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EXHIBIT 23(h)-24
FUND PARTICIPATION AGREEMENT
New England Life Insurance Company
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TABLE OF CONTENTS
ARTICLE I. Sale of Fund Shares......................................................................4
ARTICLE II. Representations and Warranties of New England Life Insurance Company.....................5
ARTICLE III. Representations and Warranties of ADVISER................................................6
ARTICLE IV. Prospectuses and Proxy Statements; Voting................................................8
ARTICLE V. Sales Material and Information..........................................................10
ARTICLE VI. Fees and Expenses.......................................................................11
ARTICLE VII. Qualification...........................................................................12
ARTICLE VIII. Indemnification.........................................................................13
ARTICLE IX. Applicable Law..........................................................................17
ARTICLE X. Termination.............................................................................18
ARTICLE XI. Notices.................................................................................20
ARTICLE XII. Miscellaneous...........................................................................21
SCHEDULE A Designated Portfolios...................................................................25
SCHEDULE B Expenses................................................................................26
SCHEDULE C Administrative Services.................................................................29
SCHEDULE D Non-Compete Provision...................................................................30
SCHEDULE E Reports per Section 9.3.................................................................31
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PARTICIPATION AGREEMENT
Between
NEW ENGLAND LIFE INSURANCE COMPANY
AND
XXXXXX LLC
THIS AGREEMENT, made and entered into as of the 25th day of August,
2000 by and between New England Life Insurance Company (hereinafter "TNE"), a
Massachusetts life insurance company, on its own behalf and on behalf of its
Separate Account TNE Series (k) Account (the "TNE Account"), and Xxxxxx LLC
(hereinafter the "ADVISER"), a limited liability company organized under the
laws of Nevada.
WHEREAS, the ADVISER is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and any applicable state
securities laws; and
WHEREAS, TNE is the issuer of certain unregistered variable
annuity contracts supported wholly or partially by the TNE Account ("TNE
Contracts); and
WHEREAS, the TNE Account is a duly organized, validly existing
segregated asset account, established by resolution of the Board of Directors of
TNE, under the insurance laws of the State of Massachusetts, to set aside and
invest assets attributable to the TNE Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, TNE intends to purchase shares of the Fund(s) listed in Schedule A
attached hereto and incorporated herein by reference, as such Schedule may be
amended from time to time by mutual written agreement (the "Designated
Portfolio(s)"), on behalf of the TNE Account to fund the applicable
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Contracts, and the Fund is authorized to sell such shares to unregistered unit
investment trusts such as the TNE Account at net asset value; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the TNE Account also intend to purchase shares in other open-end
investment companies or series thereof not affiliated with the Fund (the
"Unaffiliated Funds") to fund the Contracts; and
WHEREAS, TNE has agreements with One Orchard Equities, Inc. ("OOE"), an
affiliated broker/dealer, to market the Contracts; and
WHEREAS, TNE has an agreement with Great-West Life & Annuity Insurance
Company ("GWL&A") wherein GWL&A, either itself or through one or several of its
subsidiary companies, to provide certain administrative services associated with
trading and recordkeeping of Fund shares for the TNE Account; and
WHEREAS, BenefitsCorp Equities, Inc. ("BCE"), GWL&A's NSCC member
broker/dealer subsidiary, and with whom ADVISER has an agreement governing
trading and recordkeeping of Fund shares, will transmit instructions for the
purchase, redemption and transfer of Fund shares on behalf of the TNE Account.
NOW, THEREFORE, in consideration of their mutual promises TNE and the
ADVISER agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. All instructions for the purchase, redemption and exchange of
Designated Portfolio for the Accounts, shall be transmitted by BCE in accordance
with the terms of the Administrative Services Agreement and Schedule 1 therein
executed by and between BenefitsCorp Equities, Inc. and Xxxxxx LLC on March 1,
2000, which is attached hereto as Schedule C (the "Administrative Services
Agreement").
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ARTICLE II. Representations and Warranties of TNE
2.1. TNE represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it has legally and
validly established the Account prior to any issuance or sale of units thereof
as a segregated asset account under Massachusetts Law.
2.2. TNE represents and warrants that the Contracts are exempt from the
registration requirements of the 1933 Act by virtue of Section 3(a)(2) thereof
and that the Contracts are exempt from the registration requirements of the 1940
Act by virtue of Section 3(c)(11) thereof.
2.3. For its unregistered Accounts which are exempt from registration
under the 1940 Act in reliance upon Section 3(c)(11) thereof, TNE represents and
agrees that:
(a) it has entered into an agreement with a broker-dealer
registered under the 1934 Act wherein such
broker-dealer has agreed to act as the principal
underwriter for each such unregistered Account and
its subdivisions;
(b) the Fund shares are and will continue to be the only
investment securities held by the corresponding
Account subdivisions; and
(c) with regard to each Series, TNE, on behalf of the
corresponding TNE Account subdivision, will:
(1) vote such shares held by it in the
same proportion as the vote of all
other holders of such shares; and
(2) refrain from substituting shares of
another security for such shares
unless the SEC has approved such
substitution in the manner provided
in Section 26 of the 1940 Act.
2.4. TNE represents and warrants that the income, gains, and losses,
whether or not realized, from assets allocated to the TNE Account are, in
accordance with the applicable Contracts, to be credited to, or charged against,
the TNE Account without regard to other income, gains or losses from assets
allocated to any other accounts of TNE.
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2.5 TNE represents and warrants that the assets of the TNE Account are
and will be kept separate from TNE's general account and any other separate
accounts TNE may have, and will not be charged with liabilities from any other
business that TNE may conduct or the liabilities of any companies affiliated
with TNE.
2.6. TNE represents and warrants that the arrangements and fees, if
any, provided for in this Agreement will be disclosed as required by any
applicable law or regulation and that it has and will continue to have access to
the necessary facilities, equipment, and qualified personnel to perform the
services in accordance with the terms of this Agreement and industry practice.
2.7. TNE and the ADVISER shall maintain and preserve all records as
required by law to be maintained and preserved in connection with any
performance by TNE under this Agreement. Upon written request of any Designated
Portfolio or the ADVISER, TNE agrees to promptly provide copies of all
historical records relating to any transactions recorded, data formats for
written communication regarding the Designated Portfolio and other materials, in
each case as may reasonably be requested to enable the ADVISER and its
respective representatives and agents to monitor and review the services, or to
comply with any request of the Designated Portfolio's board of directors or
trustees, a governmental body, a self-regulatory organization or a shareholder
of a Designated Portfolio.
ARTICLE III. Representations and Warranties of ADVISER
3.1. The ADVISER represents and warrants that Designated Portfolio(s)
shares sold pursuant to this Agreement shall be registered under the 1933 Act,
duly authorized for issuance and sold in compliance with all applicable federal
securities laws including without limitation the 1933 Act, the 1934 Act, and the
1940 Act and that the Fund is and shall remain registered under the 0000 Xxx.
The Fund shall amend the registration statement for its shares under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares.
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3.2. The ADVISER agrees to comply with applicable provisions and SEC
staff interpretations of the 1940 Act to assure that the investment advisory or
management fees paid to the ADVISER by the Fund are in accordance with the
requirements of the 1940 Act. To the extent that the Fund finances distribution
expenses pursuant to Rule 12b-1, the ADVISER undertakes to have the Fund's
Board, a majority of whom are not interested persons of the Fund, formulate and
approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
3.3. The ADVISER represents and warrants that it is and shall remain
duly registered under all applicable federal and state securities laws and that
it shall perform its obligations for the Fund in compliance in all material
respects with the laws of the State of Nevada and any applicable state and
federal securities laws.
3.4. The ADVISER represents and warrants that all of the ADVISER's and
Fund's respective officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Fund
are, and shall continue to be at all times, covered by one or more blanket
fidelity bonds or similar coverage for the benefit of the Fund in an amount not
less than the minimal coverage required by Rule 17g-1 under the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid bonds
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company. TNE agrees to maintain insurance, including errors
and omissions insurance of not less than five million dollars ($5,000,000) in
the aggregate, and if necessary, bonding, issued by a qualified insurance
carrier of the types ordinarily maintained by like administrators serving mutual
funds and in commercially reasonable amounts, and, upon request, shall furnish a
certificate of insurance evidencing such coverage.
3.5. The ADVISER will use its best efforts to provide TNE with as much
advance notice as is reasonably practicable of any material change affecting the
Designated Portfolio(s) (including, but not limited to, any material change in
the registration statement or prospectus affecting the Designated Portfolio(s))
and any proxy solicitation affecting the Designated Portfolio(s) and will use
its best efforts to consult with TNE in order to implement any such change in an
orderly manner, recognizing the expenses of changes and attempting to minimize
such expenses by
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implementing them in conjunction with regular annual updates of the prospectus
for the Contracts. The ADVISER agrees to share equitably in expenses incurred by
TNE as a result of actions taken by the Fund, consistent with the allocation of
expenses contained in Schedule B attached hereto and incorporated herein by
reference.
ARTICLE IV. Prospectuses and Proxy Statements; Voting
4.1. If applicable state or federal laws or regulations require that
prospectuses for the Fund be distributed to all Contract owners, then at least
annually, the ADVISER shall provide TNE with as many copies of the Fund's
current prospectus for the Designated Portfolio(s) as TNE may reasonably request
for marketing purposes (including distribution to Contract owners with respect
to new sales of a Contract) and TNE shall distribute to Contract owners as
required by law, with expenses to be borne in accordance with Schedule C hereof.
If requested by TNE in lieu thereof, the ADVISER, shall provide such
documentation (including a camera-ready copy and computer diskette of the
current prospectus for the Designated Portfolio(s)) and other assistance as is
reasonably necessary in order for TNE once each year (or more frequently if the
prospectuses for the Designated Portfolio(s) are amended) to have the prospectus
for the Contracts and the Fund's prospectus for the Designated Portfolio(s)
printed together in one document. Should TNE determine that it will make the
prospectuses available in an electronic format, the ADVISER agrees to assist TNE
in obtaining the required information and the expenses associated with this form
of distribution will be borne in accordance with Schedule B hereof.
4.2. If applicable state or federal laws or regulations require that
the Statement of Additional Information ("SAI") for the Fund be distributed to
all Contractowners, then the ADVISER shall provide TNE with copies of the Fund's
SAI or documentation thereof for the Designated Portfolio(s) in such quantities,
with expenses to be borne in accordance with Schedule B hereof, as TNE may
reasonably require to permit timely distribution thereof to Contract owners and
TNE shall distribute such copies to Contract owners as required by law. The
ADVISER shall also provide SAIs to any Contract owner or prospective owner who
requests such SAI from the Fund (although it is anticipated that such requests
will be made to TNE).
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4.3. The ADVISER shall provide TNE with copies of the Fund's proxy
material, reports to stockholders and other communications to stockholders for
the Designated Portfolio(s) in such quantity, with expenses to be borne in
accordance with Schedule B hereof, as TNE may reasonably require to permit
timely distribution thereof to Contract owners, and TNE shall distribute such
materials to Contract owners as required by law.
4.4. It is understood and agreed that, except with respect to
information regarding TNE provided in writing by that party, TNE will not be
responsible for the content of the prospectus or SAI for the Designated
Portfolio(s).
4.5. If and to the extent required by law, TNE shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Designated Portfolio(s) shares held in its
respective Account in accordance with instructions
received from Contract owners: and
(iii) vote Designated Portfolio shares held in its
respective Account for which no instructions have
been received in the same proportion as Designated
Portfolio(s) shares for which instructions have been
received from Contract owners, so long as and to the
extent that the SEC continues to interpret the 1940
Act to require pass-through voting privileges for
variable contract owners. TNE reserves the right to
vote Fund shares held in their respective Accounts in
their own right, to the extent permitted by law.
4.6 The ADVISER represents that the Fund will comply with all
provisions of the 1940 Act requiring voting by shareholders The ADVISER
represents further that the Fund will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of directors or trustees and with whatever rules the Commission may
promulgate with respect thereto.
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ARTICLE V. Sales Material and Information
5.1. TNE shall furnish, or shall cause to be furnished, to the ADVISER
or its designee, a copy of each piece of sales literature or other promotional
material that TNE develop or propose to use and in which the Fund (or a
Portfolio thereof), its ADVISER or one of its sub-advisers or the Distributor is
named in connection with the Contracts, at least ten (10) Business Days prior to
its use. No such material shall be used if the ADVISER objects to such use
within five (5) Business Days after receipt of such material.
5.2. TNE shall not give any information or make any representations or
statements on behalf of the Fund in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement, prospectus or SAI for the Fund shares, as the same may be amended or
supplemented from time to time, or in sales literature or other promotional
material approved by the ADVISER, except with the permission of the ADVISER.
5.3. The ADVISER shall furnish, or shall cause to be furnished, to TNE,
a copy of each piece of sales literature or other promotional material in which
TNE and/or the TNE Account, is named at least ten (10) Business Days prior to
its use; Provided, however, such material shall not be used if TNE objects to
such use within five (5) Business Days after receipt of such material.
5.4. The ADVISER shall not give any information or make any
representations on behalf of any or concerning TNE, the TNE Account, or the
Contracts other than the information or representations contained in the
Contracts, as the same may be amended or supplemented from time to time, or in
sales literature or other promotional material approved by TNE or its designee,
except with the permission of TNE.
5.5. The Fund will provide TNE at least three complete copies of all
registration statements, prospectuses, SAIs, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, for the Designated Portfolio(s)
that relate to the Contracts(s), contemporaneously with the filing of such
document(s) with the SEC or NASD or other regulatory authorities.
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5.6. TNE will provide to the Fund at least one complete copy of all
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, for the
Contracts or any of the Accounts that relate to the Designated Portfolio(s),
contemporaneously with the filing of such document(s) with the SEC, NASD, or
other regulatory authority.
5.8. For purposes of Articles VII and X, the phrase "sales literature
and other promotional material" includes, but is not limited to, 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; e.g.,
on-line networks such as the Internet or other electronic media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, 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, and shareholder reports, and proxy
materials (including solicitations for voting instructions) and any other
material constituting sales literature or advertising under the NASD rules, the
1933 Act or the 0000 Xxx.
5.9. At the request of any party to this Agreement, each other party
will make available to the other party's independent auditors and/or
representative of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested in connection
with compliance and regulatory requirements related to this Agreement or any
party's obligations under this Agreement.
ARTICLE VI. Fees and Expenses
6.1. The ADVISER will pay no fees hereunder. Fees will be payable to
BCE under the Administrative Services Agreement for the recordkeeping and
broker/dealer services provided by
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BCE to the ADVISER thereunder. However the parties will bear certain expenses in
accordance with Schedule B.
6.2. All expenses incident to performance by either party under this
Agreement shall be paid by such party, except as provided in Schedule B. The
ADVISER shall see to it that all shares of the Designated Portfolio(s) are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent required, in accordance with applicable state laws
prior to their sale.
6.3. The ADVISER acknowledges that a principal feature of the Contracts
is the Contractowner's ability to choose from a number of unaffiliated mutual
funds (and portfolios or series thereof), including the Designated Portfolio(s),
and to transfer the Contract's cash value between funds and portfolios. The
ADVISER agrees to cooperate with the TNE in facilitating the operation of the
Account and the Contracts as described in the prospectus for the Contracts,
including but not limited to cooperation in facilitating transfers between
unaffiliated funds.
ARTICLE VII. Qualification
7.1. The ADVISER represents and warrants that the Fund and each
Designated Portfolio is currently qualified as a Regulated Investment Company
under Subchapter M of the Code, and that each Designated Portfolio will maintain
such qualification (under Subchapter M or any successor or similar provisions)
as long as this Agreement is in effect.
7.2. The ADVISER will notify TNE immediately upon having a reasonable
basis for believing that the Fund or any Designated Portfolio has ceased to
comply with the aforesaid Subchapter M qualification requirements or might not
so comply in the future.
7.3. The ADVISER, at the ADVISER's expense, shall provide TNE with
reports certifying compliance with the aforesaid Subchapter M qualification
requirements, at the times provided for and substantially in the form attached
hereto as Schedule F and incorporated herein by
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reference; provided, however, that providing such reports does not relieve the
Fund of its responsibility for such compliance or of its liability for any
non-compliance.
ARTICLE VIII. Indemnification
8.1. Indemnification by TNE
8.1(a). TNE agrees to indemnify and hold harmless the ADVISER and its
respective officers and directors members, owners, employees, or trustees and
each person, if any, who controls the ADVISER within the meaning of Section 15
of the 1933 Act or any affiliated person of the Advisor within the meaning of
Section 2(a)(3) of the 1940 Act and its respective officers, directors, members,
owners, employees, or trustees (collectively, the "Indemnified Parties" for
purposes of this Section 7.1) against any and all losses, claims, expenses,
damages and liabilities (including amounts paid in settlement with the written
consent of such INSURANCE PARTY) or litigation (including reasonable 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, expenses, damages or liabilities (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or the
Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the Contracts or sales literature or other promotional
material for the 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 in writing to TNE by or on behalf of the
ADVISER or Fund for use in its respective Contracts or sales
literature or other promotional material (or any amendment or
supplement to any of the foregoing) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in sales
literature or other promotional material of the Fund not
supplied by TNE or persons under the control of TNE) or
wrongful conduct of TNE or persons under the control of TNE,
with respect to the sale or distribution of the Contracts or
Fund Shares; or
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(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in sales literature or other
promotional material of the 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 a statement or omission was made in reliance upon
information furnished in writing to the Fund by or on behalf
of TNE; or
(iv) arise as a result of any failure TNE 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 TNE in this Agreement
or arise out of or result from any other material breach of
this Agreement by TNE,
(vi) any breach of this Agreement by TNE which causes an error or
delay in the calculation of a Fund's daily net asset value per
share or dividend or capital gain distribution rate,
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.
8.1(b). TNE shall not be liable under this indemnification provision
with respect to any losses, claims, expenses, 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 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 or to
any of the Indemnified Parties.
8.1(c). TNE 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 TNE 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 TNE of any such claim shall not relieve TNE 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,
except to the extent that TNE has been prejudiced by such failure to give
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notice. In case any such action is brought against the Indemnified Parties, TNE
shall be entitled to participate, at its own expense, in the defense of such
action. TNE also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from TNE to such
party of its election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and TNE
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.
8.1(d). The Indemnified Parties will promptly notify TNE of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.
8.2. Indemnification by the ADVISER
8.2(a). The ADVISER agrees to indemnify and hold harmless TNE and their
directors and officers and each person, if any, who controls TNE within the
meaning of Section 15 of the 1933 Act or any affiliated person of TNE within the
meaning of Section 2(a)(3) of the 1940 Act (collectively, the "Indemnified
Parties" for purposes of this Section 10.2) against any and all losses, claims,
expenses, damages, liabilities (including amounts paid in settlement with the
written consent of the ADVISER) or litigation (including reasonable 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 the Fund's shares or the
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 or SAI or sales
literature or other promotional material of the Fund prepared
by the Fund, the Distributor or the ADVISER (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 in writing to the
ADVISER, the Distributor or the Fund by or
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on behalf of TNE for use in the registration statement,
prospectus or SAI for the Fund or in sales literature or other
promotional material (or any amendment or supplement to any of
the foregoing) or otherwise for use in connection with the
sale of the Contracts or the Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in sales
literature or other promotional material for the Contracts not
supplied by the ADVISER or persons under its control) or
wrongful conduct of the Fund, the Distributor or the ADVISER
or persons under their control, with respect to the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in sales literature or other
promotional material covering the 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 statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished in
writing to TNE by or on behalf of the ADVISER, the Distributor
or the Fund; or
(iv) arise as a result of any failure by the Fund, the Distributor
or the ADVISER to provide the services and furnish the
materials under the terms of this Agreement
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Fund, the
Distributor or the ADVISER in this Agreement or arise out of
or result from any other material breach of this Agreement by
the ADVISER, the Distributor or the Fund; or
(vi) any breach of this Agreement by the ADVISER which causes an
error or delay in the calculation of a Fund's daily net asset
value per share or dividend or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The ADVISER shall not be liable under this indemnification
provision with respect to any losses, claims, expenses, 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 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 or to
any of the Indemnified Parties.
8.2(c). The ADVISER 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
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the ADVISER 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 ADVISER of any such claim shall not relieve the ADVISER 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, except to the
extent that the ADVISER has been prejudiced by such failure to give notice. In
case any such action is brought against the Indemnified Parties, the ADVISER
will be entitled to participate, at its own expense, in the defense thereof. The
ADVISER also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the ADVISER to
such party of the ADVISER'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 ADVISER 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(d). TNE agrees to promptly notify the ADVISER of the commencement
of any litigation or proceedings against it or any of its officers or directors
in connection with the issuance or sale of the Contracts or the operation of the
Account.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Colorado,
without regard to the Colorado Conflict of Laws provisions.
9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant and the terms hereof shall be interpreted and construed in accordance
therewith.
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ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of either party, with or without cause, with
respect to some or all Portfolios, upon sixty (60) days
advance written notice delivered to the other parties;
provided, however, that such notice shall not be given earlier
than sixty (60) days following the date of this Agreement; or
(b) at the option of TNE by written notice to the other
parties with respect to any Portfolio based upon TNE's
determination that shares of such Portfolio are not reasonably
available to meet the requirements of the Contracts; or
(c) at the option of TNE by written notice to the other
parties with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such
law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by
TNE; or
(d) at the option of the ADVISER in the event that formal
administrative proceedings are instituted against TNE by the
NASD, the SEC, the Insurance Commissioner or like official of
any state or any other regulatory body regarding TNE's duties
under this Agreement or related to the sale of the Contracts,
the operation of any Account, or the purchase of the Fund
shares, if, in each case, the ADVISER reasonably determines in
its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect
upon the ability of TNE to perform its obligations under this
Agreement; or
(e) at the option of TNE in the event that formal
administrative proceedings are instituted against the Fund,
the Distributor or the ADVISER by the NASD, the SEC, or any
state securities or insurance department or any other
regulatory body, if TNE reasonably determines in its sole
judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the
ability of the Fund, the Distributor or the ADVISER to perform
their obligations under this Agreement; or
(f) with respect to TNE at the option of the ADVISER, if the
ADVISER shall determine, in its sole judgment reasonably
exercised in good faith, that such TNE has suffered a material
adverse change in its business or financial condition or is
the subject of material adverse publicity and that material
adverse change or publicity will have a material adverse
impact on TNE's ability to perform its obligations under this
Agreement, (ii) the ADVISER notifies TNE of that determination
and its intent to terminate this Agreement, and (iii) after
considering the actions taken by TNE and any other changes in
circumstances since the giving of such a notice, the
determination of the ADVISER shall continue to apply on the
sixtieth (60th) day
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following the giving of that notice, which sixtieth day shall
be the effective date of termination; or
(g) at the option of TNE, if (i) TNE shall determine, in its
sole judgment reasonably exercised in good faith, that the
Fund, the Distributor or ADVISER has suffered a material
adverse change in its business or financial condition or is
the subject of material adverse publicity and that material
adverse change or publicity will have a material adverse
impact on the ADVISER's ability to perform its obligations
under this Agreement, (ii) TNE notifies the ADVISER of that
determination and its intent to terminate this Agreement, and
(iii) after considering the actions taken by the Fund,
Distributor or ADVISER and any other changes in circumstances
since the giving of such a notice, the determination of TNE
shall continue to apply on the sixtieth (60th) day following
the giving of that notice, which sixtieth day shall be the
effective date of termination; or
(h) at the option of any non-defaulting party hereto in the
event of a material breach of this Agreement by any party
hereto (the "defaulting party") other than as described in
12.1(a)-(g) and (i); provided, that the non-defaulting party
gives written notice thereof to the defaulting party, with
copies of such notice to all other non-defaulting parties, and
if such breach shall not have been remedied within thirty (30)
days after such written notice is given, then the
non-defaulting party giving such written notice may terminate
this Agreement by giving thirty (30) days written notice of
termination to the defaulting party; or
(i) at the option of TNE by written notice to the ADVISER with
respect to any Portfolio if TNE reasonably believes that the
Portfolio will fail to meet the Subchapter M qualifications
specified in Article VII hereof.
10.2. Notice Requirement. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties of its intent to terminate, which notice
shall set forth the basis for the termination. Furthermore,
(a) in the event any termination is based upon the provisions of
Section 10.1(a), 10.1(f), 10.1(g) or 10.1(h) of this Agreement, the
prior written notice shall be given in advance of the effective date of
termination as required by those provisions unless such notice period
is shortened by mutual written agreement of the parties;
(b) in the event any termination is based upon the provisions of
Section 10.1(d) or 10.1(e) of this Agreement, the prior written notice
shall be given at least sixty (60) days before the effective date of
termination; and
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(c) in the event any termination is based upon the provisions of
Section 10.1(b), 10.1(c), or 10.1(i), the prior written notice shall be
given in advance of the effective date of termination, which date shall
be determined by the party sending the notice.
10.3. Effect of Termination. Notwithstanding any termination of this
Agreement, so long as the Advisor remains the Advisor to the Designated
Portfolio(s) the ADVISER shall, at the option of TNE, continue to make available
additional shares of the Designated Portfolio(s) pursuant to the terms and
conditions of this Agreement, for all Contracts of TNE in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, the owners of such
Existing Contracts shall be permitted to reallocate investments in the
Designated Portfolio(s), redeem investments in the Designated Portfolio(s)
and/or invest in the Designated Portfolio(s) upon the making of additional
purchase payments under such Existing Contracts.
10.3. Surviving Provisions. Notwithstanding any termination of this
Agreement, each party's obligations under Article X to indemnify other parties
shall survive and not be affected by any termination of this Agreement. In
addition, with respect to Existing Contracts, all provisions of this Agreement
shall also survive and not be affected by any termination of this Agreement.
ARTICLE XI Notices
Any notice shall be sufficiently given when sent by registered or
certified mail 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 TNE:
New England Life Insurance Company
c/o Great-West Life & Annuity Insurance Company
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, 401(k) Products, 7T3
CC: Xxxxxxx Xxxxx, Legal, 2T3
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If to the ADVISER:
Xxxxxx LLC
Xxxxxx X. Xxxxxx Phone: (000) 000-0000
Vice President Fax: (000) 000-0000
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx LLC
Xxxxxxx Xxxxx
Vice President Phone: (000) 000-0000
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000 Fax: (000) 000-0000
Xxxxxx, Xxxxxxxx 00000
ARTICLE XII. Miscellaneous
12.1. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain or unless such information is received or becomes known through no
wrongful act or from a third party source. Without limiting the foregoing, no
party hereto shall disclose any information that another party has designated as
proprietary.
12.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
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12.4. 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.
12.5. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state 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.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Massachusetts and Colorado Insurance Commissioners with
any information or reports in connection with services provided under this
Agreement which such Commissioner may request in order to ascertain whether the
variable annuity operations of TNE are being conducted in a manner consistent
with the applicable state's applicable laws or regulations.
12.6. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration in a forum jointly
selected by the relevant parties (but if applicable law requires some other
forum, then such other forum) in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.
12.7. 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.
12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.
12.9. TNE is hereby expressly put on notice of the limitation of
liability as set forth in the Declarations of Trust of the Fund and agree that
the obligations assumed by the ADVISER pursuant to this Agreement shall be
limited in any case to the ADVISER and its assets and TNE shall not seek
satisfaction of any such obligation from the shareholders of the Fund or the
Advisor, or the
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officers, employees, directors, trustees, owners, members, or agents of the
Fund, if an applicable trust.
12.10. The ADVISER agrees that the obligations assumed by TNE pursuant
to this Agreement shall be limited in any case to TNE and their assets and the
ADVISER shall not seek satisfaction of any such obligation from the shareholders
of TNE, or the directors, officers, employees or agents of TNE, or any of them,
except to the extent permitted under this Agreement.
12.11. No provision of this Agreement may be deemed or construed to
modify or supersede any contractual rights, duties, or indemnifications, as
between the ADVISER, the Fund, and the Fund's distributor.
12.12 The parties acknowledge and agree to abide by the terms of
Schedule E as it pertains to the Designated Portfolio(s) described herein and
TNE's business of providing investment options and administrative services for
deferred compensation plans.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
NEW ENGLAND LIFE INSURANCE COMPANY
By its authorized officer,
By:
-------------------------------
Title:
Date:
XXXXXX LLC
By its authorized officer,
By:
-------------------------------
Title:
Date:
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SCHEDULE A
DESIGNATED PORTFOLIOS
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SCHEDULE B
EXPENSES
The ADVISER, and TNE will coordinate the functions and pay the costs of
completing these functions based upon an allocation of costs and
responsibilities set forth in the tables below.
PARTY
PARTY RESPONSIBLE RESPONSIBLE FOR
ITEM FUNCTION FOR COORDINATION EXPENSE
---- -------- ---------------- -------
Mutual Fund Prospectus Printing of combined prospectuses, or TNE TNE
(Including Annual Updates) compiling of electronic prospectus, if
needed in the future
Fund or ADVISER shall supply GWL&A with such TNE Fund or ADVISER,
numbers of the Designated Portfolio(s) as applicable
prospectus(es) as IPs shall reasonably request
Distribution to New and Inforce Clients TNE TNE
Distribution to Prospective Clients TNE TNE
Other Mutual Fund If Required by ADVISER Fund or ADVISER Fund or ADVISER
Prospectus Update &
Distribution
If Required by IPs TNE TNE
Mutual Fund SAI Printing (Fund or ADVISER shall supply GWL&A Fund or ADVISER Fund or ADVISER
with such numbers of the SAI(s) as Ips shall
reasonably request
Printing of combined SAI TNE TNE
Distribution TNE TNE
Proxy Material for Mutual Printing if proxy required by Law Fund or ADVISER Fund or ADVISER
Fund:
Distribution to Contractowners (including TNE Fund or ADVISER
labor, if required) if proxy required by Law
Printing & distribution if required by IPs TNE TNE
Mutual Fund Annual & Printing of combined reports TNE TNE
Semi-Annual Report
ADVISER shall supply GWL&A with such numbers TNE Fund or ADVISER,
of the Designated Portfolio(s) Annual as applicable
& Semi-Annual Report(s) as IP shall
reasonably request.
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Other communication to New If Required by the ADVISER TNE Fund or ADVISER
and Prospective clients
If Required by IPs TNE TNE
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PARTY PARTY
RESPONSIBLE FOR RESPONSIBLE FOR
ITEM FUNCTION COORDINATION EXPENSE
---- -------- --------------- ---------------
Other communication to inforce Distribution (including labor and printing) TNE Fund or ADVISER
if required by the Fund or ADVISER
Distribution (including labor and printing) TNE TNE
if required by IPs
Errors in Share Price Cost of error to participants (If caused by TNE Fund or ADVISER
calculation Fund or ADVISER)
Cost of administrative work to correct TNE Fund or ADVISER
error (if caused by Fund or ADVISER)
TNE, Fund or ADVISER TNE
Cost of error to participants, Fund, and
shareholders (if caused by IPs) TNE, Fund or ADVISER TNE
Cost of administrative work to correct
error (if caused by IPs)
Operations of the Fund All operations and related expenses, Fund or ADVISER Fund or ADVISER
including the cost of registration and
qualification of shares, taxes on the
issuance or transfer of shares, cost of
management of the business affairs of the
Fund, and expenses paid or assumed by the
fund pursuant to any Rule 12b-1 plan
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SCHEDULE C
ADMINISTRATIVE SERVICES AGREEMENT
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SCHEDULE D
NON-COMPETE PROVISIONS
TNE intends to offer Fund, ADVISER and the Fund's distributor, as applicable,
access to their current and prospective customers hereinafter "Customers" so
that Customers will have the option of purchasing the Designated Portfolio
shares of the Fund. The ADVISER desires to make the Designated Portfolio(s)
available to Customers, yet acknowledges that under certain circumstances, the
ability of Fund, ADVISER or the Fund's distributor, as applicable, to solicit
business from Customers should be subject to special limitations in exchange for
the increased ability to offer its product through an TNE's introduction. An
introduction will consist of TNE's inclusion of the Designated Portfolio(s) in
the deferred compensation product offered to a Customer for that Customer's
consideration.
1. In the scenario where TNE introduces Fund, ADVISER or the Fund's
distributor, as applicable, in any manner to a Customer which
ultimately purchases a deferred compensation product from TNE, and TNE
includes the Designated Portfolio(s) in the products offered to that
Customer, ADVISER agrees not to knowingly utilize any confidential
information regarding the Customer and/or its employees participation
in plan(s) received in connection with offering its product to Customer
in any direct solicitation of Deferred Compensation Business from that
Customer, and will not provide the Fund or the Fund's distributor with
any such confidential information except as necessary for the ADVISER's
performances under this Agreement. Further, ADVISER, as applicable,
will not attempt to directly contact Customers regularly nor attempt to
knowingly sell its mutual funds directly to Customer on a stand-alone
basis while the Designated Portfolio(s) are included in TNE's
arrangement with the Customer. For purposes of this Agreement "Deferred
Compensation Business" includes, but is not limited to, group or
individual annuity contracts, GIC's, separate accounts and wrapped or
unwrapped mutual funds whether sold separately or in conjunction-with
each other.
2. In the scenario where TNE introduces the ADVISER, the Fund or the
Fund's distributor in any manner to a Customer which does not purchase
a deferred compensation product from TNE, ADVISER is not subject to any
prohibitions regarding sales to and communications with that Customer.
Likewise, there are no prohibitions where TNE provides no introduction.
TNE may decide in its discretion when it desires to provide an introduction to
one of its Customers. TNE has no obligation to provide introductions to its
Customers.
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SCHEDULE E
Reports per Section 9.3
With regard to the reports relating to the quarterly testing of
compliance with the requirements of Subchapter M under the Internal Revenue Code
(the "Code") and the regulations thereunder, the Fund shall provide within
twenty (20) Business Days of the close of the calendar quarter a report to TNE
in the Form G1 attached hereto and incorporated herein by reference, regarding
the status under such sections of the Code of the Designated Portfolio(s), and
if necessary, identification of any remedial action to be taken to remedy
non-compliance.
With regard to the reports relating to the year-end testing of
compliance with the requirements of Subchapter M of the Code, referred to
hereinafter as "RIC status," the Fund will provide the reports on the following
basis: (i) the last quarter's quarterly reports can be supplied within the
20-day period, and (ii) a year-end report will be provided 45 days after the end
of the calendar year. However, if a problem with regard to RIC status, as
defined below, is identified in the third quarter report, on a weekly basis,
starting the first week of December, additional interim reports will be provided
specially addressing the problems identified in the third quarter report. If any
interim report memorializes the cure of the problem, subsequent interim reports
will not be required.
A problem with regard to RIC status is defined as:
(a) a failure of the Fund to derive at least ninety percent of gross
income from sources specified in Section 851(b)(2);
(b) a failure of the Fund to have at least fifty percent of the value
of total assets consisting of assets specified in Section 851(b)(3)(A);
and
(c) the Fund investing more than twenty-five percent of the value of
its total assets in the securities of one issuer, in contradiction of
the requirement specified in Section 851(b)(3)(B).
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FORM F1
CERTIFICATE OF COMPLIANCE
For the quarter ended:
---------------------------
I, ______________ , a duly authorized officer, director or agent of
______________ Fund hereby swear and affirm that ______________ Fund is in
compliance with all requirements of Subchapter M of the Internal Revenue Code
(the "Code") and the regulations thereunder as required in the Fund
Participation Agreement among New England Life Insurance Company and Xxxxxx LLC,
other than the exceptions discussed below:
Exceptions Remedial Action
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
--------------------------------- ---------------------------------------
If no exception to report, please indicate "None."
Signed this day of , .
---- ---------- ----
-----------------------------------------
(Signature)
By:
--------------------------------------
(Type or Print Name and Title/Position)
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