EXHIBIT (8)(p)
PARTICIPATION AGREEMENT
AMONG
ML LIFE INSURANCE COMPANY OF NEW YORK,
AND
OPPENHEIMERFUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, dated as of the 11th day of October, 2002, 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"), and
OppenheimerFunds Distributor, Inc.(the "Underwriter"), a New York company.
WHEREAS, the shares of beneficial interests of each Fund listed on
Schedule A attached hereto (each a "Fund" and collectively referred to as the
"Funds") are divided into several series of shares, each designated a
"Portfolio" and representing the interest in a particular managed portfolio of
securities and other assets;
WHEREAS, each Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, (the "1940 Act")
and shares of the Portfolios are registered under the Securities Act of 1933, as
amended (the "1933 Act");
WHEREAS, OppenheimerFunds, Inc. (the "Adviser"), a Colorado company,
which serves as investment adviser to each Fund, is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Underwriter, which serves as distributor to each Fund, is
registered as a broker-dealer with the Securities and Exchange Commission (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");
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, to set aside and invest assets attributable to
variable annuity contracts set forth in Schedule A hereto, as it may be amended
from time to time by mutual written agreement (the "Contracts");
WHEREAS, each Portfolio may issue shares to the general public and to
the separate accounts of insurance companies ("Participating Insurance
Companies") to fund variable annuity contracts sold to certain qualified pension
and retirement plans;
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WHEREAS, the Company intends to purchase shares of other open-end
management investment companies that offer shares to the general public to fund
the Contracts;
WHEREAS, the Underwriter knows of no reason why shares in any Portfolio
may not be sold to Participating Insurance Companies to fund variable annuity
contracts sold to certain qualified pension and retirement plans; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios (and
classes thereof) listed in Schedule A hereto, as it may be amended from time to
time by mutual written agreement (the "Designated Portfolios") on behalf of the
Account to fund the aforesaid Contracts, and the Underwriter is authorized to
sell such shares in the Designated Portfolios, and classes thereof, to the
Account at net asset value and without the payment of a sales commission to the
broker-dealer of record.
NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. Each Fund has granted to the Underwriter exclusive authority
to distribute the Fund's shares. of the Designated Portfolios and classes
thereof listed on Schedule A to this Agreement (the "Shares"). Pursuant to such
authority and instructions, and subject to Article IX hereof, the Underwriter
agrees to make the Shares available to the Company for purchase on behalf of the
Account, such purchases to be effected at net asset value (and without the
payment of a sales commission to the broker-dealer of record) in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, the Underwriter
may suspend or terminate the offering of Shares of any Designated Portfolio or
class thereof, in whole or in part, or to make a limited offering of Shares of
any Fund or redeem Shares or take such other action as the Underwriter or the
Board of Trustees of the Fund (the "Board") determine is appropriate.or 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 Portfolio.
1.2. Each Fund shall redeem, at the Company's request, any full or
fractional Shares held by the Company on behalf of the Account, such redemptions
to be effected at net asset value in accordance with Section 1.3 of this
Agreement. Notwithstanding the foregoing each Fund may delay redemption of
Shares of any Designated Portfolio to the extent permitted by the 1940 Act, and
any rules, regulations, or orders thereunder.
1.3. Purchase and Redemption Procedures
The Underwriter hereby appoints the Company as its agent for the limited purpose
of receiving purchase and redemption requests on behalf of the Account (but not
with respect to any Fund shares
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that may be held in the general account of the Company) for the Shares 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. All transactions in Account shares shall be executed
through the Omnibus Accounts of Company's affiliate Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx, Inc. ("Omnibus Accounts"). Any such request (or relevant
transactional information therefor) received by the Company on any day the New
York Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC (a "Business Day") prior to the
time that the Fund ordinarily calculates its net asset value as described from
time to time in the Fund Prospectus (which as of the date of execution of this
Agreement is 4:00 p.m. Eastern Time) shall be executed by the Fund's transfer
agent at the net asset value determined as of the close of trading on that same
Business Day, provided that the transfer agent receives notice of such request
by 9:30 a.m. Eastern Time on the next following Business Day, or in the event of
systems issues necessitating later delivery of such purchase and redemption
requests by 11 a.m. Eastern Time on the next following Business Day. Company
will provide to the Transfer Agent or its designee via the NSCC Fund SERV DCC &
S platform (which utilizes the "as of" record layout within Fund/SERV) one or
more files detailing the instructions received with respect to each Plan prior
to 4:00 p.m. Eastern Time on the prior Business Day for each of the Funds.
Except as provided above or in any other agreement between the parties, Company
shall not be, nor hold itself out to the public or engage in any activity as an
agent or distributor for the Funds, the Underwriter or any of their respective
affiliates.
(b) The Company shall pay for Shares on the same day that
it notifies the Fund of a purchase request for such Shares. Payment for Shares
shall be made in federal funds transmitted to the Fund via the NSCC Fund/SERV
DCC&S platform to be received by the Fund by p.m. Eastern Time on the day the
Fund is notified of the purchase request for Shares (unless the Fund determines
and so advises the Company that sufficient proceeds are available from
redemption of Shares of other Designated Portfolios effected pursuant to
redemption requests tendered by the Company on behalf of the Account). Upon
receipt by the Fund's transfer agent of federal funds transmitted via the NSCC
Fund/SERV DCC&S platform, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Fund. Notwithstanding any
provision of this Agreement to the contrary, for purchase and redemption
instructions with respect to any Shares, Company and the Fund will settle the
purchase and redemption transactions referred to herein, via the NSCC Fund/SERV
platform settlement process on the next Business Day following the effective
trade date. The Fund will provide to Company a daily transmission of positions
and trading activity taking place in the Omnibus Accounts using Company's
affiliate's proprietary Inventory Control System ("ICS").
(c) Payment for Shares redeemed by the Account or the
Company shall be made in federal funds transmitted via the NSCC Fund/SERV DCC&S
platform to the Company or any other designated person on the next Business Day
after the Fund 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 Portfolios in accordance with Section 1.3(b) of this Agreement),
except that the Fund reserves the right to redeem Shares in assets other than
cash and to delay
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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 Fund as described in the then current prospectus. The
Underwriter or the Fund 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 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 transfer agent's receipt of such
request as set forth in Section 1.3(a) herein.
1.4. The Fund shall use its best efforts to make the closing net
asset value per Share for each Designated Portfolio available to the Company by
6:30 p.m. Eastern Time each Business Day via the NSCC Profile 1 platform, and in
any event, as soon as reasonably practicable after the closing net asset value
per Share for such Designated Portfolio is calculated, and shall calculate such
closing net asset value, including any applicable daily dividend factor, in
accordance with the Fund's Prospectus. Notwithstanding the provisions of section
1.3 hereof, if Underwriter fails to provide the closing net asset value to
Company as of 6:30 p.m. Eastern Time on a Business Day, then Company shall have
until 12:00 noon the following business day to provide the trade information to
the Funds' transfer agent and still receive the net asset value as of the date
that Company received the trade requests from Contract holders by Close of
Market. Neither a Fund, any Designated Portfolio, 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 of its affiliates to the Fund or the Underwriter.
In the event the Fund's transfer agent is advised of any error in the
computation of the net asset value per share of a Fund or class of shares of a
Fund ("NAV") or any dividend factor (a "pricing error"), which the Fund's
investment adviser has determined requires a correction resulting in a change in
the NAV, the transfer agent shall notify Company as promptly as possible after
the Fund's transfer agent is notified of such error. If an adjustment is made to
correct a pricing error which has caused the Contracts to receive fewer shares
credited to their respective accounts than the amount to which they are
entitled, the number of shares of the Funds attributable to the accounts of such
Contracts will be adjusted and the per share amount of any underpayments of
redemption or exchange proceeds or dividend and distributions which the Fund has
adjusted as to all shareholder accounts shall be credited by the transfer agent
to the Account for crediting of such amounts to the applicable Contracts. Upon
notification by the transfer agent of any overpayment due to a pricing error,
the Company shall promptly remit to the transfer agent any overpayment that has
not been paid to the Contracts. The parties understand and agree that
Underwriter or its affiliates shall reimburse Company and/or its affiliate
MLPF&S for their reasonable and customary and demonstrable out-of-pocket costs
incurred by them as a direct result of adjustments made to correct the accounts
of Contract holders as described herein (Company's out-of-pocket expenses shall
include administrative work and mailing/printing costs and shall exclude
overhead or other previously allocated costs). Underwriter shall only be
obligated to reimburse Company for out-of-pocket costs directly incurred in
making adjustments to Contract accounts that are submitted to Underwriter in
sufficient detail as requested by Underwriter or its affiliate promptly after
any such adjustment but in no event more than 30 days
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after Company is notified of such pricing error. In no event shall the maximum
liability of Company or its affiliates hereunder exceed $25,000 per occurrence
and, on an annual basis, the maximum liability of Company and its affiliates
hereunder shall not exceed the management fees collected by the Funds'
investment adviser on assets of the Account invested in the Fund responsible for
the pricing error.
1.5. Subject to the provisions of the OppenheimerFunds Dealer
Agreement between Underwriter and Company's affiliate, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx, Inc. the Underwriter will make available for purchase by the
Company, on its behalf and on behalf of the Account a class of shares available
at net asset value which are not subject to a contingent deferred sales charge
or redemption fee. In addition, no exchange fees will be applicable to shares of
the Funds purchased by the Company, on its behalf and on behalf of the Account.
Each Fund shall furnish notice (via the NSCC Profile II platform to the Company
as soon as reasonably practicable of any income dividends or capital gain
distributions payable on any 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 Shares in the form of additional Shares of that Designated
Portfolio. Company will reinvest the additional Shares of that Designated Fund
through a trade processed via the NSCC platform. 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 parties understand and agree that all transactions of Account shares
contemplated herein shall be executed through the Omnibus Accounts and that
Company's affiliate, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Inc. will receive
all such dividends and distributions in the form of cash which Company, in turn,
will immediately reinvest in the form of additional Shares of that Designated
Portfolio. The Transfer Agent shall notify the Company promptly of the number of
Shares so issued as payment of such dividends and distributions.
1.6 Issuance and transfer of Shares shall be by book entry only
and executed through the Omnibus Accounts. Stock certificates will not be issued
to the Company or the Account. Purchase and redemption orders for Fund shares
shall be recorded in an appropriate ledger for the Account or the appropriate
subaccount of the Account.
1.7 Fund Information.
(a) The Underwriter or its designated agent will provide (or cause to
be provided) to Company the information set forth in Schedule C hereto. In
addition, notwithstanding anything contained in this Agreement to the contrary,
the Company may use such information in communications prepared for the
Contracts, including, but not limited to, application, marketing, sales and
other communications materials. The parties understand and agree that any
description of the Fund(s) used in any application, marketing, sales or
communication materials shall accurately reflect the description of the Fund(s)
set forth in the Fund(s) prospectus and marketing material as described in Part
I of Schedule C attached hereto. As set forth in Section 4.1 herein, if Company
creates
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advertising or sales describing the Fund(s) other than as set forth in approved
materials provided by the Underwriter Company shall provide Underwriter with the
opportunity to review copies of such materials prior to use of such materials
with the public. The Underwriter will provide timely notification to Company of
any change to the information described in Part I of Schedule C including
without limitation any change to the CUSIP number or symbol designation of a
Fund. Such notification shall be given to Company at least ten (10) Business
Days prior to the effective date of the change or the effect of the change with
respect to transactions by the Account in any affected Fund shall be delayed for
a reasonable time following notification hereunder.
(b) Notwithstanding anything to the contrary in this Agreement, upon
request, the Underwriter will provide Company with a copy of prospectuses, proxy
materials, financial statements, reports and other materials relating to each
Fund in sufficient quantity for each Contract owner invested in the Fund.
(c) With the exception of (i) listings of product offerings; (ii)
materials in the public domain (e.g., magazine articles and trade publications);
and (iii) materials used on an internal basis only, Company agrees not to
furnish or cause to be furnished to any third parties or to display publicly or
publish any information or materials relating to the Funds, except such
materials and information as may be distributed to Company by Underwriter or
approved for distribution by Underwriter upon Company's request
1.8. The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares may be sold
to other investors and the cash value of the Contracts may be invested in other
investment companies.
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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 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 Underwriter represents and warrants that Shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with applicable state and federal
securities laws and that each Fund is registered under the 1940 Act. Each 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. Each Fund 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 Fund, the Adviser, or the Underwriter.
2.3. The Underwriter agrees to comply with any applicable state
insurance laws or regulations (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, and including cooperating with the Company in any filings of
sales literature for the Contracts), to the extent notified thereof in writing
by the Company.
2.4. The Underwriter represents that each Fund is lawfully
organized and validly existing under the laws of the State of its organization
and that each Fund does comply in all material respects with the 1940 Act.
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 Fund shares
in accordance with any applicable state and federal securities laws.
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2.7. The Underwriter represents and warrants that all of its and
each Fund's trustees/directors, officers, employees, investment advisers, and
other individuals or entities dealing with the money and/or securities of each
Fund are covered by a blanket fidelity bond or similar coverage for the benefit
of the Fund 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.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many copies
of the Fund's current prospectus listed on Schedule B as the Company may
reasonably request.The Fund or the Underwriter shall bear the expense of
printing copies of the current prospectus for the Fund that will be distributed
to existing and prospective Contract owners, and the Company shall bear the
expense of printing copies of the Company's prospectus that are used in
connection with offering the Contracts issued by the Company. If requested by
the Company in lieu thereof, the Underwriter shall provide such documentation
(including a final copy of the then current prospectus for each Fund on diskette
at the Fund's or 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 Fund is amended) to have the prospectus for the Contracts and
the Fund's prospectus printed together in one document (such printing of the
Fund's prospectus for existing and prospective Contract owners to be at the
Fund's or Underwriter's expense).
3.2. The Fund's prospectus shall state that the current Statement
of Additional Information ("SAI") for the Fund is available, and the Underwriter
(or the Fund), at its expense, shall provide a reasonable number of copies of
such SAI free of charge to the Company. Company to provide for itself and for
any owner of a Contract who requests such SAI.
3.3. The Underwriter shall provide the Company with information
regarding each Fund'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 Underwriterat it's expense, shall provide the Company with
copiesof each Fund's 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 Shares in accordance with instructions
received from Contract owners; and
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(iii) vote Shares for which no instructions have been
received in the same proportion as 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 Shares held in any
segregated asset account in the same proportion as Shares of such portfolio for
which voting instructions have been received from Contract owners, to the extent
permitted by law.
ARTICLE IV. Sales Material and Information
4.1. As set forth in Section 1.7 (a) herein, the Company shall
furnish, or shall cause to be furnished, to the Underwriter, each piece of sales
literature or other promotional material that the Company develops and in which
a Fund (or a Designated Portfolio thereof) or the Adviser or the Underwriter is
named or describes a Fund or the Underwriter other than as set forth in the Fund
prospectus or the materials listed on Part I of Schedule C attached hereto. The
parties understand and agree that the Underwriter will review a description of
Fund(s) for use in Contract prospectus and initial Contract rollout sales
materials The Underwriter will be deemed to have approved such sales literature
or promotional material unless the Underwriter objects or provides comments to
the Company within ten (10) Business Days after receipt of such material. The
Underwriter reserves the right to reasonably object to the continued use of any
such sales literature or other promotional material in which a Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter is named, and no
such material shall be used if the Underwriter so objects.
4.2. The Company shall not give any information or make any
representations or statements on behalf of a Fund or concerning a Fund 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 prospectus or SAI for the Fund shares, as such registration statement and
prospectus or SAI may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or other
promotional material approved by the Underwriter, except with the permission of
the Underwriter.
4.3. The Underwriter 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 comments to the Underwriter within ten (10) 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.
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4.4. 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 Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, SAIs, reports, proxy
statements, sales literature and other promotional materials, and all amendments
to any of the above, that relate to the Fund or it's shares, within a reasonable
period of time after the filing of such document(s) with the SEC or other
regulatory authorities
4.6 The Company will provide to the Fund 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, and all
amendments to any of the above, that relate to the Contracts or the Account,
within a reasonable period of time after the filing of such document(s) with the
SEC or other regulatory authorities. The Company shall provide to the
Underwriter any complaints received from the Contract owners pertaining to the
Fund or the Designated Portfolio.
4.7. The Underwriter will provide the Company with as much notice
as is reasonably practicable of any proxy solicitation for any Designated
Portfolio, and of any material change in a Fund's registration statement,
particularly any change resulting in a change to the registration statement or
prospectus for any Account. The Underwriter 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. When timing
permits, the Underwriter will make reasonable efforts to attempt to have changes
affecting Contract prospectuses become effective simultaneously with the annual
updates for such prospectuses.
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 a Fund or any affiliate of a Fund: 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
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employees, and registration statements, prospectuses, SAIs, shareholder reports,
proxy materials, and any other communications distributed or made generally
available with regard to a Fund.
ARTICLE V. Fees and Expenses
5.1. All expenses incident to performance by the Underwriter under
this Agreement shall be paid by the Underwriter. The Underwriter shall see to it
that all Fund shares are registered and authorized for issuance in accordance
with applicable federal law and, if and to the extent deemed advisable by the
Underwriter, in accordance with applicable state laws prior to their sale. The
Company shall not bear the expenses for the cost of registration and
qualification of a Fund's shares, preparation and filing of a Fund'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 a Fund's
shares.
5.2. All expenses incident to the performance by the Company under
this Agreement shall be paid by the Company. The Company shall bear the expenses
of distributing each Fund's prospectus to owners of Contracts issued by the
Company and of distributing each Fund's proxy materials and reports to such
Contract owners.
ARTICLE VI. Diversification and Qualification
6.1. The Underwriter represents that each Fund is qualified as a
Regulated Investment Company under Subchapter M of the Code, and that each Fund
currently intends to 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 a Fund has ceased to so
qualify or that a Fund might not so qualify in the future.
ARTICLE VII. Indemnification
7.1. Indemnification By the Company
7.1(a). The Company agrees to indemnify and hold harmless the
Fund and the Underwriter and each of their respective trustees/directors and
officers, and each person, if any, who controls the Fund or the 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 7.1) 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:
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(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
Fund 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 Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI, or
sales literature of a Fund 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 Fund 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 a 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 to the Underwriter by or
on behalf of the Company; or
(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 6.1
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;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
7.1(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,
12
or 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.
7.1(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.
7.1(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 Fund shares or the Contracts or the
operation of a Fund.
7.2. Indemnification by the Underwriter
7.2(a). Except as provided in section 1.4 hereof, 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 7.2) against any and all losses, claims,
damages, liabilities (including amounts paid 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 prospectus or SAI or sales
literature of a Fund (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in
13
conformity with information furnished to the Underwriter or
the Fund by or on behalf of the Company for use in the
registration statement, prospectus or SAI for a Fund or in
sales literature (or any amendment or supplement) 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 the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the
Underwriter or persons under their control) or wrongful
conduct of the Underwriter or persons under its 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 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 Underwriter;
or
(iv) arise as a result of any failure by the Underwriter
to provide the services and furnish the materials under the
terms of this Agreement; or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; or
(vi) arise out of or result from the materially incorrect
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 7.2(b) and
7.2(c) hereof.
7.2(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
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 or the Account, whichever is applicable.
7.2(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
14
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.
7.2(d). The Indemnified Party will promptly 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.
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
8.2. 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.
ARTICLE IX. Termination
9.1. 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 Portfolios, by three (3)
months advance written notice delivered to the other
parties; or
(b) termination by the Company by written notice to the
Underwriter based upon the Company's determination
that shares of a Fund are not reasonably available to
meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the
Underwriter in the event any of the 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
15
(d) termination by 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 Shares; provided, however, that the
Underwriter 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 Company to perform its obligations
under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against a
Fund 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 Underwriter to perform its obligations under
this Agreement; or
(f) termination by the Company by written notice to the
Underwriter with respect to any Designated Portfolio
in the event that such Portfolio ceases to qualify as
a Regulated Investment Company under Subchapter M as
specified in Section 6.1 hereof, or if the Company
reasonably believes that such Portfolio may fail to
so qualify or comply; or
(g) termination by the Underwriter by written notice to
the Company, if the Underwriter shall determine, in
its 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
(h) termination by the Company by written notice to the
Underwriter, if the Company shall determine, in its
sole judgment exercised in good faith, that a Fund,
the 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
(i) termination by the Company upon any substitution of
the shares of another investment company or series
thereof for Shares in accordance with the terms of
the Contracts, provided that the Company has given at
least 45 days prior written notice to the Underwriter
of the date of substitution.
9.2. Notwithstanding any termination by the Company of this
Agreement and subject to section 1.1 hereof, the Underwriter shall, at the
option of the Company, continue to make
16
available additional Shares 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. 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 a Fund, redeem investments in a Fund,
and/or invest in a Fund 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 9.2 shall not apply to any terminations under
Section 9.1(i) of this Agreement.
9.3. The Company shall not redeem Shares attributable to the
Contracts (as opposed to 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 a Fund and Underwriter, as permitted by an order of the
SEC pursuant to Section 26(c) of the 1940 Act, but only if a substitution of
other securities for the Shares 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 Underwriter reasonable assurance that any
redemption pursuant to clause (ii) above is a Legally 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
Portfolio that was otherwise available under the Contracts without first giving
the Underwriter 45 days notice of its intention to do so.
9.4. Notwithstanding any termination of this Agreement, each
party's obligation under Article VII to indemnify the other parties shall
survive.
ARTICLE X. 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.
17
If to the Company: Xxxxx X. Xxxxxxxx, Esq.
Senior Vice President and General Counsel
ML Life Insurance Company of New York
0 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
If to the Underwriter: OppenheimerFunds Distributor,
000 Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attn: General Counsel
ARTICLE XI. Miscellaneous
11.1. All persons dealing with a Fund organized as a Massachusetts
business trust must look solely to the property of that Fund, and in the case of
a series company, the respective Designated Portfolios listed on Schedule B
hereto as though each such Designated Portfolio had separately contracted with
the Company and the Underwriter for the enforcement of any claims against such
Fund. The parties agree that neither the Board, officers, agents, or
shareholders of that Fund assume any personal liability or responsibility for
obligations entered into by or on behalf of the Fund.
11.2. 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.
11.3. 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.
11.4 Except as otherwise provided for in this Agreement or in any
other agreement between the parties or their respective affiliates, Company
shall not make representations concerning the Funds or the Underwriter except
those contained in the Fund's then-current Prospectuses, Statements of
Additional Information, in current printed sales literature of the Funds created
by the Underwriter, and in sales literature created by Company Except as
otherwise provided for in this Agreement or in any other agreement between the
parties or their respective affiliates, neither party shall use the name or any
trademark or service xxxx of the other party without their prior consent. In the
event this Agreement is terminated, Neither party shall use the other party's
name or any other words that may be reasonably construed to imply a continuing
relationship.
18
11.5. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.6. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
11.7. 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 information or
reports reasonably requested 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.
11.8. 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.
11.9. 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.
11.10. No party shall be liable, nor shall any party be considered in
breach of this Agreement, due to any failure or delay in performance of its
obligations under this Agreement, as a result of a cause beyond its reasonable
control including but not limited to any act of God or public enemy, act of any
military, civil or regulatory authority, change in any law or regulation, fire,
flood, tornado, earthquake, storm, or other like event, disruption or outage of
computers or communications, equipment failure, power or other utility failure,
labor strikes, exchange action, action or inaction on the part of pricing
services utilized by the Adviser to price the Fund's shares, unusual trading
activity or the suspension or disruption of trading on any exchange or another
other cause, whether similar or dissimilar to any of the foregoing, which could
not have been prevented with reasonable care.
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: _____________________
19
Name: Xxxx X. Xxxxx
Title: Vice President & Secretary
OPPENHEIMERFUNDS DISTRIBUTOR, INC.:
By its authorized officer
By: _____________________________
Name: _____________________________
Title:_____________________________
20
SCHEDULE A
Dated: October 11, 2002
SEPARATE ACCOUNTS OF THE COMPANY
Xxxxxxx Xxxxx Life Variable Annuity Separate Account D
CONTRACTS
Contract # MLNY-VA-006
SCHEDULE B
DESIGNATED PORTFOLIOS AND CLASSES
Dated: October 11, 2002
Fund Class
XXXXXXXXXXX GLOBAL FUND A
XXXXXXXXXXX MAIN STREET GROWTH AND INCOME FUND A
XXXXXXXXXXX QUEST OPPORTUNITY VALUE FUND A
SCHEDULE C
FUND MATERIALS
PART I. Fund Description
- The Underwriter will provide to Company or a common service provider
designated by Company within ten (15) days of the end of each month,
each Fund's average annual return for the 1, 5, and 10 year periods
ending the current month on a Net Asset Value basis.
- The Underwriter will provide to Company a description of each Fund
including holdings, portfolio composition, largest sectors and
geographical allocation and a statement of objective in a mutually
acceptable format.
Part II. Fund Information and Materials
The Underwriter will provide to Company the following information and
materials on an as needed basis, as requested by Company:
- A copy of each Fund's prospectus, quarterly reports and other
brochures via electronic data delivery.
- Specific investment performance information that may be
requested that cannot be obtained from the prospectus. This
would include specific calculations on various performance
parameters and will require an aggressive turnaround time
(usually 5 business days).
