DOMESTIC DISTRIBUTION AGREEMENT

 

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                                                                [EXECUTION COPY]

 

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                         DOMESTIC DISTRIBUTION AGREEMENT

 

                                  BY AND BETWEEN

 

                                 CITIGROUP INC.

 

                                       AND

 

                                  METLIFE, INC.

 

                               AS OF JULY 1, 2005

 

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                                TABLE OF CONTENTS

 

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ARTICLE I. DEFINITIONS..................................................................................        1

   Section 1.1.   Defined Terms..........................................................................        1

   Section 1.2.   Purposes of Agreement..................................................................        4

   Section 1.3.   Construction...........................................................................        4

   Section 1.4.   Headings...............................................................................        5

 

ARTICLE II. REPRESENTATIONS AND WARRANTIES..............................................................        5

   Section 2.1.   Representations and Warranties of Parent...............................................        5

   Section 2.2.   Representations and Warranties of Purchaser............................................        5

 

ARTICLE III. DOMESTIC DISTRIBUTION......................................................................        6

   Section 3.1.   Selling Agreements.....................................................................        6

   Section 3.2.   Exclusive Distribution Arrangements....................................................        7

   Section 3.3.   Non-Exclusive Distribution Arrangements................................................        7

   Section 3.4.   Private Label Products.................................................................        7

   Section 3.5.   New Products; Additional Products; Substitute Products.................................        8

   Section 3.6.   Acquisitions...........................................................................        9

   Section 3.7.   No Obligation..........................................................................       10

 

ARTICLE IV. ACCESS AND BRANDING.........................................................................       10

   Section 4.1.   Access.................................................................................       10

   Section 4.2.   Branding; Use of Names; Confidential Information; Approval of Certain Materials........       11

 

ARTICLE V. TERM OF THE AGREEMENT; CERTAIN CONDITIONS....................................................       13

   Section 5.1.   Term...................................................................................       13

   Section 5.2.   Surviva................................................................................       13

   Section 5.3.   Certain Conditions.....................................................................       13

 

ARTICLE VI. INDEMNIFICATION.............................................................................       15

   Section 6.1.   Indemnification of Parent..............................................................       15

   Section 6.2.   Indemnification of Purchaser...........................................................       15

   Section 6.3.   Indemnity Provisions in Domestic Selling Agreements....................................       15

   Section 6.4.   Indemnification Procedures.............................................................       15

   Section 6.5.   General................................................................................       17

 

ARTICLE VII. Miscellaneous..............................................................................       17

   Section 7.1.   Equitable Remedies.....................................................................       17

   Section 7.2.   Severability...........................................................................       17

   Section 7.3.   Further Assurance and Assistance.......................................................       17

   Section 7.4.   Notices................................................................................       17

   Section 7.5.   Successors and Assigns.................................................................       18

   Section 7.6.   Governing Law..........................................................................       19

   Section 7.7.   Jurisdiction; Venue; Consent to Service of Process.....................................       19

   Section 7.8.   Entire Agreement.......................................................................       19

   Section 7.9.   Amendment and Waiver...................................................................       19

   Section 7.10. Access to Records......................................................................       19

   Section 7.11. Counterparts...........................................................................       20

   Section 7.12. WAIVER OF JURY TRIAL...................................................................       20

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                         DOMESTIC DISTRIBUTION AGREEMENT

 

      THIS DOMESTIC DISTRIBUTION AGREEMENT (this "Agreement"), dated as of July

1, 2005, is made by and between Citigroup Inc., a Delaware corporation

("Parent"), and MetLife, Inc., a Delaware corporation ("Purchaser").

 

      WHEREAS, Purchaser and certain of its Affiliates provide insurance and

annuity products throughout the United States and in numerous countries around

the world;

 

      WHEREAS, Parent, through its Affiliates, has an extensive proprietary

distribution network that distributes, on behalf of insurance companies,

insurance and annuity products throughout the United States and in numerous

countries around the world;

 

      WHEREAS, Parent and Purchaser have entered into an Acquisition Agreement,

dated as of January 31, 2005 (the "Acquisition Agreement"), pursuant to which

Purchaser will acquire on the terms and subject to the conditions set forth

therein, all of the outstanding shares of capital stock of certain subsidiaries

of, and the equity interests owned by Parent in certain joint ventures of,

Parent or its Affiliates, including the Travelers Insurers;

 

      WHEREAS, in connection with the transactions contemplated by the

Acquisition Agreement, the parties hereto desire to enter into a distribution

relationship outside the United States pursuant to an International Distribution

Agreement to be entered into on the date hereof and the distribution

relationship inside the United States contemplated by this Agreement;

 

      WHEREAS, this Agreement has been restated from the form hereof attached to

the Acquisition Agreement; and

 

      WHEREAS, the execution and delivery of this Agreement is a condition to

closing of the transactions contemplated by the Acquisition Agreement.

 

      NOW, THEREFORE, in consideration of the mutual covenants, agreements and

promises herein contained, the parties do hereby agree as follows:

 

                                    ARTICLE I.

                                  DEFINITIONS

 

      Section 1.1. Defined Terms. For purposes of this Agreement, unless the

context requires otherwise, the following terms shall have the following

meanings:

 

      "Acquisition Agreement" has the meaning set forth in the recitals hereto.

 

      "Affiliate" shall mean, with respect to any Person, any other Person that

directly or indirectly, through one or more intermediaries, controls, is

controlled by or is under common control with such first Person. The term

"control" (including its correlative meanings "controlled by" and "under common

control with") shall mean possession, directly or indirectly, of power to direct

or cause the direction of management or policies (whether through ownership of

securities or partnership or other ownership interests, by contract or

otherwise).

 

      "Agreement" shall have the meaning set forth in the introductory paragraph

hereof.

 

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      "Comparable Distributor" shall mean a distributor using a substantially

similar approach to the marketing, servicing, sales support and overall

distribution of products.

 

      "Competitive" means (i) the terms, total compensation, customer appeal,

consumer pricing and value, wholesaler coverage, training and support, features

and service standards and metrics of the applicable product, taken as a whole,

are at least equivalent to those of other comparable products, considered as a

group, then distributed by the applicable Domestic Parent 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 Domestic Parent Distributor.

 

      "Confidential Information" shall have the meaning set forth in Section

4.2(b).

 

      "Domestic Exclusive Parent Distributor" means each Domestic Parent

Distributor to which a Travelers Insurer is the exclusive provider of any

Product on the date of this Agreement and such Person's successors and assigns.

 

      "Domestic Parent Distributor" means (i) any Person Affiliated with Parent

that, as of the date hereof, distributes any Product that a Travelers Insurer

offers in the United States and such Person's successors and assigns and (ii)

from and after the time of its acquisition by Parent or an Affiliate of Parent,

a Target Affiliated Distributor that distributes any life insurance or annuity

products for any Purchaser Insurer pursuant to Section 3.6(b), and such Target

Affiliated Distributor's successors and assigns.

 

      "Domestic Selling Agreements" has the meaning set forth in Section 3.1.

 

      "Exclusive Products" means the Products designated on Schedule 3.2(a) as

being subject to an exclusive relationship.

 

      "Existing Product" has the meaning set forth in Section 3.5(d).

 

      "First Term" means the five-year period commencing on the date of this

Agreement and ending on the fifth anniversary of the date of this Agreement.

 

      "Indemnified Party" has the meaning set forth in Section 6.4.

 

      "Indemnifying Party" has the meaning set forth in Section 6.4.

 

      "Law" shall have the meaning set forth in the Acquisition Agreement.

 

      "Level Playing Field" means, with respect to a product, Parent (i) shall,

and shall cause any Domestic Parent Distributor entering into a Domestic Selling

Agreement with respect to such product pursuant to Section 3.1 to, afford the

same access to its distribution platforms for such product offered by a

Travelers Insurer (or a Purchaser Insurer, as applicable) as the access it

affords to comparable products offered by a Third Party Insurer and (ii) shall

not, and shall cause its Affiliates (including the Domestic Parent Distributors)

not to, provide to its Sales Force 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 are

more favorable than the compensation or other economic inducements or benefits

provided to such Sales Force for the sale of such products offered by a

Travelers Insurer (or a Purchaser Insurer, as applicable); provided, that a

Level Playing Field may include variations in Sales Force compensation that are

(x) based upon neutral criteria that do not differentiate between product

providers, such as achieving sales volume or persistency objectives, or (y) for

products

 

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(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.

 

      "Licensing Agreement" shall have the meaning set forth in the Acquisition

Agreement.

 

      "Losses" has the meaning set forth in Section 6.1.

 

      "Marks" shall mean the Parent Distributor Marks, as defined in the

Licensing Agreement in respect of this Agreement, including "PrimElite",

"Blueprint", "Vintage" and "Marquis."

 

      "New Products" means, (i) with respect to each Domestic Parent

Distributor, any life insurance or annuity product that a Purchaser Insurer is

authorized to offer but was not included among the types of insurance or annuity

products distributed by such Domestic Parent Distributor on the date of this

Agreement and (ii) any products offered by a Purchaser Insurer pursuant to

arrangements contemplated by Section 3.6(b). For avoidance of doubt, (i) the

addition of new features to Products shall not constitute New Products in whole

or in part, regardless of whether any insurance regulatory filing is required in

connection therewith and (ii) the following products shall not be deemed to be

New Products with respect to PFSI: long-term care insurance, prepaid legal

services and individual term life insurance the primary purpose of which is

protection rather than investment.

 

      "Non-Exclusive Products" has the meaning set forth in Section 3.3.

 

      "Parent" has the meaning set forth in the introductory paragraph hereof.

 

      "Parent Indemnified Parties" has the meaning set forth in Section 6.1.

 

      "Parent 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 Parent

or any of its Affiliates, provided that such Parent Standards and Practices, to

the extent they relate to a Product or New Product and/or Domestic Parent

Distributor, shall be applied, and changes thereto shall be made, without

discriminating in any material manner against any Travelers Insurer or Purchaser

Insurer, as applicable, relative to all other similarly situated providers of

such Products or New Products distributed by such Domestic Parent Distributor.

 

      "Person" shall have the meaning set forth in the Acquisition Agreement.

 

      "PFSI" has the meaning set forth in Section 3.5(b).

 

      "PLP Distributor" has the meaning set forth in Section 3.4(b).

 

      "Private Label Product" means a life insurance or annuity product

customized for a Domestic Parent Distributor that (i) is branded under the name

of a Domestic Parent Distributor or (ii) is a variable life insurance or

variable annuity contract that offers as an option more than two investment

choices or mutual funds that are advised or managed by Parent or a Parent

Affiliate (or any successor to the Parent or a Parent Affiliate of substantially

all of the business or assets of the Parent or such Parent Affiliate which

relate primarily to the asset management business), including a Domestic Parent

Distributor (in all cases in the capacity of either an advisor or sub-advisor).

For the avoidance of doubt and without limitation, a Private Label Product

(whether existing on the date of this Agreement or thereafter) shall be deemed a

Product for all purposes under this Agreement.

 

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      "Products" means the life insurance and annuity products issued by the

Travelers Insurers and distributed through the Domestic Parent Distributors on

the date of this Agreement which are listed on Schedule 3.2(a), and any

Substitute Products distributed in replacement thereof pursuant to Section

3.5(d).

 

      "Purchaser" shall have the meaning set forth in the introductory paragraph

hereof.

 

      "Purchaser Indemnified Parties" has the meaning set forth in Section 6.2.

 

      "Purchaser Insurer" means any insurance company Affiliate of Purchaser,

including the Travelers Insurers.

 

      "Sales Force" means those point of sale representatives and their direct

supervisors utilized by Parent, Domestic Parent Distributors or one of their

respective Affiliates whose job responsibility includes the sale or promotion of

Products or New Products offered by a Travelers Insurer (or a Purchaser Insurer,

as applicable).

 

      "Second Term" means the five-year period commencing upon the expiration of

the First Term and ending on the tenth anniversary of the date of this

Agreement.

 

      "Substitute Product" has the meaning set forth in Section 3.5(d).

 

      "Target Affiliated Distributor" means any Person Affiliated with Parent

that (i) was an Affiliate of a Target Business (as defined in the Acquisition

Agreement) immediately prior to the acquisition of such Target Business by

Parent or an Affiliate of Parent and (ii) is engaged in the business of

distributing financial services products.

 

      "Term" has the meaning set forth in Section 5.1.

 

      "Third Party Claim" has the meaning set forth in Section 6.4.

 

      "Third Party Insurer" means an insurance company that is not Affiliated

with Purchaser.

 

      "Travelers Insurers" means the Domestic Insurance Companies (as defined in

the Acquisition Agreement) to be acquired by Purchaser pursuant to the

Acquisition Agreement and their successors and assigns, and with respect to a

Substitute Product that is offered pursuant to Section 3.5(d), a Purchaser

Insurer and its successors and assigns.

 

      Section 1.2. Purposes of Agreement. Notwithstanding anything in this

Agreement to the contrary, Purchaser and Parent agree that this Agreement is

intended to set forth certain principal business terms upon which they will

enter into Domestic Selling Agreements during the Term and that nothing herein

creates a Domestic Selling Agreement.

 

      Section 1.3. Construction. For the purposes of this Agreement: (i) words

(including capitalized terms defined herein) in the singular shall be held to

include the plural and vice versa, and words (including capitalized terms

defined herein) of one gender shall be held to include the other gender as the

context requires; (ii) the terms "hereof," "herein" and "herewith" and words of

similar import shall, unless otherwise stated, be construed to refer to this

Agreement as a whole (including all of the Schedules) and not to any particular

provision of this Agreement, and Article, Section, paragraph and Schedule

references are to the Articles, Sections, paragraphs and Schedules to this

Agreement, unless otherwise specified; (iii) the word "including" and words of

similar import when used in this Agreement shall mean "including, without

limitation"; (iv) all references to any period of days shall be deemed to be to

the relevant number of calendar days

 

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unless otherwise specified; and (v) "commercially reasonable efforts" shall not

require a waiver by any party of any material rights or any action or omission

that would be a breach of this Agreement.

 

      Section 1.4. Headings. The Article and Section headings contained in this

Agreement are inserted for convenience of reference only and shall not affect

the meaning or interpretation of this Agreement.

 

                                   ARTICLE II.

                         REPRESENTATIONS AND WARRANTIES

 

      Section 2.1. Representations and Warranties of Parent. Parent hereby

represents and warrants to Purchaser as set forth below.

 

            (a) Parent is a corporation duly organized, validly existing and in

good standing under the laws of its state of incorporation.

 

            (b) Parent has all necessary corporate power and authority to make,

execute and deliver this Agreement and to perform all of the obligations to be

performed by it hereunder. The making, execution, delivery and performance by

Parent of this Agreement and the consummation by Parent of the transactions

contemplated hereby have been duly and validly authorized by all necessary

corporate action on the part of Parent. This Agreement has been duly and validly

executed and delivered by Parent, and assuming the due authorization, execution

and delivery by Purchaser, this Agreement will constitute the valid, legal and

binding obligation of Parent, enforceable against it in accordance with its

terms, except as may be subject to applicable bankruptcy, insolvency, moratorium

or other similar Laws, now or hereafter in effect, relating to or affecting the

rights of creditors generally and by legal and equitable limitations on the

enforceability of specific remedies.

 

             (c) Neither the execution and delivery of this Agreement by Parent,

nor the consummation of the transactions contemplated hereby, will (i) violate

or conflict with any provision of the articles of incorporation or bylaws or

other organizational documents of Parent or any Domestic Parent Distributor,

(ii) violate any of the terms, conditions, or provisions of any Law or license

to which Parent or any Domestic Parent Distributor is subject or by which it or

any Domestic Parent Distributor or any of its or their assets are bound, or

(iii) violate, breach, or constitute a default under any contract to which

Parent or any Domestic Parent Distributor is a party or by which it or any

Domestic Parent Distributor or any of its or their assets is bound. The

distribution of any Products offered by a Travelers Insurer and distributed by a

Domestic Parent Distributor on the date hereof does not violate, breach, or

constitute a default under any contract to which Parent or any Domestic Parent

Distributor is a party or by which any of them or any of their respective assets

is bound.

 

            (d) None of the arrangements by which any Domestic Parent

Distributor distributes any Products on behalf of a Travelers Insurer in force

on the date of this Agreement violates any of the Parent Standards and Practices

in effect on such date.

 

      Section 2.2. Representations and Warranties of Purchaser. Purchaser hereby

represents and warrants to Parent as set forth below.

 

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             (a) Purchaser is a corporation duly organized, validly existing and

in good standing under the laws of its state of incorporation.

 

            (b) Purchaser has all necessary corporate power and authority to

make, execute and deliver this Agreement and to perform all of the obligations

to be performed by it hereunder. The making, execution, delivery and performance

by Purchaser of this Agreement and the consummation by Purchaser of the

transactions contemplated hereby have been duly and validly authorized by all

necessary corporate action on the part of Purchaser. This Agreement has been

duly and validly executed and delivered by Purchaser, and assuming the due

authorization, execution and delivery by Parent, this Agreement will constitute

the valid, legal and binding obligation of Purchaser, enforceable against it in

accordance with its terms, except as may be subject to applicable bankruptcy,

insolvency, moratorium or other similar Laws, now or hereafter in effect,

relating to or affecting the rights of creditors generally and by legal and

equitable limitations on the enforceability of specific remedies.

 

            (c) Neither the execution and delivery of this Agreement by

Purchaser, nor the consummation of the transactions contemplated hereby, will

(i) violate or conflict with any provision of the articles of incorporation or

bylaws or other organizational documents of Purchaser or any Purchaser Insurer

(other than the Travelers Insurers), (ii) violate any of the terms, conditions,

or provisions of any Law or license to which Purchaser is subject or by which it

or any of its assets is bound, or (iii) violate, breach, or constitute a default

under any contract to which Purchaser is a party or by which it or any of its

assets is bound.

 

                                   ARTICLE III.

                             DOMESTIC DISTRIBUTION

 

      Section 3.1. Selling Agreements. In order to effectuate the distribution

arrangements contemplated hereby among the Travelers Insurers (and Purchaser

Insurers, as applicable) and the Domestic Parent Distributors for distribution

of the Products and New Products offered by the Travelers Insurers (and

Purchaser Insurers, as applicable) within the United States, Parent shall cause

the Domestic Parent Distributors, and Purchaser shall cause the Travelers

Insurers (and Purchaser Insurers, as applicable), to negotiate in good faith and

enter into written selling agreements that are consistent with industry practice

and with the principles set forth in this Agreement and that contain terms and

conditions taken as a whole that are no less favorable to the Travelers Insurers

(and Purchaser Insurers, as applicable) and the Domestic Parent Distributors

than the terms and conditions of the selling and selling-related arrangements

existing on the date of this Agreement between the Travelers Insurers and the

Domestic Parent Distributors (the "Domestic Selling Agreements"). For each

Domestic Parent Distributor that distributes a Product for a Travelers Insurer

on the date of this Agreement, a Domestic Selling Agreement for the distribution

of such Product, to take effect on the date of this Agreement, shall be executed

and delivered by such Domestic Parent Distributor and the applicable Travelers

Insurer on or prior to the date of this Agreement. The Domestic Selling

Agreements will contain provisions concerning the periodic readjustment of

compensation as agreed by the parties thereto.

 

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      Section 3.2. Exclusive Distribution Arrangements.

 

            (a) Parent represents and warrants that Schedule 3.2(a) sets forth a

complete and accurate list of all life insurance and annuity products issued by

a Travelers Insurer and distributed by a Domestic Parent Distributor in the

United States on behalf of a Travelers Insurer on the date of this Agreement,

the identity of each Domestic Parent Distributor that distributes each such

product and whether or not a Travelers Insurer is the exclusive provider of such

product to such Domestic Parent Distributor.

 

            (b) During the First Term, each Travelers Insurer shall have the

right to be the exclusive provider in the United States of any Exclusive Product

to any Domestic Exclusive Parent Distributor. During the Second Term, each

Travelers Insurer shall have the right to be a provider, on a non-exclusive,

Level Playing Field basis, to each Domestic Exclusive Parent Distributor of each

Exclusive Product distributed by such Domestic Exclusive Parent Distributor on

the date of this Agreement. During the First Term, Parent shall not make any

change in the Parent Standards and Practices (except changes that may be

reasonably appropriate to comply with applicable Law) that would conflict with

the rights granted to the Travelers Insurers under the first sentence of this

Section 3.2(b).

 

            (c) Notwithstanding anything herein to the contrary (including,

without limitation, Section 3.5(d)), prior to the earlier of (i) the end of the

60-day period beginning on the date of this Agreement and (ii) December 31,

2005, (x) Purchaser shall cause the Exclusive Products to be marketed under the

brand name and with such trademarks or trade names (including the identity of

the underwriter of such Exclusive Product) as used on the date of this Agreement

and (y) no Purchaser Insurer shall be permitted to provide a Substitute Product

in place of an Exclusive Product.

 

      Section 3.3. Non-Exclusive Distribution Arrangements. If any Travelers

Insurer is a non-exclusive provider of a Product to any Domestic Parent

Distributor on the date of this Agreement (the "Non-Exclusive Products"), such

Travelers Insurer shall have the right to be a provider of such Product, on a

non-exclusive, Level Playing Field basis, to such Domestic Parent Distributor

during the Term.

 

       Section 3.4. Private Label Products.

 

            (a) If any Travelers Insurer is the provider of a Private Label

Product to a Domestic Parent Distributor on the date of this Agreement, such

Travelers Insurer shall have the right to be the provider of such Private Label

Product during the Term.

 

            (b) Subject to the last sentence of this Section 3.4(b), if, prior

to the seventh anniversary of the date of this Agreement, any Domestic Parent

Distributor desires to distribute, as a Private Label Product, a life insurance

product (other than term life insurance) or annuity product that it does not

distribute as a Private Label Product on the date of this Agreement, Parent

shall cause such Domestic Parent Distributor (a "PLP Distributor") to notify

Purchaser no later than the time of notification of any Third Party Insurer. If

the PLP Distributor does not select a Purchaser Insurer as the provider of the

new Private Label Product and the PLP Distributor desires to continue to seek a

Third Party Insurer, as the provider, Parent shall cause

 

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the PLP Distributor to include the Purchaser Insurers in the process for

selection of such provider (whether by formal request for proposals or

otherwise) to provide such Private Label Product prior to selecting a Third

Party Insurer. Parent shall cause the PLP Distributor to entertain in good

faith, and on terms no less favorable than those extended to any other proposed

provider, proposals from the Purchaser Insurers to provide such new Private

Label Product. Such PLP Distributor (i) shall have exclusive discretion in

determining the process for selection of, and the criteria for evaluation of,

potential providers of any such Private Label Product and (ii) shall make a good

faith determination of the relative suitability of proposals from potential

providers for satisfying the requirements of such Private Label Product (it

being understood that if such PLP Distributor determines that a pro