Document:

exv10w1

 

EXECUTION COPY

          FIRST AMENDMENT, dated as of December 28, 2007 (this “Amendment”), TO THE PURCHASE
AGREEMENT, dated as of August 13, 2007 (the “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”). Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Agreement.

WITNESSETH:

     WHEREAS, Seller, Seller Parent and Buyer entered into the Agreement; and

     WHEREAS, Seller, Seller Parent and Buyer desire to amend certain terms of the Agreement on the
terms and conditions set forth in this Amendment.

     NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly acknowledged, and subject
to the terms and conditions hereof, the parties agree as follows:

	1.	 	Section 1.1(a) of the Agreement is hereby amended and restated in its entirety as
follows:

“(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 after December 28, 2007 or
Exhibit D-2 if the Closing Date is on December 28, 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.”

	2.	 	Section 1.1(b) of the Agreement is hereby amended and restated in its entirety as
follows:

“(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 effective as of the close of business, New York
City time on December 28, 2007, provided that if the conditions set forth in
Article VI hereof, other than conditions which by their nature are to be satisfied
at the Closing have not been satisfied or waived by December 28, 2007, then the
Closing will take place effective as of the close of business, New York City time on
the third Business Day following the satisfaction or waiver of such conditions,
unless another date or time is agreed to in writing by the parties hereto. The date
on which the Closing occurs shall be referred to herein as the “Closing
Date”. The Closing shall take place at the offices of Debevoise & Plimpton LLP,
919 Third Avenue, New York, NY 10022, unless another place is agreed to in writing
by the parties hereto.”

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	3.	 	Article VIII (Tax Matters) of the Agreement is hereby amended to add Sections 8.14,
8.15, and 8.16 as follows:

“Section 8.14 Agreement to Make DAC Election at the Buyer’s Request.

(a) At the Buyer’s request, the Seller and the Seller Parent shall join with the
Buyer to amend the Agreement to make an election (the “DAC Election”) to
determine specified policy acquisition expenses without regard to the general
deductions limitation of Section 848(c)(1) of the Code in accordance with Treas.
Reg. § 1.848-2(g)(8) and Treas. Reg. § 1.197-2T(g)(5)(ii)(C)(4) with respect to each
deemed reinsurance contract between Old MLLIC and New MLLIC, and each deemed
reinsurance contract between Old MLLICNY and New MLLICNY, that results from the
Section 338(h)(10) Elections and from Treas. Reg. § 1.848-2(f)(7) and Treas. Reg.
§ 1.197-2T(g)(5)(ii)(C)(2) and that is designated by the Buyer for the DAC Election.
Each such deemed reinsurance contract is referred to herein as a “Designated
Contract.”

(b) In accordance with Treas. Reg. § 1.848-2(f)(7) and Treas. Reg.
§ 1.197-2T(g)(5)(ii)(C)(2) there shall be a separate deemed reinsurance contract
arising out of the Section 338 Elections for each category of specified insurance
contracts of Old MLLIC and of Old MLLICNY and for contracts of Old MLLIC and of Old
MLLICNY that are not specified insurance contracts. For the avoidance of doubt, the
Buyer in its sole discretion may request the Seller to make a DAC Election for any
of such deemed reinsurance contracts without being required to request the Seller to
make such election for any of such other deemed reinsurance contracts. If the Buyer
decides not to make the DAC Election for a deemed reinsurance contract, then that
deemed reinsurance contract shall be excluded from the DAC Payment calculation.

(c) At the Buyer’s request, the Seller shall join in making the DAC Election with
respect to a Designated Contract by executing an agreement substantially in the form
of that included in Exhibit I to the Agreement (referred to herein as the “DAC
Election Form”).

(d) The Buyer shall make its request of the Seller to join in making the DAC
Election with respect to a Designated Contract by no later than five (5) Business
Days after the allocations required by Section 8.10(c) of the Agreement are
finalized in accordance with such Section 8.10(c). For the avoidance of doubt, the
allocation set forth in Section 8.10(c) of this Agreement will include an allocation
of ADSP to each separate deemed reinsurance contract identified in Section 8.14(b)
above.

Section 8.15 Seller Payment for Any Cost of DAC Election.

(a) The Seller or Seller Parent shall make a payment to the Buyer for the cost to
the Buyer of making the DAC Election with respect to any Designated Contract

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of
MLLIC and of MLLICNY in connection with the short Taxable Years of MLLIC and of
MLLICNY ending December 31, 2007 (the “DAC Payment”). The DAC Payment shall
be equal to the sum of (1) the excess if any of the Total 12/31/07 Tax Benefit over
the Total 12/28/07 Tax Benefit for MLLIC plus (2) the excess if any of the Total
12/31/07 Tax Benefit over the Total 12/28/07 Tax Benefit for MLLICNY. For the
avoidance of doubt, the calculations required by this Section 8.15 shall be
performed in a manner consistent with the sample calculation attached to this
Agreement as Exhibit J.

(b) The “12/31/07 Tax Benefit” for each Designated Contract shall equal (A)
+ (B) – (C). For purposes of this calculation, “A” shall equal the present
value of 35 percent of the amount of DAC Amortization that would have been taken
into account each Taxable Year with respect to such Designated Contract if the
Closing Date were December 31, 2007 and no DAC Election were made, assuming DAC
would have been amortized 5% in 2008, 10% in each year from 2009 through 2017, and
5% in 2018; “B” shall equal the present value of 35 percent of the amount of
Section 197 Amortization that would have been taken into account each Taxable Year
with respect to such Designated Contract if the Closing Date were December 31, 2007
and no DAC Election were made, assuming the Section 197 Amortization would be
deducted evenly over 15 years from 2008 through the end of 2022; and “C”
shall equal 35 percent of the excess, if any, of the amount of total DAC that would
have been taken into account with respect to such Designated Contract if the Closing
Date were December 31, 2007 and no DAC Election were made over the ADSP allocated to
such Designated Contract in accordance with Section 8.10(c) of this Agreement.

(c) The “Total 12/31/07 Tax Benefit” shall be the sum of the 12/31/07 Tax
Benefits as calculated in accordance with Section 8.15(b) of this Agreement with
respect to each Designated Contract for each of the Companies.

(d) The “12/28/07 Tax Benefit” for each Designated Contract shall equal (X)
+ (Y) — (Z). For purposes of this calculation, “X” shall equal the present
value of 35 percent of the amount of DAC Amortization that will be taken into
account each Taxable Year with respect to such Designated Contract, assuming DAC
will be amortized 1/120 in 2007, 12/120 in each year from 2008 through 2016, and
11/120 in 2017; “Y” shall equal the present value of 35 percent of the
amount of Section 197 Amortization that will be taken into account each Taxable Year
with respect to such Designated Contract, assuming that the Section 197 Amortization
will be deducted 1/180 in 2007, 12/180 in each year from 2007 through 2021 and
11/180 in 2022; and “Z” shall equal the amount of current income actually
recognized on the federal income tax return of MLLIC or MLLICNY, as the case may be,
equal to the excess, if any, of the amount of total DAC taken into account with
respect to such Designated Contract over the ADSP allocated to such Designated
Contract in accordance with Section 8.10(c) of this Agreement.

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(e) The “Total 12/28/07 Tax Benefit” shall be the sum of the 12/28/07 Tax
Benefits as calculated in accordance with Section 8.15(d) of this Agreement with
respect to each Designated Contract for each of the Companies.

(f) For purposes of determining present value in the calculations in Section 8.15(b)
and 8.15(d), an 11% discount rate shall be used and the items of income and
deduction shall be treated as having been earned or incurred as of June 30 of the
respective Taxable Year.

(g) To the extent permitted by applicable Law, any payment made under this Section
8.15 shall be treated by the parties as an adjustment to the Purchase Price for all
federal, state, local and foreign Tax purposes, and the parties shall, and shall
cause their respective Affiliates to, file their Tax Returns accordingly.

(h) Unless otherwise indicated, all calculations pursuant to this Section 8.15 shall
be made in accordance with Sections 848 and 197 of the Code and regulations
thereunder. For the avoidance of doubt, the “general deductions” (as defined in
Section 848(c)(2) of the Code and Treas. Reg. §1.848-2(g)(6)) taken into account for
purposes of the calculations described in paragraph (b) of this Section 8.15 shall
be the amount of general deductions actually reported on the federal income tax
return filed by or with respect to MLLIC or MLLICNY, as the case may be, for the
2008 Taxable Year, as modified by Treas. Reg. § 1.197-2T(g)(5)(ii).

Section 8.16 DAC Payment Procedures.

(a) No later than 30 days after the filing of the federal income tax returns of the
Companies for the Taxable Year ending December 31, 2008, the Buyer shall deliver to
the Seller a calculation of the DAC Payment computed under Section 8.15 of this
Agreement. 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 calculation. If the Seller agrees with the Buyer’s calculation or fails to
deliver such written notice within such thirty (30) Business Days, the Buyer’s
calculation with respect to the DAC Payment shall constitute the agreed DAC Payment.
If the Seller provides timely written notice to the Buyer of any disagreement with
the Buyer’s calculations, the Seller and the Buyer shall negotiate in good faith to
determine the agreed DAC Payment. 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) of this Agreement and the amount determined in accordance with such
procedures shall constitute the agreed DAC Payment.

(b) The Seller or Seller Parent shall make a payment to the Buyer of the agreed DAC
Payment within 30 days of the determination of the agreed DAC Payment pursuant to
Section 8.16(a) of this Agreement.

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(c) In connection with the making of the DAC Election in accordance with Section
8.14 and with the determination of the agreed DAC Payment in accordance with Section
8.15 of this Agreement, the Seller and the Buyer each shall cooperate with, and
shall provide assistance to and access to any documents required by, the other party
consistent with the provisions of Section 8.5(c) of this Agreement.”

	4.	 	Article IX (Definitions) of the Agreement is hereby amended to add the following definitions:

“12/28/07 Tax Benefit” has the meaning set forth in Section 8.15(d).

“12/31/07 Tax Benefit” has the meaning set forth in Section 8.15(b).

“DAC Amortization” means, for each Designated Contract, the amount allowable
as a deduction ratably over a 120-month period pursuant to Section 848(a) of the
Code with respect to such Designated Contract as a result of the purchase and sale
of the Shares pursuant to this Agreement and the filing of the Section 338(h)(10)
Elections.

“DAC Election” has the meaning set forth in Section 8.14(a).

“DAC Election Form” has the meaning set forth in Section 8.14(c).

“DAC Payment” has the meaning set forth in Section 8.15(a).

“Designated Contract” has the meaning set forth in Section 8.14(a).

“New MLLIC” means the corporation that is deemed to acquire, pursuant to
Treas. Reg. § 1.338-1(a)(1), all of its assets as a consequence of the Section 338
Election with respect to MLLIC.

“New MLLICNY” means the corporation that is deemed to acquire, pursuant to
Treas. Reg. § 1.338-1(a)(1), all of its assets as a consequence of the Section 338
Election with respect to MLLICNY.

“Old MLLIC” means the corporation that is deemed to transfer, pursuant to
Treas. Reg. § 1.338-1(a)(1), all of its assets as a consequence of the Section 338
Election with respect to MLLIC.

“Old MLLICNY” means the corporation that is deemed to transfer, pursuant to
Treas. Reg. § 1.338-1(a)(1), all of its assets as a consequence of the Section 338
Election with respect to MLLICNY.

“Section 197 Amortization” means, for each Designated Contract, the amount
allowable as a deduction ratably over a 15-year period pursuant to Section 197(a) of
the Code with respect to such Designated Contract as a result of the purchase

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and
sale of the Shares pursuant to this Agreement and the filing of the Section
338(h)(10) Elections.

“Taxable Year” means the period of time for which taxable income is computed
for federal income tax purposes.

“Total 12/28/07 Tax Benefit” has the meaning set forth in Section 8.15(e).

“Total 12/31/07 Tax Benefit” has the meaning set forth in Section 8.15(c).

	5.	 	Schedule A to the Agreement (“Transferred Assets and Transferred Liabilities”) is
hereby amended by replacing it in its entirety with Schedule A hereto.

	6.	 	The Agreement is hereby amended by adding Exhibit I (“DAC Election Form”) and
Exhibit J (“Sample Tax Calculation”) in the form of Exhibit I and Exhibit J,
respectively, attached hereto.

	7.	 	Governing Law. This Amendment 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.

	8.	 	Entire Agreement. The Agreement, as amended by this Amendment (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.

	9.	 	Ratification. Except as specifically amended by this Amendment, the terms of the
Agreement shall remain in full force and effect and are hereby ratified and confirmed.

[Signature page follows.]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	AEGON USA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH INSURANCE GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH & CO., INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 
	 

	 	 	 	Title:exv10w2

 

EXECUTION COPY

 

 

 

MASTER DISTRIBUTION AGREEMENT

among

MERRILL LYNCH & CO., INC.,

MERRILL LYNCH INSURANCE GROUP, INC.

and

AEGON USA, INC.

as of

December 28, 2007

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I.
	 	 	 	 
	PURPOSES
	 	 	 	 
	 
	 	 	 	 
	Section 1.1. Purposes of this Agreement
	 	 	2	 
	ARTICLE II.

REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	 
	 	 	 	 
	Section 2.1. Representations and Warranties of the Seller Parent
and the Seller
	 	 	2	 
	Section 2.2. Representations and Warranties of the Buyer
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III.

PRODUCT AND SALES COMMITTEE
	 	 	 	 
	 
	 	 	 	 
	Section 3.1. Establishment of a Product and Sales Committee
	 	 	4	 
	Section 3.2. Business Plans
	 	 	4	 
	Section 3.3. Meetings of the Product and Sales Committee
	 	 	5	 
	Section 3.4. Term of the Product and Sales Committee
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV.

DISTRIBUTION SUPPORT FOR INVESTOR CHOICE AND NEW PRODUCTS
	 	 	 	 
	 
	 	 	 	 
	Section 4.1. Investor Choice Distribution Support Services
	 	 	5	 
	Section 4.2. New Product Distribution Support Services
	 	 	7	 
	Section 4.3. Buyer Insurer Wholesalers Force
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V.

DISTRIBUTION AGREEMENTS, COMMISSIONS AND PROCEDURES
	 	 	 	 
	 
	 	 	 	 
	Section 5.1. Distribution Agreements
	 	 	7	 
	Section 5.2. Commissions — Legacy Products
	 	 	8	 
	Section 5.3. Commissions – Investor Choice Annuity
	 	 	8	 
	Section 5.4. Policy Replacements
	 	 	9	 
	Section 5.5. New Product Development Proposals
	 	 	9	 
	Section 5.6. Level Playing Field
	 	 	12	 

i

 

	 	 	 	 	 
	 	 	Page
	ARTICLE VI.

FUNDS
	 	 	 	 
	 
	 	 	 	 
	Section 6.1. Investment Management Services
	 	 	12	 
	Section 6.2. Investment Management Committee
	 	 	12	 
	Section 6.3. Fund Choices
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VII.

ACCESS; BRANDING; CONFIDENTIAL INFORMATION; MATERIALS
	 	 	 	 
	 
	 	 	 	 
	Section 7.1. Access
	 	 	14	 
	Section 7.2. Branding; Use of Names
	 	 	15	 
	Section 7.3. Confidential Information
	 	 	15	 
	Section 7.4. Marketing, Training and Other Materials
	 	 	17	 
	Section 7.5. Publicity
	 	 	18	 
	 
	 	 	 	 
	ARTICLE VIII.

CERTAIN PRACTICES AND PROCEDURES
	 	 	 	 
	 
	 	 	 	 
	Section 8.1. Cooperation
	 	 	18	 
	Section 8.2. Maintenance of Certain Practices and Procedures
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IX.

TERM OF THE AGREEMENT; CERTAIN CONDITIONS; ACQUISITIONS; NO OTHER OBLIGATIONS
	 	 	 	 
	 
	 	 	 	 
	Section 9.1. Term
	 	 	19	 
	Section 9.2. Survival
	 	 	19	 
	Section 9.3. Certain Conditions
	 	 	19	 
	Section 9.4. Notice and Cure Opportunity
	 	 	21	 
	Section 9.5. Acquisitions
	 	 	21	 
	Section 9.6. No Other Obligations
	 	 	22	 
	 
	 	 	 	 
	ARTICLE X.

INDEMNIFICATION
	 	 	 	 
	 
	 	 	 	 
	Section 10.1. Indemnification by the Seller
	 	 	22	 
	Section 10.2. Indemnification by the Buyer
	 	 	23	 
	Section 10.3. Calculation of Losses
	 	 	23	 
	Section 10.4. Indemnification Notice Procedures
	 	 	24	 
	Section 10.5. Indemnification Procedures for Claims by an Indemnified Party
	 	 	25	 
	Section 10.6. Indemnification Procedures for Third Party Claims
	 	 	26	 
	Section 10.7. General
	 	 	27	 

ii

 

	 	 	 	 	 
	 	 	Page
	ARTICLE XI.

DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	Section 11.1. Defined Terms
	 	 	27	 
	 
	 	 	 	 
	ARTICLE XII.

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

iii

 

MASTER DISTRIBUTION AGREEMENT

     THIS MASTER DISTRIBUTION AGREEMENT (this “Agreement”), dated as of December 28, 2007,
is among Merrill Lynch Insurance Group, Inc., a Delaware corporation (the “Seller”),
Merrill Lynch & Co., Inc., a Delaware corporation (the “Seller Parent”) and AEGON USA,
Inc., an Iowa corporation (the “Buyer”).

     WHEREAS, the Buyer, through certain of its life insurance Affiliates, provides life insurance
and annuity products;

     WHEREAS, the Seller Parent, through certain Seller Affiliates, has an extensive proprietary
distribution network (the “Merrill Lynch Global Private Client Network”) that distributes,
on behalf of both affiliated and unaffiliated insurance companies, life insurance and annuity
products;

     WHEREAS, the Seller, the Seller Parent and the Buyer have entered into a Purchase Agreement,
dated as of August 13, 2007 (the “Purchase Agreement”), pursuant to which the Buyer will
acquire (the “Acquisition”), on the terms and subject to the conditions set forth therein,
(i) all of the outstanding shares of capital stock of Merrill Lynch Life Insurance Company,
an Arkansas domiciled stock life insurance company (“MLLIC”), and ML Life Insurance Company
of New York, a New York domiciled stock life insurance company (“MLLICNY”) (each sometimes
referred to herein as a “Company” and collectively as the “Companies”) and
(ii) certain assets and liabilities relating to the Companies but not held by the Companies
(capitalized terms used but not defined herein shall have the respective meanings given to such
terms in the Purchase Agreement);

     WHEREAS, the Companies are wholly-owned subsidiaries of the Seller Parent that manufacture
annuity products and maintain closed blocks of life insurance and annuity products;

     WHEREAS, in connection with the transactions contemplated by the Purchase Agreement, the
parties hereto desire to enter into the distribution relationship set forth in this Agreement; and

     WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the
transactions contemplated by the Purchase Agreement (the “Closing”).

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

 

 

ARTICLE I.

PURPOSES

Section 1.1. Purposes of this Agreement. This Agreement will govern the distribution
arrangements between the Buyer, the Buyer Insurers, and their Affiliates on the one hand and the
Seller and the Seller Affiliates on the other with respect to (i) the life insurance and
annuity products of the Companies sold through the Merrill Lynch Global Private Client Network in
the United States prior to the Acquisition, excluding the Merrill Lynch Investor Choice Annuity
(“Legacy Products”) as set forth on Exhibit 1.1; (ii) the Merrill Lynch Investor
Choice Annuity, including any amendment or enhancement thereto during the Term (the “Investor
Choice Annuity”, and together with the Legacy Products, “Products”) and (iii)
new life insurance or annuity products and product features, including insurance products providing
income guarantees to be used with mutual funds and similar investment products held outside an
insurance company (“Income Guarantee Products”) and any amendment or enhancement or
successor product to the Merrill Lynch Consults Annuity, that may be jointly developed by the
Seller and the Buyer Insurers for distribution either (A) in the general marketplace either
domestically, internationally, or both, or (B) through the Merrill Lynch Global Private
Client Network (“New Products”). Without limiting the specific provisions of this
Agreement, the purpose of this Agreement is to establish, govern and foster a cooperative and
mutually supportive relationship between the parties and their respective Affiliates to promote the
distribution of the Investor Choice Annuity and New Products through the Merrill Lynch Global
Private Client Network by, among other things, affording to the Buyer Insurers the level of support
by the Seller and its Affiliates and the access to the District Annuity Specialists (“DAS”)
and the Sales Force that is consistent with that afforded to the Companies prior to the
Acquisition, as is set forth more fully herein.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

Section 2.1. Representations and Warranties of the Seller Parent and the Seller. The
Seller Parent and the Seller, jointly and severally, hereby represent and warrant to the Buyer as
set forth below.

     (a) Each of the Seller Parent and the Seller is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware and has all requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the
performance of the Seller Parent’s and the Seller’s obligations hereunder, and the consummation of
the transactions contemplated hereby have been duly and validly authorized and approved by all
requisite corporate action of each of the Seller Parent and the Seller. Each of the Seller Parent
and the Seller has duly executed and delivered this Agreement. This Agreement constitutes the
legal, valid and binding obligation of the Seller Parent and the Seller enforceable against the

2

 

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

(b) Assuming compliance with the matters set forth in Section 2.5 of the Purchase Agreement,
the execution, delivery and performance by the Seller Parent and the Seller of this Agreement and
the performance and consummation of the transactions contemplated hereby do not (i)
conflict with or result in any violation or breach of any provision of the Organizational
Documents of the Seller Parent or the Seller, (ii) conflict with or result in a violation
or breach of any provision of any Law applicable to the Seller Parent and/or the Seller or
(iii) require any consent of or other action by any Person under, violate, conflict with
or result in the breach of any of the terms of, result in any modification of or loss of a benefit
under, accelerate or permit the acceleration of the performance required by, otherwise give any
other contracting party the right to modify, re-price, terminate or cancel, or constitute a
default or an event that, with or without notice or lapse of time or both, would constitute a
default under any provision of any material contract, agreement, permit, obligation, license or
other instrument or any Applicable Contract to which the Seller Parent and/or the Seller is a
party except, in the case of clauses (ii) and (iii), for such violations, conflicts, breaches or
defaults (x) that may result from facts or circumstances solely relating to the Buyer or
its Affiliates, or (y) which would not reasonably be expected, individually or in the
aggregate, to have a Company Material Adverse Effect. The distribution of any Products
distributed by a Seller Distributor on the date hereof does not violate, breach, or constitute a
default under any contract to which the Seller Parent, the Seller or any Seller Distributor is a
party or by which any of them or any of their respective assets is bound.

(c) None of the arrangements by which any Seller Distributor distributes any Products in
force on the date of this Agreement violated, or violates, in any material respect any of the
Seller Standards and Practices in effect on such date.

Section 2.2. Representations and Warranties of the Buyer. The Buyer hereby represents and
warrants to the Seller Parent and the Seller as set forth below.

          (a) The Buyer has all requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, the performance of the Buyer’s obligations
hereunder and the consummation of the transactions contemplated hereby have been duly authorized by
all requisite corporate action of the Buyer. The Buyer has duly executed and delivered this
Agreement. This Agreement constitutes the legal, valid and binding obligation of the Buyer
enforceable against the Buyer in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting or
relating to the enforcement of creditors’ rights generally

3

 

or by general principles of equity (whether such enforcement is sought in equity or at law).

          (b) The execution, delivery and performance by the Buyer of this Agreement and the
consummation of the transactions contemplated hereby do not and will not (i) conflict with
or result in any violation or breach of any provision of the Organizational Documents of the Buyer,
(ii) conflict with or result in a violation or breach of any provision of any Law
applicable to the Buyer, or (iii) require any consent of or other action by any Person
under, or constitute a default or an event that, with or without notice or lapse of time or both,
would constitute a default under, any provision of any material agreement or other instrument to
which the Buyer is a party, except in the case of clauses (ii) and (iii), for such violations,
conflicts, breaches or defaults (x) that may result from facts or circumstances solely
relating to the Seller Parent or the Seller Affiliates, or (y) which would not reasonably
be expected, individually or in the aggregate, to have a Buyer Material Adverse Effect.

ARTICLE III.

PRODUCT AND SALES COMMITTEE

Section 3.1. Establishment of a Product and Sales Committee. Promptly following the
execution of this Agreement, the parties will establish a committee (the “Product and Sales
Committee”) to consist of senior product and distribution personnel (with decision making
authority) of the parties. The Product and Sales Committee shall be the only such committee used
by the Seller and Merrill Lynch Life Agency (“MLLA”) for Third Party Insurers. The initial
members of the Product and Sales Committee shall be set forth on the Deliverables Schedule. The
purpose of the Product and Sales Committee will be to coordinate the implementation of the
distribution, access and support provisions of this Agreement, resolve issues and disputes arising
hereunder, and develop means to work together to enhance the business of both parties by fostering
the ongoing support and success of the Investor Choice Annuity and New Products. Among other
things, the Product and Sales Committee shall guide, assist and coordinate the efforts of the Buyer
Insurers and Buyer Distributors and the Merrill Lynch Global Private Client Network, including
assistance with (i) the design and positioning of (A) amendments and enhancements
to the Investor Choice Annuity and (B) New Products, (ii) obtaining feedback from
the DAS and the Sales Force on product amendments and enhancements, and sales efforts, for both the
Investor Choice Annuity and New Products, (iii) appropriate marketing announcements for the
Investor Choice Annuity and for New Products and (iv) training and rollout events for the
Investor Choice Annuity and New Products.

Section 3.2. Business Plans. In addition, the Product and Sales Committee will provide a
forum for the Buyer Insurers, Buyer Distributors and the Seller to discuss and cooperate in the
joint development of annual business plans (prepared in the first instance by the Seller and the
Sellers Distributors) for the sale of the Investor Choice Annuity and

4

 

New Products, which will include appropriate topics, including plans for: (i) growth of
sales of the Investor Choice Annuity and New Products through the Seller Distributors, including
targeted levels of sales; (ii) the participation of the Buyer Insurers and Buyer
Distributors in national, regional or branch level sales and recognition meetings and educational
sessions, in each case only with respect to such meetings or sessions in which the Seller
determines participation; and (iii) encouraging members of the Sales Force who do not
solicit or sell life insurance or annuity products to become licensed to do so and/or to consider
whether life insurance and/or annuity products are appropriate for their clients’ financial needs.
During each year that the Product and Sales Committee is constituted, the Seller will cause the
initial draft annual business plan to be delivered to the Buyer Insurers by no later than December
1 of the year preceding the year covered by the annual business plan, and thereafter the parties
will discuss the draft at a Product and Sales Committee meeting and seek to complete a final
business plan by December 31 of the year preceding the year covered by the annual business plan.

Section 3.3. Meetings of the Product and Sales Committee. The Product and Sales Committee
shall meet at least quarterly, unless otherwise agreed by the members of the Product and Sales
Committee. The agenda of the Product and Sales Committee meetings will include matters relating to
the support of the Investor Choice Annuity and New Products, and such other matters as the members
of the Product and Sales Committee may determine to be relevant. The parties will cooperate to
develop a protocol for the Product and Sales Committee meetings, including any additional
procedures (such as confidentiality procedures) that may be deemed appropriate.

Section 3.4. Term of the Product and Sales Committee. The Product and Sales Committee
shall remain in place for the Term, unless the parties agree to shorten or extend its duration.

ARTICLE IV.

DISTRIBUTION SUPPORT FOR INVESTOR CHOICE

AND NEW PRODUCTS

Section 4.1. Investor Choice Distribution Support Services.

          (a) The Seller shall cause MLLA to make available the services of the DAS to provide
distribution support for the Investor Choice Annuity in a manner and to an extent that is, in the
aggregate, consistent with the support provided by the DAS to the Companies and the Products at the
Reference Date. The DAS activities will include: (i) rolling out new features and
benefits to Merrill Lynch branch offices and FAs, (ii) providing day-to-day support for FA
inquiries, (iii) involvement in problem-solving and (iv) continued positioning of
the Investor Choice Annuity in FA meetings to meet specific client needs. For clarity, this
provision will apply to all amendments and enhancements to the Investor Choice Annuity.

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          (b) Additionally, with respect to the Investor Choice Annuity, the Seller (or a Seller
Affiliate) shall:

     (i) during the Transition Period, take such reasonable measures as the Buyer Insurers
or Buyer Distributors may request to provide product education for the Buyer Insurers’ or
Buyer Distributors’ relevant personnel (e.g., wholesalers, internal desks and other
business areas’ other relevant personnel), as may be reasonably designated by the Buyer
Insurers or the Buyer Distributors, including by making personnel available to attend
training sessions conducted by the Buyer Insurers or Buyer Distributors;

     (ii) during the Term, take such reasonable measures as the Buyer Insurers may request
to provide product education for the Seller Distributors’ relevant personnel (e.g.,
the DAS, the Sales Force, and internal and customer help desks), including by making
personnel available to attend FA training sessions conducted by the Buyer Insurers or Buyer
Distributors and by providing reasonable opportunities for the Buyer Insurers or Buyer
Distributors to provide content for broker-only publications distributed to the DAS and/or
the Sales Force. Such content shall be subject to the Seller’s approval (which shall not
be unreasonably withheld, conditioned or delayed);

     (iii) in accordance with the Seller Standards and Practices, but at no additional cost
than would be otherwise payable in accordance with Section 7.1(c), during the Term, allow
the Buyer Insurers’ or Buyer Distributors’ representatives to participate in (A)
national FA training events, (B) DAS meetings, conferences and appropriate
conference calls and (C) representation specifically with respect to the Investor
Choice Annuity in any such regional events and meetings at which a Buyer Insurer or Buyer
Distributor may already be participating in another capacity;

     (iv) during the Term, provide space on the Seller’s website, on a basis consistent
with that provided to the Companies and the Products on the Reference Date, for the Buyer
Insurers or Buyer Distributors to provide content related to the Investor Choice Annuity
(such content shall be subject to the Seller’s approval);

     (v) during the Term, permit the Buyer Insurers or Buyer Distributors to provide the
Seller Distributors with written and electronic communications that may be used for
distribution to customers of the Merrill Lynch Global Private Client Network;

     (vi) during the Term, provide annuity sales desk support to the Sales Force and the
DAS with respect to sales of the Investor Choice Annuity on a basis consistent with the
level of such support provided on the Reference Date;

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     (vii) during the Term, continue to set and track sales goals for the DAS in a manner
consistent with the Seller Standards and Practices as in effect at the Reference Date;

     (viii) during the Term, give first priority to the review of Investor Choice Annuity
product and marketing materials, and complete the review promptly within a period
consistent with the review period generally applicable to the Companies’ product and
marketing materials at the Reference Date, and in any event at least as quickly as the
review period applicable to the review of comparable product and marketing materials for
other issuers’ products in the same category as the Product in question; and

     (ix) during the Term, support DAS participation in out-of-office events, in accordance
with the Seller Standards and Practices.

Section 4.2. New Product Distribution Support Services. With respect to New Products, MLLA
(or other Seller Affiliates designated by the Seller) will provide the specific support services
agreed to by the members of the Product and Sales Committee and will provide a level of
distribution support that is consistent, as applicable, with the support and services provided
under Section 4.1 and with the overall purposes of this Agreement.

Section 4.3. Buyer Distributors Wholesaler Force. The Buyer Distributors will develop a
wholesaler force to be primarily dedicated to the Investor Choice Annuity as well as any New
Products under Section 4.2 within the Merrill Lynch Global Private Client Network, and accordingly,
following the end of the Transition Period, the DAS will work closely with the Buyer Distributors’
wholesalers in providing the distribution support described in this Article IV.

ARTICLE V.

DISTRIBUTION AGREEMENTS, COMMISSIONS AND PROCEDURES

Section 5.1. Distribution Agreements. In order to effect the distribution arrangements
contemplated by this Agreement, the Seller shall cause the Seller Distributors, and the Buyer shall
cause the Buyer Insurers and Buyer Distributors, to negotiate in good faith and enter into, on an
as-needed basis, written, non-exclusive distribution agreements with respect to the Products and
the New Products that are consistent with industry practice and with the principles set forth in
this Agreement (the “Distribution Agreements”). In addition to effecting the terms of this
Agreement with respect to compensation, access and support, the Distribution Agreements shall
contain terms and conditions that, taken as a whole, are at least as favorable to the Buyer
Insurers and Buyer Distributors as the terms and conditions of the distribution arrangements
between the Seller Distributors and Third Party Insurers, subject to such changes as would reflect
current practice of the Seller Distributors for such agreements.

7

 

Section 5.2. Commissions — Legacy Products.

     (a) From and after the Closing, except (y) as may be required by fiduciary duty,
applicable Law or other legal obligations or (z) as set forth in Section 5.2(b):

     (i) the Companies will continue to pay trail commissions, renewal commissions and
commissions with respect to additional premiums and considerations (collectively,
“Commissions”) to MLLA or other appropriate Seller Distributors for the Legacy
Products in-force at the time of the Acquisition; and

     (ii) the Commissions shall remain fixed at the levels that shall be set forth on the
Deliverables Schedule, which are no greater than the commission rates used in preparation
of the Actuarial Appraisal of MLLIC and MLLICNY as of December 31, 2006 (the “Actuarial
Report”), as supplemented by the supplement thereto dated June 29, 2007.

     (b) The Buyer Insurers may adjust rates of commissions paid to Seller Distributors on
additional premiums and considerations on the Legacy Products resulting from decreases in payments
to Buyer Insurers under other agreements between the Buyer Insurers and Eligible Fund investment
advisors who are Seller Affiliates after the date of this Agreement.

Section 5.3. Commissions — Investor Choice Annuity. From and after the Closing, while the
Buyer Insurers are offering the Investor Choice Annuity, the commission structure paid by the
Companies to the Seller Distributors for the Investor Choice Annuity shall be as set forth on the
Deliverables Schedule, which conforms in all material respects to the commission structure provided
to non-proprietary carriers as in effect on the date hereof and which is no greater than the
commission rates used in preparation of the Actuarial Report; provided, that, solely for
the purpose of maintaining parity with the commissions generally to be charged in respect of
non-proprietary variable annuity products distributed through the Merrill Lynch Global Private
Client Network, the commissions set forth on the Deliverables Schedule shall be subject to
unilateral change by the Seller for new or prospective sales following the effective date of any
such commission change; provided, further, that, while any such changes shall
remain at the sole discretion of the Seller, either party at any time may propose changes to the
commission schedule set forth in such schedule, and such proposal shall be considered by the
Product and Sales Committee as provided in Article III, and the other party shall consider such
proposal in good faith; and provided, further, that the Buyer Insurers may adjust
rates of commissions paid to Seller Distributors on additional premiums and considerations on the
Investor Choice Annuity resulting from decreases in payments to Buyer Insurers under other
agreements between the Buyer Insurers and Eligible Fund investment advisers who are Seller
Affiliates after the date of this Agreement.

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Section 5.4. Policy Replacements.

     (a) Except for changes made in the ordinary course of business and in a manner consistent with
past practices, for the duration of the Term, the Seller will not materially alter its Specialist
compensation practices, as they relate to Replacements, from those in effect on the Reference Date,
as shall be described in all material respects on the Deliverables Schedule. The term “Specialist”
shall mean both the DAS and also Wealth Planning and Business Insurance Specialists.

     (b) The Seller shall not, and shall cause the Seller Distributors not to, enter into any
program to promote the Replacement of any Product with a product issued by a third party, it being
understood that an FA may recommend the Replacement of a Product if the FA reasonably believes that
the recommendation is in the customer’s best interest and it is approved in accordance with the
Seller’s supervisory procedures. The Seller and the Seller Distributors shall continue to maintain
their respective compliance practices and policies relating to Replacements.

Section 5.5. New Product Development Proposals.

     (a) Overview. In line with the parties’ intent to foster a strategic business
relationship consistent with the overall purposes of this Agreement, (i) the parties intend
that the discussion, review and implementation of any New Product ideas pursuant to this Section
5.5 will be coordinated through the Product and Sales Committee and (ii) the Seller
intends, through the Product and Sales Committee, to work with the Buyer Insurers and Buyer
Distributors on proposals for New Products in a manner consistent with the new product process the
Seller used as of the Reference Date with respect to the Seller’s proprietary insurance products.

     (b) New Product Proposal Process. If, during the Term, either the Seller or the Buyer
Insurer submits a new product proposal to the Product and Sales Committee, then the Product and
Sales Committee shall evaluate the proposal based upon criteria furnished by the Seller in its sole
discretion. The Product and Sales Committee may engage in competitive analysis to evaluate the
proposal. If the Buyer Insurer elects not to submit a response to the criteria, the Buyer Insurer
shall so inform the Product and Sales Committee. If the Buyer Insurer elects to submit a proposal
to the criteria, the Seller shall evaluate such response in good faith and agree to move on to the
development of the Buyer Insurer’s proposal pursuant to Section 5.5(d) unless, in the Seller’s
reasonable judgment, the Buyer Insurer’s overall proposal does not meet the criteria (in the
aggregate) submitted by the Seller, in which case the Seller shall inform the Product and Sales
Committee of the Seller’s decision not to move forward with the Buyer Insurer and the reasons
therefor. The Seller shall provide the Buyer Insurer with a reasonable period of time to resolve
such issues before proceeding with the RFP process set forth in Section 5.5(c). For the avoidance
of doubt, any decision to not move forward with the Buyer Insurer or to not move forward with the
new product proposal will take

9

 

into consideration the overall purpose of this Agreement but remains at the sole discretion of
the Seller.

          (c) RFP Period for New Product Proposals.

     (i) If either (A) the Buyer Insurer elects not to submit a response to the
criteria or (B) the Seller determines not to move forward with the Buyer Insurer,
the Seller may provide requests for proposals (“RFPs”) to Third Party Insurers for such new
product proposal. If the Seller decides to provide such RFPs to Third Party Insurers, the
Seller will also provide the Buyer Insurer with the opportunity to respond to such RFP as
provided to the Third Party Insurers.

     (ii) Following receipt of the RFP, if the Buyer Insurer elects to submit a response in
accordance with the requirements set forth therein, the Seller shall evaluate such RFP
response in good faith. The Seller shall: (A) have exclusive discretion in
determining the process for selection of, and the criteria for evaluation of, potential
providers of such new product, (B) make a good faith determination of the extent to
which proposals received from potential providers satisfy the requirements of the RFP, and
(C) select the Buyer Insurer’s proposal unless, in the Seller’s reasonable
judgment, a Third Party Insurer’s overall proposal meets the requirements (in the
aggregate) of the RFP better than the Buyer Insurer’s overall proposal. For the avoidance
of doubt, a Third Party Insurer’s proposal would not be selected in preference to the Buyer
Insurer’s proposal solely on the basis that pricing proposed by the Third Party Insurer is
lower than the pricing proposed by the Buyer Insurer, provided that such pricing
differential would not, in the Seller’s reasonable judgment, be expected to substantially
and adversely impact sales.

          (d) New Product Development and Distribution. If the Seller selects the Buyer Insurer
to proceed in the development of the New Product, (A) the Seller shall work exclusively
with the Buyer Insurer to develop the New Product for a period of time of up to twelve (12) months
and (B) the Seller shall provide the Buyer Insurer with an exclusivity period of up to
twelve (12) months for the introduction and initial distribution of the New Product in the Merrill
Lynch Global Private Client Network, after which the Seller may commence distribution of products
of Third Party Insurers in the Merrill Lynch Global Private Client Network; provided, that
the initial exclusive distribution period described in (B) above shall not apply to Third Party
Insurers’ products that are distributed in the Merrill Lynch Global Private Client Network at the
time when the proposal was initially submitted to the Product and Sales Committee; and
provided further that, while continuing to take into account the cooperative and
mutually supportive relationship being fostered between the parties by this Agreement, if the
Seller concludes in the exercise of its reasonable judgment that issues have arisen that render it
impracticable to continue development of the New Product with the Buyer Insurer (and such issues
have not been resolved by the Buyer Insurer), then the Seller may terminate

10

 

such exclusive development period described in (A) above. If, after taking into consideration
the overall purpose of this Agreement, the Seller determines it is impracticable to continue, the
Seller will inform the Buyer Insurer of such determination and provide the Buyer Insurer with a
reasonable opportunity to resolve any issues.

     (e) For the avoidance of doubt, this Agreement shall in no way limit the Seller or any Seller
Affiliate from engaging in discussions or entering into any agreement with any Third Party Insurer
or any other Person with respect to new products that are initially proposed or brought to the
Seller or any Seller Affiliate by any such Third Party Insurer or other Person, and neither the
Seller nor any Seller Affiliate will have any obligation to notify the Buyer or any of its
Affiliates of its receipt of any such proposal or entry into any such agreement.

     (f) If, during the Term, a Buyer Insurer proposes, in accordance with Section 5.5(b), to
develop a new product for distribution pursuant to this Agreement and the Seller does not accept
such proposal, then for a period of 30 days from its receipt of the proposal the Seller may not
commence development of a similar product with a Third Party Insurer; however, the Seller
may continue the development of similar products already under development at the time that the
Seller’s members of the Product and Sales Committee received the proposal from the Buyer Insurer
and the Seller may agree to distribute similar products that are proposed by a Third Party Insurer
and that are fully developed in all material respects when first proposed to the Seller.

     (g) The Seller shall consult with the Product and Sales Committee on the length of any
exclusivity period specified in this Section 5.5, provided that the Seller shall retain the
sole discretion to determine the actual length of any exclusivity period specified in this Section
5.5. Notwithstanding anything to the contrary in the previous sentence, the Seller shall work
exclusively with the Buyer Insurers to develop an Income Guarantee Product for a period of time of
nine (9) months and the Seller shall provide the Buyer Insurers with an exclusivity period of
eighteen (18) months for the introduction and initial distribution of the Income Guarantee Product
in the Merrill Lynch Global Private Client Network, after which the Seller may commence
distribution of competitive products of Third Party Insurers in the Merrill Lynch Global Private
Client Network.

     (h) With respect to any proposal submitted to the Product and Sales Committee pursuant to
Section 5.5(b), before permitting any Person to develop the proposal (whether into a New Product or
otherwise and whether pursuant to Section 5.5(b) or pursuant to the RFP process in Section 5.5(c)),
the Product and Sales Committee shall determine and memorialize in writing the ownership of
Intellectual Property, if any, that will be created in the development of the proposal (and any New
Product developed therefrom). Such determination of ownership shall reflect the relative
contributions of the parties hereto and may also include, for example, the granting of a license to
use such Intellectual Property to the party without ownership rights or royalties or other payment
in connection with the exploitation of such Intellectual Property.

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Section 5.6. Level Playing Field.

     (a) The Seller shall cause the Seller Distributors not to provide to the Sales Force or the
DAS any compensation or other economic inducement or benefit for the sale of comparable products
sold in a comparable sales support and compensation framework offered by a Third Party Insurer that
is more favorable than the compensation or other economic inducement or benefit provided to such
Sales Force for the sale of such products offered by a Buyer Insurer.

     (b) The terms of this Section 5.6 shall not restrict deviations in Sales Force compensation
that are (i) based upon neutral criteria that do not differentiate between product
providers, such as achieving sales volume or persistency objectives, or (ii) for products
(including combined product and service arrangements) for which distributor compensation is
negotiated by the provider on a sale-by-sale basis, such as group retirement products.

ARTICLE VI.

FUNDS

Section 6.1. Investment Management Services. Throughout the Term, the Seller, through
Roszel or a successor Seller Affiliate with substantially similar capabilities and qualifications,
will provide Investment Management Services for the benefit of the Buyer Insurers with respect to
the Products. Moreover, for a period of 3 years after the date hereof, (i) the Seller will
not provide asset allocation model services for the benefit of insurance companies other than the
Buyer Insurers with respect to variable products distributed through the Merrill Lynch Global
Private Client Network in the United States and (ii) the Seller, through Roszel or a
successor Seller Affiliate with substantially similar capabilities and qualifications, will be the
sole provider to the Buyer Insurers of asset allocation model services with respect to the
Products. The compensation to be paid by the Buyer Insurers to the Seller (or any Seller Affiliate
designated by the Seller) for providing these Investment Management Services will be as set forth
in the Investment Management Services Agreement. As soon as reasonably practicable, consistent
with applicable Law, the parties will also meet to discuss, in good faith, the expansion of such
Investment Management Services, in whole or in part, to products offered by the Buyer Insurers in
addition to the Products.

Section 6.2. Investment Management Committee.

     (a) Structure. Promptly following the establishment of the Product and Sales
Committee, the members of the Product and Sales Committee will establish a committee (the
“Investment Management Committee”). The Investment Management Committee will consist of an
equal number of members from both the Buyer and the Seller.

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     (b) Purpose. The Investment Management Committee will be responsible for establishing
criteria for evaluating the competitiveness of the funds, and recommending changes in the menu of
investment options available inside the Products, including changes resulting from a Termination
Event. The Investment Management Committee will also be responsible for considering whether any
“material impairment”, as set forth in subsection (i) of the definition of Termination Event, has
occurred. For the avoidance of doubt, subject to Section 6.3, the Buyer Insurers shall make the
ultimate determination of the fund lineup and of whether a Termination Event has occurred.

Section 6.3. Fund Choices.

     (a) During the Term, the Buyer Insurers will, unless the Seller shall otherwise consent
continue to offer the funds managed by each of Roszel and BlackRock (or their respective
Affiliates) that are available in the Investor Choice Annuity and the Legacy Products on the
Reference Date as available fund choices in the Investor Choice Annuity (as it may be amended or
supplemented during the Term) and the Legacy Products.

     (b) During the Term, the Buyer Insurers will maintain the proportion of the funds managed by
each of Roszel and BlackRock (or their respective Affiliates) to the total fund choices available
in the Investor Choice Annuity (as it may be amended or supplemented during the Term) and the
Legacy Products at substantially the same level as on the Reference Date. For illustrative
purposes, if the Roszel or BlackRock-managed funds constituted 20% of the fund choices available to
purchasers of a Product on the Reference Date, then they must remain at least 20% of the fund
choices so available throughout the Term, unless the Seller consents to a diminution in the level
of Roszel or BlackRock-managed fund options.

     (c) Upon the occurrence of a Termination Event with respect to a Roszel or BlackRock-managed
fund, the Investment Management Committee will consider and recommend how to maintain the
percentage of Roszel and BlackRock-managed funds in the Products. Nothing herein shall preclude
the Investment Management Committee from recommending, or the Buyer Insurers from increasing, the
number of Roszel or BlackRock fund choices in the Products.

     (d) If a Buyer Insurer believes that a Termination Event has occurred with respect to a Roszel
or BlackRock-managed fund, such Buyer Insurer will give written notice of termination to the Seller
through the Investment Management Committee. For sixty (60) days after the termination notice is
given, the Seller may propose a replacement Roszel or BlackRock-managed fund for use in the
Products in which the terminated Roszel or BlackRock-managed fund is used. The replacement fund
shall be an Eligible Fund in the same Lipper asset class and style category as the terminated
Roszel or BlackRock-managed fund and shall meet the competitiveness standards established by the
Investment Management Committee pursuant to Section

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6.2(b). The relevant Buyer Insurer will not unreasonably refuse to accept the substitution of
the replacement fund, except as may be required by fiduciary duty or applicable Law. If the
relevant Buyer Insurer accepts the replacement of a Roszel or BlackRock-managed fund, the Seller
shall bear the costs of the replacement of such Roszel or BlackRock-managed fund, including the
costs of any substitution order required under the Investment Company Act to be obtained from the
SEC. If the Seller does not propose an acceptable replacement fund, then the terminated fund no
longer will be required to be included in the relevant Products under this Section 6.3 and the
required coverage percentage under Section 6.3 will be reduced accordingly.

     (e) The Investment Management Committee may agree that the Buyer Insurer should replace a
Roszel or BlackRock-managed fund with another Eligible Fund. The party proposing the replacement
shall bear the reasonable costs of the replacement, including the cost of any substitution order
required under the Investment Company Act to be obtained from the SEC.

ARTICLE VII.

ACCESS; BRANDING; CONFIDENTIAL INFORMATION; MATERIALS

Section 7.1. Access.

     (a) In addition to the access provided pursuant to Article IV, to the extent that, as of the
date of this Agreement, a Seller Distributor provides access (including access to its Sales Force,
sales offices or sales, education or training meetings that involve the promotion of products) to a
Buyer Insurer and Buyer Distributor, such Seller Distributor shall continue to permit access to
such Buyer Insurer and Buyer Distributor during the Term, on substantially the same terms and
conditions as such Buyer Insurer and Buyer Distributor is provided access as of the date of this
Agreement and in a manner consistent with applicable Law and the Seller’s Standards and Practices.

     (b) As a condition to the ongoing access described in the preceding paragraph, the Buyer
Insurers and Buyer Distributors to whom access is provided shall maintain, in the aggregate,
wholesaler coverage, training, and sales support to the Seller Distributor on terms and conditions
that are no less favorable overall than those provided by the Buyer Insurers and Buyer Distributors
to such Seller Distributor on the Reference Date, and over a mutually agreeable time following the
date of this Agreement shall provide additional wholesaler coverage, training and sales support at
commensurate levels devoted to support the marketing and sales of the Products that are then being
offered.

     (c) From and after the Closing, any support fees to be paid by the Buyer Insurers to the
Seller (or a Seller Affiliate) will be paid either by the Buyer Insurer or a Buyer Distributor.
For the avoidance of doubt, from and after the Closing, the Buyer

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Insurers and Buyer Distributors shall be considered one group in connection with the
determination of support fees.

Section 7.2. Branding; Use of Names.

     (a) During the Term, in accordance with the terms and subject to the conditions of the
Transitional Trademark License Agreement:

     (i) If being distributed through the Merrill Lynch Global Private Client Network, the
Investor Choice Annuity may be offered and branded by the Buyer Insurers utilizing the
trademarks, service marks, brand names, domain names or trade, corporate or business names
that relate to it as of the date of this Agreement (including any and all such Merrill
Lynch marks and names); provided that any such mark or name shall be appropriately
altered to reflect any change to the mark or name of the applicable Seller Distributor and
to reflect any change that is required by Law as a result of any change in the issuer of
the Investor Choice Annuity; and

     (ii) to the extent that a New Product (including the Income Guarantee Product) is
distributed by a Seller Distributor on behalf of a Buyer Insurer after the date of this
Agreement, such New Product may be offered and branded by the Buyer Insurers making use of
one or more Merrill Lynch marks or names.

     (b) During the Term, the Seller shall not grant a license to product providers to use the
Merrill Lynch marks or names with (i) any variable or fixed annuity products or
(ii) any product in the same product category as any New Product, in each case that is
distributed in the Merrill Lynch Global Private Client Network; provided, that if the Buyer
Insurers cannot meet the Seller’s product needs after consultation in accordance with Section 5.5
or the Seller’s product capacity needs for a New Product exceed the Buyer Insurers’ capacity, then
the Seller shall not be prohibited from granting a license to a Third Party Insurer for such New
Product.

Section 7.3. Confidential Information.

     (a) During the Term, each Party and its Affiliates may receive access to confidential
information and other proprietary information (“Confidential Information”) of the other
Party and its Affiliates. Each party shall take all appropriate actions consistent with applicable
Law to ensure the protection, privacy, confidentiality and security of Confidential Information.

     (b) Confidential Information of the Seller and its Affiliates includes, but is not limited to,
the names, addresses, telephone numbers and social security numbers of applicants for, the
purchasers of and other customers of the Products and

15

 

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

     (c) Confidential Information of the Buyer and its Affiliates includes any information
concerning the Products (including pricing, services, computer or operational systems and marketing
strategies of the Buyer and its Affiliates), any information relating to the development or
exploitation of intellectual property rights of the Buyer and its Affiliates, and any other
information pertaining to the Buyer and its Affiliates that is proprietary in nature. The Seller
acknowledges and agrees that Confidential Information of the Buyer and its Affiliates is and shall
remain the property of the Buyer and its Affiliates. Confidential Information of the Buyer and its
Affiliates shall not include any information (i) that was previously known by a Seller
Distributor from a source other than any Buyer Insurer (including a Company prior to its
acquisition by the Buyer) without obligations of confidence; (ii) that was or is rightfully
received by a Seller Distributor from a third party without obligations of confidence to any Buyer
Insurer or from publicly available sources without obligations of confidence to any Buyer Insurer;
or (iii) that was or is developed by means independent of information obtained from any
Buyer Insurer.

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     (d) As a condition to access to the other party’s Confidential Information, the receiving
party and its Affiliates shall not use, copy or disclose such Confidential Information in any
manner (including to sell or cross-sell their products), except as provided in this Agreement or as
otherwise agreed. Confidential Information may be used to service the Products and New Products,
including, as appropriate, to accept additional contributions and premium for and to modify, add or
exchange coverage to any Product or New Product purchased by a policy owner who purchased such
Product or New Product from a Seller Distributor. The parties also understand that the Buyer
Insurers may respond to inquiries from holders of the Products or New Products concerning other
Buyer Insurer products and services, provided there shall be no solicitation of such inquiry using
Confidential Information.

     (e) The parties and their respective Affiliates shall take all necessary action to ensure the
protection, confidentiality and security of the other party’s and its Affiliates’ Confidential
Information in conformity with applicable Law and the privacy policies of the other party and its
Affiliates as in force from time to time.

Section 7.4. Marketing, Training and Other Materials.

     (a) Any marketing, training or other materials to be made available by any Buyer Insurer or
Buyer Distributor to any Seller Distributor’s Sales Force or customers in connection with the
Products or New Products (other than ordinary course communications to policyholders and contract
holders) shall be made available only with the prior written consent (which shall not be
unreasonably withheld, conditioned or delayed) of the applicable Seller Distributor;
provided, that all such materials that are used by the Buyer Insurers or Buyer Distributor
in connection with the distribution of the Products through the Seller Distributors on the date of
this Agreement shall not require any such consent. In the event that the applicable Buyer Insurer
or Buyer Distributor or the applicable Seller Distributor determines to discontinue the use of any
such materials, the parties shall cooperate to ensure that such use is discontinued by such Seller
Distributor’s Sales Force. For clarity, this provision shall not apply to any Product prospectus
or periodic report required to be filed with the SEC.

     (b) Any marketing, training or other materials prepared by a Seller Distributor and to be made
available by such Seller Distributor to its Sales Force or customers that describes any Buyer
Insurer or any of its Affiliates or any insurance or annuity product offered by any of them may be
made available only with the prior consent of the applicable Buyer Insurer; provided that
all such materials that are used by the Seller Distributors in connection with the distribution of
the Products on the date of this Agreement shall not require any such consent (except to the extent
that descriptions of the Companies reflect their ownership by the Buyer). In the event that the
applicable Buyer Insurer or the applicable Seller Distributor determines to discontinue the use of
any such materials, the parties shall cooperate to ensure that such use is discontinued by such
Seller Distributor’s Sales Force.

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Section 7.5. Publicity. Without limiting Section 7.4 above, and except as required by
applicable law, neither the Buyer nor the Seller shall, directly or indirectly, make or cause to be
made any public announcement or issue any release or notice in respect of this Agreement, the
transactions or services contemplated hereby or the relationship between the parties without the
prior written consent of the other party. The Buyer and the Seller shall: (i) consult with
each other prior to (A) issuing, or, permitting their respective Affiliates to issue, any
press releases or otherwise making public statements with respect to this Agreement, the
transactions or services contemplated hereby or the relationship between the parties and
(B) making any filings with any Governmental Entity or with any national securities
exchange with respect thereto; and (ii) be provided a reasonable opportunity to comment on
any such public announcement, release or notice. Within a reasonable period of time following the
Closing, the Product and Sales Committee will compile a series of documents, including, but not
limited to, talking points, question and answer lists and company and business descriptions, which
the parties will use to provide guidance in responding to routine inquiries with respect to this
Agreement, the transactions or services contemplated hereby or the relationship between the
parties. Such series of documents will be reviewed and updated as necessary by the Product and
Sales Committee on a quarterly basis. Until such time as such documents are updated by the Product
and Sales Committee, the parties may continue to use the then most recently approved series of
documents.

ARTICLE VIII.

CERTAIN PRACTICES AND PROCEDURES

Section 8.1. Cooperation. The Buyer acknowledges that the Seller and the Seller Affiliates
may have certain obligations and liabilities from and after the Closing arising out of or resulting
from the manner in which Life Insurance and Annuity Contracts were marketed or sold prior to the
Closing through the Merrill Lynch Global Private Client Network. Accordingly, from and after the
Closing, the Buyer shall cooperate in all reasonable respects with the Seller and the Seller
Affiliates with respect to the defense or settlement of, or other response to, any complaint of any
kind asserted against the Seller or any Seller Affiliate with respect to the manner in which any
such Life Insurance and Annuity Contract was marketed or sold prior to the Closing, including, at
the reasonable written request of the Seller or any Seller Affiliate, by (i) furnishing or
causing to be furnished, records, information and testimony, and attending conferences, discovery
proceedings, trials or appeals in connection therewith and (ii) maintaining, terminating or
modifying any practices, policies or procedures of the Companies with respect to the
administration, interpretation or enforcement of any such Life Insurance and Annuity Contract in
order to facilitate any such defense, settlement or response, as the case may be; provided
that, while Section 5.2(b)(iii) of the Purchase Agreement remains in force, the Buyer or Buyer
Insurer shall not be obligated to take any action pursuant to this Section 8.1 if (a) such
action, measured from the perspective of the Buyer or Buyer Insurer and after giving effect to the
impact of any related indemnity of the Buyer or

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Buyer Insurer under Section 5.2(b)(iii) of the Purchase Agreement, is commercially unreasonable or
(b) the Buyer or Buyer Insurer has been advised in writing by its counsel that there is a
substantial likelihood that such action would violate applicable Law.

Section 8.2. Maintenance of Certain Practices and Procedures. Without limiting the
generality of Section 8.1, the Buyer shall cause the Companies at all times from and after the
Closing to (i) maintain in all material respects the practices and procedures that shall be
set forth on Section 8.2(i) of the Deliverables Schedule with respect to the closed block of life
insurance policies referred to thereon, (ii) ensure that the guaranteed interest rate for
the Company’s single premium whole life block of business (non-variable) will be at least 4%, net
of the cost of insurance, as shall be set forth with more particularity on Section 8.2(ii) of the
Deliverables Schedule, (iii) maintain in all material respects the functionality of the
Companies’ administrative systems as in effect on the date hereof (or of any replacement system) so
as to enable the Companies and the Seller Affiliates to comply with the specific terms of the open
ended settlements entered into prior to the Closing with respect to certain Life Insurance and
Annuity Contracts, as shall be set forth with more particularity on Section 8.2(iii) of the
Deliverables Schedule, and (iv) maintain the policy history of each Life Insurance and
Annuity Contract marketed and sold by the Companies prior to the Closing in substantially the same
manner in which such policy histories have been maintained by the Companies prior to the Closing.

ARTICLE IX.

TERM OF THE AGREEMENT; CERTAIN CONDITIONS; ACQUISITIONS; NO OTHER OBLIGATIONS

Section 9.1. Term. Except as otherwise stated herein, the term of this Agreement (the
“Term”) will commence on the date of this Agreement and shall continue until the fifth
anniversary of this Agreement; provided, that the expiration of this Agreement shall not
reduce nor curtail the term of any Distribution Agreement that extends beyond the end of the Term.

Section 9.2. Survival. Upon expiration of this Agreement, the provisions of Section 5.2,
Section 5.3, Section 7.3, this Section 9.2, Article VIII, Article X and Article XII shall survive
without modification.

Section 9.3. Certain Conditions. Subject to Section 9.4, but notwithstanding anything else
to the contrary in this Agreement or in any Distribution Agreement:

          (a) no Seller Distributor shall be required to enter into a Distribution Agreement in respect
of, or have any obligation to distribute (and may immediately cease to distribute), any Product or
New Product offered by a Buyer Insurer, or undertake or continue with any New Product development
project, if:

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     (i) the Seller reasonably determines that such Product or New Product offered by a
Buyer Insurer is not Competitive;

     (ii) any change is made or any feature is added to such Product or New Product (or a
fund or investment option therein) without the Seller’s or the applicable Seller
Distributor’s prior written approval, which approval shall not be unreasonably withheld,
conditioned or delayed;

     (iii) the Seller determines, in its sole discretion, such Product or New Product or
the offering thereof conflicts in any material respect with:

     (x) applicable Law;

     (y) any provision of any subsisting agreement in effect on the Reference Date
by which the Seller or any Seller Affiliates or any of their respective assets or
properties are bound; or

     (z) the Seller Standards and Practices; or

     (iv) a federal, state or local domestic, foreign or supranational governmental,
regulatory or self-regulatory authority, agency, court, tribunal, commission or other
governmental, regulatory or self-regulatory entity, with jurisdiction over the Seller or a
Seller Distributor formally requests in writing or mandates that such Seller Distributor
cease offering or no longer offer the Product; and

          (b) no Buyer Insurer shall be required to enter into a Distribution Agreement in respect of,
or have any obligation to issue (and may immediately cease to issue), any Product or New Product,
or undertake or continue with any New Product development project, if:

     (i) the Buyer Insurer reasonably determines that such Product or New Product is not
competitive. For the purposes of this subsection (i), a Product or New Product is not
“competitive” if, among other things, the overall profitability of such Product or New
Product to the relevant Buyer Insurer does not meet such Buyer Insurer’s profitability
targets, which shall be consistent with its profitability targets, in the aggregate, for
similar products offered through comparable distribution channels;

     (ii) Seller or the applicable Seller Distributor unreasonably withholds, conditions or
delays approval of any change or additional feature proposed by the Buyer or the applicable
Buyer Insurer;

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     (iii) the Buyer determines, in its sole discretion, such Product or New Product or the
offering thereof conflicts in any material respect with:

     (x) applicable Law; or

     (y) any provision of any subsisting agreement in effect on the Reference Date
by which the Buyer or any Buyer Affiliate or any of their respective assets or
properties are bound; or

     (iv) a federal, state or local domestic, foreign or supranational governmental,
regulatory or self-regulatory authority, agency, court, tribunal, commission or other
governmental, regulatory or self-regulatory entity with jurisdiction over Buyer or a Buyer
Affiliate formally requests in writing or mandates that such Buyer Affiliate cease offering
or no longer offer the Product.

Section 9.4. Notice and Cure Opportunity. Prior to any Seller Distributor’s or Buyer
Affiliate’s exercising its right under Section 9.3 not to enter into a Distribution Agreement with
respect to any Product or New Product, to cease offering any Product or New Product or to cease to
undertake or continue with any New Product development project, such person shall provide written
notice to the Buyer or Seller, as appropriate, containing a reasonably detailed statement of the
grounds for such exercise, and shall afford the recipient a period of thirty (30) days in which to
cure the deficiency, unless such deficiency is not capable of being cured. No Seller Distributor
or Buyer Affiliate, as appropriate, shall be required to continue to distribute any Product or New
Product pending any cure period, if the offering of such Product or New Product would reasonably be
expected to (i) violate applicable Law or (ii) conflict with the Seller Standards
and Practices. It is the parties’ intention to bring concerns regarding the Products or the
distribution thereof to the Product and Sales Committee before they rise to a level warranting a
deficiency notice under this provision, and the parties shall in good faith use that forum to seek
to resolve such concerns.

Section 9.5. Acquisitions.

          (a) Notwithstanding anything to the contrary in this Agreement, neither the Seller nor any
Seller Distributor shall be (i) deemed to be in violation of this Agreement or any
Distribution Agreement or (ii) obligated hereunder or thereunder to take any action
(including to make any adjustment to commissions, economic inducements or other benefits for the
Sales Force), if such violation would arise, or such action would be required to be taken, solely
as a result of the Seller or any Seller Affiliate acquiring assets or a business of any Person
engaged in the distribution of financial services products following the date of this Agreement.

          (b) If the Seller Parent sells or otherwise disposes of all or substantially all of the
Merrill Lynch Global Private Client Network (in one or a series of

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related transactions) during the Term, the provisions of this Agreement shall continue to
apply to the transferred business, and the Seller shall enter into appropriate agreements with the
acquirer to effectuate the purpose of this Agreement as to the transferred business.

          (c) In the case of a direct or indirect acquisition by the Seller of the assets or business of
another entity engaged in the distribution of investment products that compete with the Products
(if permitted under Section 4.11 of the Purchase Agreement), (i) no such acquisition will
limit or restrict any obligation of the Seller or the Seller Distributors under this Agreement or
any Distribution Agreement and (ii) at the request of the Buyer, the Seller will use
reasonable efforts, subject to applicable Law and the contractual obligations to which the acquired
business is subject immediately before its acquisition (except provisions entered into in
preparation for the acquisition), to cause the acquired business to provide the Buyer and its
Affiliates access and support for distribution of the Products on the same basis as provided by the
Seller and the Seller Distributors hereunder.

Section 9.6. No Other Obligations. Except as specifically set forth herein, nothing in
this Agreement shall (i) impose upon any Seller Distributor any obligation to distribute
any Products or New Products offered by a Buyer Insurer through the Seller Distributors,
(ii) impose upon the Seller or any Seller Affiliate any obligation to provide to their
respective employees any Product or New Product issued by the Buyer or any Affiliate of the Buyer,
(iii) impose upon any Seller Distributor any obligation to refrain from distributing life
insurance or annuity products offered by Third Party Insurers, (iv) restrict the Buyer or
the Seller or any of their respective Affiliates from acquiring or disposing of any assets of, or
reorganizing or consolidating, any business, (v) restrict the ability of any Buyer Insurer
to distribute insurance or annuity products through Persons other than Seller Distributors,
(vi) impose upon any Buyer Insurer any obligation to distribute through the Seller
Distributors any products or new products offered by a Buyer Insurer, or (vii) create any
obligation on the part of the Seller or any Seller Affiliate with respect to the support of the
Products or New Products. Except as set forth in Section 9.5(c), nothing in this Agreement shall
impose upon any Seller Affiliate that becomes a Seller Affiliate after the date of this Agreement
any obligation to distribute any Product or New Product on behalf of a Buyer Insurer. For the
avoidance of doubt, in the event any Seller Distributor ceases to be a Seller Affiliate, the Seller
shall have no obligations under this Agreement with respect to such Seller Distributor, except, if
applicable, as set forth in Section 9.5(b).

ARTICLE X.

INDEMNIFICATION

Section 10.1. Indemnification by the Seller. Subject to the terms of this Article X, the
Seller and the Seller Parent shall, jointly and severally, defend, indemnify and hold harmless the
Buyer, each Company and their Affiliates and their respective directors,

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officers and employees (the “Buyer Indemnified Parties”) from and against, and pay or
reimburse the Buyer Indemnified Parties for, any and all Losses resulting from or arising out of
(i) any inaccuracy in or breach of any representation or warranty by the Seller Parent or
the Seller in or pursuant to this Agreement or any failure of the Seller Parent or the Seller to
perform any covenant or agreement under this Agreement and (ii) errors, omissions,
negligence, misrepresentation, fault or wrongful action of the Seller or its Affiliates, or of any
director, officer or employee of the Seller or sales persons associated with the Seller (including
failure to comply with any applicable federal law or regulation, state law or regulation,
administrative or exchange rule or regulation, or rule of any applicable self-regulatory
organization), in the performance of the obligations hereunder.

Section 10.2. Indemnification by the Buyer. Subject to the terms of this Article X, the
Buyer shall defend, indemnify and hold harmless the Seller Parent, the Seller and their respective
Affiliates and their respective directors, officers and employees (the “Seller Indemnified
Parties”) from and against, and pay or reimburse the Seller Indemnified Parties for, any and
all Losses resulting from or arising out of (i) any inaccuracy in or breach of any
representation or warranty by the Buyer in or pursuant to this Agreement or any failure of the
Buyer or its Affiliates to perform any covenant or agreement under this Agreement and (ii)
errors, omissions, negligence, misrepresentation, fault or wrongful action of the Buyer or its
Affiliates or of any director, officer or employee of the Buyer or such Affiliates (including
failure to provide adequate disclosure concerning the Products or to properly administer the
Products and failure to comply with any applicable federal law or regulation, state law or
regulation, administrative or exchange rule or regulation, or rule of any applicable
self-regulatory organization), in the performance of obligations hereunder.

     Section 10.3. Calculation of Losses.

     (a) Any indemnity payment made by an Indemnifying Party to an Indemnified Party pursuant to
Sections 10.1 or 10.2 shall be made net of (x) any amounts actually recovered by the
Indemnified Party under applicable insurance policies or from any other Person alleged to be
responsible for the matters underlying such indemnity payment less (y) any related costs
and expenses, including the aggregate cost of pursuing any related insurance claims plus any
related increases in insurance premiums or other chargebacks; provided, however,
that notwithstanding anything in Section 10.3(c) to the contrary no party shall have any obligation
to seek to recover any insurance proceeds or to initiate a lawsuit against any other Person in
connection with making a claim under this Article X. If the Indemnified Party receives any amounts
under applicable insurance policies or from any other Person alleged to be responsible for the
matters underlying such indemnity payment subsequent to an indemnification payment by the
Indemnifying Party, then the Indemnified Party shall promptly reimburse the Indemnifying Party for
any payment made or expense incurred by the Indemnifying Party in connection with

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providing such indemnification payment up to the amount received by the Indemnified Party.

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

     (c) Each Indemnified Party shall, use all commercially reasonable efforts to collect any and
all amounts available under insurance coverage or from any other Person alleged to be responsible
for any Losses payable under Section 10.1, and shall take such actions in such respect as the
Indemnifying Party may reasonably request. If the Indemnified Party receives any payment from the
Indemnifying Party in respect of any Losses pursuant to Section 10.1 or 10.2 and the Indemnified
Party could have recovered all or part of such Losses from a third party based on the underlying
claim asserted against the Indemnifying Party, the Indemnified Party shall assign such of its
rights to proceed against such third party as are necessary to permit the Indemnifying Party to
recover from such third party the amount of such payment.

     (d) No Indemnifying Party shall be liable pursuant to Sections 10.1 and 10.2 in respect of any
Loss if such Loss would not have arisen but for, or to the extent any Loss is increased as a result
of, (i) the passing of, or a change in, a Law or a change to any written interpretation of
the Law or administrative practice of any Governmental Authority occurring on or after the Closing
or (ii) the change by statute or by any regulatory or other official auditing standards
body of any accounting policy applicable to the applicable Indemnified Party.

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

Section 10.4. Indemnification Notice Procedures.

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

          (b) Each Indemnified Party agrees to provide prompt written notice (the “Indemnification
Notice”) to the Indemnifying Party of the assertion of any claim, or the commencement of any
suit, action or proceeding in respect of which indemnity may be sought under this Article X, which
Indemnification Notice shall: (i) specify in reasonable detail the basis on which
indemnification is being asserted, (ii) provide a reasonable estimate of the amount of the
Losses asserted therein, (iii) specify the provision or provisions of this Agreement under
which such Losses are asserted and (iv) in the case of a claim asserted by any third party
(“Third Party Claim”), include copies of all notices and documents (including court
papers), if any, served on or received by the Indemnified Party by such third party.
Notwithstanding the foregoing, the failure to give an Indemnification Notice shall not affect the
indemnification sought hereunder except to the extent the Indemnifying Party shall have been
actually prejudiced as a result of such failure (except that the Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Indemnifying Party failed to give
such notice). Thereafter, the Indemnified Party shall promptly deliver to the Indemnifying Party
copies of all notices and documents (including court papers) received by the Indemnified Party
relating to any Third Party Claim as to which indemnity may be sought hereunder. Notwithstanding
anything to the contrary in this Section 10.4, unless the Indemnifying Party assumes the defense of
such Third Party Claim, the Indemnified Party is not obligated to make available to the
Indemnifying Party documentation that is subject to attorney client privilege, work product
protection or any other applicable privilege or protection.

Section 10.5. Indemnification Procedures for Claims by an Indemnified Party.

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

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Indemnified Party or the Indemnifying Party shall submit such dispute to a court of competent
jurisdiction as set forth in Section 12.13.

     (b) Claims for Losses specified in any Indemnification Notice to which an Indemnifying Party
shall not object in writing within forty-five (45) days of receipt of such Indemnification Notice,
claims for Losses covered by a memorandum of agreement of the nature described in Section 10.5(a),
and claims for Losses the validity and amount of which have been the subject of judicial
determination as described in Section 10.5(a) or shall have been settled with the consent of the
Indemnifying Party, as described in Section 10.6, are hereinafter referred to, collectively, as
“Agreed Claims”. Within ten (10) Business Days of the determination of the amount of any
Agreed Claim, the Indemnifying Party shall pay to the Indemnified Party an amount equal to the
Agreed Claim by wire transfer in immediately available funds to the bank account or accounts
designated by the Indemnified Party in a notice to the Indemnifying Party not less than two (2)
Business Days prior to such payment.

Section 10.6. Indemnification Procedures for Third Party Claims.

          (a) The Indemnifying Party shall be entitled to assume, conduct and control, through counsel
of its own choosing and at its own expense, the settlement or defense of any Third Party Claim;
provided, however, that if the Indemnifying Party does not promptly assume the
defense of such Third Party Claim within fifteen (15) Business Days following the receipt of an
Indemnification Notice or does not elect to defend such Third Party Claim, the Indemnified Party
shall have the right, in addition to any other right or remedy it may have hereunder, at the
Indemnifying Party’s expense, to assume and thereafter conduct such defense with counsel of its own
choosing; provided, that the Indemnified Party shall obtain the prior written consent of
the Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned),
without prejudice to the ability of the Indemnified Party to enforce its claim for indemnification
against the Indemnifying Party hereunder before entering into any settlement or compromising,
discharging or admitting any liability with respect to any such Third Party Claim. If the
Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance
with the provisions of this Section 10.6(a), (i) the Indemnifying Party shall obtain the
prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld,
delayed or conditioned) before entering into any settlement of such Third Party Claim, if the
settlement does not release the Indemnified Party from all liabilities and obligations with respect
to such Third Party Claim or the settlement imposes injunctive or other equitable relief against
the Indemnified Party or admits any liability in connection therewith, (ii) the Indemnified
Party shall be entitled to participate in (but not conduct or control) the defense of such Third
Party Claim and to employ separate counsel of its choice for such purpose, and (iii) the
Indemnified Party shall promptly provide to the Indemnifying Party copies of all notices and
documents not supplied with the Indemnification Notice because of any privilege. The fees and

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expenses of such separate counsel shall be paid by the Indemnified Party; provided,
however, that such Indemnified Party will be entitled to participate in any such defense
with separate counsel at the expense of the Indemnifying Party if (x) authorized by the
Indemnifying Party to participate or (y) in the opinion of counsel to the Indemnified
Party, a conflict or potential conflict exists between the Indemnified Party and the Indemnifying
Party that would make such separate representation advisable; and provided further,
that the Indemnifying Party will not be required to pay for more than one such counsel for all
Indemnified Parties in connection with any Third Party Claim.

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

Section 10.7. General. The rights and remedies provided herein shall be cumulative and in
addition to all other rights and remedies available to the parties at law or equity, and the
exercise or beginning of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such rights or remedies by such party. Notwithstanding
the preceding sentence, nothing in this Agreement shall restrict or prevent any party from seeking
indemnification under any applicable provision of the Purchase Agreement, or any other Ancillary
Transaction Agreements (as defined in the Purchase Agreement), provided that no party shall obtain
duplicative recoveries.

ARTICLE XI.

DEFINITIONS

Section 11.1. Defined Terms. For purposes of this Agreement, unless the context requires
otherwise, the following terms shall have the following meanings:

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

     “Actuarial Report” has the meaning set forth in Section 5.2(a).

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

     “Agreed Claims” has the meaning set forth in Section 10.5(b).

27

 

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

     “BlackRock” means BlackRock, Inc.

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

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

     “Buyer Distributors” means the Affiliates of the Buyer Insurers involved in the
underwriting and wholesale distribution activities of fixed and variable annuities and life
insurance.

     “Buyer Indemnified Parties” has the meaning set forth in Section 10.1.

     “Buyer Insurer” means any Affiliate of the Buyer that is an insurance company, and
such Affiliate’s successors and assigns. For clarity, the Buyer Insurer includes the Companies as
of and after the Closing.

     “Buyer Material Adverse Effect” has the meaning set forth in Article IX of the
Purchase Agreement.

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

     “Commissions” has the meaning set forth in Section 5.2(a).

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

     “Company Material Adverse Effect” has the meaning set forth in Article IX of the
Purchase Agreement.

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

     “Confidential Information” has the meaning set forth in Section 7.3.

     “DAS” has the meaning set forth in Section 1.1.

28

 

     “Deliverables Schedule” means the information that has been previously provided by the
Seller to the Buyer relating to certain information requested by the Buyer.

     “Distribution Agreements” has the meaning set forth in Section 5.1.

     “Eligible Funds” means funds managed by either Roszel or BlackRock (or their
respective Affiliates) as of the date hereof and future funds managed by either Roszel or BlackRock
(or their respective Affiliates).

     “FA” means Financial Advisor.

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

     “Income Guarantee Products” has the meaning set forth in Section 1.1.

     “Indemnification Notice” has the meaning set forth in Section 10.4(b).

     “Indemnified Party” has the meaning set forth in Section 10.4(a).

     “Indemnifying Party” has the meaning set forth in Section 10.4(a).

     “Intellectual Property” means all intellectual property rights arising from or in
respect of the following, whether protected, created or arising under the laws of the United States
or any foreign jurisdiction: trademarks, service marks, designs, logos and other indicia of origin
including all goodwill associated with and common law rights related to the foregoing, domain
names, works of authorship, copyrights, and registrations and applications to register (including
intent-to-use applications) or renew the registration of any of the foregoing, patents and patent
applications, processes, methods, know-how, confidential information and the tangible embodiments
of any of the foregoing.

     “Investment Company Act” means the Investment Company Act of 1940, as amended.

     “Investment Management Committee” has the meaning set forth in Section 6.2.

     “Investment Management Services” means (i) advisory services with respect to
the creation, evaluation, selection and monitoring of the investment options available in the
Products, and (ii) asset allocation model services, including any asset allocation fund
(fund of funds).

29

 

     “Investor Choice Annuity” has the meaning set forth in Section 1.1.

     “Law” has the meaning set forth in Article IX of the Purchase Agreement.

     “Legacy Products” has the meaning set forth in Section 1.1.

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

     “MLLA” has the meaning set forth in Section 3.1.

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

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

     “New Products” has the meaning set forth in Section 1.1.

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

     “Product and Sales Committee” has the meaning set forth in Section 3.1.

     “Products” has the meaning set forth in Section Section 1.1.

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

     “Reference Date” means the effective date of the Confidential Information Memorandum
dated April 9, 2007.

     “Replacement” (or the verb form, “Replace”) means a transaction in which a new
life insurance policy or annuity contract is to be purchased by a prospective owner and, in
connection with the transaction, one or more existing life insurance policies or annuity contracts
initially sold through the Seller or MLLA owned by the owner are lapsed, forfeited, surrendered,
partially surrendered, assigned to the insurer replacing the life

30

 

insurance policy or annuity contract through the Seller or MLLA or otherwise terminated, or
are reasonably likely to do so.

     “RFP” has the meaning set forth in Section 5.5(c).

     “Roszel” means Roszel Advisors, LLC.

     “Sales Force” means those point of sale representatives and their direct supervisors
utilized by the Seller, the Seller Distributors or one of their respective Affiliates whose job
responsibility includes the sale or promotion of the Products or New Products offered by a Buyer
Insurer.

     “SEC” means the U.S. Securities and Exchange Commission.

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

     “Seller Affiliate” means any Affiliate of the Seller functioning or otherwise
operating in the Merrill Lynch Global Private Client Network in connection with the sale or
manufacturing of life insurance and annuity products for distribution within the Merrill Lynch
Global Private Client Network.

     “Seller Distributor” means any Seller Affiliate that, as of the date hereof,
distributes any Product that a Buyer Insurer (including the Companies), offers, such Affiliate’s
successors and assigns, and any other Seller Affiliate that from time to time enters into a
Distribution Agreement with respect to a Product.

     “Seller Indemnified Parties” has the meaning set forth in Section 10.2.

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

     “Seller Standards and Practices” means the client service and relationship standards,
business practices, ethical standards, customer privacy and protection policies and general service
quality standards, reputational considerations and industry standards, as determined from time to
time by the Seller or any Seller Affiliates and disclosed to the Buyer, provided that materially
adverse changes in the Seller Standards and Practices after the Reference Date shall not affect the
parties’ respective rights and obligations hereunder unless such materially adverse change is
(i) mutually agreed in writing (such consent not to be unreasonably withheld) or
(ii) required by a change in applicable Law.

     “Specialist” has the meaning set forth in Section 5.4(a).

     “Taxes” means all taxes, including any interest and penalties thereon or other
additions thereto, imposed by any Governmental Authority, including income or profits taxes,
payroll and employee withholding taxes, sales and use taxes, ad valorem taxes,

31

 

value added taxes, excise taxes, franchise taxes, gross receipts taxes, real and personal property
taxes, environmental taxes, and transfer taxes.

     “Term” has the meaning set forth in Section 9.1.

     “Termination Event” means:

     (i) Any material impairment in the competitiveness of the Roszel or BlackRock-managed
fund in comparison with comparable insurance products funds, considered as a group, used by
the Buyer Insurers in their variable life insurance and annuity products;

     (ii) Any material increase in the advisory fee, without the consent of the relevant
Buyer Insurer;

     (iii) Any material change in the investment objective or primary investment policies,
without the prior consent of the relevant Buyer Insurer;

     (iv) The closure of the Roszel or BlackRock-managed fund to further investment;

     (v) If the Roszel or BlackRock-managed fund for any reason no longer is advised by an
Affiliate of the Seller;

     (vi) A material reduction in the service or distribution fees paid to the Buyer
Insurers or their Affiliates by a Roszel or BlackRock-managed fund, its adviser, or their
respective Affiliates, except reductions required by fiduciary duty or change in applicable
Law;

     (vii) Termination of the participation agreement with respect to the relevant Buyer
Insurer’s investment in the Covered Fund, as a result of a breach by the Covered Fund
adviser or its Affiliates; or

     (viii) Approval by the fund board of a plan to liquidate, terminate or merge the fund,
or transfer all or substantially all of its assets to another fund.

     “Third Party Claim” has the meaning set forth in Section 10.4(b).

     “Third Party Insurer” means an insurance company that is not an Affiliate of the Buyer
or the Seller.

     “Transition Period” means the period from the date of this Agreement to the eighteen
(18) month anniversary of such date.

32

 

     “Transition Services Agreement” means that Transition Services Agreement, dated as of
December 28, 2007 by and among the Seller Parent, the Seller and the Buyer.

     “Transitional Trademark License Agreement” means that Trademark License Agreement,
dated as of December 28, 2007 by and between the Seller Parent and the Buyer.

ARTICLE XII.

MISCELLANEOUS

Section 12.1. Further Actions. Subject to the terms and conditions of this Agreement, each
of the parties hereto agrees to use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.

Section 12.2. Expenses. Except as otherwise provided in this Agreement, each party shall
each bear its own costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby.

Section 12.3. Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and shall be given by
personal delivery or sending by an overnight courier service, proof of delivery requested, to the
following addresses:

	 	 	 	 	 
	(a)	 	if to the Seller, to it at:
	 
	 	 	 	 
	 	 	Merrill Lynch Insurance Group, Inc.

1700 Merrill Lynch Drive

3rd Floor

Pennington, NJ 08534

	 

	 	Attention:
	 	Barry G. Skolnick, Esq.,
	 

	 	 	 	Senior Vice President and General Counsel
	 
	 	 	 	 
	 	 	with copies to (which shall not constitute notice):
	 
	 	 	 	 
	 	 	Merrill Lynch & Co., Inc.

4 World Financial Center

New York, New York 10080
	 

	 	Attention:
	 	Todd Myers, Head of Business Development,
	 

	 	 	 	Global Wealth Management
	 
	 	 	 	 
	 	 	Merrill Lynch & Co., Inc.

4 World Financial Center

New York, New York 10080

33

 

	 	 	 	 	 
	 

	 	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 Wealth Management
	 
	 	 	 	 
	 	 	Merrill Lynch & Co., Inc.

4 World Financial Center

New York, New York 10080
	 

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

	 	 	 	Strategic M&A and Global Private Equity Counsel
	 
	 	 	 	 
	 	 	with copies to (which shall not constitute notice):
	 
	 	 	 	 
	 	 	Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022
	 

	 	Attention:
	 	Stephen R. Hertz, Esq., and Nicholas F. Potter, Esq.
	 
	 	 	 	 
	(c)	 	if to the Buyer, to it at:
	 
	 	 	 	 
	 

	 	AEGON USA, Inc. 4333 Edgewood Road NE Cedar Rapids, Iowa 52499
	 

	 	Attention:
	 	Craig Vermie, Esq.
	 

	 	 	 	Senior Vice President and General Counsel
	 
	 	 	 	 
	 	 	with copies to (which shall not constitute notice):
	 
	 	 	 	 
	 	 	AEGON USA, Inc.

4333 Edgewood Road, NE

Cedar Rapids, Iowa 52499
	 

	 	Attention:
	 	James Beardsworth

34

 

	 	 	 	 	 
	 

	 	 	 	Senior Vice President — Business Development
	 
	 	 	 	 
	 	 	LeBoeuf, Lamb, Greene & MacRae LLP

125 West 55th Street

New York, New York 10019
	 

	 	Attention:
	 	John M. Schwolsky, Esq. and Paul P. Chen, Esq.

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

Section 12.4. Entire Agreement. This Agreement (including the Exhibits hereto), the
Purchase Agreement, the Distribution Agreements, the Investment Management Agreement, the
Transition Services Agreement, the Transitional Trademark License Agreement and the Confidentiality
Agreement constitute the entire agreement among the parties hereto and supersede all prior
agreements and understandings, oral and written, among the parties hereto with respect to the
subject matter hereof.

Section 12.5. No Third Party Beneficiaries. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns, and nothing in
this Agreement, express or implied, is intended to confer on any Person other than the parties
hereto, or their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

Section 12.6. Assignability. Neither this Agreement nor any of the rights, interests or
obligations of any party shall be assigned (except by operation of law), in whole or in part, by
any of the parties hereto without the prior written consent of the other parties hereto, and any
such assignment that is not consented to shall be null and void; provided, however, that the Seller
will not unreasonably withhold its consent to any such assignment by the Buyer to any direct or
indirect wholly-owned Subsidiary of the Buyer or AEGON NV; provided, that notwithstanding
any such assignment, the Buyer shall remain liable to perform all of its obligations hereunder;
provided, further, that no such assignment shall be permitted if it shall result in
any amount payable to the Seller pursuant to this Agreement being subject to withholding Tax.

Section 12.7. Amendment and Modification; Waiver. Subject to applicable Law, this
Agreement may be amended, modified or supplemented only by a written instrument authorized and
executed on behalf of each of the parties hereto. No waiver by any party of any of the provisions
hereof shall be effective unless explicitly set forth in writing and executed by the party so
waiving. The waiver by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other or subsequent breach.

35

 

Section 12.8. Severability. Whenever possible, each provision or portion of any provision
of this Agreement will be interpreted in such manner as to be effective and valid under applicable
Law, but if any provision or portion of any provision of this Agreement or the application thereof
under certain circumstances is held to be invalid, illegal or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in full force and
effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable. Upon such
determination that any term or other provision is invalid, illegal or unenforceable, the parties
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent possible.

Section 12.9. Section Headings. The section headings contained in this Agreement are
inserted for reference purposes only and shall not affect the meaning or interpretation of this
Agreement.

Section 12.10. Interpretation. Unless the context requires otherwise, all words used in
this Agreement in the singular number shall extend to and include the plural, all words in the
plural number shall extend to and include the singular, and all words in any gender shall extend to
and include all genders. The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation” whether or not they are in fact followed by such words
or words of like import. The words “in the ordinary course of business” shall be deemed to be
followed by the phrase “consistent with past practice” whether or not they are in fact followed by
such words or words of like import. When a reference is made in this Agreement to an Article,
Section, subsection or Exhibit, such reference shall be to an Article of, a Section of, a
subsection of, or an Exhibit to, this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and shall not modify,
expand, define, or otherwise affect in any way the meaning or interpretation of this Agreement.
The phrases “the date of this Agreement”, “the date hereof” and terms of similar import, shall be
deemed to refer to the date set forth in the first paragraph of this Agreement. The words
“hereof”, “herein”, “hereby” and other words of similar import refer to this Agreement as a whole
unless otherwise indicated. Whenever the last day for the exercise of any right or the discharge
of any duty under this Agreement falls on other than a Business Day, the party having such right or
duty shall have until the next Business Day to exercise such right or discharge such duty. Unless
otherwise indicated, the word “day” shall be interpreted as a calendar day.

Section 12.11. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of which together shall be deemed to be
one and the same instrument, it being understood that the parties need not sign the same
counterpart.

36

 

Section 12.12. Facsimile. This Agreement, to the extent signed and delivered by means of
facsimile or other electronic transmission, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same binding effect as if it
were the original signed version thereof delivered in person. No party hereto shall claim that
this Agreement is invalid, not binding or unenforceable based upon the use of facsimile or other
electronic transmission to deliver a signature, or the fact that any signature or agreement or
instrument was transmitted or communicated through the use of facsimile or other electronic
transmission, and each such party forever waives any such claim or defense.

Section 12.13. Enforcement. The parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, violated or unfulfilled. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent noncompliance with, or
breaches or violations of any provisions of this Agreement by any of the other parties and to
enforce specifically the terms and provisions of this Agreement in any action instituted in any
court of the United States or any state thereof having subject matter jurisdiction, this being in
addition to any other remedy to which any of the parties may be entitled at law or in equity. In
the event that any action is brought in equity to enforce the provisions of this Agreement, no
party will allege, and each party hereby waives the defense or counterclaim, that there is an
adequate remedy at Law. In addition, each of the parties hereto irrevocably and unconditionally
submits itself to the exclusive jurisdiction of the United States District Court for the Southern
District of New York or, if such court does not have jurisdiction, the New York State Supreme Court
in the Borough of Manhattan, in the event any dispute arises out of this Agreement or any of the
transactions provided for by this Agreement and agrees that all claims in respect of the action may
be heard and determined in any such court and agrees not to bring any action arising out of or
relating to this Agreement in any other court. In any action, each of the parties irrevocably and
unconditionally waives and agrees not to assert by way of motion, as a defense or otherwise, any
claims that it is not subject to the jurisdiction of the above court, that such action is brought
in any inconvenient forum or that the venue of such action is improper. Each of the parties also
agrees that any final and nonappealable judgment against a party in connection with any action
shall be conclusive and binding on such party and that such award or judgment may be enforced in
any court of competent jurisdiction, either within or outside of the United States. A certified or
exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of
such award or judgment. Without limiting the foregoing, each party agrees that service of process
on such party at the address provided in Section 12.3 shall be deemed effective service of process
on such party. THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST ANY OTHER PARTY

37

 

HERETO IN ANY MATTERS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.

Section 12.14. Governing Law. This Agreement shall be governed by the laws of the State of
New York, without giving effect to its principles or rules of conflict of laws to the extent such
principles or rules are not mandatorily applicable by statute and would require or permit the
application of the laws of another jurisdiction.

Section 12.15. Fiduciary and Legal Obligations. Notwithstanding any provision of this
Agreement to the contrary, the obligations of each party hereunder are subject to such party’s
fiduciary and regulatory obligations and applicable Law, as may be in effect from time to time,
including in the case of any party’s obligations to seek to cause any other person to take any
action hereunder, such other person’s fiduciary and regulatory obligations and applicable Law.

38

 

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

	 	 	 	 	 	 	 
	 	 	AEGON USA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:

Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH INSURANCE GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:

Title	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH & CO., INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:

Title:	 	 

 

 

EXHIBIT 1.1

LEGACY PRODUCTS

Fixed Life Insurance Products

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

Fixed Annuities

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

Variable Annuities

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

Modified Guaranteed Annuities

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

Variable Life

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

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