schedule A hereto, other than any such assets which are
transferred to either Company prior to the Closing (the “Transferred Assets”) and the
liabilities set forth on Schedule A hereto, other than any such liabilities which are transferred
to either Company prior to the Closing (the “Transferred Liabilities”) relating to the
operations of the Companies not held by the Companies; and

     WHEREAS, in connection with the consummation of this Agreement, at the Closing, the Buyer, the
Seller and the Seller Parent will enter into a Master Distribution Agreement, substantially in the
form attached hereto as Exhibit A (the “Distribution Agreement”), a trademark license
agreement, substantially in the form of Exhibit B hereto (the “Trademark License
Agreement”) and a transition services agreement, substantially in the form of Exhibit C hereto
(the “Transition Services Agreement”).

     NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set
forth herein and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

 

ARTICLE I

PURCHASE OF SHARES AND TRANSFERRED ASSETS; ASSIGNMENT OF TRANSFERRED LIABILITIES

     Section 1.1 Purchase and Sale.

     (a) Purchase and Sale. In consideration for the sale and transfer of the Shares and
the Transferred Assets, and upon the terms and subject to the conditions of this Agreement, at the
Closing the Buyer shall (i) deliver to the Seller cash in an amount equal to the excess of
(x) $1,301,000,000, as the same may be adjusted in accordance with Exhibit D-1 if the
Closing Date is prior to December 10, 2007 or after December 31, 2007 or Exhibit D-2 if the Closing
Date is on December 31, 2007 over (y) the aggregate amount of all dividends paid by the
Companies to the Seller during the period from June 22, 2007 through the Closing (the “Purchase
Price”), and (ii) assume the Transferred Liabilities.

     (b) Closing. Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Section 10.1, the closing of the
transactions contemplated by this Agreement (the “Closing”) will take place at 10:00 a.m.
New York City time as soon as practicable, and in no event later than the third Business Day
following, the satisfaction or waiver of each of the conditions set forth in Article VI hereof,
other than conditions which by their nature are to be satisfied at the Closing, but subject to the
satisfaction of such conditions (the “Closing Date”), provided that notwithstanding
the foregoing, if such conditions are satisfied or waived on or after December 10, 2007 but on or
prior to December 28, 2007, the Closing will take place at 10:00 a.m. New York City time on
December 31, 2007. The Closing shall take place at the offices of Debevoise & Plimpton LLP, 919
Third Avenue, New York, NY 10022, unless another date, time or place is agreed to in writing by the
parties hereto.

     (c) Actions at the Closing. At the Closing, (i) the Seller shall deliver to
the Buyer certificates representing the Shares duly endorsed or accompanied by stock powers duly
executed, in proper form for transfer and accompanied by all requisite stock transfer tax stamps,
free and clear of all Liens, and (ii) the Buyer will pay the Purchase Price to the Seller
by wire transfer of immediately available funds to one or more accounts designated by the Seller
for such purpose, which designation shall occur at least two (2) Business Days prior to the
Closing.

     (d) Documents Deliverable at Closing. At the Closing, in order to give effect to the
purchase and sale of the Shares, the Transferred Assets and the assignment and assumption of the
Transferred Liabilities, the Seller, or one or more of its Affiliates, on the one hand, and the
Buyer, on the other hand, shall execute and deliver:

2

 

          (i) a bill (or bills) of sale, assignment and general conveyance, in each case substantially
in the form attached hereto as Exhibit E, with respect to each of the Transferred Assets (the
“Bill of Sale and Assignment”);

          (ii) an assumption agreement, substantially in the form attached hereto as Exhibit F, with
respect to the Transferred Liabilities (the “Assumption Agreement”); and

          (iii) all such additional instruments, documents and certificates provided for by this
Agreement or as may be reasonably requested by the other party to give effect to the closing of the
transactions provided for by this Agreement and the Ancillary Transaction Agreements.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF

THE SELLER PARENT AND THE SELLER

     Except as set forth in the disclosure letter delivered by the Seller to the Buyer on or before
the execution of this Agreement (the “Seller Disclosure Letter”) (it being agreed that
disclosure of any item in any section or subsection of the Seller Disclosure Letter shall be deemed
disclosure with respect to any other section or subsection to which the relevance of such
disclosure to the applicable representation and warranty is reasonably apparent), and subject, in
all cases to, Section 2.6(c), each of the Seller Parent and the Seller represents and warrants to
the Buyer as of the date hereof and as of the Closing Date (except for any such representations and
warranties which are made as of a specific date, which representations and warranties are made only
as of such date) as follows:

     Section 2.1 Corporate Authorization. Each of the Seller Parent and the Seller is a
corporation duly organized, validly existing and in good standing under the laws of the state of
Delaware and has all requisite corporate power and authority to execute and deliver this Agreement
and each Ancillary Transaction Agreement to which it is or will be a party as of the Closing, to
perform its obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and each Ancillary Transaction
Agreement to which it is or will be a party as of the Closing, the performance of the Seller
Parent’s and the Seller’s obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby have been duly and validly authorized and approved by
all respective requisite corporate action of each of the Seller Parent and the Seller. Each of the
Seller Parent and the Seller has duly executed and delivered this Agreement and on the Closing Date
will have duly executed and delivered each Ancillary Transaction Agreement to which it is or will
be a party as of the Closing. This Agreement constitutes, and each such Ancillary Transaction
Agreement when so executed and delivered will

3

 

constitute, the legal, valid and binding obligation of the Seller Parent and the Seller
enforceable against the Seller Parent and the Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar Laws affecting or relating to the enforcement of creditors’ rights generally or by general
principles of equity (whether such enforcement is sought in equity or at law).

     Section 2.2 Corporate Status. MLLIC is a corporation duly organized, validly existing
and in good standing under the laws of the state of Arkansas, and MLLICNY is a corporation duly
organized, validly existing and in good standing under the laws of the state of New York. Each
Company has all requisite corporate power and authority to carry on the Transferred Business as now
conducted and to own, lease and operate all its properties and assets, if any, except where the
failure to be so organized, existing or in good standing or where the failure to have such power
and authority would not reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect. Each Company is duly qualified to do business as a foreign corporation
and is in good standing in each of the jurisdictions specified in Section 2.2 of the Seller
Disclosure Letter, which includes each jurisdiction in which the nature of its business or the
properties owned, leased or operated by it makes such qualification necessary, except for those
jurisdictions where the failure to be so qualified or to be in good standing would not reasonably
be expected, individually or in the aggregate, to have a Company Material Adverse Effect. The
Seller has made available to the Buyer complete copies of the Organizational Documents of each
Company as currently in effect, and neither Company is in violation of any provision of its
respective Organizational Documents.

     Section 2.3 Non-Contravention. Except as set forth in Section 2.3 of the Seller
Disclosure Letter, and, with respect to clauses (ii), (iii) and (iv), assuming compliance with the
matters set forth in Section 2.5, the execution, delivery and performance by each of the Seller
Parent and the Seller of this Agreement and each Ancillary Transaction Agreement to which it is or
will be a party as of the Closing and the performance and consummation of the transactions
contemplated hereby and thereby do not (i) conflict with or result in any violation or
breach of any provision of the Organizational Documents of the Seller Parent, the Seller or either
Company, (ii) conflict with or result in a violation or breach of any provision of any Law
applicable to the Seller Parent, the Seller or either Company, (iii) require any consent of
or other action by any Person under, violate, conflict with or result in the breach of any of the
terms of, result in any modification of or loss of a benefit under, accelerate or permit the
acceleration of the performance required by, otherwise give any other contracting party the right
to modify, re-price, terminate or cancel, or constitute a default or an event that, with or without
notice or lapse of time or both, would constitute a default under any provision of any material
contract, agreement, license or other instrument to which the Seller or the Seller Parent is a
party or any Applicable Contract to which either Company is a party or any of their respective
assets or properties may be subject, or (iv) result in the creation or

4

 

imposition of any Lien on any Assets or Transferred Assets, except, in the case of clauses
(ii) through (iv), for such violations, conflicts, breaches or defaults (x) that may result
from facts or circumstances solely relating to the Buyer or its Affiliates, or (y) which
would not reasonably be expected, individually or in the aggregate, to have a Company Material
Adverse Effect.

     Section 2.4 Capitalization; Title to Shares.

     (a) The authorized capital stock of MLLIC consists of 1,000,000 shares of common stock, par
value $10.00 per share. As of the date hereof, there are 250,000 MLLIC Shares issued and
outstanding. The authorized capital stock of MLLICNY consists of 220,000 shares of common stock,
par value $10.00 per share. As of the date hereof, there are 220,000 MLLICNY Shares issued and
outstanding. The Shares have been duly authorized and validly issued and are fully paid and
nonassessable and free of any preemptive rights. The Seller owns the Shares, beneficially and of
record, free and clear of all Liens. Upon the transfer and delivery of and payment for the Shares
at the Closing, as contemplated herein, the Buyer will acquire good and valid title to all of the
Shares, free and clear of all Liens, other than any Lien arising due to actions of the Buyer or its
Affiliates.

     (b) Except as set forth in Section 2.4(a), there are no outstanding (i) shares of
capital stock of or other voting or equity interests in either Company, (ii) securities of
either Company convertible into or exercisable or exchangeable for shares of capital stock of or
other voting or equity interests in such Company, (iii) options or other rights or
agreements, commitments or understandings of any kind to acquire from either Company, or other
obligation of the Seller or either Company to issue, transfer or sell, any capital stock of or
other voting or equity interests in either Company, or securities convertible into or exercisable
or exchangeable for capital stock of or other voting or equity interests in either Company,
(iv) voting trusts, proxies or other similar agreements or understandings to which either
Company is a party or by which either Company is bound with respect to the voting of any shares of
capital stock of or other voting or equity interests in either Company, or (v) contractual
obligations or commitments of any character restricting the transfer of, or requiring the
registration for sale of, any shares of capital stock of or other voting or equity interests in
either Company.

     Section 2.5 Governmental Authorization. The execution, delivery and performance by
each of the Seller Parent and the Seller of this Agreement and each Ancillary Transaction Agreement
to which it is or will be a party as of the Closing, and the consummation of the transactions
contemplated hereby and thereby, do not require any consent, exemption, authorization, approval or
deemed approval of, non-disapproval, ruling, order of, notice to, registration or filing with, any
Governmental Authority to be made or obtained by the Seller Parent, the Seller or either Company,
other than: (i) the filing of pre-merger notification and report forms under the HSR Act,
(ii) the approvals, filings and notices required under the Insurance Laws set forth in
Section 2.5 of the Seller

5

 

Disclosure Letter, (iii) such other consents, approvals, authorizations, declarations,
filings or notices as are set forth in Section 2.5 of the Seller Disclosure Letter, (iv) as
may result from any facts or circumstances solely relating to the Buyer or its Affiliates, and
(v) such other consents, approvals, authorizations, declarations, filings or notices, the
failure of which to obtain or make would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.

     Section 2.6 Financial Statements.

     (a) The Seller has made available to the Buyer (or, in the case of subsection (iii), will
promptly make available to the Buyer following the preparation thereof) complete copies of
(i) the audited statutory financial statements of each Company at and for the periods ended
December 31, 2006 (the “Balance Sheet Date”), 2005 and 2004, together with the report of
each Company’s independent auditors thereon (the “SAP Audited Financial Statements”),
(ii) the unaudited interim statutory financial statements of each Company at and for the
periods ended March 31, 2007 and June 30, 2007 (the “SAP Unaudited Financial Statements”),
and (iii) all interim statutory financial statements of each Company at and for each period
ending after the date hereof and prior to the Closing Date (the “SAP Unaudited Interim
Financial Statements” and together with the SAP Audited Financial Statements and the SAP
Unaudited Financial Statements, the “SAP Financial Statements”). The SAP Financial
Statements have been prepared in accordance with SAP applied on a consistent basis (except as may
be indicated in the notes thereto) and present fairly in all material respects in accordance with
SAP the financial position, results of operations and cash flows of each Company at and for the
respective periods indicated therein (subject, in the case of the SAP Unaudited Financial
Statements and the SAP Unaudited Interim Financial Statements, to normal year-end adjustments).
The Seller has also made available to the Buyer (or, in the case of subsection (z), will
promptly deliver to the Buyer following the preparation thereof) complete copies of (x) the
audited GAAP financial statements of each Company at and for the periods ended on the Balance Sheet
Date and December 31, 2005 and 2004, together with the report of each Company’s independent
auditors thereon (the “GAAP Audited Financial Statements”), (y) the unaudited
interim GAAP financial statements of each Company at and for the periods ended March 31, 2007 and
June 30, 2007 (the “GAAP Unaudited Financial Statements”), and (z) all interim GAAP
financial statements of each Company at and for each period ending after the date hereof and prior
to the Closing Date (the “GAAP Unaudited Interim Financial Statements” and together with
the GAAP Audited Financial Statements and the GAAP Unaudited Financial Statements, the “GAAP
Financial Statements”). The GAAP Financial Statements and the Separate Account Financial
Statements have been prepared in accordance with GAAP applied on a consistent basis (except as may
be indicated in the notes thereto) and present fairly in all material respects in accordance with
GAAP the financial position, results of operations and cash flows of the relevant entity at and for
the respective periods indicated therein (subject, in the case of the GAAP Unaudited Financial
Statements and the GAAP

6

 

Unaudited Interim Financial Statements, to normal year-end adjustments). Except as set forth
in Section 2.6 of the Seller Disclosure Letter, neither Company has received any written
communication from any Governmental Authority or its external auditor of any material deficiency
with respect to any of the SAP Financial Statements, GAAP Financial Statements or Separate Account
Financial Statements.

     (b) Without limiting the generality of Section 2.6(a), the reserves for payment of benefits,
losses, claims and expenses under all Life Insurance and Annuity Contracts of each Company in force
as of the date of the SAP Financial Statements (i) were determined in accordance with SAP,
consistently applied throughout the specified period, and (ii) were calculated, in all
material respects, in accordance with generally accepted actuarial standards, consistently applied
throughout the specified period.

     (c) The Buyer agrees that, except to the limited extent expressly set forth in Section 2.6(b),
none of the representations and warranties set forth in this Article II shall be construed in any
way as a representation or warranty as to the adequacy or sufficiency, for any purpose, of the
reserves held by the Companies against the liabilities arising under the terms of the Life
Insurance and Annuity Contracts issued by them or as a guarantee as to the collectibility of any
reinsurance balances ceded to third party reinsurers. Without limiting the generality of the
foregoing, except as expressly set forth in Section 2.6(b), the Seller makes no representation or
warranty whatsoever, and shall provide no indemnity or guarantee of any sort or incur any liability
with respect to any such reserves, or the development or adequacy thereof, or the collectibility of
ceded reinsurance balances; provided that notwithstanding the foregoing, the provisions of
this Section 2.6(c) shall not apply to any non-collectibility of ceded reinsurance balances
resulting from a breach prior to the Closing of any reinsurance agreement by any Company.

     Section 2.7 No Undisclosed Material Liabilities. To the Seller’s Knowledge, neither
Company has any liabilities or obligations, whether known, unknown, absolute, accrued, contingent
or otherwise and whether due or to become due, except (i) as set forth in Section 2.7 of
the Seller Disclosure Letter, (ii) liabilities and obligations disclosed or reserved
against in the SAP Financial Statements or specifically disclosed in the notes thereto,
(iii) liabilities and obligations that (x) were incurred after the Balance Sheet
Date in the ordinary course of business, or (y) would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect, and (iv)
liabilities and obligations arising under this Agreement or the Ancillary Transaction Agreements.

     Section 2.8 Absence of Certain Changes.

     (a) Except (i) as contemplated or permitted by this Agreement or the Ancillary
Transaction Agreements, (ii) as disclosed in Section 2.8(a) of the Seller Disclosure
Letter, (iii) for the payment to the Seller of dividends in the amounts of

7

 

$125,000,000 from MLLIC and $5,453,435 from MLLICNY in the first quarter of 2007, in the
amount of $68,731,054 from MLLIC in the second quarter of 2007, and to the extent that MLLICNY
determines, in its sole discretion, to make any such dividend payment, in the amount of up to
$11,973,699 from MLLICNY during the balance of 2007, or (iv) as required by Law,
(x) the Companies have not taken any action that would have constituted a violation of
Section 4.2 if Section 4.2 had applied since the Balance Sheet Date until the date hereof, and
(y) since the Balance Sheet Date, there has not occurred, individually or in the aggregate,
a Company Material Adverse Effect.

     (b) During the period from the Balance Sheet Date to the date hereof, except as contemplated
by this Agreement or any Ancillary Transaction Agreement, none of the Seller Parent, the Seller or
any Seller Affiliates has (i) mortgaged, pledged or subjected to any Lien, other than
Permitted Liens, any material Transferred Asset or (ii) entered into, amended in any
material respect or terminated or non-renewed any material Contract, the rights or obligations
under which constitute Transferred Assets or Transferred Liabilities.

     Section 2.9 Contracts. Except as set forth in Section 2.9 of the Seller Disclosure
Letter, the Seller has made available true and complete copies of (a) each Contract, the
rights and obligations under which constitute Transferred Assets or Transferred Liabilities
(collectively, the “Assumed Contracts”) and (b) each of the following contracts of
the Companies (collectively, the “Applicable Contracts”): (i) any material
agreement for the incurrence of indebtedness by either Company or the direct or indirect guarantee
by either Company of any indebtedness or other financial obligations of any Person, including
agreements with Affiliates which are to be terminated pursuant to Section 4.6; (ii) any
non-competition agreement which limits the manner in which, or the localities where, the
Transferred Business is conducted; (iii) any joint venture, partnership agreement, joint
marketing, strategic alliance or similar Contracts, other than in respect of joint ventures or
similar investments held in an investment portfolio; (iv) any Contract (other than, in the
case of clause (B), Life Insurance and Annuity Contracts and other Contracts entered into in the
ordinary course of business) providing for the indemnification by either Company of (A) any
special purpose vehicle or other financing entity, including off balance sheet entities, or
(B) any other Person in excess of $250,000; (v) any Contract providing for future
payments that are conditioned on, in whole or in part, or that cause an event of default as a
result of, a change of control or similar event; (vi) any agency, broker, selling,
marketing or similar Contract, other than distribution arrangements to which any Company, on the
one hand, and any other Seller Affiliate, on the other hand, are parties; (vii) the forms
of any Life Insurance and Annuity Contract used in the United States containing rate guarantees,
rate caps or rate escalators; (viii) any agreement to which any Company is a party granting
or obtaining any right to use or practice any rights under any material Intellectual Property
(other than licenses for off-the-shelf standard commercially available commercial software), all
material information technology service agreements used in or necessary for the conduct of the
Transferred Business, material service agreements that involve Intellectual Property used

8

 

in or necessary for the conduct of the Transferred Business and all material outsourcing agreements
used in or necessary for the conduct of the Transferred Business; (ix) all contractual
treaties and agreements regarding ceded or assumed reinsurance to which either Company is a party
in effect as of the date hereof; (x) all Contracts providing for specific severance
benefits or parachute payments; (xi) all leases, subleases or rental or use Contracts
requiring payments, in any 12-month period, in excess of $250,000; (xii) all material
Contracts relating to the future disposition (including, but not limited to, restrictions on
transfer or rights of first refusal) of any Assets of the Companies or for the grant to any Person
of any preferential rights to purchase or use any Assets of the Companies other than, in the case
of each of the foregoing, any Contracts for the sale of investment assets in the ordinary course of
business; (xiii) all Contracts outside of the ordinary course of business relating to the
future funding of investments; (xiv) any Contract for the provision of any administrative
services with respect to any Life Insurance and Annuity Contract; (xv) any Contract under
which either Company or any Registered Separate Account invests in mutual funds in connection with
any Life Insurance and Annuity Contract, including any Contract under which a Company receives any
payment from such mutual funds or any of their respective Affiliates; and (xvi) all other
Contracts that involve or are reasonably likely to involve the payment pursuant to the terms of
such Contracts by or to either Company of $500,000 or more. Except as would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse Effect, to the
Seller’s Knowledge, each Assumed Contract and Applicable Contract is in full force and effect. Each
Assumed Contract and Applicable Contract constitutes a legal, valid and binding obligation of the
Seller, a Seller Affiliate or the Company that is a party thereto and, to the Seller’s Knowledge,
of each other party thereto, enforceable against the Seller, such Seller Affiliate or such Company,
as the case may be, in accordance with its terms, subject to bankruptcy, receivership, insolvency,
reorganization, moratorium, fraudulent transfer and other Laws relating to or affecting the rights
of creditors in general and by legal and equitable limitations on the enforceability of specific
remedies. Except as set forth in Section 2.9 of the Seller Disclosure Letter or as would not
reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect, none of the Seller Parent, the Seller, any Seller Affiliate or either Company that is a
party thereto nor, to the Seller’s Knowledge, any other party, is in violation or default of any
term of any Assumed Contract or Applicable Contract and no condition or event exists which with the
giving of notice or the passage of time, or both, would constitute a violation or default by the
Seller, such Seller Affiliate or either Company, as the case may be, or, to the Seller’s Knowledge,
any other party thereto.

     Section 2.10 Assets and Properties.

     (a) Each Company has (i) good and valid title to all of the assets that are reflected
on the Year End Balance Sheet of such Company that are owned by such Company or were acquired by
such Company after the Balance Sheet Date and

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(ii) otherwise has the rights to use pursuant to a valid and enforceable lease, license or similar
contractual arrangement all other assets reflected on such Year End Balance Sheet or so acquired
after such Balance Sheet Date (collectively, the “Assets”), in each case free and clear of
any Lien other than Permitted Liens, except Assets sold in the ordinary course of business and
those Assets the failure of which to have good title to, or otherwise the right to use pursuant to
a valid and enforceable lease, license or similar contractual arrangement, as the case may be,
would not reasonably be expected, individually or in the aggregate, to have a Company Material
Adverse Effect.

     (b) The Seller or a Seller Affiliate has good and valid title, or otherwise has the right to
use pursuant to a valid and enforceable lease, license or similar contractual arrangement, all of
the Transferred Assets, in each case free and clear of any Lien other than Permitted Liens. Upon
delivery of and payment for the Transferred Assets at the Closing, the Buyer will acquire good and
valid title to, or otherwise the legal right to use the Transferred Assets, in each case, free and
clear of any Lien, other than Permitted Liens or any Lien arising due to any actions of the Buyer
or its Affiliates.

     (c) Immediately after giving effect to the Closing, the assets of the Companies, taken as a
whole, together with the rights granted under, and subject to the respective limitations set forth
in, the Ancillary Transaction Agreements, comprise the assets and rights that are reasonably
required to conduct the Transferred Business as it is being conducted as of the date hereof.

     Section 2.11 Insurance Business.

     (a) Each Company possesses a certificate of authority or other authorization to transact
insurance (an “Insurance License”) in each state in which each Company is required to
possess an Insurance License, except as would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect. All such Insurance Licenses are in full
force and effect and neither Company has received written notice of any investigation or proceeding
that would reasonably be expected to result in the suspension or revocation of any such Insurance
License.

     (b) Neither Company is currently the subject of any supervision, conservation, rehabilitation,
liquidation, receivership, insolvency or other similar proceeding, nor is either Company operating
under any formal or informal agreement or understanding with the licensing authority of any state
which restricts its authority to do business or requires it to take, or refrain from taking, any
action.

     (c) Except as set forth in Section 2.11(c) of the Seller Disclosure Letter, to the Seller’s
Knowledge, each Company’s Life Insurance and Annuity Contracts are, and since January 1, 2004 have
been to the extent required under applicable Law, on forms approved by the applicable Insurance
Department or which have been filed or not objected to by such Insurance Department within the
period provided for objection. No material deficiencies have been asserted by any Governmental Authority with respect to any
such filings which have not been cured or otherwise resolved.

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     (d) Except as would not reasonably be expected, individually or in the aggregate, to have a
Company Material Adverse Effect, each Company has filed all reports, statements, registrations,
filings or submissions (including those on behalf of its separate accounts) required to be filed
with any Insurance Department or the SEC since January 1, 2004. As of their respective dates of
filing with the SEC or the applicable Insurance Department, as applicable (or, if amended or
superseded by a filing prior to the date hereof, as of the date of such filing), all such reports,
statements, documents registrations, filings and submissions complied in all material respects with
applicable Law and none of such reports, statements, documents, registrations, filings or
submissions, as the case may be, when filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. The
Seller has made available to the Buyer copies of all material reports on financial examination,
market conduct reports and other reports delivered by any Insurance Department in respect of each
Company since January 1, 2004.

     (e) Neither Company is a party to or subject to any undertaking, stipulation, consent decree,
or order entered into with or issued by any Insurance Department restricting the payment by it of
dividends.

     (f) The Seller has made available to the Buyer a copy of the actuarial report prepared by
Milliman, Inc. (“Milliman”), dated March 17, 2007, and all attachments, addenda,
supplements and modifications thereto, including the roll-forward of appraisal value dated June 29,
2007 (the “Actuarial Report”). Except as set forth in Section 2.11(f) of the Seller
Disclosure Letter, the information and data furnished by the Companies in writing to Milliman
expressly in connection with the preparation of the Actuarial Report (i) were based on the
Records, except where the circumstances required supplemental information, and (ii) to the
Seller’s Knowledge, were accurate in all material respects.

     (g) Except as set forth in Section 2.11(g) of the Seller Disclosure Letter, to the Seller’s
Knowledge, each Company is in compliance with all applicable Insurance Laws, all applicable
securities laws and FINRA requirements regulating the marketing and sale of life insurance policies
and annuity contracts, except for such non-compliance as would not reasonably be expected,
individually or in the aggregate, to have a Company Material Adverse Effect, including applicable
Insurance Laws, applicable securities laws and FINRA requirements regulating advertisements and
sales literature, requiring mandatory disclosure of policy information, requiring employment of
standards to determine if the purchase of a policy or contract is suitable for an applicant,
prohibiting the use of unfair methods of competition and deceptive acts or practices and regulating
replacement transactions. For purposes of this Section 2.11(g), (i) “advertisements and
sales literature” means any material that is published or used in any electronic or other public

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media or that is generally distributed or made generally available to customers or the public
regarding the Life Insurance and Annuity Contracts and/or services related to the Life Insurance
and Annuity Contracts, including materials designed to create public interest in life insurance
policies and annuity contracts or in an insurer, or in an insurance producer, or to induce the
public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain such a
policy or contract, and (ii) “replacement transaction” means a transaction in which a new
life insurance policy or annuity contract is to be purchased by a prospective owner and, in
connection with the transaction, one or more existing life insurance policies or annuity contracts
owned by the owner have been or are likely to lapse, or be forfeited, surrendered, partially
surrendered, assigned to the insurer replacing the life insurance policy or annuity contract or
otherwise terminated. Except as set forth in Section 2.11(g) of the Seller Disclosure Letter,
since January 1, 2004, neither Company has received any written notice of, and, to the Seller’s
Knowledge, there has not been, any material violation of, any applicable Laws with respect to each
Company’s business.

     (h) To the Seller’s Knowledge, since January 1, 2004, all benefits claimed by any Person under
any Life Insurance and Annuity Contract have been paid (or provision for payment thereof has been
made) in accordance with the terms of the Life Insurance and Annuity Contracts under which they
arose and such payments were not delinquent and were paid (or will be paid) without fines or
penalties, except for (i) any such claim for benefits for which either Company reasonably
believes that there is a reasonable basis to contest payment and is taking such action or
(ii) such delinquencies and non-payments as would not reasonably be expected, individually
or in the aggregate, to have a Company Material Adverse Effect.

     (i) The distribution of variable products in the Merrill Lynch Global Private Client Network
is performed by Merrill Lynch Life Agency, Inc., as general agent, and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as broker-dealer.

     (j) To the Seller’s Knowledge, (i) each of the Companies’ agents, general agents,
producers, and other Persons and entities which markets its products (collectively, the
“Producers”), at the time such Producer solicited, negotiated, wrote, sold or produced
business for either Company, to the extent required by Law, was duly and appropriately appointed by
such Company to act as a Producer for such Company and was duly and appropriately licensed as a
Producer (for the type of business solicited, negotiated, written, sold or produced by such
Producer), in each case, in the particular jurisdiction in which such Producer solicited,
negotiated, wrote, sold or produced such business for such Company; (ii) no such Producer
violated any term or provision of any Law applicable to any aspect (including, but not limited to,
the soliciting, negotiating, marketing, sale or production) of either Company’s products; and
(iii) no such Producer has breached the terms of any agency or broker Contract with or for
the benefit of either Company, except, in each case, as would not reasonably be expected,
individually or in the aggregate, to

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have a Company Material Adverse Effect. The Seller has made available for inspection by the
Buyer copies of all contracts, as of the date hereof, that govern the basic relationship between
any of the Companies and their respective Producers (except for the compensation schedules relating
thereto, which have not been made available). Except as set forth in Section 2.11(j) of the Seller
Disclosure Letter, to the Seller’s Knowledge, the manner in which the Companies compensate each
Producer is in compliance with all applicable Laws, except for such non-compliance as would not
reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect.

     (k) No provision in any in-force Life Insurance and Annuity Contract gives the holder thereof
or any other Person the right to receive dividends, distributions or other benefits based on the
revenue, earnings or profits of either Company.

     Section 2.12 Separate Accounts. Each separate account maintained by either Company is
duly and validly established under applicable Insurance Law, and is either duly registered as an
investment company under the Investment Company Act or is excluded from the definition of
“investment company” pursuant to Section 3(c)(1), 3(c)(7) or 3(c)(11) of the Investment Company
Act. Except as set forth in Section 2.12 of the Seller Disclosure Letter, each Registered Separate
Account is, and since January 1, 2004 has been, operated in compliance with the Investment Company
Act and all other applicable Laws, has been granted all exemptive relief necessary to conduct its
operations as presently conducted, and is, and since January 1, 2004 has been, in compliance with
all conditions to any such relief, except as would not reasonably be expected, individually or in
the aggregate, to have a Company Material Adverse Effect. Except as would not reasonably be
expected, individually or in the aggregate, to have a Company Material Adverse Effect, the Life
Insurance and Annuity Contracts under which each of the Companies’ separate accounts is established
are duly and validly issued and are binding obligations of either Company, and such Contracts, and
all interests under such Contracts, are either exempt from registration under the Securities Act of
1933, as amended (the “Securities Act”), or were sold pursuant to an effective registration
statement under the Securities Act, and any such registration statement is currently in effect to
the extent necessary to permit the appropriate Company to receive contributions under such
Contract.

     Section 2.13 Intellectual Property.

     (a) Section 2.13(a) of the Seller Disclosure Letter lists all material registered or
applied-for U.S. trademarks owned by the Seller Parent or the Seller that are used primarily in
connection with the Transferred Business as of the date hereof.

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     (b) To the Seller’s Knowledge, the Intellectual Property owned by the Companies (the
“Owned Intellectual Property”) does not include any material or registered trademarks,
service marks, trade names, trade dress, designs, logos and other indicia of origin, domain names,
works of authorship, copyrights, software, Internet
websites, patents and patent applications, inventions, processes, methods, techniques,
procedures, designs, formulae, know-how, operating manuals, and instructions, other than a certain
application used to administer the life insurance business of the Companies.

     (c) To the Seller’s Knowledge, (i) the conduct of the Transferred Business and the
current use of any Intellectual Property by or on behalf of the Companies do not infringe, dilute
or misappropriate the rights of any Person, (ii) there is no basis for a claim that the
Owned Intellectual Property or the Intellectual Property used by or on behalf of the Companies or
necessary for the conduct of the Transferred Business infringes, misappropriates, dilutes or
violates the rights of any Person, and (iii) no Person is infringing, diluting or
misappropriating any Owned Intellectual Property. Neither Company nor any Person acting on behalf
of either Company has asserted any claim against any other Person for infringement, dilution or
misappropriation of any Owned Intellectual Property.

     (d) No Intellectual Property used by or on behalf of the Companies or necessary for the
conduct of the Transferred Business is subject to any outstanding judgment, injunction, order,
decree or agreement (i) materially restricting the use thereof by or on behalf of either
Company or (ii) materially restricting the licensing of any Owned Intellectual Property to
any Person. To the Seller’s Knowledge, neither Company has entered into any agreement to indemnify
a party against a charge of infringement arising out of the authorized use of any Intellectual
Property. None of the Companies, the Seller or the Seller’s Affiliates has received any written
demand, claim or notice from any Person in respect of the Intellectual Property used by or on
behalf of the Companies or necessary for the conduct of the Transferred Business which challenges
the validity of, or the rights of either Company in, any such Intellectual Property.

     (e) Each Company is in material compliance with its privacy and data security policies and
procedures.

     (f) Each Company has established and is in compliance with commercially reasonable security
programs that are designed to protect (i) the security, confidentiality and integrity of
transactions executed through their computer systems, including encryption and/or other security
protocols and techniques when appropriate and (ii) the security, confidentiality and
integrity of all confidential or proprietary data except, in each case, which individually or in
the aggregate would not have a Company Material Adverse Effect. Neither Company has suffered a
material security breach with respect to its data or systems, and none of the Companies, the Seller
or the Seller’s Affiliates has notified any customer of the Transferred Business of any information
security breach involving such customer’s confidential information or such employee’s confidential
information.

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     Section 2.14 Litigation. Except as set forth in Section 2.14 of the Seller Disclosure
Letter, there is no Action or Proceeding (excluding such Actions or Proceedings in the ordinary course of business relating to policies or contracts of insurance
written or reinsurance ceded or assumed by either Company) pending or, to the Seller’s Knowledge,
threatened against either Company, its properties or Assets, which, if adversely determined, would
reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect. There is no judgment, decree, injunction, award, regulatory restriction or order of any
Governmental Authority or arbitrator outstanding or imposed against the Seller Parent, the Seller
or any of their controlled Affiliates or either Company or any of its respective properties or
assets which (i) materially restricts the ability of either Company to conduct its business
in the ordinary course or (ii) would reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect.

     Section 2.15 Compliance with Laws. Section 2.11 addresses the Companies’ compliance
with Insurance Laws. Except as set forth in Section 2.15 of the Seller Disclosure Letter, since
January 1, 2004, each Company is in compliance with all other applicable Laws, and has not received
any notice of violation thereof, except, in each case, for such conflicts, violations, breaches or
defaults as would not reasonably be expected, individually or in the aggregate, to have a Company
Material Adverse Effect.

     Section 2.16 Environmental Matters. Except as set forth in Section 2.16 of the Seller
Disclosure Letter, since January 1, 2005, except as would not reasonably be expected, individually
or in the aggregate, to have a Company Material Adverse Effect, each Company has complied and is in
compliance with all applicable Environmental Laws and has obtained and is in compliance with all
applicable Environmental Permits. No written notice of violation, notification of liability or
potential liability or request for information has been received by either Company relating to or
arising out of any Environmental Law since January 1, 2005. No order has been issued and is
currently in effect involving either Company relating to or arising out of any Environmental Law.

     Section 2.17 Employees. Neither Company has any employees or has had any employees
since January 1, 2004.

     Section 2.18 Employee Benefit Plans and Related Matters; ERISA.

     (a) Neither Company maintains, sponsors or contributes to, or has any liabilities under, any
Benefit Plans.

     (b) No circumstances exist with respect to any Benefit Plan maintained or contributed to, or
required to be maintained or contributed to, by the Seller or any of the Seller’s Affiliates for
the benefit of any Designated Affiliated Employee (each such Benefit Plan, a “Seller Benefit Plan”)
under Title IV of ERISA, Section 302 of ERISA, or Section 412 of the Code, in each case, that would
reasonably be expected to be a liability of Buyer following the Closing Date. No Seller Benefit
Plan is a multiemployer plan (as defined in Section 3(37) of ERISA), and each Company has not contributed to or been obligated
to contribute to any multiemployer plan.

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     (c) The Seller has operated each Seller Benefit Plan that is subject to the requirements of
Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA in compliance therewith,
except where the failure to comply would not have a Company Material Adverse Effect.

     (d) The Seller has no unpaid liabilities for either civil penalties under Section 502 of ERISA
or excise taxes under Sections 4971, 4972, 4975, 4976, 4977, 4978, 4979, 4979A, 4980, 4980B, 4980D,
4980E, 4980F or 4980G of the Code that would reasonably be expected to be liabilities of the Buyer
following the Closing.

     Section 2.19 Tax Matters.

     Except as would not reasonably be expected, individually or in the aggregate, to have a
Company Material Adverse Effect, or as set forth in Section 2.19 of the Seller Disclosure Letter:

     (a)   (i) (A) All Tax Returns required to have been filed by or with respect to each
Company have been filed on a timely basis (taking into account valid extensions), all such Tax
Returns are true, correct and complete and all amounts shown as due and payable on such Tax
Returns, and all other Taxes due and payable by or with respect to each Company, have been paid or
have been reserved against in the SAP Financial Statements to the extent required under SAP,
(B) neither Company has executed or filed any power of attorney with respect to Taxes which
is currently in force, (C) neither Company is a party to any Tax allocation agreement,
(D) neither Company has any liability for the Taxes of any Person (other than any member of
a consolidated, combined or unitary tax group that includes Merrill Lynch & Co., Inc. or any
Affiliate thereof) as a result of the application of Treasury Regulations Section 1.1502-6 (or any
similar provision of state, local or foreign law), and (E) neither Company is subject to
(x) any currently effective agreement or other document extending the period for the
assessment or collection of any Tax, or (y) any ongoing examination, audit, other
administrative proceeding or litigation with respect to the determination of any Tax liability.

          (ii)   No deficiencies for any Taxes have been proposed, asserted or assessed against either
Company that have not been finally resolved and paid in full, and no written claim has been made by
any Governmental Authority in a jurisdiction where either Company does not file a Tax Return that
either Company is or may be subject to taxation in that jurisdiction.

          (iii)    All employment and withholding Taxes required to have been paid or withheld by or on
behalf of either Company have been paid to the proper Governmental Authority or properly set aside
in accounts for such purpose.

16

 

          (iv)    There are no liens for Taxes upon the assets of either Company or upon the Transferred
Assets except for statutory liens for Taxes not yet paid.

          (v)    Neither Company is or has been a United States real property holding corporation (as
defined in Section 897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.

          (vi)    During the past two years, neither Company has distributed the stock of another entity
nor has it had its stock distributed by another entity in a transaction that was purported or
intended to be governed in whole or in part by Code Section 355 or 361.

          (vii)    Both Companies qualify and, for all years for which the applicable statute of
limitations has not expired, have qualified, as a life insurance company for purposes of the Code
and have been subject to taxation under subchapter L of the Code.

          (viii)    Neither the execution of this Agreement nor the consummation of the transactions
contemplated hereby will result, separately or in the aggregate, in the payment under any Benefit
Plan of any “excess parachute payments” within the meaning of Section 280G of the Code.

     (b)   (i) Neither Company has executed, become subject to or entered into any closing agreement
as defined in Section 7121 of the Code or any similar or predecessor provisions thereof under the
Code or other Tax law that could affect the amount of Tax for any Post-Closing Period.

          (ii)    Neither Company has entered into any transaction that is a “listed transaction” within
the meaning of Treasury Regulation Section 1.6011-4(b)(2), and neither Company has organized or
participated in the sale of any interest in any partnership or other entity, any investment plan or
arrangement, or any other plan or arrangement that involves a “listed transaction” within the
meaning of Treasury Regulation Section 1.6011-4(b)(2).

          (iii)    There are no outstanding rulings or requests for rulings with any Governmental Authority
addressed, directly or indirectly, to either Company that are, or if issued, would be binding on
either Company for any Post-Closing Period.

     (c)  (i) Neither Company is a party to any hold-harmless or indemnification agreement with
respect to the tax qualification or tax treatment of Life Insurance and Annuity Contracts or other
financial products, employee benefit plans, individual retirement accounts, and annuities and any
similar related policy, contract, plan or product, whether individual, group or otherwise, sold,
issued, entered into or administered by such Company.

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          (ii)   There are no Tax or other liabilities that will result from the Tax treatment under the
Code of Life Insurance and Annuity Contracts, and other financial products, employee benefit plans,
individual retirement accounts and annuities and any similar related policy, contract, plan or
product, whether individual, group or otherwise, if any, issued or sold by either Company being
less favorable to the purchaser, policyholder or intended beneficiaries thereof than the Tax
treatment under the Code for which such policies, products, plans or contracts qualified or
purported to qualify at the time of their issuance or purchase. For purposes of this Section 2.19
the provisions of the Code relating to the Tax treatment of such policies, products, plans or
contracts shall include, but not be limited to, Sections 61, 72, 79, 101, 104, 105, 106, 125, 130,
264, 401, 403, 408, 408A, 412, 415, 419, 419A, 457, 817, 817A, 818, 1035, 1275, 7702, 7702A, and
7702B, as applicable.

     Section 2.20 Insurance Policies of the Companies.

     (a) Section 2.20 of the Seller Disclosure Letter lists all material insurance policies
(including fidelity bonds and other similar instruments) relating to the Companies or the officers
or directors of either Company, in each case, as in effect on the date hereof (the “Company
Insurance Policies”).

     (b) All premiums payable under the Company Insurance Policies either have been timely paid or
adequate provisions for the payment by each Company thereof has been made, except for such failures
to pay such premiums that would not reasonably be expected, individually or in the aggregate, to
have a Company Material Adverse Effect. Such Company Insurance Policies of each Company (or other
policies providing substantially similar insurance coverage) have been in effect continuously since
such Company has been owned directly or indirectly by the Seller Parent and remain in full force
and effect. No written notice of cancellation or termination has been received by the Seller or
either Company with respect to any Company Insurance Policy.

     Section 2.21 Finders’ Fees. There is no investment banker, broker, finder or other
intermediary retained by or authorized to act on behalf of the Seller Parent, the Seller or either
Company who is entitled to any fee or commission from the Buyer or any of its Affiliates
(including, after the Closing, either Company) upon the consummation of the transactions
contemplated by this Agreement and the Ancillary Transaction Agreements.

     Section 2.22 Intercompany Accounts; Transactions with Affiliates.

     (a) Section 2.22(a) of the Seller Disclosure Letter lists all inter-company balances as of the
Balance Sheet Date between the Seller or any Seller Affiliate (other than the Companies), on the
one hand, and either Company, on the other hand. Since the Balance Sheet Date, there has not been
any accrual of liability by either Company to the Seller or any Seller Affiliate (other than the
Companies) or other transaction between
either Company and the Seller or any Seller Affiliate (other than the Companies), except in
the ordinary course of business.

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     (b) Section 2.22(b) of the Seller Disclosure Letter contains a complete and correct list of
all material written contracts between either Company and any of the following Persons:
(i) the Seller Parent, the Seller or any of their Affiliates (other than the Companies) and
(ii) any director, officer, employee, consultant or senior executive of the Seller or any
Seller Affiliate (including the Companies) (such transactions, “Related Party
Transactions”). Except as set forth in Section 2.22(b) of the Seller Disclosure Letter, to the
Seller’s Knowledge, all material Related Party Transactions that will continue after the Closing
have been entered into and performed on arm’s length terms and in the ordinary course of business
and in compliance with all applicable transfer pricing, disclosure, reporting and other related
requirements.

     Section 2.23 Records. To the Seller’s Knowledge, the Records of each Company are
complete and correct, except as would not reasonably be expected, individually or in the aggregate,
to have a Company Material Adverse Effect. Except as set forth in Section 2.23 of the Seller
Disclosure Letter, each of the Companies maintains proper and adequate internal accounting controls
that provide reasonable assurance that: (i) transactions are executed with management’s
authorization; (ii) transactions are recorded as necessary to permit preparation and
certification of its financial statements and to maintain accountability for its respective assets;
(iii) access to its respective assets is permitted only in accordance with management’s
authorization; (iv) the reporting of its respective assets and liabilities is compared with
existing assets and liabilities at regular intervals; and (v) assets and liabilities are
recorded accurately, and proper and adequate procedures are implemented to effect the collection
thereof on a current and timely basis.

     Section 2.24 Reinsurance Agreements. Except as set forth in Section 2.24 of the
Seller Disclosure Letter, (i) no reinsurance, coinsurance, modified coinsurance or other
similar treaty or agreement to which either Company is a party contains any provision providing
that the other party thereto may amend, modify, re-price, cancel or terminate such agreement by
reason of the transactions contemplated by this Agreement or the Ancillary Transaction Agreements
and (ii) no consent is required from any party to an existing reinsurance agreement in
connection with the transactions contemplated by this Agreement or the Ancillary Transaction
Agreements except, in each case, as would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect. Section 2.24 of the Seller Disclosure Letter
sets forth each material reinsurance audit report issued in connection with the Companies since
January 1, 2004.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF

THE BUYER

     Except as set forth in the disclosure letter delivered by the Buyer to the Seller on or before
the execution of this Agreement (the “Buyer Disclosure Letter”) (it being agreed that
disclosure of any item in any section or subsection of the Buyer Disclosure Letter shall be deemed
disclosure with respect to any other section or subsection to which the relevance of such
disclosure to the applicable representation and warranty is reasonably apparent), the Buyer hereby
represents and warrants to the Seller and the Seller Parent as of the date hereof and as of the
Closing Date (except for any such representations and warranties which are made as of a specific
date, which representations and warranties are made only as of such date) as follows:

     Section 3.1 Corporate Authorization. The Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and each Ancillary Transaction Agreement to which
it is a party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this Agreement and
each Ancillary Transaction Agreement to which it is a party, the performance of the Buyer’s
obligations hereunder and thereunder and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized and approved by all requisite corporate action of
the Buyer. The Buyer has duly executed and delivered this Agreement and on the Closing Date will
have duly executed and delivered each Ancillary Transaction Agreement to which it is a party. This
Agreement constitutes, and each such Ancillary Transaction Agreement when so executed and delivered
will constitute, the legal, valid and binding obligation of the Buyer, enforceable against the
Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or relating to the
enforcement of creditors’ rights generally or by general principles of equity (whether such
enforcement is sought in equity or at law).

     Section 3.2 Corporate Status. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of Iowa. The Buyer has all requisite
corporate power and authority to carry on its business as now conducted and to own, lease and
operate all its properties and assets, except where the failure to be so organized, existing or in
good standing or where the failure to have such power and authority would not reasonably be
expected, individually or in the aggregate, to have a Buyer Material Adverse Effect. The Buyer is
duly qualified to do business as a foreign corporation and is in good standing in each of the
jurisdictions specified in Section 3.2 of the Buyer Disclosure Letter, which includes each
jurisdiction in which the nature of its business or the properties owned, leased or operated by it
makes such qualification

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necessary, except for those jurisdictions where the failure to be so qualified or to be in
good standing would not reasonably be expected, individually or in the aggregate, to have a Buyer
Material Adverse Effect. The Buyer has made available to the Seller complete copies of its
Organizational Documents as currently in effect, and the Buyer is not in violation of any provision
of such Organizational Documents.

     Section 3.3 Non-Contravention. Except as set forth in Section 3.3 of the Buyer
Disclosure Letter, the execution, delivery and performance by the Buyer of this Agreement and each
Ancillary Transaction Agreement to which it is a party and the performance and consummation of the
transactions contemplated hereby and thereby do not (i) conflict with or result in any
violation or breach of any provision of the Organizational Documents of the Buyer, (ii)
conflict with or result in a violation or breach of any provision of any Law applicable to the
Buyer, or (iii) require any consent of or other action by any Person under, violate,
conflict with or result in the material breach of any of the terms of, result in any modification
of or loss of a benefit under, accelerate or permit the acceleration of the performance required
by, otherwise give any other contracting party the right to modify, re-price, terminate or cancel,
or constitute a default or an event that, with or without notice or lapse of time or both, would
constitute a default under, any provision of any material contract, agreement or other instrument
to which the Buyer is a party or any of its assets or properties may be subject, except, in the
case of clauses (ii) through (iii), for such violations, conflicts, breaches or defaults
(x) that may result from facts or circumstances solely relating to the Seller or the Seller
Affiliates, or (y) which would not reasonably be expected, individually or in the
aggregate, to have a Buyer Material Adverse Effect.

     Section 3.4 Finders’ Fees. There is no investment banker, broker, finder or other
intermediary retained by or authorized to act on behalf of the Buyer or any of its Affiliates who
is entitled to any fee or commission from the Seller or any Seller Affiliate (including, prior to
the Closing, each Company) upon consummation of the transactions and satisfy its obligations
contemplated by this Agreement and the Ancillary Transaction Agreements.

     Section 3.5 Financial Ability to Perform. The Buyer has, and will have at the
Closing, available cash and/or existing borrowing facilities that together are sufficient to enable
it to pay the Purchase Price and to otherwise consummate the transactions contemplated by this
Agreement and the Ancillary Transaction Agreements.

Section 3.6 Inspections; No Other Representations. The Buyer is informed and
sophisticated, and has engaged expert advisors, experienced in the evaluation and purchase of
companies such as the Companies as contemplated hereunder. The Buyer has undertaken such
investigation and has been provided with and has evaluated such documents and information as it has
deemed necessary to enable it to make an informed and intelligent decision with respect to the
execution, delivery and performance of this Agreement and each Ancillary Transaction Agreement to
which it is a party. The Buyer

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 will undertake prior to the Closing such further investigation and request such additional
documents and information as it deems necessary. The Buyer acknowledges that the Seller and the
Seller Parent make no representation or warranty with respect to (i) any projections,
estimates or budgets delivered to or made available to the Buyer of future revenues, future results
of operations (or any component thereof), future cash flows or future financial condition (or any
component thereof) of each Company or the future business and operations of each Company or
(ii) any other matter of any kind, including any other information or documents made
available to the Buyer or its counsel, accountants or advisors with respect to each Company or the
Transferred Business or their respective operations, except as expressly set forth in this
Agreement, and the Buyer is not relying on any representation or warranty other than those
expressly set forth in this Agreement.

     Section 3.7 Tax Matters. The Buyer is eligible to make the Section 338(h)(10)
Elections.

     Section 3.8 Litigation. Except as set forth in Section 3.8 of the Buyer Disclosure
Letter, there is no Action or Proceeding pending or, to the Buyer’s Knowledge, threatened against
the Buyer that, if adversely determined, would reasonably be expected, individually or in the
aggregate, to have a Buyer Material Adverse Effect.

     Section 3.9 Financial Statements. The Buyer has made available to the Seller
complete copies of the audited statutory financial statements of the Buyer’s insurance Subsidiaries
as at and for the year ended December 31, 2006 (collectively, the “Buyer Subsidiary Financial
Statements”), and the consolidated balance sheet of the Buyer and its Subsidiaries as at
December 31, 2006. The Buyer Subsidiary Financial Statements have been prepared in accordance with
SAP applied on a consistent basis (except as may be indicated in the notes thereto) and the Buyer
Subsidiary Financial Statements present fairly in all material respects in accordance with SAP the
financial position, results of operations and cash flows of the respective insurance Subsidiaries
of the Buyer at and for the respective periods indicated therein.

ARTICLE IV

CERTAIN COVENANTS AND AGREEMENTS

Section 4.1 Access; Information and Records; Confidentiality.

     (a) During the period commencing on the date hereof and ending on the Closing Date, the Seller
shall, and shall cause each Company to, upon reasonable request and notice, afford to the Buyer,
its counsel, accountants, financing sources and other authorized representatives reasonable access
during normal business hours to the properties, books and records, contracts and officers of each
Company in order that they may have the opportunity to make reasonable investigations of the
affairs of the

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Companies; provided, that such access does not unreasonably interfere with the ongoing
business of either Company, the Seller or any Seller Affiliate, cause any representation or
warranty in this Agreement to be breached, cause any closing condition set forth in Article VI to
fail to be satisfied or otherwise cause the breach of this Agreement or any other agreement to
which either Company, the Seller or any Seller Affiliate is a party. The Seller shall, and shall
cause each Company to, use its commercially reasonable efforts to cause its officers, employees,
accountants and other agents to furnish to the Buyer such additional financial and operating
information in its possession with respect to either Company as the Buyer may from time to time
reasonably request.

     (b) Until the Closing, the Buyer shall hold, and shall cause its directors, officers,
employees, Affiliates, agents and advisors to hold, any information regarding the Companies in
confidence to the extent required by, and in accordance with, the provisions of the letter dated
April 2, 2007 between AUSA Holding Company and Merrill Lynch & Co., Inc. (the “Confidentiality
Agreement”).

     (c) After the Closing, upon reasonable written request and notice, the Seller and the Buyer
shall, and the Buyer shall cause the Companies to, furnish or cause to be furnished to the other
party and its representatives, employees, counsel and accountants access to, during normal business
hours, such assistance and information, including all original agreements, documents, books,
records, contracts and files in the possession of the Seller or the Buyer, as applicable, or any of
their respective Affiliates, including, with respect to the Buyer, the Companies, and relating to
the Transferred Business as is reasonably necessary for financial reporting and accounting matters,
the preparation and filing of any Tax Returns, reports or forms or the defense of any Tax claim or
assessment; provided, however, that such access does not unreasonably interfere
with the ongoing business of the Seller, the Buyer or either Company, as applicable, shall not
violate applicable Law or contractual obligations of the Seller, the Buyer or either Company, as
applicable, and shall not cause the Companies to breach or waive any privilege, including
attorney-client privilege.

     Section 4.2 Conduct of the Business of the Companies Prior to the Closing Date.

     (a) During the period from the date hereof and continuing until the earlier of the termination
of this Agreement in accordance with its terms and the Closing, except, (x) as provided for
under this Agreement or any Ancillary Transaction Agreement, (y) as required by Law, or
(z) as set forth in Section 4.2 of the Seller Disclosure Letter, unless the Buyer otherwise
consents in writing in advance after delivery of a Section 4.2 Notice (and the response by the
Buyer to any request for such consent shall not be unreasonably withheld, delayed or conditioned),
the Seller shall use commercially reasonable efforts to preserve intact the Companies’
relationships with its material Producers and otherwise cause each Company to conduct the
Transferred Business in all material respects in the ordinary course of business. Without limiting
the foregoing, prior to the Closing Date,

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except as contemplated by this Agreement or any Ancillary Transaction Agreement or as set
forth in Section 4.2 of the Seller Disclosure Letter, the Seller shall not permit either Company to
take any of the following actions, without the prior consent of the Buyer in writing after delivery
of a Section 4.2 Notice, which consent shall not be unreasonably withheld, delayed or conditioned:

          (i)    (w) declare, set aside or pay any dividends on, or make any other distributions
(whether in cash, securities, stock or property or any combination thereof) in respect of, the
outstanding capital stock of either Company (other than the declaration or payment of any dividend
or distributions to either Company), (x) split, combine, subdivide or reclassify, or
propose to split, combine, subdivide or reclassify, any of its outstanding capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or in substitution for
shares of the outstanding capital stock of either Company, (y) purchase, redeem or
otherwise acquire, or propose to purchase, redeem or otherwise acquire, any shares of outstanding
capital stock or any debt of either Company, or any rights, warrants or options to acquire any such
shares, other than, to the extent not paid prior to the date hereof pursuant to Section 2.8, the
payment in 2007 to the Seller of dividends in the amount of up to $193,731,054, in the aggregate,
from MLLIC and up to $17,427,134, in the aggregate, from MLLICNY, to the extent that each Company
determines, in its sole discretion, to make all or a portion of such payments (provided,
however, that such dividends shall not cause any Company’s RBC Ratio to be lower than 300%
immediately following the payment of such dividends), or (z) authorize, recommend, propose
or announce an intention to adopt a plan of complete or partial liquidation or dissolution of any
of the Companies;

          (ii)    issue, sell, grant, pledge or otherwise encumber, or authorize the issuance, sale, grant,
pledge or encumbrance of, any shares of either Company’s capital stock, any other voting securities
or any securities convertible into, or exchangeable for, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities;

          (iii)    amend its Organizational Documents;

          (iv)    (x) acquire (by merger, consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership or other business organization or assets comprising a
business or any material amount of property or assets in or of any other Person, or (y)
dispose, transfer or lease, or otherwise authorize the disposal, transfer or lease of, any material
property or assets, except for acquisitions or dispositions effected in the ordinary course of
business (including acquisitions or dispositions of investments consistent with the respective
investment policies of each Company, which policies have been previously provided to the Buyer); it
being understood and agreed that this Section 4.2(a)(iv) will not in any way restrict the
assignment, assumption or other conveyance of any of the assets or liabilities set forth on
Schedule A hereto from the Seller or any Affiliate of the Seller, on the one hand, to either
Company, on the other hand;

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          (v)    mortgage, pledge or subject to any Lien other than Permitted Liens any of its material
Assets, except in the ordinary course of business;

          (vi)    (x) incur, assume, redeem or pre-pay any indebtedness for borrowed money or
assume, guarantee, endorse or otherwise become responsible or liable (whether directly,
contingently or otherwise) for any such indebtedness of another Person, except in the ordinary
course of business, or (y) make any loans, advances or capital contributions to, or
investments in, any other Person (including advances to Affiliates, directors or officers), except
in the ordinary course of business;

          (vii)    enter into, amend or modify in any material respect, or terminate or non-renew any
Applicable Contract or waive, release or assign any material rights or claims thereunder, except in
the ordinary course of business;

          (viii)    make any material change in either Company’s reserving, underwriting, claims
administration, reinsurance, payment, pricing, selling, credit or allowance or valuation
principles, practices, policies or procedures, other than in the ordinary course of business;

          (ix)    make any material change in either Company’s accounting or actuarial principles,
practices, policies or procedures, other than as permitted or required by changes in applicable SAP
or generally accepted actuarial standards;

          (x)    make any capital expenditures in excess of $250,000 in the aggregate;

          (xi)    settle any non-Tax claim, action or proceeding which involves a remedy other than
monetary damages;

          (xii)    settle any non-Tax claim, action or proceeding in an amount that exceeds $250,000,
individually and $1,000,000 in the aggregate, other than the settlement in the ordinary course of
business of any policy or contract of insurance or reinsurance written or assumed by either
Company;

          (xiii)    enter into or terminate any exclusive distribution agreement;

          (xiv)    enter into, amend or modify any Seller benefit plan, employment, severance, change in
control, retention, termination or similar agreement or arrangement, or grant any bonuses, salary
increases, severance or termination pay;

          (xv)    make any severance payments to any officer of either of the Companies;

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          (xvi)    forfeit, abandon, modify, waive or terminate any material Insurance License;

          (xvii)    (x) enter into any contract outside of the ordinary course of business that
could exceed $250,000 in payments in any 12-month period or (y) enter into any contract
outside the ordinary course of business with a term greater than one year that is not terminable
without liability to the Companies;

          (xviii)    enter into any ceded reinsurance treaty or agreement other than in the ordinary course
of business or enter into any assumed reinsurance treaty or agreement without the consent of the
Buyer;

          (xix)    terminate, cancel or amend, or cause the termination, cancellation or amendment of, any
insurance coverage (and any surety bonds, letters of credit, cash collateral or other deposits
related thereto required to be maintained with respect to such coverage), other than in the
ordinary course of business, maintained by any of the Companies that is not replaced by comparable
insurance coverage;

          (xx)    (A) settle or compromise any Tax liability; (B) make or change any Tax
election or file any amended Tax Returns; or (C) file any claim for a refund of any Taxes,
except, in each case, in the ordinary course of business, as required by applicable Law or as would
not have a material adverse effect on the Buyer post-Closing; or

          (xxi)    enter into a Contract to do, or to authorize, or commit to do, any of the foregoing.

     (b) Prior to the Closing Date, except as contemplated by this Agreement or any Ancillary
Transaction Agreement, the Seller shall not, and shall cause the Seller Affiliates to not, without
the prior written consent of the Buyer, which consent shall not be unreasonably withheld, delayed
or conditioned, (i) mortgage, pledge as subject to any Lien, other than Permitted Liens,
any material Transferred Asset or (ii) enter into, amend in any material respect or
terminate or non-renew any material Contract, the rights or obligations under which constitute
Transferred Assets or Transferred Liabilities.

     (c) If the Seller proposes to seek the Buyer’s consent to take any action otherwise prohibited
under this Section 4.2, the Seller shall provide reasonable advance written notice to the Buyer,
which notice shall describe in reasonable detail such action proposed to be taken and the facts and
circumstances (including the rationale for taking such action) (a “Section 4.2 Notice”).

     (d) Notwithstanding anything in this Agreement to the contrary the Company shall be permitted,
prior to the Closing, to assign its rights and obligations under the agreement listed in Section
4.2(d) of the Seller Disclosure Letter to any Seller Affiliate, provided that such Seller
Affiliate shall provide the Buyer with a sublicense with respect to such agreement pursuant to and
in accordance with the terms and conditions of the Transition Services Agreement.

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     Section 4.3 Filings.

     (a) Each party hereto shall (i) make the filings required of it or any of its
Affiliates under the HSR Act and all applicable Insurance Laws in connection with this Agreement
and the Ancillary Transaction Agreements and the transactions contemplated hereby and thereby as
promptly as practicable following the date hereof (and not later than 30 days after the date
hereof), (ii) comply at the earliest practicable date and after consultation with the other
parties hereto with any request for additional information or documentary material received by it
or any of its Affiliates from the Federal Trade Commission (the “FTC”), the Antitrust
Division of the Department of Justice (the “Antitrust Division”), any Insurance Department
or any other Governmental Authority or any other Person, (iii) cooperate with the other
parties hereto in connection with any filing under the HSR Act or under any Insurance Law and in
connection with resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement or any of the Ancillary Transaction Agreements initiated by the FTC,
the Antitrust Division, any Insurance Department or any other Governmental Authority, (iv)
use commercially reasonable efforts to take any other action reasonably necessary to obtain the
consents, approvals and authorizations required for the consummation of the transactions
contemplated by this Agreement or any of the Ancillary Transaction Agreements at the earliest
practicable date and (v) use commercially reasonable efforts to cause the waiting periods
under the HSR Act and under applicable Insurance Laws to terminate or expire at the earliest
possible date.

     (b) Each party shall promptly inform the other parties of any material communication made to,
or received by such party or any of its representatives from, the FTC, the Antitrust Division, any
Insurance Department or any other Governmental Authority regarding any of the transactions
contemplated by this Agreement or any of the Ancillary Transaction Agreements.

     (c) Each party shall promptly inform the other parties of any meetings or hearings to be held
with or before the FTC, the Antitrust Division, any Insurance Department or any other Governmental
Authority regarding any of the transactions contemplated by this Agreement or any of the Ancillary
Transaction Agreements, and shall afford the other parties the opportunity to attend all such
meetings and hearings.

     (d) The filing fee under the HSR Act and all fees or payments to an Insurance Department in
connection with the transactions contemplated by this Agreement and the Ancillary Transaction
Agreements shall be borne equally by the Buyer and the Seller.

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     (e) Without limiting the foregoing, each party hereby agrees to use its commercially
reasonable efforts to prepare all documentation, to effect all filings, provide all notices and to
obtain all permits, consents, clearances, waivers, approvals and authorizations of all Insurance
Departments and other Governmental Authorities and other Persons necessary to consummate the
transactions contemplated by this Agreement and the Ancillary Transaction Agreements as promptly as practicable. In connection with
effecting any such filing, providing of notice or obtaining any such permit, consent, clearance,
waiver, approval or authorization necessary to consummate the transactions contemplated by this
Agreement and the Ancillary Transaction Agreements, each party shall, subject to applicable Law,
(i) permit counsel for the other party a reasonable opportunity to review in advance, and
consider in good faith the views of the other party in connection with, any proposed written
communication to any Governmental Authority, and (ii) provide counsel for the other party
with copies of all filings made by such party, and all correspondence between such party (and its
advisors) with any Governmental Authority and any other information supplied by such party to, or
received from, a Governmental Authority relating to the transactions contemplated hereby or by the
Ancillary Transaction Agreements; provided, however, that materials may be redacted
or withheld (x) to the extent that they concern the valuation of the Transferred Business
or either party or alternatives to the transactions contemplated by this Agreement and the
Ancillary Transaction Agreements and (y) as necessary to comply with contractual
arrangements. The Seller Parent and the Seller agree to furnish the Buyer with such necessary
information and reasonable assistance as may be reasonably requested in connection with the
preparation by the Buyer of all filings or submissions pursuant to this Section 4.3.

     Section 4.4 Public Announcements. The Seller and the Buyer shall agree on the form of
any press release with respect to the announcement of the transactions contemplated by this
Agreement and the Ancillary Transaction Agreements whether issued jointly or by any party. Unless
otherwise required by Law, including the rules and regulations promulgated by the SEC, prior to the
Closing Date, no news release or other public announcement pertaining to the transactions
contemplated by this Agreement or any Ancillary Transaction Agreement shall be made by or on behalf
of any party or their respective Affiliates without the prior written consent of the other party,
which consent shall not be unreasonably withheld, delayed or conditioned. Prior to issuing any
such press release or a public announcement required by Law, the parties shall consult with each
other and each party shall have a reasonable opportunity to comment on such press release or
announcement.

     Section 4.5 Further Actions. Subject to the terms and conditions of this Agreement,
each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement and by the Ancillary
Transaction Agreements, including using its

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commercially reasonable efforts to (i) obtain,
in addition to consents, approvals and authorizations discussed in Section 6.1, any consents,
approvals and authorizations as are required in connection with the consummation of the
transactions contemplated by this Agreement and by the Ancillary Transaction Agreements,
(ii) effect, in addition to filings discussed in Section 6.1, all necessary filings,
(iii) defend any action, suit or proceeding, whether judicial or administrative, whether brought derivatively or on behalf of third parties
(including Governmental Authorities or officials), challenging this Agreement or the Ancillary
Transaction Agreements or the transactions contemplated hereby or thereby and (iv) furnish
to each other such information and assistance and consult with each other with respect to the terms
of any undertaking as reasonably may be requested in connection with the foregoing.

     Section 4.6 Termination of Affiliate Relations.

     (a) Except as set forth in Section 4.6(a) of the Seller Disclosure Letter, on or prior to the
Closing Date, all liabilities owed to the Seller and the Seller Affiliates (other than the
Companies) by each Company shall in each case be settled or cancelled, either by way of cash
contribution to capital, cash distribution or set-off, such that immediately prior to the Closing,
all such liabilities shall have been extinguished. Notwithstanding anything herein to the
contrary, the Seller, the Seller Affiliates and either Company may enter into such Contracts and
instruments as may be required to effect the transactions contemplated by the preceding sentence;
provided that any such Contracts or instruments shall be in a form reasonably satisfactory
to the Buyer.

     (b) Except as set forth in Section 4.6(b) of the Seller Disclosure Letter, all agreements
between a Company, on the one hand, and the Seller and/or any of the Seller Affiliates (other than
the Companies), on the other hand, shall be terminated as of the Closing, and all obligations and
liabilities thereunder shall thereupon be discharged and released.

     Section 4.7 Insurance. Coverage of each Company, the Transferred Business, or their
respective operations and other risks attributable to it under all insurance policies of the Seller
and the Seller Affiliates (other than the Companies) shall cease as of the Closing Date.

     Section 4.8 Keepwell Agreement. At the Closing, the Buyer shall enter into keepwell
agreements with the Companies consistent in all material respects with the terms and provisions of
the customary keepwell agreements entered into between the Buyer and its Affiliates, with the
expectation that such keepwell agreements shall replace the Seller Guarantees.

     Section 4.9 Director and Officer Resignations. At the Closing, the Seller, unless
otherwise requested in writing by the Buyer, shall cause to be delivered to the Buyer duly signed
resignations of the directors and officers of each Company who are also officers of the Seller or
the Seller Affiliates (other than the Companies).

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     Section 4.10 Parent Undertaking. The Seller Parent agrees to perform, or cause the
Seller to perform, all of the Seller’s obligations and agreements hereunder, and shall be entitled
to exercise any rights of the Seller under this Agreement.

     Section 4.11 Non-Competition.

     (a) For a period of five (5) years following the Closing Date, the Seller Parent agrees that
it shall not, and shall cause each Seller Affiliate “controlled” by Seller Parent (as the term
“control” is defined in the second sentence of the definition of the term “Affiliate”), including
for the avoidance of doubt, Merrill Lynch, Pierce, Fenner & Smith, not to, without the prior
written consent of the Buyer (such consent not to be unreasonably withheld, conditioned or
delayed), issue any Life Insurance and Annuity Contract or substantially similar products
(including any products providing for lifetime withdrawals or payments from mutual funds, brokerage
accounts, asset accounts, asset pools, 401K accounts or other financial accounts) (collectively,
“Restricted Products”) for distribution through Merrill Lynch Global Private Client Network in the
United States of America (the “Restricted Activity”). For clarity, and subject to Section
4.11(c), the obligations of the Seller under this Section 4.11 with respect to the Seller
Affiliates shall apply to any Person for so long as such Person is a Seller Affiliate but not
thereafter.

     (b) Notwithstanding the restrictions set forth in Section 4.11(a), for clarity, this Agreement
does not preclude, prohibit, restrict or otherwise limit the Seller or any Seller Affiliate from
engaging in any activity other than the Restricted Activity, including:

          (i)    manufacturing or issuing any product other than a Restricted Product;

          (ii)    marketing, selling, distributing or otherwise assisting in any manner in the manufacture
or sale of any Restricted Product issued or manufactured by any other Person consistent in all
material respects with the manner in which the Seller or any Seller Affiliate or any of their
respective Affiliates has marketed, sold or distributed any Restricted Product on behalf of any
Person at any time prior to the date hereof and consistent with the Distribution Agreement;

          (iii)    cooperating in any manner with any Person in the design or development of new Life
Insurance and Annuity Contracts or related products, or the extension of existing life and annuity
or related products, to be manufactured by such Person and marketed, sold or distributed in any
manner by the Seller or any Seller Affiliate to the extent consistent with the Distribution
Agreement; or

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          (iv)    engaging in any other activity engaged in by the Seller or any Seller Affiliate as of the
date hereof.

     (c) Notwithstanding anything herein to the contrary in this Section 4.11, the covenant set
forth in Section 4.11(a) shall in no way apply to or otherwise limit (i) any private
equity, hedge fund, merchant banking, asset management, non-strategic principal or investment
business or similar business or activity of the Seller or any Seller Affiliate, including BlackRock Inc. and its Affiliates or any entity affiliated with the Merrill Lynch
Global Private Equity or Merrill Lynch Global Alternative Investment divisions or any successor
thereto, or (ii) any trading, brokerage, lending, investment banking or advisory business
or activity of the Seller or any Seller Affiliate.

     (d) Notwithstanding anything to the contrary contained in this Section 4.11, the covenant set
forth in Section 4.11(a) shall not be breached by reason of any Person (other than the Seller or
any Seller Affiliate) engaged in the Restricted Activity agreeing to acquire or acquiring, directly
or indirectly, outstanding voting securities of the Seller or any Seller Affiliate or entering into
a business combination or merger of equals, or agreeing to enter into any such transaction, with
the Seller or any Seller Affiliate at any time, whether by means of a stock purchase, merger,
consolidation, tender offer or otherwise.

     (e) Notwithstanding anything to the contrary contained in this Section 4.11, the covenant set
forth in Section 4.11(a) shall in no way apply to or otherwise limit the ability of the Seller or
any Seller Affiliate to acquire or hold any interest (whether by way of a purchase, merger,
consolidation or other transaction) in any Person engaged directly or indirectly in any Restricted
Activities if the direct and indirect interest owned by the Seller and the Seller Affiliates
represents less than 10% of the voting interests and less than 10% of the ownership, revenue and
profits interests in such Person, assuming the exercise of all rights of the Seller and the Seller
Affiliates.

     (f) Notwithstanding anything to the contrary contained in this Section 4.11, the covenant set
forth in Section 4.11(a) shall in no way apply to or otherwise limit the ability of the Seller or
any Seller Affiliate to acquire or hold any interest in any Person in excess of the amount set
forth in Section 4.11(e) if either (x) both (A) the consolidated revenues of such
Person from Restricted Activities in the previous four fiscal quarters are less than 33.3% of such
Person’s consolidated revenues during such period and (B) the sum of the aggregate
consolidated revenues of such Person and its Subsidiaries in the preceding four fiscal quarters
from Restricted Activities, multiplied by the direct or indirect percentage economic interest of
the Seller and the Seller Affiliates in such Person is less than 10% of the consolidated revenues
of the Seller and the Seller Affiliates for such period, or (y) the Seller shall, or shall
cause such Seller Affiliate to, take commercially reasonable actions necessary to cease and
terminate such Restricted Activities or to sell or otherwise divest such Person or business (or the
portion thereof necessary to cause clause (x) above to be true) to a third party that is not a
Seller Affiliate, as soon as reasonably practicable following the completion of such acquisition,
and the Buyer shall have a right to participate as a bidder in respect of any such sale
transaction.

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     (g) The parties hereto recognize that the Laws and public policies of the various states of
the United States of America may differ as to the validity and enforceability of covenants similar
to those set forth in this Section 4.11. It is the intention of the parties that the provisions of
this Section 4.11 be enforced to the fullest extent permissible under the Laws and policies of each jurisdiction in which enforcement may
be sought, and that the unenforceability (or the modification to conform to such Laws or policies)
of any provisions of this Section 4.11 shall not render unenforceable or impair the remainder of
the provisions of this Section 4.11. Accordingly, if at the time of enforcement of any provision
of this Section 4.11, a court of competent jurisdiction holds that the restrictions stated herein
are unreasonable under circumstances then existing, the parties hereto agree that the maximum
period, scope or geographic area reasonable under such circumstances shall be substituted for the
stated period, scope or geographic area and that such court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and geographical area permitted by
applicable Law.

     (h) The Seller expressly acknowledges that the restrictive covenants set forth in this Section
4.11, including the geographic scope and duration of such covenants, are necessary in order to
protect and maintain the proprietary interests and other legitimate business interests of the Buyer
and its Affiliates, and that any violation thereof could result in irreparable injury to the Buyer
and its Affiliates that would not be readily ascertainable or compensable in terms of money, and
therefore the Buyer and its Affiliates shall be entitled to seek from any court of competent
jurisdiction temporary, preliminary and permanent injunctive relief as well as damages, which
rights shall be cumulative and in addition to any other rights or remedies to which it may be
entitled. The Seller further agrees that if it is determined that it has willfully breached the
terms of this Section 4.11, the Buyer and its Affiliates shall be entitled to recover from the
Seller all reasonable costs and reasonable attorney’s fees incurred as a result of its attempts to
redress such breach or to enforce its rights and protect its legitimate interests.

     (i) If the Seller Parent or any controlled Affiliate of the Seller Parent acquires more than
50% of the voting securities of any Person that distributes life and annuity products through the
Merrill Lynch Global Private Client Network as of the date of such acquisition, the Buyer and the
Seller shall implement the procedures set forth in Section 4.11(i) of the Seller Disclosure Letter.

     Section 4.12 Use of Name. As soon as practicable after the Closing Date, the Buyer
will change the names of the Companies to names that do not include a Seller Mark or any name or
mark similar thereto and make all necessary legal filings with the appropriate Governmental
Authority to effect such change.

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     Section 4.13 Practices and Procedures.

     (a) The Buyer acknowledges that the Seller and the Seller Affiliates may have certain
obligations and liabilities from and after the Closing arising out of or resulting from the manner
in which Life Insurance and Annuity Contracts were marketed or sold prior to the Closing through
Merrill Lynch Global Private Client Network. Accordingly, from and after the Closing, the Buyer
shall cooperate in all reasonable respects with the Seller and the Seller Affiliates with respect
to the defense or settlement of, or other response to, any complaint of any kind asserted against the Seller or any Seller Affiliate
with respect to the manner in which any such Life Insurance and Annuity Contract was marketed or
sold prior to the Closing, including, at the reasonable written request of the Seller or any Seller
Affiliate, by (i) furnishing or causing to be furnished, records, information and
testimony, and attending conferences, discovery proceedings, trials or appeals in connection
therewith and (ii) maintaining, terminating or modifying any practices, policies or
procedures of the Companies with respect to the administration, interpretation or enforcement of
any such Life Insurance and Annuity Contract in order to facilitate any such defense, settlement or
response, as the case may be; provided that the Buyer shall not be obligated to take any
action pursuant to this Section 4.13(a) if (x) such action, measured from the perspective
of the Buyer and after giving effect to the impact of any related indemnity of the Buyer under
Section 5.2(b)(iii), is commercially unreasonable or (y) the Buyer has been advised in
writing by its counsel that there is a substantial likelihood that such action would violate
applicable Law.

     (b) Without limiting the generality of the foregoing, the Buyer shall cause the Companies at
all times from and after the Closing to (i) maintain in all material respects the policies,
practices and procedures that shall set forth on Section 8.2(i) of the Deliverables Schedule (as
defined in the Distribution Agreement) to the Distribution Agreement with respect to the closed
block of life insurance policies referred to thereon, (ii) ensure that the guaranteed
interest rate for the Company’s single premium whole life block of business (non-variable) will be
at least 4%, net of the cost of insurance, as shall be set forth with more particularity on Section
8.2(ii) of the Deliverables Schedules (as defined in the Distribution Agreement) to the
Distribution Agreement, (iii) maintain in all material respects the functionality of the
Companies’ administrative systems as in effect on the date hereof so as to enable the Seller and
the Seller Affiliates to comply with the specific terms of the open ended settlements entered into
prior to the Closing with respect to certain Life Insurance and Annuity Contracts, as shall be set
forth with more particularity on Section 8.2(iii) of the Deliverables Schedule (as defined in the
Distribution Agreement) to the Distribution Agreement, and (iv) maintain the policy history
of each Life Insurance and Annuity Contract marketed and sold by the Companies prior to the Closing
in substantially the same manner in which such policy histories have been maintained by the
Companies prior to the Closing.

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     Section 4.14 Indemnification and Insurance.

     (a) From and after the Closing, the Buyer shall cause the Companies to continue to indemnify
and hold harmless each Company’s present and former directors, officers, and employees, in their
capacities as such, from and against all damages, costs and expenses incurred or suffered in
connection with any threatened or pending Action or Proceeding at law or in equity relating to the
Transferred Business (including actions related to this Agreement, the Ancillary Transaction
Agreements, or the transactions contemplated hereby or thereby) or the status of such individual as
a director, officer, or employee at or prior to the Closing, to the fullest extent permitted by applicable Law. The
Buyer shall cause each Company to retain in the certificate or articles of incorporation or by-laws
(or the comparable corporate charter documents) of each Company any indemnification provision or
provisions, including provisions respecting the advancement of expenses, in effect immediately
prior to the date of this Agreement solely for the benefit of each Company’s officers, directors
and employees that existed immediately prior to the Closing and during the time period prior to the
Closing, and not thereafter amend the same with respect to such persons (except to the extent that
such amendment preserves, increases or broadens the indemnification or other rights theretofore
available to such officers, directors employees and agents).

     (b) For six years from the Closing, the Buyer shall cause to be maintained in effect an
officers’ and directors’ liability insurance policy, with an insurer with a Standard & Poor’s or AM
Best’s rating of at least A- — VIII that provides coverage for acts or omissions occurring prior
to the Closing covering each Person currently covered by such insurance policies held by or for the
benefit of each Company and its respective directors, officers, and employees on terms with respect
to coverage and in amounts no less favorable in the aggregate than those of such policies in effect
on the date of this Agreement (the “Existing Insurance”). The Buyer shall satisfy its
obligations under this Section 4.14(b) by causing each Company to purchase a “tail” policy from an
insurer with a Standard & Poor’s or AM Best’s rating of at least A- — VIII, which (i) has
an effective term of six years from the Closing, (ii) covers each Person currently covered
by the Existing Insurance for actions and omissions occurring on or prior to the Closing and
(iii) contains terms that are no less favorable in the aggregate than those of the Existing
Insurance ; provided, however, that the Buyer shall not be obligated to make annual
premium payments for such insurance to the extent such premiums exceed 150% of the premiums paid as
of the date hereof by the Buyer for such insurance (the “Current Premium”), and if such
premiums for such insurance would at any time exceed 150% of the Current Premium, then the Buyer
shall cause to be maintained policies of insurance which, in the Buyer’s reasonable determination,
provide the maximum coverage available at an annual premium equal to 150% of the Current Premium.
In lieu of such coverage, the Buyer may substitute a prepaid “tail” policy for such coverage, which
the Buyer may obtain prior to the Closing for a cost not in excess of the amount set forth in
Section 4.14(b) of the Buyer Disclosure Letter or by causing each such Person to become a “covered
person” under any D&O policy maintained by the Buyer or any Affiliate of the Buyer which provides
coverage in amounts and on terms no less favorable in the aggregate then those provided to such
Persons under the Existing Insurance.

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     Section 4.15 Transition Assistance. Between the date hereof and the Closing, subject
to applicable Law, the parties shall use commercially reasonable efforts to cooperate in planning
for executing and providing knowledge transfer with respect to transition and migration of the
Transferred Business (including the data, systems, operations and administration) to the Buyer as
of the Closing, in accordance with a mutually agreed upon timetable and processes; provided, that the foregoing shall be
done in a manner so as not to interfere unreasonably with the conduct of the business of any party
hereto or any of their respective Affiliates.

     Section 4.16 Intellectual Property License. Effective immediately after the Closing,
the Seller Parent, on behalf of itself and its Affiliates, shall grant, to the Companies a
non-exclusive, sublicenseable (but solely for the benefit of the Transferred Business),
royalty-free and transferable (but only to the Companies’ Affiliates) right to use the advertising
materials used in the Transferred Business as of the Closing Date, and created derivative works
based thereon, for one (1) year after the Closing solely for use in connection with the Transferred
Business. The Companies shall own all right, title and interest in and to the aforesaid derivative
works developed by or on their behalf.

     Section 4.17 Distribution Agreements. Effective as of the Closing, (i) the
Buyer shall have the right to cause each of the Companies and a registered broker-dealer Affiliated
with it (the “New Principal Underwriter”), to enter into one or more principal underwriting
agreements, on mutually agreeable terms compliant with the Distribution Agreement, with respect to
the offer and sale of the Investor Choice Annuity (as defined in the Distribution Agreement) and
the receipt of additional premiums under the Life Insurance and Annuity Contracts after the
Closing, and (ii) the Seller shall cause the appropriate Seller Distributors (as defined in
the Distribution Agreement) (including Merrill Lynch, Pierce, Fenner & Smith, Incorporated and
Merrill Lynch Life Agency), and the Buyer shall cause the Companies and the New Principal
Underwriter, to enter into distribution agreements on mutually agreeable terms compliant with the
Distribution Agreement as necessary to permit the sale of Investor Choice Annuities and the receipt
of additional premium under the Life Insurance and Annuity Contracts after the Closing.

     Section 4.18 Ancillary Transaction Agreements. Effective as of the Closing, each of
the Seller and the Buyer and any of their respective Affiliates which is a party to any of the
Ancillary Transaction Agreements shall enter into, or cause its applicable Affiliate to enter into,
each such Ancillary Transaction Agreements to which it is a party.

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     Section 4.19 Roszel Agreements.

     (a) Prior to the Closing, the Seller shall terminate each of (i) the agreement between
the Seller and Roszel Advisors, LLC (“Roszel”) dated as of July 1, 2002, whereby Roszel
pays the Seller for certain administrative services (the “Roszel Administrative Services
Agreement”), and (ii) the agreement between the Seller and MLLIC, dated as of July 1,
2002, whereby MLLIC performs certain administrative services and the Seller pays to MLLIC the
entire amount the Seller receives under the Administrative Services Agreement. Prior to the
Closing, the Seller shall cause each of MLLIC and MLLICNY to enter into an agreement with Roszel
with terms and conditions substantially similar to those set forth in the Administrative Services
Agreement attached hereto as Exhibit G.

     (b) Prior to the Closing, the Seller shall cause each of MLLIC and MLLICNY to enter into an
agreement with Roszel or another Seller Affiliate that provides for Investment Management Services
(as defined in the Distribution Agreement) to be performed by Roszel or such Seller Affiliate with
respect to the “Merrill Lynch Investor Choice Annuity” (as defined in the Distribution Agreement)
product in exchange for a fee and otherwise on terms and conditions substantially similar to the
terms and conditions set forth in the Roszel Investment Management Services Term Sheet attached
hereto as Exhibit H.

     Section 4.20 Third Party Consents. The Seller will use its commercially reasonable
efforts between the date hereof and the Closing Date to obtain any consents of third parties
necessary for the conduct of the Transferred Business by the Companies following the Closing, to
the extent required. In the event that any such consent is not obtained prior to the Closing, the
Seller shall, pursuant to and in accordance with the terms and conditions of the Transition
Services Agreement, provide the Buyer with the a sublicense with respect to the license agreement
under which such consent is required until such consent is obtained or as otherwise set forth in
the Transition Services Agreement.

     Section 4.21 Reinsurance Disputes. Following the Closing, the Seller shall, at the
reasonable request of the Buyer, reasonably cooperate with the Buyer in connection with any ongoing
Actions or Proceedings involving disputes between the Companies and their reinsurers, including
making employees of the Seller or any Seller Affiliates available on a mutually convenient,
commercially reasonable, basis to provide information and other assistance including testimony in
connection with such Actions or Proceedings. The Buyer shall reimburse the Seller for any
reasonable out-of-pocket costs incurred by the Seller or any Seller Affiliates in connection with
such cooperation.

     Section 4.22 Closing Announcement. Whether in conjunction with the notification to
each holder of a Life Insurance and Annuity Contract issued by either Company about the name change
of the Companies, or otherwise, the Buyer shall cause each Company as soon as practicable to inform
each such holder in writing about the transaction and the Buyer’s transitional use of the Seller
Parent’s marks. In this regard, the parties will use commercially reasonably efforts to agree on
the content, format and size of such notice prior to the Closing.

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ARTICLE V

INDEMNIFICATION

     Section 5.1 Survival. The representations and warranties of the parties contained in
this Agreement or in any certificate delivered pursuant hereto or in connection herewith, and the
right to commence any claim with respect thereto, shall survive for eighteen (18) months after the
Closing Date; provided that (i) the representations and warranties in Section 2.19(a) (Tax Matters) shall not survive the Closing,
(ii) the representations and warranties in Section 2.1 (Corporate Authorization), Section
2.2 (Corporate Status), Section 2.4 (Capitalization; Title to Shares), Section 2.19(b) (Tax
Matters), Section 2.21 (Finders’ Fees), Section 3.1 (Corporate Authorization), Section 3.2
(Corporate Status), Section 3.4 (Finder’s Fees) and Section 3.7 (Tax Matters) shall survive
indefinitely and (iii) the representations and warranties in Section 2.18 (Employee Benefit
Plans and Related Matters; ERISA) with respect to ERISA, shall survive for 3 years after the
Closing. The covenants and agreements contained in this Agreement to be performed or complied with
after the Closing Date shall survive until fully performed or complied with; provided, that
this provision is not intended to release any party from liability for any breach occurring prior
to the Closing of any covenant or agreement that does not survive the Closing. Notwithstanding the
preceding sentences, any breach of a representation, warranty, covenant or agreement in respect of
which indemnity may be sought under this Agreement shall survive the time at which it would
otherwise terminate pursuant to the preceding sentences, if notice of the inaccuracy or breach
thereof giving rise to such right of indemnity shall have been given to the party against whom such
indemnity may be sought prior to such time, which notice describes in reasonable detail the facts
and circumstances with respect to the subject matter of such Indemnified Party’s claim, and the
nature of such claim; provided, that, in the case of any such alleged breach constituting a
Third Party Claim, such representation and warranty shall so continue to survive only to the extent
such Indemnified Party has received a written notice from a third party asserting the claim that
constitutes the basis of such Third Party Claim prior to the time such representation and warranty
otherwise ceases to survive hereunder.

     Section 5.2 Indemnification.

     (a) From and after the Closing, subject to the terms of this Article V, the Seller and the
Seller Parent shall, jointly and severally, defend, indemnify and hold harmless the Buyer, each
Company and their Affiliates and their respective directors, officers and employees (the “Buyer
Indemnified Parties”) from and against, and pay or

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reimburse the Buyer Indemnified Parties for, any and all Losses resulting from or arising out of (i) any inaccuracy in or breach of any
representation or warranty as of the date hereof and as of the Closing Date (or such other date
specified in such representation or warranty) by the Seller Parent or the Seller in or pursuant to
this Agreement (other than any representation and warranty contained in Section 2.19(a)), in all
cases, other than with respect to the Included Seller Materiality Representations, without giving
effect to any limitation as to “materiality” or “Company Material Adverse Effect” contained therein
(“Seller Warranty Breach”), (ii) any failure of the Seller Parent or the Seller to
perform any covenant or agreement under this Agreement, provided that the Seller Parent and
the Seller shall not have any liability pursuant to this Section 5.2 as a result of any Losses
resulting from Taxes of the Companies the sole remedies for which shall be those found in Section
8.1, (iii) the Buyer’s performance of its obligations under Section 4.13 (other than expenses incurred in the ordinary course of business in providing the services
described in Section 4.13(b)), (iv) the Scheduled Liabilities, (v) the Excluded
Liabilities, (vi) any failure to obtain any third party consent set forth in Section 5.2 of
the Seller Disclosure Letter or (vii) any bad faith, misconduct, willful malfeasance or
violation of applicable Law by the Seller, any Seller Distributor (as defined in the Distribution
Agreement) or any of their respective employees, agents or registered representatives in the
underwriting, marketing, solicitation of applications for or sales of the Companies’ products prior
to the Closing (other than to the extent resulting from or arising out of matters disclosed in
Sections 2.7 and 2.11 of the Seller Disclosure Letter, except Scheduled Liabilities, which are
indemnified to the extent indemnified under Section 5.2(a)(iv), and Excluded Liabilities, which are
indemnified to the extent indemnified under Section 5.2(a)(v)).

     (b) From and after the Closing, subject to the terms of this Article V, the Buyer shall
defend, indemnify and hold harmless the Seller Parent, the Seller and their respective Affiliates
and their respective directors, officers and employees (the “Seller Indemnified Parties”)
from and against, and pay or reimburse the Seller Indemnified Parties for, any and all Losses
resulting from or arising out of (i) any inaccuracy in or breach of any representation or
warranty as of the date hereof and as of the Closing Date (or such other date specified in such
representation or warranty) by the Buyer in or pursuant to this Agreement, in all cases, other than
the Included Buyer Materiality Representations, without giving effect to any limitation as to
“materiality” or “Buyer Material Adverse Effect” contained therein (“Buyer Warranty
Breach”), (ii) any failure of the Buyer to perform any covenant or agreement under this
Agreement, (iii) any liability imposed on the Seller or any Seller Affiliates from and
after the Closing in its respective capacity as a distributor of any policy of either Company that
is in force as of the Closing that would not have been imposed on it but for actions taken by the
Buyer, the Companies or any of their respective Affiliates after the Closing with respect to the
interpretation, administration and enforcement of such policies that are inconsistent with the
manner in which such policies were interpreted, administered or enforced, as the case may be, by
the Seller and the Companies prior to the Closing (the
“Seller Pre-Closing

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Practices and Procedures”), provided that prior to the termination of the Transition Services
Agreement in accordance with its terms only, this indemnification should apply only to the extent
the Seller Pre-Closing Practices and Procedures (A) have been written and disclosed in any
prospectus filed with the SEC relating to any Life Insurance and Annuity Contract or (B)
otherwise become known to any responsible officer of the Buyer or any Affiliate of the Buyer during
the term of the Transition Services Agreement, except, in all cases, to the extent that (x)
any such liabilities result from or arise out of any Scheduled Liabilities or Excluded Liabilities,
(y) such action by the Buyer is taken at the request of the Seller or the Seller Parent, or
(z) the Buyer is advised in writing by its counsel that such action by the Buyer is
necessary to avoid a substantial likelihood of a violation of applicable Law, (iv) any
Seller Guarantee, (v) the Transferred Liabilities, or (vi) the Buyer’s ownership,
operation or use of the Transferred Assets following the Closing, except to the extent that any Losses result from or arise out of any Seller Warranty
Breach.

     Section 5.3 Certain Limitations.

     (a) Notwithstanding anything to the contrary contained in this Agreement, with respect to
indemnification by the Seller Parent and the Seller for any Seller Warranty Breach pursuant to
Section 5.2(a)(i), (i) the Seller Parent and the Seller shall not be liable unless and
until the cumulative amount of Losses with respect to all such Seller Warranty Breaches (excluding
all Losses which may result from or arise out of any Seller Warranty Breach but which also are
separately indemnifiable under any other provision of this Agreement) exceeds $12,500,000, and then
only to the extent of such excess, and (ii) the Seller Parent and the Seller shall not be
liable for any single claim with respect to any Seller Warranty Breach which results in Losses of
$100,000 or less (provided, that claims arising out of similar facts or circumstances shall
be aggregated for this purpose) and such claims below such $100,000 amount shall not be counted for
purposes of Section 5.3(a)(i). In addition, notwithstanding anything in this Agreement to the
contrary, the Seller Parent’s and the Seller’s maximum liability for all Seller Warranty Breaches
and Scheduled Liabilities shall not exceed $200,000,000 in the aggregate, provided that
this limitation shall not apply to any Seller Warranty Breach of Section 2.1 (Corporate
Authorization), Section 2.2 (Corporate Status), Section 2.4 (Capitalization; Title to Shares) or
Section 2.21 (Finders’ Fees).

     (b) Notwithstanding anything to the contrary contained in this Agreement, with respect to
indemnification by the Buyer for any Buyer Warranty Breach pursuant to Section 5.2(b)(i),
(i) the Buyer shall not be liable unless and until the cumulative amount of Losses with
respect to all such Buyer Warranty Breaches (excluding all Losses which may result from or arise
out of any Buyer Warranty Breach but which are separately indemnifiable under any other provision
of this Agreement) exceeds $12,500,000, and then only to the extent of such excess, (ii)
the Buyer shall not be liable for any single claim with respect to any Buyer Warranty Breach which
results in Losses of $100,000 or

39

 

less (provided claims arising out of similar facts or
circumstances shall be aggregated for this purpose) and such claims below such $100,000 amount
shall not be counted for purposes of Section 5.3(b)(i), and (iii) the Buyer’s maximum
liability for all Buyer Warranty Breaches shall not exceed $200,000,000 in the aggregate,
provided that this Section 5.3(a) shall not apply to any Buyer Warranty Breach of Section
3.1 (Corporate Authorization), Section 3.2 (Corporate Status) or Section 3.4 (Finders’ Fees).

     (c) The Buyer agrees that, except to the limited extent expressly set forth in Section 2.6(b),
none of the representations and warranties set forth in Article II shall be construed in any way as
a representation or warranty as to the adequacy or sufficiency, for any purpose, of the reserves
held by the Companies against the liabilities arising under the terms of the Life Insurance and
Annuity Contracts issued by them or as a guarantee as to the collectibility of any reinsurance
balances ceded to third party reinsurers. Without limiting the generality of the foregoing, except as expressly set forth
in Section 2.6(b), the Seller makes no representation or warranty whatsoever, and shall provide no
indemnity or guarantee of any sort or incur any liability with respect to any such reserves, or the
development or adequacy thereof, or the collectibility of ceded reinsurance balances,
provided that notwithstanding the foregoing, the provisions of this Section 5.3(c) shall
not apply to any non-collectibility of ceded reinsurance balances resulting from a breach prior to
the Closing of any reinsurance agreement by any Company.

     (d) Subject to each party’s right to seek specific performance pursuant to Section 4.11 and
Section 10.13 and to pursue any claim with respect to fraud or intentional misrepresentation,
Article V and Article VIII of this Agreement provide the sole and exclusive remedies after the
Closing for any misrepresentation, breach of warranty, covenant or other agreement, or claim of any
nature arising out of or related to this Agreement or the transactions provided for hereby.
Notwithstanding anything in this Agreement or any Ancillary Transaction Agreement to the contrary,
if an Indemnified Party has the right to indemnification or recovery under more than one provision
of this Agreement or any of the Ancillary Transaction Agreements, an Indemnified Party shall have
the right to seek and obtain indemnification or other recovery for all Losses and other recoveries
allowed under each such provision; provided, that such Indemnified Party shall not obtain
duplicative recoveries.

     (e) Any breach of or inaccuracy in any representation or warranty of the Seller given as of
the Closing Date resulting from any failure to take an action by the Seller or either Company due
to the Buyer’s unreasonable or untimely refusal to give its consent to a written request by the
Seller under Section 4.2 (provided that Buyer has received a Section 4.2 Notice) shall,
unless and to the extent that such representation was breached or inaccurate as of the date hereof,
not be deemed to have been breached or to be inaccurate for purposes of this Article V, and no
Losses arising out of or resulting in any manner from any such breach or inaccuracy as of the
Closing Date shall be in any manner indemnifiable under this Article V or otherwise.

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     Section 5.4 Calculation of Losses.

     (a) Any indemnity payment made by an Indemnifying Party to an Indemnified Party pursuant to
Section 5.2 shall be made net of (x) any amounts actually recovered by the Indemnified
Party under applicable insurance policies or from any other Person alleged to be responsible for
the matters underlying such indemnity payment less (y) any related costs and expenses,
including the aggregate cost of pursuing any related insurance claims plus any related increases in
insurance premiums or other chargebacks; provided, however, that notwithstanding
anything in Section 5.4(d) to the contrary no party shall have any obligation to seek to recover
any insurance proceeds or to initiate a lawsuit against any other Person in connection with making
a claim under this Article V. If the Indemnified Party receives any amounts under applicable
insurance policies or from any other Person alleged to be responsible for the matters underlying such indemnity payment
subsequent to an indemnification payment by the Indemnifying Party, then the Indemnified Party
shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by the
Indemnifying Party in connection with providing such indemnification payment up to the amount
received by the Indemnified Party.

     (b) The amount of any indemnities payable by the Seller Parent or the Seller to the Buyer
Indemnified Parties pursuant to Section 5.2(a) or Section 8.1(a) shall be reduced by any reserves
in respect of the Loss giving rise to such indemnity payment recorded on either Year End Balance
Sheet to the extent such reserves are specifically related to such Loss.

     (c) Each Indemnified Party shall use commercially reasonable efforts to mitigate any Loss that
the Indemnified Party asserts or is reasonably likely to assert under this Article V upon a
responsible officer of any Indemnified Party becoming aware of any event that would reasonably be
expected to give rise to such assertion. In the event that the Indemnified Party shall fail to
make, or cause to be made, any such commercially reasonable efforts to mitigate any such claim or
liability, then notwithstanding anything to the contrary contained in this Agreement, the
Indemnifying Party shall not be required to indemnify any Indemnified Party for that portion of any
Losses that would reasonably be expected, individually or in the aggregate, to have been avoided if
the Indemnified Party had made such efforts.

     (d) Each Indemnified Party shall use all commercially reasonable efforts to collect any and
all amounts available under insurance coverage or from any other Person alleged to be responsible
for any Losses payable under Section 5.2, and shall take such actions in such respect as the
Indemnifying Party may reasonably request. If the Indemnified Party receives any payment from the
Indemnifying Party in respect of any Losses pursuant to Section 5.2 and the Indemnified Party could
have recovered all or part

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of such Losses from a third party based on the underlying claim asserted
against the Indemnifying Party, the Indemnified Party shall assign such of its rights to proceed
against such third party as are necessary to permit the Indemnifying Party to recover from such
third party the amount of such payment.

     (e) Any indemnification payments made pursuant to this Agreement shall be treated for Tax
purposes as an adjustment to the Purchase Price, unless otherwise required by applicable Law.

     (f) No Indemnifying Party shall be liable pursuant to Section 5.2(a) or 5.2(b), as the case
may be, in respect of any Loss if such Loss would not have arisen but for, or to the extent any
Loss is increased as a result of, (i) the passing of, or a change in, a Law or a change to
any written interpretation of the Law or administrative practice of any Governmental Authority
occurring on or after the Closing or (ii) the change by
statute or by any regulatory or other similar official auditing standards body of any accounting policy
applicable to the applicable Indemnified Party.

     (g) No Indemnifying Party shall be liable to any Indemnified Party in respect of any Loss
under this Article V to the extent such Loss is attributable to, or to the extent any Loss is
increased as a result of, any (i) act, omission, transaction, or arrangement carried out at
the written request of or with the written approval of such Indemnified Party, (ii) act,
transaction or arrangement carried out by or on behalf of such Indemnified Party if such act,
transaction or arrangement was not commercially reasonable independent of such Indemnified Party’s
rights to indemnification under this Agreement, or (iii) breach by such Indemnified Party
of any of its obligations under this Agreement or any Ancillary Transaction Agreements or any
obligations entered into pursuant thereto.

     Section 5.5 Indemnification Notice Procedures.

     (a) A party entitled to indemnification under Section 5.2 shall be referred to as an
“Indemnified Party.” A party obligated to indemnify an Indemnified Party under Section 5.2
shall be referred to as an “Indemnifying Party.”

     (b) Each Indemnified Party agrees to provide prompt written notice (the “Indemnification
Notice”) to the Indemnifying Party of the assertion of any claim, or the commencement of any
suit, action or proceeding in respect of which indemnity may be sought under this Article V, which
Indemnification Notice shall: (i) specify in reasonable detail the basis on which
indemnification is being asserted, (ii) provide a reasonable estimate of the amount of the
Losses asserted therein, (iii) specify the provision or provisions of this Agreement under
which such Losses are asserted and (iv) in the case of a claim asserted by any third party
(“Third Party Claim”), include copies of all notices and documents (including court
papers), if any, served on or received by the Indemnified Party by such third party.
Notwithstanding the foregoing, the failure to give an Indemnification Notice shall not affect the
indemnification sought hereunder except to

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the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure (except that the Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Indemnified Party failed to give
such notice). Thereafter, the Indemnified Party shall promptly deliver to the Indemnifying Party
copies of all notices and documents (including court papers) received by the Indemnified Party
relating to any Third Party Claim as to which indemnity may be sought hereunder. Notwithstanding
anything to the contrary in this Section 5.5(b), unless the Indemnifying Party assumes the defense
of such Third Party Claim, the Indemnified Party is not obligated to make available to the
Indemnifying Party documentation that is subject to attorney client privilege, work product
protection or any other applicable privilege or protection.

     Section 5.6 Indemnification Procedures for Claims by an Indemnified Party.

     (a) In the event that the Indemnifying Party shall object to the indemnification of an
Indemnified Party in respect of any claim or claims specified in any Indemnification Notice, the
Indemnifying Party shall, within thirty (30) days after receipt by the Indemnifying Party of such
Indemnification Notice, deliver to the Indemnified Party a notice to such effect and the
Indemnifying Party and the Indemnified Party shall, within the forty-five (45) day period beginning
on the date of receipt by the Indemnified Party of such objection, attempt in good faith to agree
upon the rights of the respective parties with respect to each of such claims to which the
Indemnifying Party shall have so objected. If the Indemnified Party and the Indemnifying Party
succeed in reaching agreement on their respective rights with respect to any of such claims, the
Indemnified Party and the Indemnifying Party shall promptly prepare and sign a memorandum setting
forth such agreement. Should the Indemnified Party and the Indemnifying Party be unable to agree
as to any particular item or items or amount or amounts within such time period or any additional
time period agreed to in writing by the parties, then either the Indemnified Party or the
Indemnifying Party shall submit such dispute to a court of competent jurisdiction as set forth in
Section 10.13.

     (b) Claims for Losses specified in any Indemnification Notice to which an Indemnifying Party
shall not object in writing within forty-five (45) days of receipt of such Indemnification Notice,
claims for Losses covered by a memorandum of agreement of the nature described in Section 5.6(a),
and claims for Losses the validity and amount of which have been the subject of judicial
determination as described in Section 5.6(a) or shall have been settled with the consent of the
Indemnifying Party, as described in Section 5.7, are hereinafter referred to, collectively, as
“Agreed Claims.” Within ten (10) Business Days of the determination of the amount of any
Agreed Claim, the Indemnifying Party shall pay to the Indemnified Party an amount equal to the
Agreed Claim by wire transfer in immediately available funds to the bank account or accounts
designated by the Indemnified Party in a notice to the Indemnifying Party not less than two (2)
Business Days prior to such payment.

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     Section 5.7 Indemnification Procedures for Third Party Claims.

     (a) The Indemnifying Party shall be entitled to assume, conduct and control, through counsel
of its own choosing and at its own expense, the settlement or defense of any Third Party Claim;
provided, however, that if the Indemnifying Party does not promptly assume the
defense of such Third Party Claim within fifteen (15) Business Days following the receipt of an
Indemnification Notice or does not elect to defend such Third Party Claim, the Indemnified Party
shall have the right, in addition to any other right or remedy it may have hereunder, at the
Indemnifying Party’s expense, to assume and thereafter conduct such defense with counsel of its own
choosing; provided, that the Indemnified Party shall obtain the prior written consent of
the Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned),
without prejudice to the ability of the Indemnified Party to enforce its claim for indemnification against the
Indemnifying Party hereunder before entering into any settlement or compromising, discharging or
admitting any liability with respect to any such Third Party Claim. If the Indemnifying Party
shall assume the control of the defense of any Third Party Claim in accordance with the provisions
of this Section 5.7(a), (i) the Indemnifying Party shall obtain the prior written consent
of the Indemnified Party (which consent shall not be unreasonably withheld, delayed or conditioned)
before entering into any settlement of such Third Party Claim, if the settlement does not release
the Indemnified Party from all liabilities and obligations with respect to such Third Party Claim
or the settlement imposes injunctive or other equitable relief against the Indemnified Party or
admits any liability in connection therewith, (ii) the Indemnified Party shall be entitled
to participate in (but not conduct or control) the defense of such Third Party Claim and to employ
separate counsel of its choice for such purpose, and (iii) the Indemnified Party shall
promptly provide to the Indemnifying Party copies of all notices and documents not supplied with
the Indemnification Notice because of any privilege. The fees and expenses of such separate
counsel shall be paid by the Indemnified Party; provided, however, that such
Indemnified Party will be entitled to participate in any such defense with separate counsel at the
expense of the Indemnifying Party if (x) authorized by the Indemnifying Party to
participate or (y) in the opinion of counsel to the Indemnified Party, a conflict or
potential conflict exists between the Indemnified Party and the Indemnifying Party that would make
such separate representation advisable; and provided further, that the Indemnifying
Party will not be required to pay for more than one such counsel for all Indemnified Parties in
connection with any Third Party Claim.

     (b) Each party shall cooperate, and cause their respective Affiliates to cooperate, in the
defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such
records, information and testimony, and attend such conferences, discovery proceedings, hearings,
trials or appeals, as may be reasonably requested in connection therewith. All reasonable
out-of-pocket costs and expenses incurred in connection with the Indemnified Party’s cooperation
shall be borne by the Indemnifying Party.

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ARTICLE VI

CONDITIONS PRECEDENT

     Section 6.1 Conditions to Each Party’s Obligations. The respective obligations of
each party to effect the purchase and sale of the Shares and the other actions to be taken
hereunder at the Closing are subject to the satisfaction or waiver by such party on or prior to the
Closing of the following conditions:

     (a) Any applicable waiting period under the HSR Act with respect to the transactions
contemplated by this Agreement shall have expired or been terminated.

     (b) Other than with respect to the HSR Act, (i) all authorizations, consents and
approvals of, and filings and notifications with or to Insurance Departments required to be made or
obtained prior to the Closing in connection with the execution, delivery and performance of this
Agreement and the Ancillary Transaction Agreements shall have been made or obtained, as the case
may be, and (ii) other authorizations, consents and approvals of, and filings and
notifications with or to, other Governmental Authorities required to be made prior to the Closing
Date in connection with the execution, delivery and performance of this Agreement and the Ancillary
Transaction Agreements, and, in the case of both clauses (i) and (ii), as listed in Section 6.1 of
the Seller Disclosure Letter shall have been made or obtained, except, in the case of clause (ii),
to the extent that the failure to make or obtain such authorizations, consents, approvals, filings
and notifications would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect or a Buyer Material Adverse Effect, and, in the case of both
clauses (i) and (ii), without any conditions, restrictions, undertakings or limitations which
would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect or a Buyer Material Adverse Effect.

     (c) No Governmental Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, judgment, decree, injunction,
determination or other order that, in each case, restrains, enjoins or otherwise prohibits, or
seeks to restrain, enjoin or otherwise prohibit consummation of the transactions contemplated by
this Agreement or makes illegal the consummation of such transactions, provided that the
party seeking to invoke this condition shall have used all commercially reasonable efforts to have
any such order, injunction or determination revoked, vacated or reversed.

     (d) The Buyer and the Seller shall each have executed a duly completed copy of the IRS Form
8023 or any successor form thereto with respect to each Company and such forms shall have been
provided to the Buyer in accordance with Section 8.10.

     Section 6.2 Conditions to Obligations of the Buyer. The obligations of the Buyer to
effect the purchase and sale of the Shares and the other actions to be taken
hereunder at the Closing are further subject to the satisfaction or waiver by the Buyer on or prior to the Closing
of the following conditions:

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     (a) The representations and warranties of the Seller Parent and the Seller set forth in this
Agreement shall be true and correct as of the date hereof and as of the Closing Date as though made
on and as of the Closing Date (except that those representations and warranties which address
matters only as of the date hereof or other particular date shall be true and correct only as of
the date hereof or other such particular date), except where the failure of such representations
and warranties to be so true and correct as of the Closing Date (without giving effect to any
limitation as to “materiality” or “Company Material Adverse Effect” contained therein) would not
reasonably be expected, individually or in the aggregate, to have a Company Material Adverse
Effect, and the Buyer shall have received a certificate signed on behalf of the Seller by an executive
officer of the Seller to such effect.

     (b) Each of the Seller Parent and the Seller shall have performed in all material respects all
obligations required to be performed by it under this Agreement on or prior to the Closing Date,
and the Buyer shall have received a certificate signed on behalf of the Seller by an executive
officer of the Seller to such effect.

     (c) Each of the Seller Parent and the Seller shall have delivered, or caused to be delivered,
to the Buyer each of the Ancillary Transaction Agreements duly executed by it or a Seller Affiliate
party thereto, as applicable.

     (d) The Seller shall have delivered to the Buyer certificates for the Shares duly endorsed or
accompanied by stock powers duly endorsed in blank, with any required transfer stamps affixed
thereto.

     Section 6.3 Conditions to Obligations of the Seller. The obligations of the Seller to
effect the purchase and sale of the Shares and the other actions to be taken hereunder at the
Closing are further subject to the satisfaction or waiver by the Seller on or prior to the Closing
of the following conditions:

     (a) The representations and warranties of the Buyer set forth in this Agreement shall be true
and correct as of the date hereof and as of the Closing Date as though made on and as of the
Closing Date (except that those representations and warranties which address matters only as of the
date hereof or other particular date shall be true and correct only as of the date hereof or other
such particular date), except where the failure of such representations and warranties to be so
true and correct as of the Closing Date (without giving effect to any limitation as to
“materiality” or “Buyer Material Adverse Effect” contained therein) would not reasonably be
expected, individually or in the aggregate, to have a Buyer Material Adverse Effect; and the Seller
shall have received a certificate signed on behalf of the Buyer by an executive officer of the
Buyer to such effect.

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     (b) The Buyer shall have performed in all material respects all obligations required to be
performed by it under this Agreement on or prior to the Closing Date, and the Seller shall have
received a certificate signed on behalf of the Buyer by an executive officer of the Buyer to such
effect.

     (c) The Buyer shall have delivered, or caused to be delivered, to the Seller each of the
Ancillary Transaction Agreements duly executed by the Buyer.

ARTICLE VII

[Intentionally omitted.]

ARTICLE VIII

TAX MATTERS

     Section 8.1 Liability for Taxes.

     (a) The Seller shall be responsible for and shall indemnify and hold harmless the Buyer
Indemnified Parties, from and against (i) all Taxes of each Company attributable to any
Pre-Closing Period (other than any such Taxes for which the Buyer is
responsible under Section 8.8
or any Stub Period Non-Income Taxes); (ii) any liability for Taxes arising under Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law) as a result
of a Company being a member of a consolidated, combined, unitary or similar group on or prior to
the Closing; (iii) any amount payable after the Closing Date, as a Tax or otherwise, as a
result of a Company’s being party to any Tax sharing agreement entered into before the Closing
Date; and (iv) any liability for Taxes resulting from a breach or inaccuracy of the
representations contained in Section 2.18 or Section 2.19(b) (for this purpose, the breach of any
representation or warranty shall be determined without regard to any limitation as to knowledge,
“materiality” or “Company Material Adverse Effect” contained therein).

     (b) The Buyer shall be responsible for and shall indemnify and hold harmless the Seller
Indemnified Parties from and against all (i) Post-Closing Period Taxes of each Company that
are not the responsibility of the Seller under Section 8.1(a), (ii) any Stub Period
Non-Income Taxes and (iii) any Taxes for which the Buyer is responsible under Section 8.8.

     (c) Each of the Seller and the Buyer hereby agree to indemnify the other party for, and hold
the other party harmless against, any and all Losses arising from a failure to comply with the
covenants found in Section 4.2(a)(xx) and Section 8.10.

     (d) Notwithstanding anything else in this Agreement to the contrary, the Seller shall not
indemnify the Buyer Indemnified Parties for any payments made pursuant to
Section 8.2, nor shall the Seller be in violation of any of its representations, warranties, covenants or agreements made
pursuant to this Agreement as a result of such payments.

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     (e) After the Closing, the Seller or the Buyer, as the case may be, shall provide or shall
cause to be provided reimbursement for any Taxes paid after the Closing by one party or its
Affiliates (the “Tax Indemnified Party”) that are the responsibility of the other party or
its Affiliates (the “Tax Indemnifying Party”) in accordance with the terms of this Section
8.1 or Section 8.8. Within a reasonable time prior to the payment of any such Taxes, the Tax
Indemnified Party paying such Taxes shall give written notice to the Tax Indemnifying Party of the
Taxes payable and the amount which is the liability of each party, although failure to do so will
not relieve the Tax Indemnifying Party of its liability hereunder except to the extent the Tax
Indemnifying Party is actually prejudiced thereby. Subject to the delivery of prior written notice regarding any such Taxes, the party
required to provide reimbursement hereunder shall pay such amount on the later to occur of
(i) the date payment is made by the party paying such Taxes and (ii) five (5)
Business Days after receipt of such prior written notice.

     (f) For purposes of this Section 8.1, any liability for Taxes attributable to a taxable period
that begins before and ends after the Closing Date shall be apportioned between the Pre-Closing
Period and the Post-Closing Period (i) in the case of real and personal property Taxes, by
apportioning such Taxes on a per diem basis and (ii) in the case of all other Taxes, on the
basis of an interim closing of the books as of the end of the Closing Date.

     (g) Each Tax Indemnified Party shall use commercially reasonable efforts to mitigate any Tax
that the Tax Indemnified Party is indemnified for or is reasonably likely to be indemnified for
under this Article VIII upon a responsible officer of any Tax Indemnified Party becoming aware of
any event that would reasonably be expected to give rise to such assertion. In the event that the
Tax Indemnified Party shall fail to make, or cause to be made, any such commercially reasonable
efforts to mitigate any such claim or liability, then notwithstanding anything to the contrary
contained in this Agreement, the Tax Indemnifying Party shall not be required to indemnify any Tax
Indemnified Party for that portion of any Taxes that would reasonably be expected, individually or
in the aggregate, to have been avoided if the Tax Indemnified Party had made such efforts.

     (h) No Tax Indemnifying Party shall be liable to a Tax Indemnified Party in respect of any Tax
under this Article VIII to the extent such Tax is attributable to, or to the extent any such Tax is
increased as a result of, any (i) act, omission, transaction, or arrangement carried out at
the written request of or with the written approval of such Tax Indemnified Party, (ii)
act, transaction, or arrangement that was not commercially reasonable independent of such Tax
Indemnified Party’s rights to indemnification for Taxes, or (iii) breach by such Tax
Indemnified Party of any of its obligations under this Agreement or any Ancillary Transaction
Agreement or any obligations entered into pursuant thereto.

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     Section 8.2 Tax Sharing Agreements. On or prior to the Closing Date, all Tax Sharing
Agreements between either Company, on the one hand, and the Seller or any Seller Affiliate, on the
other hand, shall be terminated, such that, after the Closing, neither the Seller nor either
Company shall be bound thereby or have any obligation or liability thereunder; provided,
that, for the avoidance of doubt, this Section 8.2 shall not apply to the obligations of the Buyer
or the Seller under this Agreement. Notwithstanding the foregoing, as soon as is practicable after
the Closing Date, each Company shall make a calculation under the Tax Sharing Agreement of its
allocation of Consolidated Income Taxes for the taxable year that ends on the Closing Date. For
purposes of this calculation, notwithstanding anything to the contrary in the Tax Sharing
Agreement, items of income, gain, loss, deduction, expense and credits of each Company
shall be determined on the basis of an interim closing of the books for the Pre-Closing
Period. To the extent either Company has a liability under the Tax Sharing Agreement, such Company
shall make a final payment under the Tax Sharing Agreement equal to the amount so determined. To
the extent either Company is entitled to payment under the Tax Sharing Agreement, the Seller shall
make, or shall cause to be made, a final payment to such Company equal to the amount so determined.
Payments under the prior two sentences are referred to herein as the “Tax Allocation
Amounts.” The Tax Allocation Amounts shall be payable within sixty (60) days after the Closing
Date.

     Section 8.3 Tax Returns, Elections, etc.

     (a) (i) The Seller shall prepare and timely file, or cause to be prepared and timely
filed, all Tax Returns for Consolidated Income Taxes, regardless of when such Returns are required
to be filed. Such Tax Returns, as they relate to either Company, shall be consistent with past
practice, except as required by applicable Law or as would not have a material adverse effect on
the Buyer. (ii) The Seller shall prepare and timely file, or cause to be prepared and
timely filed, all other Tax Returns for either Company for taxable periods that end on or before
the Closing Date and that are required to be or are in fact filed prior to the Closing (taking into
account any extensions). Such Tax Returns shall be consistent with past practice, except as
required by applicable Law or as would not have a material adverse effect on the Buyer.

     (b) The Seller shall prepare, or cause to be prepared, Tax Returns for either Company for
taxable periods that end on or before the Closing Date that are not described in Section 8.3(a).
Such Tax Returns shall be consistent with past practice, except as required by applicable Law or as
would not have a material adverse effect on the Buyer. The Seller shall submit to the Buyer each
such Tax Return at least twenty (20) days prior to the due date (including extensions) of such Tax
Return. The Buyer shall timely file, or cause to be timely filed, each such Tax Return in the form
submitted to it by the Seller, unless otherwise required by applicable Law or agreed by the Seller
and the Buyer. If the Buyer believes it would be a violation of applicable Law to file any Tax
Return submitted by the Seller, the Buyer agrees to notify the Seller promptly and to negotiate in
good faith regarding the filing of such return.

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     (c) The Buyer shall prepare and timely file, or cause to be prepared and timely filed, all
Straddle Returns of each Company. Such Tax Returns shall be prepared, in all material respects, in
a manner consistent with the positions taken and accounting methods used on the Tax Returns filed
by or with respect to the appropriate Company prior to the Closing Date, unless otherwise required
by applicable Law or agreed by the Seller and the Buyer.

     (d) The Buyer shall prepare and timely file, or cause the Companies to prepare and timely
file, all Tax Returns required to be filed by or with respect to each Company for any Tax period
beginning after the Closing Date.

     (e) Except to the extent otherwise required by Law, the Buyer shall not, and shall not permit
any of its Affiliates to, without the prior written consent of the Seller, which consent may not be
unreasonably withheld, conditioned or delayed, amend any Tax Returns relating in whole or in part
to a Pre-Closing Period.

     Section 8.4 Tax Payments.

     (a) The Seller shall timely pay or cause to be timely paid to the appropriate Governmental
Authority (without duplication of amounts otherwise payable or previously paid) all Taxes required
to be reported on any Tax Returns required to be filed by the Seller pursuant to Section 8.3(a).

     (b) The Buyer shall timely pay or cause to be timely paid to the appropriate Governmental
Authority all Taxes required to be reported on any Tax Returns required to be filed by Buyer
pursuant to Section 8.3(b), Section 8.3(c) or Section 8.3(d).

     (c) In no event shall the Seller’s and the Buyer’s obligations to pay, or cause to be paid,
Taxes in accordance with Section 8.4(a) and Section 8.4(b), respectively, relieve the Seller or the
Buyer from its obligations under Section 8.1 to indemnify or provide reimbursement for any Taxes
paid after the Closing Date.

     Section 8.5 Tax Audits, Assistance and Cooperation.

     (a) The Seller or the Buyer, as the case may be, shall notify such other party within fifteen
(15) days after receipt by such first party or any of its Affiliates of written notice of any
pending federal, state, local or foreign Tax audit or examination or notice of deficiency or other
adjustment, assessment or redetermination (“Tax Matters”) relating to Taxes for which such
other party or its Affiliates may be responsible under Section 8.1.

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     (b) The Seller shall have the sole right to control, contest, resolve and defend against any
Tax Matters relating to Taxes of either Company for which the Seller is obligated to indemnify the
Buyer under Section 8.1, provided, that the Seller shall keep the Buyer reasonably informed
on an ongoing basis with respect to issues affecting either Company and also provided, that
the Seller shall not pay, discharge, settle, compromise, litigate, or otherwise dispose (collective
“dispose”) of any item subject to such tax proceedings with respect to any Taxes other than
Consolidated Income Taxes that will materially adversely affect the Buyer or any of its Affiliates
without obtaining prior written consent of the Buyer, which consent shall not be unreasonably
withheld, conditioned or delayed. The Seller may elect to forgo control of any Tax proceeding that
it is entitled to control pursuant to this Section 8.5(b), and shall notify the Buyer if the Seller
elects to forgo such control. In that event, (i) the Buyer shall control the conduct of
such Tax proceeding, but shall afford the Seller and its Tax advisers a reasonable opportunity to
participate (at the Seller’s expense) in the conduct of such Tax proceeding, including, without
limitation, the right to participate in conferences with all
Governmental Authorities and submit pertinent material in support of the Seller’s position and
(ii) the Seller shall be responsible for any reasonable fees and other out-of-pocket costs
(including reasonable outside professional fees and costs) incurred in contesting such Tax
proceeding.

     (c) After the Closing Date, each of the Seller and the Buyer shall (and shall cause their
respective Affiliates, including either Company, to):

          (i)    assist the other party in preparing any Tax Returns which such other party is responsible
for preparing and/or filing in accordance with Section 8.3;

          (ii)    maintain and make available to the other party, on such other party’s reasonable request,
copies of any and all information, books and records necessary to prepare and/or file any Tax
Return or to respond to audits by any Governmental Authority, for the full period of the applicable
statute of limitations, including any extensions thereof, with respect to the relevant Taxes.
After the applicable period, the Seller or the Buyer may dispose of such information, books and
records; provided, that prior to such disposition, the Seller or the Buyer shall give the
other party the opportunity to take possession of such information, books and records;

          (iii)    upon fifteen (15) days’ notice and without undue interruption to the business of such
party or either Company, as the case may be, provide access during normal business hours to the
books and records of such party or either Company relating to the Taxes of either Company prior to
the Closing Date;

          (iv)    within fifteen (15) days after receipt, furnish the other party with copies of all
correspondence received from any Governmental Authority in connection with any Tax Matter of either
Company or information request with respect to any taxable period for which the other party may
have a liability under Section 8.1; and

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          (v)    within fifteen (15) days after receipt of a request therefor, provide to the other party
powers of attorney or similar authorizations reasonably necessary to carry out the purposes of this
Section 8.5.

     (d) If the parties disagree as to the calculation of the amount of any Tax that is required to
be calculated in applying this Article VIII, the allocation of Purchase Price pursuant to Section
8.10(c) or the allocation of aggregate deemed sales price (“ADSP”) and adjusted grossed up
basis among the assets of each Company pursuant to Section 8.10(c), the parties shall promptly
consult with each other and endeavor in good faith, for a period of thirty (30) days, to resolve
any such disagreements (each disagreement not so resolved, a “Tax Dispute”). Thereafter,
either party may submit the resolution of any Tax Disputes to a mutually agreed upon nationally
recognized accounting firm (or, if they cannot mutually agree upon such firm, each party shall
select a nationally recognized accounting firm, which two firms shall mutually agree upon a third
nationally recognized accounting firm) (the “Accounting Arbitrator”) to resolve the dispute. The Accounting
Arbitrator shall only be authorized as directed by the parties on any one issue to either
(i) decide in favor of and choose the position of either of the parties or (ii) to
decide upon a compromise position within the range of positions presented by the parties to the
Accounting Arbitrator. The Accounting Arbitrator shall base its decision solely upon the
presentations of the parties to the Accounting Arbitrator at a hearing held before the Accounting
Arbitrator and upon any materials made available by either party and not upon independent review.
The Accounting Arbitrator shall be instructed to resolve the Tax Disputes and such resolution shall
be (w) set forth in writing and signed by the Accounting Arbitrator, (x) delivered
to the Buyer and the Seller as soon as practicable after the Tax Disputes are submitted to the
Accounting Arbitrator but not later than the 30th day after the Accounting Arbitrator is instructed
to resolve the Tax Disputes, (y) made in accordance with this Agreement, and (z)
final, binding and conclusive on the parties on the date of delivery of such resolution. Any
expenses relating to the engagement of the Accounting Arbitrator shall be shared equally by the
parties.

     Section 8.6 Refunds and Tax Credits.

     (a) The Seller shall be entitled to retain, or the Seller shall be entitled to receive
immediate payment from the relevant Company or the Buyer (if the Buyer or any of its Affiliates
shall be the recipient) of, any refund or credit attributable to any Taxes for which the Seller is
responsible hereunder, plus any interest received with respect thereto. Such payment shall be net
of any Tax cost to the Buyer or any of its Affiliates attributable to the receipt of such refund
(including interest). In the event that any such Tax refund is subsequently reduced as a result of
any adjustment required by any Governmental Authority, the Seller shall promptly pay the amount of
such reduction to the Buyer, net of any Tax cost to the Seller or any of its Affiliates
attributable to the receipt of such reduction (including interest).

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     (b) The Buyer and the Seller shall cooperate, and shall cause their respective Affiliates to
cooperate, with respect to claiming any refund or credit with respect to Taxes referred to in
Section 8.6(a). Such cooperation shall include: providing all relevant information available with
respect to any such claim; filing and diligently pursuing such claim (including by litigation, if
appropriate); paying over to the Seller in accordance with Section 8.6(a), any amount received by
the Buyer or any of its Affiliates with respect to such claim; provided, that the foregoing
shall be done in a manner so as not to interfere unreasonably with the conduct of the business of
the Buyer. The Seller shall bear the reasonable out-of-pocket expenses of the Buyer in seeking
such refund.

     Section 8.7 Carrybacks. To the extent permitted by law, the Buyer shall cause each
Company to elect to relinquish any carryback of net operating losses, net capital losses, unused
Tax credits and other deductible or creditable Tax attributes arising in a period beginning after
the Closing Date to any Pre-Closing Period.

     Section 8.8 Transfer Taxes. Notwithstanding any provision of this Agreement to the
contrary, all Transfer Taxes shall be borne 50% by the Buyer and 50% by the Seller. The Buyer
shall file, or shall cause to be filed, to the extent permitted by applicable law, all Tax Returns
as may be required to comply with the provisions of such Tax Laws relating to Transfer Taxes. The
Seller shall cooperate with the Buyer in connection with all such filings and shall file those Tax
Returns that the Buyer is not permitted to file.

     Section 8.9 Tax Treatment of Indemnity Payments. To the extent permitted by law, the
parties agree to treat any indemnity payment made under this Article VIII as an adjustment to the
Purchase Price for all federal, state, local and foreign Tax purposes, and the parties agree to,
and shall cause their respective Affiliates to, file their Tax Returns accordingly.

     Section 8.10 Section 338 Elections.

     (a) The Seller and the Buyer shall timely make or shall cause the appropriate Persons to
timely make joint elections (collectively, the “Section 338(h)(10) Elections”), with
respect to the purchase of the stock of each Company under (i) Section 338(h)(10) of the
Code and (ii) any analogous election with respect to state, local or foreign income Taxes,
to the extent that such election is separately available, in each state, local and foreign
jurisdiction where the Companies (or either of them) currently file income Tax Returns. The Seller
and the Buyer shall report (or shall cause an appropriate Person to report), in connection with the
determination of Taxes, the purchase of the stock of the Companies pursuant to this Agreement in a
manner consistent with the Section 338(h)(10) Elections.

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     (b) Subject to Section 8.10(c), the Buyer shall be responsible for the filing of the Forms
8023 (together with any schedules or attachments thereto) that are required pursuant to Treasury
Regulation Section 1.338(h)(10)-1 and for the preparation and filing of any other forms that are
required to be submitted to any federal, state, county, or other local Governmental Authority in
connection with a Section 338(h)(10) Election (the “Section 338 Forms”). Subject to
Section 6.1(d) and Section 8.10(c), the Seller shall execute, or shall cause an appropriate Person
to execute and deliver to Buyer such Section 338 Forms as are requested by Buyer to complete
properly the Section 338(h)(10) Elections at least twenty (20) days before the date such Section
338 Forms are required to be filed; provided, that Buyer shall have delivered to the Seller
all the Section 338 Forms properly completed in accordance with applicable Law no less than forty
five (45) days before the date such Section 338 Forms are required to be filed.

     (c) As soon as practicable after the Closing Date, but in no event later than 150 days after
the Closing Date, the Buyer shall deliver to the Seller a written notice setting forth (with
reasonable specificity) (i) the Buyer’s good faith calculation of ADSP and the allocation
thereof between the Companies and among the assets of the
Companies in accordance with the principles of the applicable Treasury Regulations, including
but not limited to Treasury Regulation §1.338-6, and (ii) the Buyer’s good faith allocation
of the Purchase Price and the Transferred Liabilities among the MLLIC Shares, the MLLICNY Shares
and the Transferred Assets (the “Buyer’s Allocation”). Within thirty (30) Business Days
after receipt thereof, the Seller shall deliver to the Buyer written notice indicating whether the
Seller disagrees with the Buyer’s Allocation. If the Seller agrees with the Buyer’s Allocation or
if the Seller fails to deliver such written notice within such thirty (30) Business Days, the
Buyer’s Allocation shall constitute the agreed-upon allocation (the “Agreed Allocation”).
If the Seller provides timely written notice to the Buyer of any disagreement with the Buyer’s
Allocation, the parties shall negotiate in good faith to determine the Agreed Allocation. If they
do not reach agreement within 30 days after commencing negotiations, the parties shall promptly
submit the items in dispute to the Accounting Arbitrator in accordance with the procedures set
forth in Section 8.5(d). Except as determined to the contrary by the appropriate Governmental
Authority upon an audit of its (or its Affiliates’) Tax Returns, each of the parties shall file (or
cause to be filed) all relevant Tax Returns consistent with the Agreed Allocation and shall not
take (or permit any Affiliate to take) any position inconsistent with the Agreed Allocation;
provided, however, that (i) the deemed purchase prices of the assets may differ
from the deemed sales prices in order to reflect the Buyer’s transaction costs not included in the
Agreed Allocation, and (ii) the amounts realized on the deemed sales of assets may differ
from the deemed sales prices reflected in the Agreed Allocation in order to reflect transaction
costs that reduce the amounts realized for federal income Tax purposes.

     (d) Each of the Seller and the Buyer hereby covenant that they will take all actions necessary
to make valid and effective Section 338(h)(10) Elections in accordance with the terms of this
Agreement, and omit from taking any actions that would cause the Section 338(h)(10) Elections to be
invalid or ineffective.

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     Section 8.11 Survival. Notwithstanding anything in this Agreement to the contrary,
the indemnification provisions of this Article VIII shall survive until the expiration of all
applicable statutes of limitations with respect to the assessment of Tax giving rise to a claim
hereunder (giving effect to any waiver or extension thereof), and any claim for indemnity under
this Article VIII may be made at any time prior to sixty (60) days after the expiration of such
statutes of limitations. Any such claim shall be made by the Tax Indemnified Party by providing to
the Tax Indemnifying Party written notice thereof.

     Section 8.12 Coordination. Notwithstanding Article V or any other provision of this
Agreement, the Seller and the Buyer shall not have any liability under this Agreement for or with
respect to Taxes of either Company except as otherwise expressly provided in this Article VIII.
For the avoidance of doubt, any indemnification for Loss that does not encompass Taxes imposed on
either Company arising out of any breach of
any representations or warranty contained in Section 2.18 (Employee Benefit Plans and Related
Matters; ERISA) or Section 2.19(b) or (c) (Tax Matters) shall be provided for in Article V.

     Section 8.13 Effective Date. No provision of this Article VIII (other than Section
8.2, Section 8.3(a), Section 8.4(a), Section 8.5(a), Section 8.5(b), Section 8.8, Section 8.10(d)
and Section 8.12) shall apply until immediately after the Closing.

ARTICLE IX

DEFINITIONS

     As used herein, the following terms have the following meanings:

     “Accounting Arbitrator” has the meaning set forth in Section 8.5(d).

     “Actions or Proceedings” means any action, suit, proceeding, arbitration or
Governmental Authority investigation.

     “Actuarial Report” has the meaning set forth in Section 2.11(f).

     “ADSP” has the meaning set forth in Section 8.5(d).

     “Affiliate” means with respect to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by or is under common
control with such Person. The term “control” includes the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

     “Agreed Allocation” has the meaning set forth in Section 8.10(c).

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     “Agreed Claims” has the meaning set forth in Section 5.6(b)

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

     “Ancillary Transaction Agreements” means the Distribution Agreement, the Bill of Sale
and Assignment, the Assumption Agreement, the Trademark License Agreement and the Transition
Services Agreement.

     “Antitrust Division” has the meaning set forth in Section 4.3(a).

     “Applicable Contracts” has the meaning set forth in Section 2.9.

     “Assets” has the meaning set forth in Section 2.10(a).

     “Assumed Contract” has the meaning set forth in Section 2.9.

     “Assumption Agreement” has the meaning set forth in Section 1.1(d)(ii).

     “Balance Sheet Date” has the meaning set forth in Section 2.6(a).

     “Benefit Plans” means any “employee benefit plans,” within the meaning of section 3(3)
of ERISA or any bonus, incentive compensation programs, deferred compensation programs, pension,
retirement, profit-sharing, savings, stock option or other equity-based arrangements, severance
plans or arrangements, employment agreements or benefits, vacation benefits, insurance (including
any self-insured arrangements), health or medical benefits, employee assistance program, disability
or sick leave benefits, workers’ compensation, supplemental unemployment benefits, severance
benefits and post-employment or retirement benefits (including compensation, pension, health,
medical or life insurance benefits) or other fringe benefit plan or arrangement, including without
limitation any “employee pension benefit plans” within the meaning of section 3(2) of ERISA, any
“employee benefit plans” subject to section 302 of ERISA or section 412 of the Code or any
“multiemployer plans” within the meaning of section 3(37) of ERISA.

     “Bill of Sale and Assignment” has the meaning set forth in Section 1.1(d)(i).

     “Business Day” means any day that is not (i) a Saturday, (ii) a Sunday
or (iii) any other day on which commercial banks are authorized or required by Law to be
closed in the City of New York.

     “Buyer” has the meaning set forth in the preamble.

     “Buyer Allocation” has the meaning set forth in Section 8.10(c).

     “Buyer Disclosure Letter” has the meaning set forth in Article III.

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     “Buyer Indemnified Party” has the meaning set forth in Section 5.2(a).

     “Buyer’s Knowledge” means the actual knowledge, without due inquiry, of Patrick Baird,
President and CEO, Darryl Button, CFO and Craig Vermie, General Counsel.

     “Buyer Material Adverse Effect” means any event, occurrence, fact, condition, change,
development, or effect that (i) would prevent or materially delay the consummation of the
transactions contemplated hereby or by the Ancillary Transactions Agreements, (ii) would
otherwise materially adversely effect the ability of the Buyer to perform its obligations hereunder
and thereunder and the other transactions contemplated hereby and thereby or (iii) in
connection with Section 6.1(b), would materially adversely affect the business, assets, properties, liabilities, results of operations or condition
(financial or otherwise) of the Buyer.

     “Buyer Subsidiary Financial Statements” has the meaning set forth in Section 3.9

     “Buyer Warranty Breach” has the meaning set forth in Section 5.2(b).

     “Closing” has the meaning set forth in Section 1.1(b).

     “Closing Date” has the meaning set forth in Section 1.1(b).

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

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

     “Company Insurance Policies” has the meaning set forth in Section 2.20(a).

     “Company Material Adverse Effect” means any event, occurrence, fact, condition,
change, development, or effect that (i) has had, or would reasonably be expected to have, a
material adverse effect on the business, assets, properties, liabilities, results of operations or
condition (financial or otherwise) of the Companies, taken as a whole, (ii) would prevent
or materially delay the consummation of the sale of the Shares or the transactions contemplated
hereby or by the Ancillary Transaction Agreements or (iii) would otherwise materially
adversely effect the ability of the Seller to perform its obligations hereunder and thereunder and
the other transactions contemplated hereby and thereby; except to the extent that such event,
occurrence, fact, condition, change, development or effect results from (v) changes in
economic, banking, currency, capital markets, regulatory, political or other similar conditions
(including acts of war, declared or undeclared, armed hostilities or terrorism), financial
services, commodities or other market conditions or prevailing interest rates, provided,
this sub-clause (v) shall not apply to the extent any such material adverse effect is a direct
consequence of a Market Event that disproportionately affects Seller Parent, and its consolidated
Subsidiaries, taken as a

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whole, as compared with similarly situated companies engaged the
diversified financial services industry, (w) changes in or events affecting the insurance industry,
insurance services industry, annuity industry, brokerage industry, investment advisory industry or
asset management industry generally, (x) compliance by the Seller with the terms and conditions of
this Agreement, (y) any effect arising out of a change in GAAP, SAP or applicable Law or (z) the
announcement of this Agreement and the Ancillary Transaction Agreements or the consummation of the
transactions contemplated hereby and thereby.

     “Confidentiality Agreement” has the meaning set forth in Section 4.1(b).

     “Consolidated Income Taxes” means all federal, state, provincial or local Income
Taxes, domestic or foreign, that are paid on a consolidated, unitary, combined or similar
basis with respect to Tax Returns that include one or more of the Companies on the one hand,
and the Seller Parent or any of its Affiliates (other than either Company) on the other hand.

     “Contracts” means any contract, agreement, arrangement, instrument, undertaking,
indenture, commitment loan, guarantee, mortgage, note or other legally binding obligation.

     “Current Premium” has the meaning set forth in Section 4.14(b).

     “Designated Affiliated Employees” means employees of the Seller or any of the Seller
Affiliates designated by the Seller who devote substantially all of their working efforts to the
manufacturing operations of the Companies.

     “Distribution Agreement” has the meaning set forth in the recitals.

     “Environmental Laws” means any and all statutes, laws, regulations and rules, in each
case as in effect on the Closing Date, that have as their principal purpose the protection of the
natural environment or the regulation of Hazardous Substances.

     “Environmental Permits” means all permits, licenses, approvals, authorizations or
consents required by or issued by any Governmental Authority under any applicable Environmental Law
and includes any and all orders, consent orders or binding agreements issued or entered into by a
Governmental Authority under any applicable Environmental Law.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Excluded Liabilities” means any liability, including all related fines, penalties,
assessments, settlements and other amounts, resulting from or arising out of the following items
listed in the Seller Disclosure Letter: Section 2.7(i) items 1, 4(a) and (c), 6, 7, 8, 9, 10;
Section 2.15 items 1, 3, 5, 6 and 7; and Section 2.14 item 1.

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     “Existing Insurance” has the meaning set forth in Section 4.14(b).

     “FINRA” means the Financial Industry Regulatory Authority or any predecessor thereto,
including the National Association of Securities Dealers, Inc.

     “FTC” has the meaning set forth in Section 4.3(a).

     “GAAP” means the U.S. generally accepted accounting principals as in effect as of the
date hereof.

     “GAAP Audited Financial Statements” has the meaning set forth in Section 2.6(a).

     “GAAP Financial Statements” has the meaning set forth in Section 2.6(a).

     “GAAP Unaudited Financial Statements” has the meaning set forth in Section 2.6(a).

     “GAAP Unaudited Interim Financial Statements” has the meaning set forth in Section
2.6(a).

     “Governmental Authority” means any national government, any state or province or other
political subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative authority of government, including any governmental department,
commission, board, bureau, agency, court or instrumentality, whether domestic or foreign.

     “Hazardous Substances” means all substances or materials regulated as hazardous,
toxic, explosive, dangerous, flammable or radioactive under any environmental statute, law,
regulation or rule including, but not limited to, (i) petroleum and polychlorinated
biphenyls and (ii) in the United States, all substances defined as Hazardous Substances,
Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency
Plan, 40 C.F.R. Section 300.5.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.

     “Included Materiality Buyer Representation” means the limitations as to “materiality”
or “Buyer Material Adverse Effect” (x) contained in Section 3.9 and (y) in any
representation or warranty contained in this Agreement relating to the conformity of any financial
statement, regulatory filing or other regulatory disclosure to GAAP, SAP or any legal standard but
only to the extent that GAAP, SAP or such legal standard is qualified by its stated terms by
“materiality,” “material adverse effect” or similar concept of materiality.

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     “Included Materiality Seller Representations” means the limitations as to
“materiality” or “Company Material Adverse Effect” (x) contained in Section 2.6(a), 2.6(b),
2.8(a)(y) and 2.23, (y) contained in Section 4.2(a)(viii) and incorporated by reference
into Section 2.6(a)(x), and (z) in any representation or warranty contained in this
Agreement relating to the conformity of any financial statement, regulatory filing or other
regulatory disclosure to GAAP, SAP or any legal standard but only to the extent that GAAP, SAP or
such legal standard is qualified by its stated terms by “materiality,” “material adverse effect” or
similar concept of materiality.

     “Income Taxes” shall mean any federal, state, local or foreign Tax based upon or
measured by net income (but not any gross income Tax and not any withholding Tax) together with any
interest and penalties thereto.

     “Indemnification Notice” has the meaning set forth in Section 5.5(a).

     “Indemnified Party” has the meaning set forth in Section 5.5(a).

     “Indemnifying Party” has the meaning set forth in Section 5.5(a).

     “Insurance Department” means, in any jurisdiction, the Governmental Authority
primarily charged with the regulation of the business of insurance in such jurisdiction.

     “Insurance Laws” means all applicable statutes, laws, regulations, rules, directives,
orders, decrees, injunctions, agency requirements, licenses or permits of any Insurance Department
regulating the business or products of insurance.

     “Insurance License” has the meaning set forth in Section 2.11.

     “Intellectual Property” means all intellectual property rights arising from or in
respect of the following, whether protected, created or arising under the laws of the United States
or any foreign jurisdiction: trademarks, service marks, trade names, trade dress, designs, logos
and other indicia of origin including all goodwill associated with and common law rights related to
the foregoing, domain names, works of authorship, copyrights, software (including source code,
object code, executables, utilities and routines), databases, data, Internet websites, and
registrations and applications to register (including intent-to-use applications) or renew the
registration of any of the foregoing, patents and patent applications, inventions, processes,
methods, techniques, procedures, designs, formulae, know-how, customer lists, confidential
information, operating manuals, instructions and the tangible embodiments of any of the foregoing.

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     “Investment Company Act” means the Investment Company Act of 1940, as amended,
together with the rules and regulations thereunder.

     “Law” means federal, state, local or foreign law, rule, regulation, judgment,
injunction or order of any Governmental Authority.

     “Liens” means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest or encumbrance in respect of such property or asset.

     “Life Insurance and Annuity Contract” means any group or individual life insurance
policy or annuity contract or certificate, whether or not registered under the Securities Act.

     “Losses” means all costs, damages, diminution in value of the Companies (but in the
case of diminution in value only to the extent directly and proximately arising out of or resulting
from an indemnifiable event and not to exceed $100,000,000 in the aggregate with respect to all
indemnifiable events), disbursements, obligations, penalties, liabilities, assessments, judgments,
losses, injunctions, orders, decrees, rulings, dues, fines, fees, settlements, deficiencies or awards (including interest, penalty, investigation, reasonable
legal, accounting and other professional fees, and other costs or expenses incurred in the
investigation, collection, prosecution and defense of any action, suit, proceeding or claim and
amounts paid in settlement) imposed upon or incurred, sustained or suffered by an Indemnified
Party; provided, however, that notwithstanding anything to the contrary in this
Agreement, Losses shall not include (i) lost profits or opportunity costs or consequential,
incidental, special, indirect, exemplary or punitive damages, except to the extent such
consequential, incidental, special, indirect, exemplary or punitive damages (x) are awarded
against any Indemnified Party in a Third Party Claim, or (y) arise out of or result from
any Seller Guarantee; it being understood and agreed that subject to the $100,000,000 limitation
with respect to diminution of value losses referred to above in this definition of the term
“Losses”, a court of competent jurisdiction shall be permitted to take account of lost profits for
the sole purpose of determining any such diminution of value losses.

     “Market Event” means any event, occurrence, fact, condition, development or effect
that results from any changes in economic, banking, currency, capital markets, financial services,
commodities or other market conditions, or prevailing interest rates.

     “Merrill Lynch Global Private Client Network” means the retail brokerage and advisory
business of Merrill Lynch & Co., Inc. conducted in the United States and included within the
Merrill Lynch Global Private Client Group (as such term is used as of the date hereof). For the
avoidance of doubt, the Merrill Lynch Global Private Client Network shall not include (i)
any private equity, hedge fund, merchant banking, asset management, non-strategic principal or
investment business or similar business or activity of the Seller or any Seller Affiliate,
including BlackRock Inc. and its Affiliates or

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any entity affiliated with the Merrill Lynch Global Private Equity or Merrill Lynch Global Alternative Investment divisions or any successor thereto,
or (ii) any trading, brokerage, lending, investment banking or advisory business or
activity of the Seller or any Seller Affiliate.

     “Milliman” has the meaning set forth in Section 2.11(f).

     “MLLIC” has the meaning set forth in the recitals.

     “MLLIC Shares” has the meaning set forth in the recitals.

     “MLLICNY” has the meaning set forth in the recitals.

     “MLLICNY Shares” has the meaning set forth in the recitals.

     “New Principal Underwriter” has the meaning set forth in Section 4.17.

     “Non-Income Taxes” means Taxes other than Income Taxes.

     “Organizational Documents” means the articles of incorporation, certificate of
incorporation, charter, bylaws, articles of formation, certificate of formation, regulations,
operating agreement, certificate of limited partnership, partnership agreement, and any other
similar documents, instruments or certificates executed, adopted or filed in connection with the
creation, formation or organization of a Person, including any amendments thereto.

     “Owned Intellectual Property” has the meaning set forth in Section 2.13(b).

     “Permitted Liens” means (i) Liens disclosed in the SAP Financial Statements or
the footnotes thereto or the GAAP Financial Statements or the footnotes thereto, other than those
securing indebtedness, (ii) Liens for Taxes, assessments and other governmental charges not
yet due and payable or, if due, not delinquent or being contested in good faith by appropriate
proceedings, (iii) mechanics’, workmen’s, repairmen’s, warehousemen’s, carriers’ or other
like Liens arising or incurred in the ordinary course of business, (iv) Liens arising under
any Insurance Laws and regulations related to the business of insurance, (v) Liens related
to title retention arrangements arising under original purchase price conditional sales contracts
and equipment leases with third parties entered into in the ordinary course of business or arising
from the unpaid purchase price of personal property acquired in the ordinary course of business,
and (vi) other Liens which would not reasonably be expected, individually or in the
aggregate, to materially interfere with the conduct of the business of the Companies or materially
detract from the value of the property, asset or right.

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     “Person” means any natural person, firm, limited liability company, general
partnership, limited partnership, joint venture, association, corporation, trust, Governmental
Authority or other entity.

     “Post-Closing Period” means any Tax period ending after the Closing Date and, with
respect to a Tax period that begins before the Closing Date and ends thereafter, the portion of
such Tax period after the Closing Date.

     “Pre-Closing Period” means any Tax period ending on or prior to the Closing Date and,
with respect to a Tax period that begins before the Closing Date and ends thereafter, the portion
of such period through the end of the Closing Date.

     “Producers” has the meaning set forth in Section 2.11(j).

     “Purchase Price” has the meaning set forth in Section 1.1(a).

     “RBC Instructions” means the RBC Instruction of the National Association of Insurance
Commissioners as in effect as of the date hereof.

     “RBC Ratio” means, as of any date of determination, for each of the Companies, the
ratio (expressed as a percentage) that its adjusted capital (as defined in the RBC Instructions)
bears to its authorized control level (as defined in the RBC Instructions) as of such date,
calculated in accordance with the life insurance risk based capital formula contained in the RBC
Instructions. If such calculation is not made on the basis of data contained in annual statutory
financial statements, premium (as defined in the RBC Instructions) for the year to date period will
be annualized wherever required in such calculation.

     “Related Party Transaction” has the meaning set forth in Section 2.22(b).

     “Records” means all books, records and original documents that reasonably pertain to
or are used by the Companies or their Affiliates to administer, reflect, monitor, evidence or
record information relating to the business or conduct of the Companies and all such records and
original documents, including all such records maintained on electronic or magnetic media, or in
any electronic database systems of the Companies, the Seller or any of their respective Affiliates.

     “Registered Separate Account” means each separate account of either of the Companies
that is registered as an investment company under the Investment Company Act.

     “Restricted Activity” has the meaning set forth in Section 4.11(a).

     “Restricted Products” has the meaning set forth in Section 4.11(a).

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     “Roszel” has the meaning set forth in Section 4.19(a).

     “Roszel Administrative Services Agreement” has the meaning set forth in Section
4.19(a).

     “Roszel Investment Management Term Sheet” has the meaning set forth in Section
4.19(a).

     “SAP” means, with respect to either Company, the statutory accounting practices which
are prescribed or permitted by the Insurance Department in the state of domicile of such Company.

     “SAP Audited Financial Statements” has the meaning set forth in Section 2.6(a).

     “SAP Financial Statements” has the meaning set forth in Section 2.6(a).

     “SAP Unaudited Financial Statements” has the meaning set forth in Section 2.6(a).

     “SAP Unaudited Interim Financial Statements” has the meaning set forth in Section
2.6(a).

     “Scheduled Liabilities” means any (i) liability, including all related fines,
penalties, assessments, settlements and other amounts, resulting from or arising out of the
following items listed in the Seller Disclosure Letter: Section 2.7(i) items 5, 11-21; Section
2.11(g) item 2; and Section 2.15 item 8 or (ii) liability arising from the failure of any
of the Life Insurance and Annuity Contracts written on the contract forms identified on Section 9
of the Seller Disclosure Letter to comply with Section 72 of the Code at or prior to Closing;
provided, that neither the Seller nor the Seller Parent shall in any way be responsible for
any such liabilities that are attributable to any change in applicable Law occurring after the
Closing, to any amendments, modifications or endorsements of such Life Insurance and Annuity
Contracts following the Closing or to any correspondence or communication with the holders of such
Life Insurance and Annuity Contracts by the Buyer or any of its Affiliates after the Closing.

     “SEC” means the Securities and Exchange Commission.

     “Section 4.2 Notice” has the meaning set forth in Section 4.2(c).

     “Section 338 Forms” has the meaning set forth in Section 8.10(b).

     “Section 338(h)(10) Election” has the meaning set forth in Section 8.10(a).

     “Securities Act” has the meaning set forth in Section 2.12.

     “Seller” has the meaning set forth in the preamble.

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     “Seller Affiliate” means any Affiliate of the Seller.

     “Seller Benefit Plan” has the meaning set forth in 2.18(b).

     “Seller Disclosure Letter” has the meaning set forth in Article II.

     “Seller Guarantees” means all guarantees, indemnities, and letters of credit
outstanding and other agreements as of the Closing Date issued for the benefit of the Company or
another Person (including the policyholders of the Company) in connection with the Transferred
Business and under which the Seller or any Seller Affiliate (other than either Company) may bear
any responsibility to make payments, including the Keepwell Agreement, between the Seller and
MLLIC, dated as of June 30, 2003, the Keepwell Agreement, between the Seller and MLLICNY, dated as
of June 30, 2003, and the Contracts listed in Section 10.1 of the Seller Disclosure Letter.

     “Seller Indemnified Party” has the meaning set forth in Section 5.2(b).

     “Seller’s Knowledge” means the actual knowledge, without due inquiry, of Deborah J.
Adler, John C. Carroll, Joseph E. Justice, Barry G. Skolnick, William Bridy, Lori Salvo, Paul
Michalowski and Stephen Bodurtha.

     “Seller Parent” has the meaning set forth in the preamble.

     “Seller Pre-Closing Practices and Procedures” shall have the meaning as set forth in
Section 5.2(b).

     “Seller Warranty Breach” has the meaning set forth in Section 5.2(a).

     “Separate Account Financial Statements” means the financial statements of the
Registered Separate Accounts.

     “Shares” has the meaning set forth in the recitals.

     “Straddle Return” means any Tax Return (other than any Tax Return relating to
Consolidated Income Taxes) of either Company for a Pre-Closing Period that includes (but does not
end on) the Closing Date.

     “Stub Period Non-Income Taxes” means Non-Income Taxes attributable to the taxable
period (or portion thereof) beginning on the date hereof and ending on the Closing Date,
provided that such term shall not include any additional Non-Income Taxes, interest or
penalties imposed post-Closing with respect to a Tax Return prepared by the Seller pursuant to
Section 8.3(a) or Section 8.3(b).

     “Subsidiary” means with respect to any Person, any other Person (other than a natural
person), whether incorporated or unincorporated, of which at least a majority of

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the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or indirectly owned or
controlled by the Person or by one or more of its respective Subsidiaries or by the Person and any
one or more of its respective Subsidiaries.

     “Tax Allocation Amount” has the meaning set forth in Section 8.2

     “Tax Dispute” has the meaning set forth in Section 8.5(d).

     “Tax Indemnified Party” has the meaning set forth in Section 8.1(e).

     “Tax Indemnifying Party” has the meaning set forth in Section 8.1(e).

     “Tax Matters” has the meaning set forth in Section 8.5(a).

     “Tax Return” means any report, return, statement or other written information required
to be filed with a taxing authority in connection with Taxes.

     “Tax Sharing Agreement” shall mean all agreements providing for the allocation of
Consolidated Income Taxes among Merrill Lynch and Co. or any of its Affiliates and either Company.

     “Taxes” means all taxes, including any interest and penalties thereon or other
additions thereto, imposed by any Governmental Authority, including income or profits taxes,
payroll and employee withholding taxes, sales and use taxes, ad valorem taxes, value added taxes,
excise taxes, franchise taxes, gross receipts taxes, real and personal property taxes,
environmental taxes, and transfer taxes.

     “Third Party Claim” has the meaning set forth in Section 5.5(b).

     “Trademark License Agreement” has the meaning as set forth in the recitals.

     “Transfer Taxes” means all transfer, documentary, sales, use, registration and other
similar Taxes (including all applicable real estate transfer taxes) incurred in connection with the
transfer of the Shares, the Transferred Assets or the Transferred Liabilities pursuant to this
Agreement.

     “Transferred Assets” has the meaning set forth in the recitals.

     “Transferred Business” means (i) all books of business written or assumed by
MLLIC and MLLICNY, (ii) the capabilities of each Company to manufacture annuity products
and maintain closed blocks of insurance and annuity products,(iii) the Transferred Assets
and (iv) the Transferred Liabilities.

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     “Transferred Liabilities” has the meaning set forth in the recitals.

     “Transition Services Agreement” has the meaning as set forth in the recitals.

     “Treasury Regulations” means the regulations of the U.S. Treasury Department issued
pursuant to the Code.

     “Year End Balance Sheet” means with respect to MLLIC or MLLICNY, as the case may be,
the audited balance sheet of such Company as of December 31, 2006, constituting a portion of the
SAP Audited Financial Statements.

ARTICLE X

MISCELLANEOUS

     Section 10.1 Termination and Abandonment.

     (a) General. This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time, but not later than the Closing Date:

          (i)    by mutual written consent of the Buyer and the Seller;

          (ii)    by the Buyer, the Seller Parent or the Seller if an injunction, restraining order, decree
or other action of any Governmental Authority of competent jurisdiction is issued, enacted,
promulgated, enforced or entered that prohibits the consummation of the transactions contemplated
by this Agreement and such injunction, restraining order, decree or other action is final and
non-appealable; provided, however, that the party seeking to terminate this
Agreement pursuant to this clause (ii) shall have used its commercially reasonable efforts to have
such injunction, order, decree or other action vacated, denied, annulled, quashed or lifted;

          (iii)    by the Buyer if there has been a violation or breach by the Seller or the Seller Parent
of any covenant, representation or warranty contained in this Agreement which has prevented or
would prevent the satisfaction of any condition to the obligations of the Buyer set forth in
Section 6.1 or Section 6.2 and such violation or breach has not been waived by the Buyer and has
not been, or cannot be, cured by the Seller Parent, the Seller or any Seller Affiliate within
thirty (30) days after written notice thereof from the Buyer;

          (iv)    by the Seller Parent or the Seller if there has been a violation or breach by the Buyer
of any covenant, representation or warranty contained in this Agreement which has prevented or
would prevent the satisfaction of any condition to the obligations of the Parent or the Seller set
forth in Section 6.1 or Section 6.3 and such violation or breach has not been waived by the Seller
Parent or the Seller and has not been, or cannot be, cured by the Buyer within thirty (30) days
after written notice thereof from the Seller Parent or the Seller; or

67

 

          (v)    by the Buyer, the Seller Parent or the Seller if the Closing shall not have been
consummated on or before the date nine (9) months from the date hereof; provided, that if
the Closing has not occurred due solely to the failure of a party to receive a required approval
from a Governmental Authority, the parties agree to extend the foregoing termination date to the
date twelve (12) months from the date hereof; provided, further, that the right to
terminate this Agreement pursuant to this clause (v) shall not be available to any party whose
failure to fulfill or cause to be fulfilled any obligation under this Agreement has been the primary cause of the failure of the Closing to
occur on or before such date.

     (b) Procedure Upon Termination. In the event of the termination and abandonment of
this Agreement, written notice thereof shall promptly be given to the other parties hereto and this
Agreement shall terminate and the transactions contemplated hereby shall be abandoned without
further action by any of the parties hereto.

     (c) Survival of Certain Provisions. The respective obligations of the parties hereto
pursuant to Section 4.1(b) and this Article X shall survive any termination of this Agreement in
accordance with its terms.

     (d) Effect of Termination. In the event of a termination of this Agreement pursuant
to Section 10.1(a), no party shall have any liability or obligation to the other party, except
(i) in connection with a breach of this Agreement occurring prior to such termination (for
the avoidance of doubt, any breach of this Agreement prior to such termination shall survive such
termination), (ii) as provided in Section 10.1(c) and (iii) from any act of fraud
or intentional misrepresentation.

     Section 10.2 Expenses. Except as otherwise provided in this Agreement, each party
shall each bear its own costs and expenses incurred in connection with this Agreement and the
Ancillary Transaction Agreements and the transactions contemplated hereby and thereby. If the
parties hereto jointly engage Milliman in connection with the purchase price adjustment
calculations pursuant to Exhibits D-1 or D-2 of this Agreement, any costs and expenses incurred in
connection with Milliman’s services shall be borne equally by the parties.

     Section 10.3 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be in writing and shall
be given by personal delivery or sending by an overnight courier service, proof of delivery
requested, to the following addresses:

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	(a)	 	if to the Seller, to it at:
	 
	 	 	 	 
	 	 	Merrill Lynch Insurance Group, Inc.
	 	 	1700 Merrill Lynch Drive
	 	 	3rd Floor
	 	 	Pennington, NJ 08534
	 

	 	Attention:
	 	Barry G. Skolnick, Esq., Senior Vice President and
	 

	 	 	 	General Counsel
	 
	 	 	 	 
	with copies to (which shall not constitute notice):
	 
	 	 	 	 
	 	 	Merrill Lynch & Co., Inc.
	 	 	4 World Financial Center
	 	 	New York, New York 10080
	 

	 	Attention:
	 	Todd Myers, Head of Business Development,
	 

	 	 	 	Global Private Client
	 
	 	 	 	 
	 	 	Merrill Lynch & Co., Inc.
	 	 	4 World Financial Center
	 	 	New York, New York 10080
	 

	 	Attention:
	 	Frank J. Marinaro, Esq., First Vice President,
	 

	 	 	 	Strategic M&A and Global Private Equity Counsel
	 
	 	 	 	 
	 	 	Debevoise & Plimpton LLP
	 	 	919 Third Avenue
	 	 	New York, New York 10022
	 

	 	Attention:
	 	Stephen R. Hertz, Esq. and Nicholas F. Potter, Esq.
	 
	 	 	 	 
	(b)	 	if to the Seller Parent, to it at:
	 
	 	 	 	 
	 	 	Merrill Lynch & Co., Inc.
	 	 	4 World Financial Center
	 	 	New York, New York 10080
	 

	 	Attention:
	 	Todd Myers, Head of Business Development,
	 

	 	 	 	Global Private Client
	 
	 	 	 	 
	 	 	Merrill Lynch & Co., Inc.
	 	 	4 World Financial Center
	 	 	New York, New York 10080
	 

	 	Attention:
	 	Frank J. Marinaro, Esq., First Vice President,
	 

	 	 	 	Strategic M&A and Global Private Equity Counsel

69

 

	 	 	 	 	 
	 
	 	 	 	 
	with copies to (which shall not constitute notice):
	 
	 	 	 	 
	 	 	Debevoise & Plimpton LLP
	 	 	919 Third Avenue
	 	 	New York, New York 10022
	 

	 	Attention:
	 	Stephen R. Hertz, Esq. and Nicholas F. Potter, Esq.
	 
	 	 	 	 
	(c)	 	if to the Buyer, to it at:
	 
	 	 	 	 
	 	 	AEGON USA, Inc.
	 	 	4333 Edgewood Road NE
	 	 	Cedar Rapids, Iowa 52499
	 

	 	Attention:
	 	Craig Vermie, Esq.,
	 

	 	 	 	Senior Vice President and General Counsel
	 
	 	 	 	 
	with a copy to (which shall not constitute notice):
	 
	 	 	 	 
	 	 	Aegon USA, Inc.
	 	 	4333 Edgewood Road NE
	 	 	Cedar Rapids, Iowa 52499
	 

	 	Attention:
	 	James A. Beardsworth,
	 

	 	 	 	Senior Vice President — Business Development
	 
	 	 	 	 
	 	 	LeBoeuf, Lamb, Greene & MacRae LLP
	 	 	125 West 55th Street
	 	 	New York, NY 10019
	 

	 	Attention:
	 	John M. Schwolsky, Esq.
	 

	 	 	 	Paul P. Chen, Esq.

or to such other Person or address as a party shall specify by notice in writing to the other
parties. All such notices, requests, demands, waivers and communications shall be deemed to have
been given on the date of personal receipt or proven delivery.

     Section 10.4 Entire Agreement. This Agreement (including the Seller Disclosure
Letter, the Buyer Disclosure Letter and exhibits hereto) and the Confidentiality Agreement
constitute the entire agreement among the parties hereto and supersede all prior agreements and
understandings, oral and written, between or among the parties hereto with respect to the subject
matter hereof.

     Section 10.5 No Third Party Beneficiaries. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and assigns, and nothing
in this Agreement, express or implied, is intended to confer on any Person other than the parties
hereto, or their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement other than Section 4.15, which are intended to be for the benefit of the applicable Seller Affiliates, and Article V which is intended to be for the
benefit of the Buyer Indemnified Parties and the Seller Indemnified Parties and may be enforced by
such Persons.

70

 

     Section 10.6 Assignability. Neither this Agreement nor any of the rights, interests
or obligations of any party shall be assigned (except by operation of law), in whole or in part, by
any of the parties hereto without the prior written consent of the other
parties hereto, and any such assignment that is not consented to shall be null and void;
provided, however, that the Seller will not unreasonably withhold its consent to
any such assignment by the Buyer to any direct or indirect wholly-owned Subsidiary of the Buyer or
AEGON NV; provided, that notwithstanding any such assignment, the Buyer shall remain liable
to perform all of its obligations hereunder, including the obligations to pay the full amount of
the Purchase Price; provided, further, that no such assignment shall be permitted
if it shall result in any amount payable to the Seller pursuant to this Agreement being subject to
withholding Tax.

     Section 10.7 Amendment and Modification; Waiver. Subject to applicable Law, this
Agreement may be amended, modified or supplemented only by a written instrument authorized and
executed on behalf of each of the parties hereto. No waiver by any party of any of the provisions
hereof shall be effective unless explicitly set forth in writing and executed by the party so
waiving. The waiver by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other or subsequent breach.

     Section 10.8 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision or portion of any provision of this Agreement or the
application thereof under certain circumstances is held to be invalid, illegal or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable. Upon
such determination that any term or other provision is invalid, illegal or unenforceable, the
parties shall negotiate in good faith to modify this Agreement so as to effect the original intent
of the parties as closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest extent possible.

     Section 10.9 Section Headings. The section headings contained in this Agreement are
inserted for reference purposes only and shall not affect the meaning or interpretation of this
Agreement.

     Section 10.10 Interpretation. Unless the context requires otherwise, all words used
in this Agreement in the singular number shall extend to and include the plural, all words in the
plural number shall extend to and include the singular, and all words in any

71

 

gender shall extend to and include all genders. The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation” whether or not they are in fact followed by such words
or words of like import. The words “in the ordinary course of business” shall be deemed to be
followed by the phrase “consistent with past practice” whether or not they are in fact followed by
such words or words of like import. When a reference is made in this Agreement to an Article,
Section, Annex, Exhibit, Schedule or Disclosure Letter, such reference shall be to an Article of, a
Section of, or an Annex, Exhibit, Schedule or Disclosure Letter to, this Agreement unless otherwise
indicated. Disclosure of any item in the Seller Disclosure Letter or the Buyer Disclosure Letter
shall not be deemed an admission that such item represents a material item, fact, exception of
fact, event or circumstance or that occurrence or non-occurrence of any change or effect related to
such item would result in a Company Material Adverse Effect or a Buyer Material Adverse Effect, as
the case may be. The table of contents and headings contained in this Agreement are for reference
purposes only and shall not modify, expand, define, or otherwise affect in any way the meaning or
interpretation of this Agreement. References to “$” shall mean United States dollars. The phrases
“the date of this Agreement,” “the date hereof” and terms of similar import, shall be deemed to
refer to the date set forth in the first paragraph of this Agreement. The words “hereof,”
“herein,” “hereby” and other words of similar import refer to this Agreement as a whole unless
otherwise indicated. Whenever the last day for the exercise of any right or the discharge of any
duty under this Agreement falls on other than a Business Day, the party having such right or duty
shall have until the next Business Day to exercise such right or discharge such duty. Unless
otherwise indicated, the word “day” shall be interpreted as a calendar day.

     Section 10.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument, it being understood that the parties need not sign the
same counterpart.

     Section 10.12 Facsimile. This Agreement, to the extent signed and delivered by means
of facsimile or other electronic transmission, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same binding effect as if it
were the original signed version thereof delivered in person. No party hereto shall claim that
this Agreement is invalid, not binding or unenforceable based upon the use of facsimile or other
electronic transmission to deliver a signature, or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of facsimile or other electronic
transmission, and each such party forever waives any such claim or defense.

     Section 10.13 Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, violated or unfulfilled.

72

 

It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent noncompliance with, or
breaches or violations of any provisions of this Agreement by any of the other parties and to
enforce specifically the terms and provisions of this Agreement in any action instituted in any
court of the United States or any state thereof having subject matter jurisdiction, this being in
addition to any other remedy to which any of the parties may be entitled at law or in equity. In
the event that any action is brought in equity to enforce the provisions of this Agreement, no
party will allege, and each party hereby waives the defense or counterclaim, that there is an adequate
remedy at Law. In addition, each of the parties hereto irrevocably and unconditionally submits
itself to the exclusive jurisdiction of the United States District Court for the Southern District
of New York or, if such court does not have jurisdiction, the New York State Supreme Court in the
Borough of Manhattan, in the event any dispute arises out of this Agreement or any of the
transactions provided for by this Agreement and agrees that all claims in respect of the action may
be heard and determined in any such court and agrees not to bring any action arising out of or
relating to this Agreement in any other court. In any action, each of the parties irrevocably and
unconditionally waives and agrees not to assert by way of motion, as a defense or otherwise, any
claims that it is not subject to the jurisdiction of the above court, that such action is brought
in any inconvenient forum or that the venue of such action is improper. Each of the parties also
agrees that any final and nonappealable judgment against a party in connection with any action
shall be conclusive and binding on such party and that such award or judgment may be enforced in
any court of competent jurisdiction, either within or outside of the United States. A certified or
exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of
such award or judgment. Without limiting the foregoing, each party agrees that service of process
on such party at the address provided in Section 10.3 shall be deemed effective service of process
on such party. THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST ANY OTHER PARTY HERETO IN
ANY MATTERS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.

     Section 10.14 Release of Section 5.2(b)(iv). If the Buyer sells either Company at any
time after the Closing, the Buyer shall have the right to ask the Seller to release it from its
indemnification obligation under Section 5.2(b)(iv) in consideration of the provision of an
identical guarantee from the buyer of any such Company. The Seller will consider any such request
in good faith with due consideration of all appropriate factors, including the relative
creditworthiness of any such buyer compared to the Buyer.

     Section 10.15 Governing Law. This Agreement shall be governed by the laws of the
State of New York, without giving effect to its principles or rules of conflict of laws to the
extent such principles or rules are not mandatorily applicable by statute and would require or
permit the application of the laws of another jurisdiction.

73

 

     Section 10.16 FIRPTA. The Buyer shall not withhold any amounts pursuant to Section
1445 of the Code provided that the Seller delivers to the Buyer at the Closing a certificate
complying with the Code and the Treasury Regulations, duly executed and acknowledged, certifying
that the shares are not U.S. real property interests.

74

 

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

	 	 	 	 	 
	 	AEGON USA, INC.

 	 
	 	By:  	/s/ James A. Beardsworth	 
	 	 	Name:  	James A. Beardsworth	 
	 	 	Title:  	Senior Vice President	 
	 

	 	 	 	 	 
	 	MERRILL LYNCH INSURANCE GROUP, INC.

 	 
	 	By:  	/s/ Deborah J. Adler	 
	 	 	Name:  	Deborah J. Adler	 
	 	 	Title:  	Chairman, President, CEO and Chief Actuary	 
	 

	 	 	 	 	 
	 	MERRILL LYNCH & CO., INC.

 	 
	 	By:  	/s/ Robert J. McCann	 
	 	 	Name:  	Robert J. McCann 	 
	 	 	Title:  	Executive Vice President and President,
Global Private Client Group

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