Exhibit (8)(e)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT made as of the 20/th/ day of December, 2001, by and between
Lord Xxxxxx Series Fund, Inc. ("Fund"), a Maryland Corporation, on its behalf
and on behalf of each separate investment series thereof, whether existing as of
the date above or established subsequent thereto, (each a "Portfolio" and
collectively, the "Portfolios"), Lord Xxxxxx Distributor LLC, a New York limited
liability Company (the "Distributor"), and MONY Life Insurance Company (the
("Company"), a life insurance company organized under the laws of the State of
New York.
WHEREAS, Fund is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the " `40 Act"),
as an open-end, diversified management investment company; and
WHEREAS, Fund is organized as a series fund comprised of separate
investment series, namely the Portfolios; and
WHEREAS, Fund was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies and also offers its shares to certain qualified pension and
retirement plans; and
WHEREAS, Fund has filed an application with the SEC requesting an order
granting relief from various provisions of the `40 Act and the rules thereunder
to the extent necessary to permit Fund shares to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated participating insurance companies accounts ("Participating
Companies") and qualified pension and retirement plans outside the separate
account context (including, without limitation, those trusts, plans, accounts
contracts or annuities described in Sections 401(a), 403(a), 403(b), 408(a),
408(b), 414(d), 457(b), 408(k), 501(c)(18) of the Internal Revenue Code of 1986,
as amended (the "Code") and any other trust, plan, account, contract or annuity
trust that is determined to be within the scope of Treasury Regulation
ss.1.817.5(f)(3)(iii) ("Plans"); and
WHEREAS, the Company has established or will establish one or more separate
accounts ("Separate Accounts") to offer Variable Contracts and is desirous of
having Fund as one of the underlying funding vehicles for such Variable
Contracts; and
WHEREAS, Distributor is registered with the SEC as a broker-dealer under
the Securities Exchange Act of 1934, as amended and acts as Fund's principal
underwriter; and
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WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of Fund to fund the
aforementioned Variable Contracts and Fund is authorized to sell such shares to
the Company at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
Fund, and Distributor agree as follows:
Article I. SALE OF FUND SHARES
1.1 Fund agrees to make Variable Contract Class shares ("Shares") of the
Fund available to the Separate Accounts of the Company for investment of
purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in Fund's then current prospectus and statement of
additional information. Company agrees to purchase and redeem the Shares of the
Portfolios offered by the then current prospectus and statement of additional
information of the Fund in accordance with the provisions of such prospectus and
statement of additional information. Company shall not permit any person other
than a Variable Contract owner to give instructions to Company which would
require Company to redeem or exchange Shares of the Fund.
1.2 Fund agrees to sell to the Company those Shares of the selected
Portfolios of Fund which the Company orders, executing such orders on a daily
basis at the net asset value next computed after receipt by Fund or its designee
of the order for the Shares of Fund. For purposes of this Section 1.2, the
Company shall be the designee of Fund for receipt of such orders from the
designated Separate Account and receipt by such designee shall constitute
receipt by Fund; provided that the Company receives the order by 4:00 p.m.
Eastern time and Fund receives notice from the Company by telephone, facsimile
(orally confirmed) or by such other means as Fund and the Company may mutually
agree of such order by 9:00 a.m. Eastern time on the next following Business
Day. "Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which Fund calculates its net asset value pursuant to
the rules of the SEC.
1.3 Fund agrees to redeem on the Company's request, any full or fractional
Shares of Fund held by the Company, executing such requests on a daily basis at
the net asset value next computed after receipt by Fund or its designee of the
request for redemption, in accordance with the provisions of this agreement and
Fund's then current registration statement. For purposes of this Section 1.3,
the Company shall be the designee of Fund for receipt of requests for redemption
from the designated Separate Account and receipt by such designee shall
constitute receipt by Fund; provided that the Company receives the request for
redemption by 4:00 p.m. Eastern time and Fund receives notice from the Company
by telephone, facsimile (orally confirmed) or by such other means as Fund and
the Company may mutually agree of such request for redemption by 9:00 a.m.
Eastern time on the next following Business Day.
1.4 Fund shall furnish, on or before the ex-dividend date, notice to the
Company of any income dividends or capital gain distributions payable on the
Shares of any Portfolios of Fund. The Company hereby elects to receive all such
income dividends and capital gain distributions as are
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payable on a Portfolio's Shares in additional Shares of the Portfolio. Fund
shall notify the Company or its designee of the number of Shares so issued as
payment of such dividends and distributions.
1.5 Fund shall make the net asset value per share for the selected
Portfolios available to the Company on a daily basis, via a mutually agreeable
form, as soon as reasonably practicable after the net asset value per share is
calculated but shall use its best efforts to make such net asset value available
by 6:30 p.m. Eastern time.
1.6 At the end of each Business Day, the Company shall use the information
described in Section 1.5 to calculate Separate Account unit values for the day.
Using these unit values, the Company shall process each such Business Day's
Separate Account transactions based on requests and premiums received by it by
the close of trading on the floor of the New York Stock Exchange (currently 4:00
p.m. Eastern time) to determine the net dollar amount of Fund Shares which shall
be purchased or redeemed at that day's closing net asset value per share. The
net purchase or redemption orders so determined shall be transmitted to Fund by
the Company by 9:00 a.m. Eastern time on the Business Day next following the
Company's receipt of such requests and premiums in accordance with the terms of
Sections 1.2 and 1.3 hereof.
1.7 If the Company's order requests the purchase of Fund Shares, the
Company shall pay for such purchase by wiring federal funds to Fund or its
designated custodial account on the day the order is transmitted by the Company.
If the Company's order requests a net redemption resulting in a payment of
redemption proceeds to the Company, Fund shall use its best efforts to wire the
redemption proceeds to the Company by the next Business Day, unless doing so
would require Fund to dispose of Portfolio securities or otherwise incur
additional costs. In any event, proceeds shall be wired to the Company within
three Business Days or such longer period permitted by the `40 Act or the rules,
orders or regulations thereunder and Fund shall notify the person designated in
writing by the Company as the recipient for such notice of such delay by 3:00
p.m. Eastern time the same Business Day that the Company transmits the
redemption order to Fund.
1.8 Fund agrees that all Shares of the Portfolios of Fund will be sold only
to Participating Insurance Companies which have agreed to participate in Fund to
fund their Separate Accounts and/or to Plans, all in accordance with the
requirements of Section 817(h) of the Code and Treasury Regulation 1.817-5.
Shares of the Portfolios of Fund will not be sold directly to the general
public.
1.9 Fund may refuse to sell Shares of any Portfolios to any person, or
suspend or terminate the offering of the Shares of any Portfolios if such action
is required by law or by regulatory authorities having jurisdiction or is, in
the sole discretion of the Board of Directors/Trustees of the Fund (the
"Board"), deemed necessary, desirable or appropriate.
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1.10 Issuance and transfer of Portfolio Shares will be by book entry only.
Stock certificates will not be issued to the Company or the Separate Accounts.
Shares ordered from Portfolios will be recorded in appropriate book entry titles
for the Separate Accounts.
Article II. SHAREHOLDER SERVICES
2.1 Company agrees to provide the following shareholder services to the
Fund: (i) responding to inquiries from owners of Variable Contracts using one or
more of the Portfolios as an investment vehicle regarding the services performed
by Company that relate to the Funds; (ii) providing information to the Fund and
Variable Contract owners with respect to Shares of the Fund attributable to
Variable Contract owners' accounts; (iii) communicating directly with Variable
Contract owners concerning the Fund's operations; and (iv) providing such other
similar services as the Fund may reasonably request to the extent permitted
under applicable federal and state requirements (collectively, the "Shareholder
Services").
2.2 In connection with the rendering of the Shareholder Services described
in this Article, the Company shall be deemed to be an independent contractor,
and shall have no authority to act as agent for the Distributor or the Fund in
any matter.
2.3 The Fund or Distributor shall pay Company a fee for its rendering of
the Shareholders Services described in this Article (the "Service Fee"). The
Service Fee shall be calculated monthly and paid quarterly at the annual rate
set forth on Schedule A attached hereto and made a part of this Agreement as may
be amended from time to time with the mutual consent of the parties hereto. The
parties agree that the Service Fee paid to the Company is for shareholder
services only and does not constitute payment in any manner for investment
advisory services or for costs of distribution.
Article III. REPRESENTATIONS AND WARRANTIES
3.1 The Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of New York and that it has
legally and validly established each Separate Account as a segregated asset
account under such laws.
3.2 The Company represents and warrants that it has registered or, prior
to any issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the provisions of
the `40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.
3.3 The Company represents and warrants that the income, gains and losses,
whether or not realized, from assets allocated to each Separate Account are, in
accordance with the applicable Variable Contracts, to be credited to or charged
against such Separate Account without regard to other income,
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gains or losses from assets allocated to any other accounts of the Company. The
Company represents and warrants that the assets of the Separate Account are and
will be kept separate from the General Account of the Company and any other
separate accounts the Company may have, and will not be charged with liabilities
from any business that the Company may conduct or the liabilities of any
companies affiliated with the Company.
3.4 The Company represents and warrants that the Variable Contracts will be
registered under the Securities Act of 1933 (the "`33 Act") unless an exemption
from registration is available prior to any issuance or sale of the Variable
Contracts and that the Variable Contracts will be issued and sold in compliance
in all material respects with all applicable federal and state laws and further
that the sale of the Variable Contracts shall comply in all material respects
with state insurance law suitability requirements.
3.5 The Company represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify Fund immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.
3.6 Fund represents and warrants that the Portfolio Shares offered and sold
pursuant to this Agreement will be registered under the `33 Act and sold in
accordance with all applicable federal and state laws, and Fund shall be
registered under the `40 Act prior to and at the time of any issuance or sale of
such Shares. Fund, subject to Section 1.9 above, shall amend its registration
statement under the `33 Act and the x00 Xxx from time to time as required in
order to effect the continuous offering of its Shares. Fund shall register and
qualify its Shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by Fund.
3.7 Fund represents and warrants that each Portfolio will comply with the
diversification requirements set forth in Section 817(h) of the Code, and the
rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify the Company immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance.
3.8 Fund represents and warrants that each Portfolio invested in by the
Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment for
each taxable year and will notify the Company immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.
3.9 Distributor represents and warrants that it is and will be a member in
good standing of the National Association of Securities Dealers, Inc. ("NASD")
and is and will be registered as a
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broker-dealer with the SEC. Distributor further represents that it will sell and
distribute Portfolio Shares in accordance with all applicable state and federal
laws and regulations, including without limitation the `33 Act, the `34 Act and
the x00 Xxx.
3.10 Distributor represents and warrants that it will remain duly
registered and licensed in all material respects under all applicable federal
and state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal laws.
Article IV. PROSPECTUS AND PROXY STATEMENTS
4.1 Fund shall prepare and be responsible for filing with the SEC and any
state regulators requiring such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of Fund.
4.2 At least annually, Fund or its designee shall provide the Company, free
of charge, with as many copies of the current prospectus for the Shares of the
Portfolios as the Company may reasonably request for distribution to existing
Variable Contract owners whose Variable Contracts are funded by such Shares.
Fund or its designee shall provide the Company, at the Company's expense, with
as many more copies of the current prospectus for the Shares as the Company may
reasonably request for distribution to prospective purchasers of Variable
Contracts. If requested by the Company in lieu thereof, Fund or its designee
shall provide such documentation in a mutually agreeable form and such other
assistance as is reasonably necessary in order for the parties hereto once a
year (or more frequently if the prospectus for the Shares is supplemented or
amended) to have the prospectus for the Variable Contracts and the prospectus
for the Fund Shares and any other fund shares offered as investments for the
Variable Contracts printed together in one document. Where the prospectus for
the Variable Contracts and the prospectus for the Fund Shares and any other fund
shares offered as investments for the Variable Contracts are printed in one
document, the Fund agrees to bear its proportionate share of the printing
expense (excluding composition and document layout expenses) for copies of its
current prospectus for the Fund Shares that will be distributed to existing
Variable Contract owners whose Variable Contracts are funded by such Shares.
4.3 The Fund shall provide the Company with copies of the Fund's proxy
statements, Fund reports to shareholders, and other Fund communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Variable Contract owners. The Fund shall reimburse the Company
for the reasonable cost of distribution of the Fund's proxy statements to
existing Variable Contract owners, up to the maximum amount provided for by
applicable regulation, if any.
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4.4 Fund will provide the Company with at least one complete copy of all
prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, and all amendments or supplements to any of the above
that relate to the Portfolios promptly after the filing of each such document
with the SEC or other regulatory authority. The Company will provide Fund with
at least one complete copy of all prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements, and all
amendments or supplements to any of the above that relate to a Separate Account
promptly after the filing of each such document with the SEC or other regulatory
authority.
Article V. SALES MATERIALS
5.1 The Company will furnish, or will cause to be furnished, to Fund or
Distributor, each piece of sales literature or other promotional material in
which Fund, Distributor or any affiliate thereof is named, at least fifteen (15)
Business Days prior to its intended use. No such material shall be used unless
the Fund or Distributor approves such material. Such approval shall be presumed
given if notice to the contrary is not received by Company within fifteen
Business Days after receipt by the Fund or Distributor of such material.
5.2 Fund or Distributor will furnish, or will cause to be furnished, to the
Company, each piece of sales literature or other promotional material in which
the Company or its Separate Accounts are named, at least fifteen (15) Business
Days prior to its intended use. No such material shall be used unless the
Company approves such material. Such approval shall be presumed given if notice
to the contrary is not received by Fund or within fifteen Business Days after
receipt by the Company of such material.
5.3 Except with the permission of the Company, neither the Fund nor
Distributor shall give any information or make any representations on behalf of
the Company or concerning the Company, the Separate Accounts, or the Variable
Contracts other than the information or representations contained in the
registration statement or prospectus for such Variable Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in reports of the Separate Accounts for distribution to owners of
such Variable Contracts, or in sales
literature or other promotional material approved by the Company or its
designee, provided however that such information or representations are used in
a context that does not cause the information, representations or statements
contained in the registration statement or prospectus for the Variable
Contracts, reports of the Separate Account, or sales literature or other
promotional material approved by the Company or its designee to be untrue or
omit information contained in such documentation otherwise required to be stated
or necessary to make the information, representations, or statements not
misleading.
5.4 Except with the permission of the Fund or Distributor, neither the
Company nor its affiliates or agents shall give any information or make any
representations or statements on behalf of the Fund, Distributor or any
affiliate thereof or concerning the Fund, Distributor or any affiliate thereof,
other than the information or representations contained in the registration
statements or prospectuses for the Fund, as such registration statements and
prospectuses may be amended or supplemented from time to time, or in reports to
shareholders or proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or Distributor or designee thereof,
provided however that such information or representations are used in a context
that does not cause the information, representations or statements contained in
the registration statements or prospectuses for the Fund, reports to
shareholders or proxy statements for the Fund, or sales literature or other
promotional material approved by the Fund or Distributor or designee thereof to
be untrue or omit information contained in such documentation otherwise required
to be stated or necessary to make the information, representations, or
statements not misleading.
5.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public media),
sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under NASD rules, the `40 Act or the x00 Xxx.
Article VI. POTENTIAL CONFLICTS
6.1 The parties acknowledge that Fund filed an application with the SEC
requesting an order granting relief from various provisions of the `40 Act and
the rules thereunder to the extent necessary to permit Fund Shares to be sold to
and held by variable annuity and variable life insurance separate accounts of
Participating Companies and Plans. It is anticipated that such exemptive order
(the "Mixed and Shared Funding Exemptive Order"), when and if issued, shall
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require Fund and each Participating Company and Plan to comply with conditions
and undertakings substantially as provided in this Article. If the Mixed and
Shared Funding Exemptive Order imposes conditions materially different from
those provided for in this Article, the conditions and undertakings imposed by
the Mixed and Shared Funding Exemptive Order shall govern this Agreement and the
parties hereto agree to amend this Agreement consistent with the Mixed and
Shared Funding Exemptive Order.
6.2 The Fund's Board will monitor the Fund for the existence of any
material irreconcilable conflict between and among the interests of the Variable
Contract owners of all Participating Companies and of Plan Participants and
Plans investing in the Fund, and determine what action, if any, should be taken
in response to such conflicts. An irreconcilable material conflict may arise for
a variety of reasons, which may include: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling or any similar action by insurance, tax or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of Fund are being managed;
(e) a difference in voting instructions given by variable annuity and variable
life insurance contract owners; (f) a decision by a Participating Insurance
Company to disregard the voting instructions of Variable Contract owners and (g)
if applicable, a decision by a Plan to disregard the voting instructions of plan
participants.
6.3 The Company will report any potential or existing conflicts to the
Board. The Company will be responsible for assisting the Board in carrying out
its duties and responsibilities under the Mixed and Shared Funding Exemptive
Order by providing the Board with all information reasonably necessary for the
Board to consider any issues raised. The responsibility includes, but is not
limited to, an obligation by the Company to inform the Board whenever it has
determined to disregard Variable Contract owner voting instructions.
6.4 If a majority of the Board, or a majority of its disinterested Board
members, determines that a material irreconcilable conflict exists with regard
to contract owner investments in the Fund, the Board shall give prompt notice of
the conflict and the implications thereof to all Participating Companies and
Plans. If the Board determines that Company is a relevant Participating Company
or Plan with respect to said conflict, Company shall at its sole cost and
expense, and to the extent reasonably practicable (as determined by a majority
of the disinterested Board members), take such action as is necessary to remedy
or eliminate the irreconcilable material conflict. Such necessary action may
include but shall not be limited to: (a) withdrawing the assets allocable to
some or all of the Separate Accounts from Fund or any Portfolio thereof and
reinvesting those assets in a different investment medium, which may include
another Portfolio of Fund, or another investment company; (b) submitting the
question as to whether such segregation should be implemented to a vote of all
affected Variable Contract owners and as appropriate, segregating the assets of
any appropriate group (i.e. variable annuity or variable life insurance contract
owners of one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to the affected Variable Contract owners the
option of making such a change; and (c) establishing a new
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registered management investment company (or series thereof) or managed separate
account. If a material irreconcilable conflict arises because of the Company's
decision to disregard Variable Contract owner voting instructions, and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the election of Fund to withdraw the Separate
Account's investment in Fund, and no charge or penalty will be imposed as a
result of such withdrawal. The responsibility to take such remedial action shall
be carried out with a view only to the interests of the Variable Contract
owners.
For the purposes of this Article, a majority of the disinterested members
of the Board shall determine whether or not any proposed action adequately
remedies any irreconcilable material conflict but in no event will Fund or its
investment adviser (or any other investment adviser of Fund) be required to
establish a new funding medium for any Variable Contract. Further, the Company
shall not be required by this Article to establish a new funding medium for any
Variable Contracts if any offer to do so has been declined by a vote of a
majority of Variable Contract owners materially and adversely affected by the
irreconcilable material conflict.
6.5 The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to the Company.
6.6 No less than annually, the Company shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out its obligations. Such reports, materials, and data shall be
submitted more frequently if deemed appropriate by the Board.
6.7 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or if
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the `40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the Mixed and
Shared Funding Exemptive Order, then Fund, and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rule 6e-2 and Rule 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such Rules are applicable.
Article VII. VOTING
7.1 The Company will provide pass-through voting privileges to all
Variable Contract owners so long as the SEC continues to interpret the `40 Act
as requiring pass-through voting privileges for Variable Contract owners.
Accordingly, the Company, where applicable, will vote Shares of the Portfolio
held in its Separate Accounts in a manner consistent with voting instructions
timely received from its Variable Contract owners. The Company will be
responsible for assuring that each of its Separate Accounts that participates in
Fund calculates voting privileges in a manner consistent with other
Participating Insurance Companies. The Company will vote Shares for which it has
not received timely voting instructions, as well as Shares it owns, in the same
proportion as
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its votes those Shares for which it has received voting instructions. Company
and its agents shall not oppose or interfere with the solicitation of proxies
for Fund Shares held for such Variable Contract owners.
Article VIII. INDEMNIFICATION
8.1 Indemnification by the Company.
(a) Subject to Section 8.3 below, the Company agrees to indemnify and hold
harmless Fund and Distributor, and each of their trustees, directors, members,
principals, officers, partners, employees and agents and each person, if any,
who controls Fund or Distributor within the meaning of Section 15 of the `33 Act
(collectively, the "Indemnified Parties" for purposes of this Article) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company, which consent shall not be
unreasonably withheld) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of Fund's Shares or the Variable Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement or prospectus for the Variable Contracts
or contained in the Variable Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of an
Indemnified Party for use in the registration statement or
prospectus for the Variable Contracts or in the Variable
Contracts or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Variable
Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of Fund
not supplied by the Company, or persons under its control) or
wrongful conduct of the Company or persons
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under its control, with respect to the sale or distribution of
the Variable Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, or sales literature of Fund or any amendment thereof
or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information
furnished to Fund by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company.
(b) The Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement.
(c) The Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Company in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against an
Indemnified Party, the Company shall be entitled to participate at its own
expense in the defense of such action. The Company also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Company to such party of the Company's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.2 Indemnification by Fund and Distributor.
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(a) Subject to Section 8.3 below, the Fund and Distributor agree to
indemnify and hold harmless the Company and each of its directors, officers,
employees, and agents and each person, if any, who controls the Company within
the meaning of Section 15 of the `33 Act (collectively, the "Indemnified
Parties" for the purposes of this Article) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of Fund and Distributor which consent shall not be unreasonably
withheld) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of Fund's Shares or the Variable Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the registration statement or prospectus of Fund (or any
amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission
was made in reliance upon and in conformity with
information furnished to Fund or Distributor by or on
behalf of the Company for use in the registration statement
or prospectus for Fund (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Variable Contracts or Fund Shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or
sales literature for the Variable Contracts not supplied by
Fund or Distributor or persons under its control) or
wrongful conduct of Fund or Distributor or persons under
its control, with respect to the sale or distribution of
the Variable Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement or prospectus covering the Variable Contracts, or
any amendment thereof or supplement thereto or the omission
or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading if such statement or
omission or such alleged statement or omission was made in
reliance
13
upon and in conformity with information furnished to the
Company for inclusion therein by or on behalf of Fund or
Distributor; or
(iv) arise as a result of a failure by Fund or Distributor to
provide the services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by Fund or Distributor
in this Agreement or arise out of or result from any other
material breach of this Agreement by Fund or Distributor.
(b) Fund or Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.
(c) Fund or Distributor, as the case may be, shall not be liable under
this indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified Fund or
Distributor, as the case may be, in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Fund or Distributor of any such claim shall not
relieve Fund or Distributor from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, Fund or Distributor shall be entitled to participate at
its own expense in the defense thereof. Fund or Distributor also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from Fund or Distributor to such party of
Fund's or Distributor's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and Fund or Distributor will not be liable to such party under this Agreement
for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.3 Indemnification for Errors. In the event of any error or delay with
respect to information regarding the purchase, redemption, transfer, pricing or
registration of Shares of the Fund, the parties agree that each is obligated to
make the Separate Accounts and/or the Fund, respectively, whole for any error or
delay that it causes, subject in each case to the related Portfolio's policies
on materiality of pricing errors, if applicable. In addition, the parties
specifically agree that any indemnification relating to the costs of
reprocessing of transactions will be limited to the reasonable costs of such
reprocessing as may be necessary to adjust its respective accounting and/or
record-
14
keeping systems as a result of an error or delay; provided, however, that
(1) there will be no costs payable with respect to any error or delay identified
within two Business Days following the applicable trade date, and (2) the
maximum amount as to which either party will be responsible for indemnification
for reprocessing costs with respect to any error or delay is $2,000 per
occurrence. Each party agrees to provide the other with prompt notice of any
errors or delays of the type referred to in this Section and to use reasonable
efforts to take such action as may be appropriate to avoid or mitigate any such
costs or losses.
Article IX. TERM; TERMINATION
9.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.
9.2 This Agreement shall terminate in accordance with the following
provisions:
(a) At the option of the Company or Fund at any time from the date
hereof upon ninety (90) days notice, unless a shorter time is
agreed to by the parties;
(b) At the option of the Company, if Fund Shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by the Company. Prompt notice of election to terminate
shall be furnished by the Company, said termination to be
effective ten days after receipt of notice unless Fund makes
available a sufficient number of Shares to reasonably meet the
requirements of the Variable Contracts within said ten-day period;
(c) At the option of the Company, upon the institution of formal
proceedings against Fund by the SEC, the National Association of
Securities Dealers, Inc., or any other regulatory body, the
expected or anticipated ruling, judgment or outcome of which
would, in the Company's reasonable judgment, materially impair
Fund's ability to meet and perform Fund's obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by the Company with said termination to be effective
upon receipt of notice;
(d) At the option of Fund, upon the institution of formal proceedings
against the Company by the SEC, the NASD, or any other regulatory
body, the expected or anticipated ruling, judgment or outcome of
which would, in Fund's reasonable judgment, materially impair the
Company's ability to meet and perform its obligations and duties
hereunder. Prompt notice of
15
election to terminate shall be furnished by Fund
with said termination to be effective upon receipt of
notice;
(e) In the event Fund's Shares are not registered, issued or
sold in accordance with applicable state or federal law, or
such law precludes the use of such Shares as the underlying
investment medium of Variable Contracts issued or to be
issued by the Company. Termination shall be effective upon
such occurrence without notice;
(f) At the option of Fund if the Variable Contracts cease to
qualify as annuity contracts or life insurance contracts, as
applicable, under the Code, or if Fund reasonably believes
that the Variable Contracts may fail to so qualify.
Termination shall be effective upon receipt of notice by the
Company;
(g) At the option of the Company, upon Fund's breach of any
material provision of this Agreement, which breach has not
been cured to the satisfaction of the Company within ten
days after written notice of such breach is delivered to
Fund;
(h) At the option of Fund, upon the Company's breach of any
material provision of this Agreement, which breach has not
been cured to the satisfaction of Fund within ten days after
written notice of such breach is delivered to the Company;
(i) At the option of Fund, if the Variable Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law. Termination shall be effective
immediately upon such occurrence without notice;
(j) In the event this Agreement is assigned without the prior
written consent of the Company, Fund, and Distributor,
termination shall be effective immediately upon such
occurrence without notice.
9.3 Notwithstanding any termination of this Agreement pursuant
to Section 9.2 hereof, Fund at the option of the Company will continue to make
available additional Fund Shares, as provided below, pursuant to the terms and
conditions of this Agreement, for all Variable Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, the owners of the
Existing Contracts or the Company, whichever shall have legal authority to do
so, shall be permitted to reallocate investments in Fund, redeem investments in
Fund and/or invest in Fund upon the payment of additional premiums under the
Existing Contracts.
Article X. NOTICES
Any notice hereunder shall be given by registered or certified mail return
receipt requested to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Funds:
Lord Xxxxxx Family of Funds
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
with a copy to:
Lord, Xxxxxx & Co.
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
If to the Distributor:
Lord Xxxxxx Distributor LLC
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
If to the Company:
MONY Life Insurance Company
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Secretary
Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.
Article XI. MISCELLANEOUS
11.1 Privacy. Each party hereto acknowledges that, by reason of its
performance under this Agreement, it shall have access to, and shall receive
from the other party (and its affiliates,
17
partners and employees), the confidential information of the other party (and
its affiliates, partners and employees), including but not limited to the
"nonpublic personal information" of their consumers within the meaning of SEC
Regulation S-P (collectively, "Confidential Information"). Each party shall hold
all such Confidential Information in the strictest confidence and shall use such
Confidential Information solely in connection with its performance under this
Agreement and for the business purposes set forth in this Agreement. Under no
circumstances may a party cause any Confidential Information of the other party
to be disclosed to any third party or reused or redistributed without the other
party's prior written consent.
11.2 Fees and Expenses. The Fund and Distributor shall pay no fee or other
compensation to Company under this Agreement, and Company shall pay no fee or
other compensation to the Fund or Distributor, except as provided herein and in
Schedule A attached hereto and made a part of this Agreement as may be amended
from time to time with the mutual consent of the parties hereto. All expenses
incident to performance by each party of its respective duties under this
Agreement shall be paid by that party, unless otherwise specified in this
Agreement
11.3 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
11.4 Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
11.5 Governing Law. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the State of New
York. It shall also be subject to the provisions of the federal securities laws
and the rules and regulations thereunder and to any orders of the SEC granting
exemptive relief therefrom and the conditions of such orders.
11.6 Liability. This Agreement has been executed on behalf of the Fund by
the undersigned officer of the Fund in his or her capacity as an officer of the
Fund. The obligations of this Agreement shall be binding upon the assets and
property of the Fund and each respective Portfolio thereof only and shall not be
binding on any Director/Trustee, officer or shareholder of the Fund
individually. In addition, notwithstanding any other provision of this
Agreement, no Portfolio shall be liable for any loss, expense, fee, charge or
liability of any kind relating to or arising from the actions or omissions of
any other Portfolio or from the application of this Agreement to any other
Portfolio. It is also understood that each of the Portfolios shall be deemed to
be entering into a separate Agreement with the Company so that it is as if each
of the Portfolios had signed a separate Agreement with the Company and that a
single document is being signed simply to facilitate the execution and
administration of the Agreement.
11.7 Inquiries and Investigations. Each party shall cooperate with each
other party and all appropriate governmental authorities (including without
limitation the SEC, the NASD and state
18
insurance regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby.
11.8 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto and supersedes all prior agreement and
understandings relating to the subject matter hereof.
Amendment, Waiver and Other Matters. Neither this Agreement, nor any provision
hereof, may be amended, waived, modified or terminated in any manner except by a
written instrument properly authorized and executed by all parties hereto. The
rights, remedies and obligations contained in this Agreement are cumulative and
are in addition to any and all rights, remedies and obligations, at law or in
equity, which the parties hereto are entitled to under state and federal laws.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Fund Participation Agreement as of the date and year first above
written.
Lord Xxxxxx Series Fund, Inc. Lord Xxxxxx Distributor LLC
By: Lord, Xxxxxx & Co., it's Managing
Member
By: /s/ XXXXXXXX XXXXXX By: /s/ XXXXXXXX XXXXXX
---------------------------- ------------------------------
Name: Name:
Title: Title:
MONY Life Insurance Company MONY Life Insurance Company
By: /s/ XXXXXXX X. XXXXXXX By: /s/ XXXXXX PEOS
---------------------------- ------------------------------
Name: Name:
Title: Title:
19
Schedule A
Fund or Distributor shall pay the Company a Service Fee at the following annual
rates based on the average daily net asset value of the respective Portfolio
Shares held by the Company's Separate Account(s).
Fee Rate
---------------------------------------------------------------------
Service Fee.................................................. 0.25%
20
