EXHIBIT 8(ff)
PARTICIPATION AGREEMENT
AMONG
ML LIFE INSURANCE COMPANY OF NEW YORK,
XXXXX XXXXX VARIABLE TRUST,
AND
XXXXX XXXXX DISTRIBUTORS, INC.
THIS AGREEMENT, dated as of the 1st day of March, 2005, by and among ML
Life Insurance Company of New York (the "Company"), a New York life insurance
company, on its own behalf and on behalf of each segregated asset account of the
Company set forth on Schedule A hereto as may be amended from time to time
(hereinafter referred to individually and collectively as the "Account"), Xxxxx
Xxxxx Variable Trust (the "Trust"), a Massachusetts business trust, and Xxxxx
Xxxxx Distributors, Inc. (the "Underwriter"), a Massachusetts company.
WHEREAS, the Trust engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Trust and
Underwriter ("Participating Insurance Companies");
WHEREAS, the shares of beneficial interest of the Trust are divided into
several series of shares, each designated a "Fund" and representing the interest
in a particular managed portfolio of securities and other assets;
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission (the "SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended, (the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, if and to the extent necessary to permit shares of
the Trust to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
(the "Mixed and Shared Funding Exemptive Order");
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and shares of the Funds are registered under the
Securities Act of 1933, as amended (the "1933 Act");
WHEREAS, Xxxxx Xxxxx Management (the "Adviser"), a Massachusetts business
trust, which serves as investment adviser to the Trust, is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as amended;
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WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto as it may be amended from time to time by mutual
written agreement, to set aside and invest assets attributable to the aforesaid
Contracts;
WHEREAS, the Underwriter, which serves as distributor to the Trust, is
registered as a broker dealer with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Funds") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
the Account at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Trust and the Underwriter agree as follows:
ARTICLE I. Sale of Trust Shares
1.1. The Trust has granted to the Underwriter exclusive authority to
distribute the Trust's shares, and has agreed to instruct, and has so
instructed, the Underwriter to make available to the Company for purchase on
behalf of the Account shares of those Designated Funds selected by the
Underwriter. Pursuant to such authority and instructions, and subject to Article
X hereof, the Underwriter agrees to make available to the Company for purchase
on behalf of the Account, shares of those Designated Funds listed on Schedule A
to this Agreement, such purchases to be effected at net asset value in
accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
(i) Trust series (other than those listed on Schedule A) in existence now or
that may be established in the future will be made available to the Company only
as the Underwriter may so provide, and (ii) the Board of Trustees of the Trust
(the "Board") may suspend or terminate the offering of Trust shares of any
Designated Fund or class thereof, if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole discretion of the
Board acting in good faith and in light of its fiduciary duties under federal
and any applicable state laws, suspension or termination is necessary in the
best interests of the shareholders of such Designated Fund.
1.2. The Trust shall redeem, at the Company's request, any full or
fractional Designated Fund shares held by the Company on behalf of the Account,
such redemptions to be
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effected at net asset value in accordance with Section 1.3 of this Agreement.
Notwithstanding the foregoing, (i) the Company shall not redeem Trust shares
attributable to Contract owners except in the circumstances permitted in Section
10.3 of this Agreement, and (ii) the Trust may delay redemption of Trust shares
of any Designated Fund to the extent permitted by the 1940 Act, and any rules,
regulations, or orders thereunder.
1.3. Purchase and Redemption Procedures
(a) The Parties agree to communicate, process and settle purchase
and redemption transactions for Designated Fund shares via the Trust/SERV and
Networking systems of the National Securities Clearing Corporation ("NSCC"). The
Trust hereby appoints the Company as an agent of the Trust for the limited
purpose of receiving purchase and redemption requests on behalf of the Account
(but not with respect to any Trust shares that may be held in the general
account of the Company) for shares of those Designated Funds made available
hereunder, based on allocations of amounts to the Account or subaccounts thereof
under the Contracts and other transactions relating to the Contracts or the
Account. Receipt of any such request (or relevant transactional information
therefor) on any day the New York Stock Exchange is open for trading and on
which the Trust calculates its net asset value pursuant to the rules of the SEC
(a "Business Day") by the Company as such limited agent of the Trust prior to
the time that the Trust ordinarily calculates its net asset value as described
from time to time in the Trust Prospectus (which as of the date of execution of
this Agreement is 4:00 p.m. Eastern Time) shall constitute receipt by the Trust
on that same Business Day, provided that such request is transmitted to the
Trust via the NSCC by the latest time trades are accepted by Trust/SERV.
"Trust/SERV" shall mean NSCC's system for automated, centralized processing of
mutual fund purchase and redemption orders, settlement, and account
registration. "Networking" shall mean NSCC's system that allows mutual funds and
life insurance companies to exchange account level information electronically.
(b) The Company shall pay for shares of each Designated Fund by the
scheduled close of federal funds transmissions on the same Business Day that it
notifies the Trust of a purchase request for such shares. Payment for Designated
Fund shares shall be in federal funds transmitted by wire from the Settling Bank
(on behalf of the Company) to NSCC (unless the Trust determines and so advises
the Company that sufficient proceeds are available from redemption of shares of
other Designated Funds effected pursuant to redemption requests tendered by the
Company on behalf of the Account). Upon receipt of federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Trust. "Settling Bank" shall mean the entity appointed to
perform such settlement services on behalf of the Trust.
(c) Payment for Designated Fund shares redeemed by the Account or
the Company shall be made in federal funds transmitted by wire to the Company on
the next Business Day after the Trust is properly notified of the redemption
order of such shares (unless redemption proceeds are to be applied to the
purchase of shares of other Designated Funds in accordance with Section 1.3(b)
of this Agreement), except that the Trust reserves the right to
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redeem Designated Fund shares in assets other than cash and to delay payment of
redemption proceeds to the extent permitted under Section 22(e) of the 1940 Act
and any Rules thereunder, and in accordance with the procedures and policies of
the Trust as described in the then current prospectus. The Trust shall not bear
any responsibility whatsoever for the proper disbursement or crediting of
redemption proceeds by the Company; the Company alone shall be responsible for
such action.
(d) Any purchase or redemption request for Designated Fund shares
held or to be held in the Company's general account shall be effected at the
closing net asset value per share next determined after the Trust's receipt of
such request, provided that, in the case of a purchase request, payment for
Trust shares so requested is received by the Trust in federal funds prior to
close of business for determination of such value, as defined from time to time
in the Trust Prospectus.
1.4. The Trust shall use its best efforts to make the closing net asset
value per share for each Designated Fund available to the Company by 6:00 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the closing net asset value per share for such Designated Fund
is calculated, and shall calculate such closing net asset value in accordance
with the Trust's Prospectus. In the event the Trust is unable to make the 6:00
p.m. deadline stated herein, it shall provide additional time for the Company to
place orders for the purchase and redemption of shares. Such additional time
shall be equal to the additional time which the Trust takes to make the closing
net asset value available to the Company. Neither the Trust, any Designated
Fund, the Underwriter, nor any of their affiliates shall be liable for any
information provided to the Company pursuant to this Agreement which information
is based on incorrect information supplied by the Company or any other
Participating Insurance Company to the Trust or the Underwriter. Any material
error in the calculation or reporting of the closing net asset value per share
shall be reported immediately upon discovery to the Company. In such event the
Company shall be entitled to an adjustment to the number of shares purchased or
redeemed to reflect the correct closing net asset value per share and the Trust
shall bear the cost of correcting such errors. Any error of a lesser amount
shall be corrected in the next Business Day's net asset value per share.
1.5. The Trust shall furnish notice (by wire or telephone followed by
written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated Fund
shares. The form of payment of dividends and capital gains distributions will be
determined in accordance with the Company's operational procedures in effect at
the time of the payment of such dividend or distribution. At this time the
Company, on its behalf and on behalf of the Account, hereby elects to receive
all such dividends and distributions as are payable on any Designated Fund
shares in the form of additional shares of that Designated Fund. The Company
reserves the right, on its behalf and on behalf of the Account, to revoke this
election and to receive all such dividends and capital gain distributions in the
form of cash. The Trust shall notify the Company promptly of the number of
Designated Fund shares so issued as payment of such dividends and distributions.
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1.6. Issuance and transfer of Trust shares shall be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Trust shares shall be recorded in an appropriate
ledger for the Account or the appropriate subaccount of the Account.
1.7. (a) The parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Trust's shares may be sold to other
insurance companies (subject to Section 1.8 hereof) and the cash value of the
Contracts may be invested in other investment companies. A funding vehicle other
than those listed on Schedule A to this Agreement may be made available for the
investment of the cash value of the Contracts, provided, however, that the
Company gives the Trust and the Underwriter 45 days written notice of its
intention to make such other investment vehicle available as a funding vehicle
for the Contracts.
(b) The Company shall not, without prior notice to the Underwriter
(unless otherwise required by applicable law), take any action to operate the
Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Underwriter
(unless otherwise required by applicable law), induce Contract owners to change
or modify the Trust or change the Trust's distributor or investment adviser.
(d) The Company shall not, without prior notice to the Trust, induce
Contract owners to vote on any matter submitted for consideration by the
shareholders of the Trust in a manner other than as recommended by the Board of
Trustees of the Trust.
1.8. The Underwriter and the Trust shall sell Trust shares only to
Participating Insurance Companies and their separate accounts and to persons or
plans or other persons identified under the Mixed and Shared Funding Exemptive
Order as permitted investors in the Trust ("Qualified Persons") that communicate
to the Underwriter and the Trust that they qualify to purchase shares of the
Trust under Section 817(h) of the Internal Revenue Code of 1986, as amended (the
"Code") and the regulations thereunder without impairing the ability of the
Account to consider the portfolio investments of the Trust as constituting
investments of the Account for the purpose of satisfying the diversification
requirements of Section 817(h). The Underwriter and the Trust shall not sell
Trust shares to any insurance company or separate account unless an agreement
complying with Article VI of this Agreement is in effect to govern such sales,
to the extent required. The Company hereby represents and warrants that it and
the Account are Qualified Persons. The Trust reserves the right to cease
offering shares of any Designated Fund in the discretion of the Trust.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts (a) are, or
prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in
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transactions that are properly exempt from registration under the 1933 Act. The
Company further represents and warrants that the Contracts will be issued and
sold in compliance in all material respects with all applicable federal
securities and state securities and insurance laws and that the sale of the
Contracts shall comply in all material respects with state insurance suitability
requirements. The Company further represents and warrants that it is an
insurance company duly organized and in good standing under applicable law, that
it has legally and validly established the Account prior to any issuance or sale
thereof as a segregated asset account under Arkansas insurance laws, and that it
(a) has registered or, prior to any issuance or sale of the Contracts, will
register the Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts, or alternatively (b) has not registered the Account in proper
reliance upon an exclusion from registration under the 1940 Act. The Company
shall register and qualify the Contracts or interests therein as securities in
accordance with the laws of the various states only if and to the extent deemed
advisable by the Company.
2.2. The Trust represents and warrants that Trust shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly authorized for
issuance and sold in compliance with applicable state and federal securities
laws, and that the Trust is and shall remain registered under the 1940 Act. The
Trust 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. The Trust shall register and qualify the shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Trust or the Underwriter.
2.3. The Trust may make payments to finance distribution expenses pursuant
to Rule 12b-1 under the 1940 Act. Prior to financing distribution expenses
pursuant to Rule 12b-1, the Trust will have the Board, a majority of whom are
not interested persons of the Trust, formulate and approve a plan pursuant to
Rule 12b-1 under the 1940 Act to finance distribution expenses.
2.4. The Trust and Distributor represent that the Trust's investment
policies, fees, and expenses are and shall at all times remain in compliance
with applicable state securities laws, if any, and the Trust and Distributor
represent that their respective operations are and shall at all times remain in
material compliance with applicable state securities laws of the State of
Arkansas to the extent required to perform this Agreement. The Trust and
Distributor also represent that the Trust will comply with any additional state
insurance law restrictions, as provided in writing by the Company to the Trust,
including the furnishing of information not otherwise available to the Company
which is required by state insurance law to enable the Company to obtain the
authority needed to issue the Contracts in any applicable state.
2.5. The Trust represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
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2.6. The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Trust shares
in accordance with any applicable state and federal securities laws.
2.7. The Trust and the Underwriter represent and warrant that all of their
trustees/directors, officers, employees, investment advisers, and other
individuals or entities dealing with the money and/or securities of the Trust
are and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust in an amount not less than the
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.8. The Trust represents and warrants that the investments of each Fund
will comply with the diversification requirements set forth in Section 817(h) of
the Code and the rules and regulations thereunder.
2.9 The Company and the Trust each represents and warrants that it: (a)
has access to the facilities of the NSCC, (b) has met and will continue to meet
all of the requirements to participate in Trust/SERV and Networking, and (c)
intends to remain at all times in compliance with the then current rules and
procedures of NSCC, all to the extent necessary or appropriate to facilitate
such communications, processing, and settlement of Designated Fund share
transactions.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many copies of the
Trust's current prospectus describing only the Designated Funds listed on
Schedule A as the Company may reasonably request. The Trust or the Underwriter
shall bear the expense of printing copies of the current prospectus and profiles
for the Trusts that will be distributed to existing Contract owners, and the
Company shall bear the expense of printing copies of the Trust's prospectus and
profiles that are used in connection with offering the Contracts issued by the
Company. If requested by the Company in lieu thereof, the Trust shall provide
such documentation (including a final copy of the new prospectus on diskette at
the Trust's or the Underwriter's expense) and other assistance as is reasonably
necessary in order for the Company once each year (or more frequently if the
prospectus for the Trust is amended) to have the prospectus for the Contracts
and the Trust's prospectus printed together in one document (such printing for
existing Contract owners to be at the Trust's or Underwriter's expense).
3.2. The Trust's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Trust is available, and the Underwriter
(or the Trust), at its expense, shall provide a reasonable number of copies of
such SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.
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3.3. The Trust shall provide the Company with information regarding the
Trust's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract.
3.4. The Trust, at its or the Underwriter's expense, shall provide the
Company with copies of its proxy material, reports to shareholders, and other
communications to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners.
3.5. The Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Trust shares in accordance with instructions received
from Contract owners; and
(iii) vote Trust shares for which no instructions have been received
in the same proportion as Trust shares of such portfolio for
which instructions have been received,
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 or to the
extent otherwise required by law. The Company will vote Trust shares held in any
segregated asset account in the same proportion as Trust shares of such
portfolio for which voting instructions have been received from Contract owners,
to the extent permitted by law.
3.6. Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Fund
calculates voting privileges as required by the Mixed and Shared Funding
Exemptive Order and consistent with any reasonable standards that the Trust may
adopt and provide in writing.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Trust or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Trust (or a Designated Fund
thereof) or the Adviser or the Underwriter is named. No such material shall be
used until approved by the Trust or its designee. The Trust or its designee will
be deemed to have approved such sales literature or promotional material unless
the Trust or its designee objects or provides comment to the Company within ten
Business Days after receipt of such material. The Trust or its designee reserves
the right to reasonably object to the continued use of any such sales literature
or other promotional material in which the Trust (or a Designated Fund thereof)
or the Adviser or the Underwriter is named, and no such material shall be used
if the Trust or its designee so object.
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4.2. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or profiles or prospectus or SAI for the Trust shares, as such
registration statement and profiles and prospectus or SAI may be amended or
supplemented from time to time, or in reports or proxy statements for the Trust,
or in sales literature or other promotional material approved by the Trust or
its designee or by the Underwriter, except with the permission of the Trust or
the Underwriter or the designee of either.
4.3. The Trust and the Underwriter, or their designee, shall furnish, or
cause to be furnished, to the Company, each piece of sales literature or other
promotional material that it develops and in which the Company, and/or its
Account, is named. No such material shall be used until approved by the Company.
The Company will be deemed to have approved such sales literature or promotional
material unless the Company objects or provides comment to the Trust, the
Underwriter, or their designee within ten Business Days after receipt of such
material. The Company reserves the right to reasonably object to the continued
use of any such sales literature or other promotional material in which the
Company and/or its Account is named, and no such material shall be used if the
Company so objects.
4.4. The Trust and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement and prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Trust will provide to the Company at least one complete copy of
all registration statements, profiles, prospectuses, SAIs, reports, proxy
statements, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Trust or its shares, promptly after the filing of such
document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Trust or Underwriter at least one
complete copy of all registration statements, prospectuses (which shall include
an offering memorandum, if any, if the Contracts issued by the Company or
interests therein are not registered under the 1933 Act), SAIs, reports,
solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Contracts or the Account,
promptly after the filing of such document(s) with the SEC or other regulatory
authorities. The Company shall provide to the Trust and the Underwriter any
complaints received from the Contract owners pertaining to the Trust or the
Designated Fund.
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4.7. The Trust will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Fund, and of
any material change in the Trust's registration statement, particularly any
change resulting in a change to the registration statement or prospectus for any
Account. The Trust will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner.
4.8. For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Trust or any affiliate of the Trust: 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 (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, 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 registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Trust.
ARTICLE V. Fees and Expenses
5.1. The Trust and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, except that if the Trust or any Fund adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution expenses,
then the Trust or Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing, and such payments will be made out of existing fees otherwise payable
to the Underwriter, past profits of the Underwriter, or other resources
available to the Underwriter. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Trust, in
accordance with applicable state laws prior to their sale. The Trust shall bear
the expenses for the cost of registration and qualification of the Trust's
shares, preparation and filing of the Trust's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law
and all taxes on the issuance or transfer of the Trust's shares.
5.3. The Company shall bear the expenses of distributing the Trust's
prospectus to owners of Contracts issued by the Company and of distributing the
Trust's proxy materials and reports to such Contract owners.
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ARTICLE VI. Diversification and Qualification
6.1. The Trust will invest its assets in such a manner as to ensure that
the Contracts will be treated as annuity or life insurance contracts, whichever
is appropriate, under the Code and the regulations issued thereunder (or any
successor provisions). Without limiting the scope of the foregoing, each
Designated Fund has complied and will continue to comply with Section 817(h) of
the Code and Treasury Regulation Section 1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, or life insurance contracts, and any amendments or
other modifications or successor provisions to such Section or Regulations. In
the event of a breach of this Article VI by the Trust, it will (a) take all
reasonable steps to notify the Company of such breach and (b) immediately take
all necessary steps to adequately diversify the Trust so as to achieve
compliance within the grace period afforded by Regulation 1.817-5.
6.2. The Trust represents that it is or will be qualified as a Regulated
Investment Company under Subchapter M of the Code, and that it will maintain
such qualification (under Subchapter M or any successor or similar provisions)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future. The Trust acknowledges that compliance with Subchapter M is an
essential element of compliance with Section 817(h).
6.3. The Trust shall provide the Company or its designee with reports
certifying compliance with the aforesaid Section 817(h) diversification and
Subchapter M qualification requirements on a quarterly basis.
6.4. Subject to Sections 6.1 and 6.2, the Company represents that the
Contracts are currently, and at the time of issuance shall be, treated as life
insurance or annuity insurance contracts, under applicable provisions of the
Code, and that it will maintain such treatment, and that it will notify the
Trust and the Underwriter immediately upon having a reasonable basis for
believing the Contracts have ceased to be so treated or that they might not be
so treated in the future. The Company agrees that any prospectus offering a
contract that is a "modified endowment contract" as that term is defined in
Section 7702A of the Code (or any successor or similar provision), shall
identify such contract as a modified endowment contract.
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ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the Contract owners of all
separate accounts investing in the Trust. An irreconcilable material conflict
may arise for a variety of reasons, including: (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, no-action or interpretative letter, 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 any Fund are being managed; (e) a difference in voting
instructions given by variable annuity contract and variable life insurance
contract owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Board shall promptly inform the Company if
it determines that an irreconcilable material conflict exists and the
implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
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. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owner voting instructions
are disregarded.
7.3. If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Trust or any Fund and reinvesting such assets in a different investment
medium, including (but not limited to) another Fund of the Trust, or submitting
the question whether such segregation should be implemented to a vote of all
affected contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the Account's investment
in the Trust and terminate this Agreement with respect to each Account;
provided, however, that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as determined
by a majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Trust gives written
notice that this provision is being
12
implemented, and until the end of that six month period the Trust shall continue
to accept and implement orders by the Company for the purchase (and redemption)
of shares of the Trust.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Trust and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Trust shall continue to
accept and implement orders by the Company for the purchase (and redemption) of
shares of the Trust.
7.6. For purposes of Sections 7.3 through 7.5 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Trust be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Trust
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7. If and to the extent the Mixed and Shared Funding Exemption Order or
any amendment thereto contains terms and conditions different from Sections 3.4,
3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement, then the Trust and/or
the Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with the Mixed and Shared Funding Exemptive Order,
and Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in the Mixed and Shared Funding
Exemptive Order or any amendment thereto. If and to the extent that Rule 6e-2
and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the 1940 Act or the rules promulgated thereunder
with respect to mixed or shared funding (as defined in the Mixed and Shared
Funding Exemptive Order) on terms and conditions materially different from those
contained in the Mixed and Shared Funding Exemptive Order, then (a) the Trust
and/or the Participating Insurance Companies, as appropriate, shall take such
steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable; and (b) Sections
[3.5, 3.6, 7.1., 7.2, 7.3, 7.4, and 7.5] of this Agreement shall continue in
effect only to the extent that terms and conditions substantially identical to
such Sections are contained in such Rule(s) as so amended or adopted.
13
ARTICLE VIII. Indemnification
8.1. Indemnification By the Company
8.1(a). The Company agrees to indemnify and hold harmless the Trust
and the Underwriter and each of its trustees/directors and officers, and each
person, if any, who controls the Trust or Underwriter within the meaning of
Section 15 of the 1933 Act or who is under common control with the Underwriter
(collectively, the "Indemnified Parties" for purposes of this Section 8.1 )
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) 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:
(i) arise out of or are based upon any untrue statement or alleged
untrue statements of any material fact contained in the registration
statement, prospectus (which shall include a written description of
a Contract that is not registered under the 1933 Act), or SAI for
the Contracts or contained in sales literature 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 to the Company by or on behalf of the Trust for use in the
registration statement, prospectus or SAI for the Contracts or in
the Contracts or sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Contracts or
Trust 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, SAI, or sales literature of the
Trust not supplied by the Company or persons under its control) or
wrongful conduct of the Company or its agents or persons under the
Company's authorization or control, with respect to the sale or
distribution of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus, SAI, or sales literature of the Trust 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 to the Trust by or on behalf of the Company; or
14
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the terms of
this Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the qualification
requirements specified in Section 6.4 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; or
as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1
(c) hereof.
8.1(b). The Company 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 its obligations or duties under this Agreement.
8.1(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.
8.1(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Trust shares or the Contracts or the operation
of the Trust.
8.2. Indemnification by the Underwriter
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
15
in settlement with the written consent of the Underwriter) 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:
(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 profile or prospectus or SAI or sales literature of the
Trust (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 Underwriter or the Trust by or on
behalf of the Company for use in the registration statement,
profile, prospectus or SAI for the Trust or in sales literature (or
any amendment or supplement) or otherwise for use in connection with
the sale of the Contracts or Trust 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, SAI or sales literature for the
Contracts not supplied by the Underwriter or persons under its
control) or wrongful conduct of the Trust or Underwriter or persons
under their control, with respect to the sale or distribution of the
Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a registration statement,
prospectus, SAI or sales literature 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 to the Company by or on behalf of the Trust or
the Underwriter; or
(iv) arise as a result of any failure by the Trust or the
Underwriter to provide the services and furnish the materials under
the terms of this Agreement (including a failure of the Trust,
whether unintentional or in good faith or otherwise, to comply with
the diversification and other qualification requirements specified
in Sections 6.1 and 6.2 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Trust or the Underwriter
in this Agreement or arise out of or result from any other material
breach of this Agreement by the Trust or the Underwriter; or
16
vi) arise out of or result from the materially incorrect or untimely
calculation or reporting of the 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 Underwriter 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 or such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or the Account, whichever is applicable.
8.2(c). The Underwriter 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 Underwriter 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 Underwriter of
any such claim shall not relieve the Underwriter 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 Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Underwriter to such party of the
Underwriter'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 Underwriter 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.
The Indemnified Party agrees promptly to notify the Underwriter 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.
8.3. Indemnification By the Trust
8.3(a). The Trust agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Trust) or litigation (including legal
and other expenses) to which the Indemnified Parties may be required to pay or
may become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, expenses, damages,
17
liabilities or expenses (or actions in respect thereof) or settlements, are
related to the operations of the Trust and:
(i) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification and other
qualification requirements specified in Sections 6.1 and 6.2 of this
Agreement); or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Trust; or
(iii) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value per
share or dividend or capital gain distribution rate.
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Trust 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 or to
the Company, the Trust, the Underwriter or the Account, whichever is applicable.
8.3(c). The Trust 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 Trust 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 Trust of any
such claim shall not relieve the Trust 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, the Trust will be entitled to participate, at
its own expense, in the defense thereof. The Trust also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Trust to such party of the Trust'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 Trust 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.
18
8.3(d). The Company and the Underwriter agree promptly to notify the
Trust of the commencement of any litigation or proceeding against it or any of
its respective officers or directors in connection with the Agreement, the
issuance or sale of the Contracts, the operation of the Account, or the sale or
acquisition of shares of the Trust.
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 New York.
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
(including, but not limited to, any Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
If, in the future, the Mixed and Shared Funding Exemptive Order should no longer
be necessary under applicable law, then Article VII shall no longer apply.
ARTICLE X. Termination
10.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to some
or all Designated Funds, by three (3) months advance written
notice delivered to the other parties; or
(b) termination by the Company by written notice to the Trust and
the Underwriter based upon the Company's determination that
shares of the Trust are not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Trust and
the Underwriter in the event any of the Designated Fund'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 the Company; or
(d) termination by the Trust or the Underwriter in the event that
formal administrative proceedings are instituted against the
Company by the NASD, the SEC, the Insurance Commissioner or
like official of any state or any other regulatory body
regarding the Company's duties under this Agreement or related
to the sale of the Contracts, the operation of any Account, or
the purchase of the Trust's shares; provided, however, that
the Trust or Underwriter determines in its sole judgment
exercised in good
19
faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to
perform its obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Trust or
the Underwriter by the NASD, the SEC, or any state securities
or insurance department or any other regulatory body;
provided, however, that the Company 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 Trust or the Underwriter to perform its
obligations under this Agreement; or
(f) termination by the Company by written notice to the Trust and
the Underwriter with respect to any Designated Fund in the
event that such Fund ceases to qualify as a Regulated
Investment Company under Subchapter M or fails to comply with
the Section 817(h) diversification requirements specified in
Sections 6.1 and 6.2 hereof, or if the Company reasonably
believes that such Fund may fail to so qualify or comply; or
(g) termination by the Trust or Underwriter by written notice to
the Company in the event that the Contracts fail to meet the
qualifications specified in Section 6.4 hereof; or
(h) termination by either the Trust or the Underwriter by written
notice to the Company, if either one or both of the Trust or
the Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that the Company has
suffered a material adverse change in its business,
operations, financial condition, or prospects since the date
of this Agreement or is the subject of material adverse
publicity; or
(i) termination by the Company by written notice to the Trust and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that the Trust, Adviser, or
the Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects since
the date of this Agreement or is the subject of material
adverse publicity; or
(j) termination by the Trust or the Underwriter by written notice
to the Company, if the Company gives the Trust and the
Underwriter the written notice specified in Section 1.7(a)
hereof and at the time such notice was given there was no
notice of termination outstanding under any other provision of
this Agreement; provided, however, any termination under
20
this Section 10.l(j) shall be effective forty-five days after
the notice specified in Section 1.7(a) was given; or
(k) termination by the Company upon any substitution of the shares
of another investment company or series thereof for shares of
a Designated Fund of the Trust in accordance with the terms of
the Contracts, provided that the Company has given at least 45
days prior written notice to the Trust and Underwriter of the
date of substitution; or
(l) termination by any party in the event that the Trust's Board
of Trustees determines that a material irreconcilable conflict
exists as provided in Article VII; or
(m) termination by any party upon another party's failure to cure
a material breach of any provision of this Agreement within 45
days after written notice thereof.
10.2. Notwithstanding any termination of this Agreement, the Trust and the
Underwriter shall, at the option of the Company, continue to make available
additional shares of the Trust pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing Contracts"), unless the
Underwriter requests that the Company seek an order pursuant to Section 26(c) of
the 1940 Act to permit the substitution of other securities for the shares of
the Designated Funds. The Underwriter agrees to split the cost of seeking such
an order, and the Company agrees that it shall reasonably cooperate with the
Underwriter and seek such an order upon request. Specifically, the owners of the
Existing Contracts may be permitted to reallocate investments in the Trust,
redeem investments in the Trust and/or invest in the Trust upon the making of
additional purchase payments under the existing Contracts (subject to any such
election by the Underwriter). The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement. The parties
further agree that this Section 10.2 shall not apply to any terminations under
Section 10.1 (g) of this Agreement.
10.3. The Company shall not redeem Trust shares attributable to the
Contracts (as opposed to Trust shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45 days
prior written notice to the Trust and Underwriter, as permitted by an order of
the SEC pursuant to Section 26(b) of the 1940 Act, but only if a substitution of
other securities for the shares of the Designated Funds is consistent with the
terms of the Contracts, or (iv) as permitted under the terms of the Contract.
Upon request, the Company will promptly furnish to the Trust and the Underwriter
reasonable assurance that any redemption pursuant to clause (ii) above is a
Legally
21
Required Redemption. Furthermore, except in cases where permitted under the
terms of the Contacts, the Company shall not prevent Contract owners from
allocating payments to a Fund that was otherwise available under the Contracts
without first giving the Trust or the Underwriter 45 days notice of its
intention to do so.
10.4. Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
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 the Trust:
c/o Xxxxx Xxxxx Distributors, Inc.
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Legal Officer
If to the Company:
ML Life Insurance Company of New York
0000 Xxxxxxx Xxxxx Xx., 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
If to the Underwriter:
Xxxxx Xxxxx Distributors, Inc.
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Legal Officer
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Trust must look solely to the property
of the Trust, and in the case of a series company, the respective Designated
Funds listed on Schedule A hereto as though each such Designated Fund had
separately contracted with the Company and the Underwriter for the enforcement
of any claims against the Trust. The parties agree that neither
22
the Board, officers, agents or shareholders of the Trust assume any personal
liability or responsibility for obligations entered into by or on behalf of the
Trust.
12.2. 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 has come into the
public domain.
12.3. 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.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. 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.
12.6. 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 Arkansas Insurance Commissioner 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 contract
operations of the Company are being conducted in a manner consistent with the
Arkansas variable annuity laws and regulations and any other applicable law or
regulations. The Company agrees to pay the reasonable costs and expenses
incurred by the Trust or the Underwriter in connection with responding to such a
request from the Arkansas Insurance Commissioner.
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.
23
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.
ML LIFE INSURANCE COMPANY OF NEW YORK:
By its authorized officer
By: _________________________________________
Title: _________________________________________
Date: _________________________________________
XXXXX XXXXX VARIABLE TRUST
By its authorized officer
By: _________________________________________
Title: _________________________________________
Date: _________________________________________
XXXXX XXXXX DISTRIBUTORS, INC.
By its authorized officer
By: _________________________________________
Title: _________________________________________
Date: _________________________________________
24
SCHEDULE A
CONTRACT DESIGNATION AND FORM NUMBER
Xxxxxxx Xxxxx Investor Choice Annuity - Investor Series
Form MLNY-VA-010
SEPARATE ACCOUNT
ML of New York Variable Annuity Separate Account A - Established 8/6/91
DESIGNATED FUNDS
Xxxxx Xxxxx VT Floating-Rate Income Fund
As of March 1, 2005
