PARTICIPATION AGREEMENT
AMONG
METLIFE INVESTORS INSURANCE COMPANY,
METLIFE INVESTORS DISTRIBUTION COMPANY,
ALLIANCE CAPITAL MANAGEMENT L.P.
AND
ALLIANCE FUND DISTRIBUTORS, INC.
DATED AS OF
MAY 1, 2001
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of May, 2001
("Agreement"), by and among Metlife Investors Insurance Company, a Missouri life
insurance company ("Insurer") (on behalf of itself and its "Separate Account,"
defined below); MetLife Investors Distribution Company, a Delaware corporation
("Contracts Distributor"), the principal underwriter with respect to the
Contracts referred to below; Alliance Capital Management L.P., a Delaware
limited partnership ("Adviser"), the investment adviser of the Fund referred to
below; and Alliance Fund Distributors, Inc., a Delaware corporation
("Distributor"), the Fund's principal underwriter (collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and Alliance Variable Products Series
Food, Inc. (the "Fund") desire that Class B shares of the Fund's Alliance
Xxxxxxxxx Value Portfolio, Alliance Xxxxxxxxx Small Cap Value Portfolio, Premier
Growth Portfolio and Real Estate Portfolio (the "Portfolios"; reference herein
to the "Fund" includes reference to each Portfolio to the extent the context
requires) be made available by Distributor to serve as underlying investment
media for those combination fixed and variable annuity contracts of Insurer that
are the subject of Insurer's Form N-4 registration statement filed with the
Securities and Exchange Commission (the "SEC"), File Nos. 333-34741 and
333-50540 (the "Contracts"), to be offered through Contracts Distributor and
other registered broker-dealer firms as agreed to by Insurer and Contracts
Distributor; and
WHEREAS the Contracts provide for the allocation of net amounts received by
Insurer to separate series (the "Divisions"; reference herein to the "Separate
Account" includes reference to each Division to the extent the context requires)
of the Separate Account for investment in Class B
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shares of corresponding Portfolios of the Fund that are made available through
the Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make Class B shares of the
Portfolios available to Insurer for this purpose at net asset value and with no
sales charges, all subject to the following provisions:
Section 1. Additional Portfolios
The Fund has and may, from time to time, add additional Portfolios, which
will become subject to this Agreement, if, upon the written consent of each of
the Parties hereto, they are made available as investment media for the
Contracts.
Section 2. Processing Transactions
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2.1 Timely Pricing and Orders.
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The Adviser or its designated agent will provide closing net asset value,
dividend and capital gain information for each Portfolio to Insurer at the
close of trading on each day (a "Business Day") on which (a) the New York
Stock Exchange is open for regular trading, (b) the Fund calculates the
Portfolio's net asset value and (c) Insurer is open for business. The Fund
or its designated agent will use its best efforts to provide this
information by 6:00 p.m., Eastern time. Insurer will use these data to
calculate unit values, which in turn will be used to process transactions
that receive that same Business Day's Separate Account Division's unit
values. Such Separate Account processing will be done the same evening, and
corresponding orders with respect to Fund shares will be placed the morning
of the following Business Day. Insurer will use
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its best efforts to place such orders with the Fund by 10:00 a.m., Eastern
time. In the event that Fund is unable to meet the 6:00 p.m. time stated
herein, it shall provide additional time for the Insurer to place orders
for the purchase and redemption of shares. Such additional time shall be
equal to the additional time which Fund takes to make the net asset value
available to the Insurer. If Fund provides the Insurer with materially
incorrect share net asset value information through no fault of the
Insurer, the Insurer on behalf of the Separate Accounts, shall be entitled
to an adjustment to the number of shares purchased or redeemed to reflect
the correct share net asset value. Any material error in the calculation of
net asset value per share, dividend or capital gain information shall be
reported promptly upon discovery to the Insurer. If a Separate Account due
to such error has received amounts in excess of the amounts of which it is
entitled, the Insurer, when requested by Fund, shall make adjustments to
the Separate Account to reflect the change in the values of the shares as
reflected in the unit values of the affected Contract owners who still have
values in the Portfolio. No adjustment for an error shall be taken in any
Separate Account until such time as the parties hereto have agreed to a
resolution of the error, but the parties shall use all reasonable efforts
to reach such agreement within two business days after the discovery of the
error.
2.2 Timely Payments.
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Insurer will transmit orders for purchases and redemptions of Fund shares
to Distributor, and will wire payment for net purchases to a custodial
account designated by the Fund on the day the order for Fund shares is
placed, to the extent practicable. Payment for net redemptions will be
wired by the Fund to an account designated by Insurer on the same day as
the order is placed, to the extent practicable, and in any event be made
within six calendar days after the date the order is placed in
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order to enable Insurer to pay redemption proceeds within the time
specified in Section 22(e) of the Investment Company Act of 1940, as
amended (the "1940 Act").
2.3 Redemption in Kind.
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The Food reserves the right to pay any portion of a redemption in kind of
portfolio securities, if the Food's board of directors (the "Board of
Directors") determines that it would be detrimental to the best interests
of shareholders to make a redemption wholly in cash.
2.4 Applicable Price.
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The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions order
Contracts will be executed at, the net asset values as determined as of the
close of regular trading on the New York Stock Exchange on the Business Day
that Insurer receives such orders and processes such transactions, which,
Insurer agrees shall occur not earlier than the Business Day prior to
Distributor's receipt of the corresponding orders for purchases and
redemptions of Portfolio shares. For the purposes of this section, Insurer
shall be deemed to be the agent of the Food for receipt of such orders from
holders or applicants of contracts, and receipt by Insurer shall constitute
receipt by the Food. All other purchases and redemptions of Portfolio
shares by Insurer, will be effected at the net asset values next computed
after receipt by Distributor of the order therefor, and such orders will be
irrevocable. Insurer hereby elects to reinvest all dividends and capital
gains distributions in additional shares of the corresponding Portfolio at
the record-date net asset values until Insurer otherwise notifies the Food
in writing, it being agreed by the Parties that the record date and the
payment date with respect to any dividend or distribution will be the same
Business Day.
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Fund represents that all shares of the Portfolios of the Fund will be sold
only to Participating Insurance Companies which have agreed to participate
in the Fund to fund their Separate Accounts and/or to Qualified Plans, all
in accordance with the requirements of Section 817(h)(4) of the Internal
Revenue Code of 1986, as amended ("Code") and Treasury Regulation 1.817-5.
Shares of the Portfolios of the Fund will not be sold directly to the
general public.
Section 3. Costs and Expenses
-----------------------------
3.1 General.
Except as otherwise specifically provided herein, each Party will bear all
expenses incident to its performance under this Agreement.
3.2 Registration.
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The Fund will bear the cost of its registering as a management investment
company under the 1940 Act and registering its shares under the Securities
Act of 1933, as amended (the "1933 Act"), and keeping such registrations
current and effective; including, without limitation, the preparation of
and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices respecting
the Fund and its shares and payment of all applicable registration or
filing fees with respect to any of the foregoing. Insurer will bear the
cost of registering the Separate Account as a unit investment trust under
the 1940 Act and registering units of interest under the Contracts under
the 1933 Act and keeping such registrations current and effective;
including, without limitation, the preparation and filing with the SEC of
Forms N-SAR and Rule 24f-2 Notices respecting the Separate Account and its
units of interest and payment of all applicable registration or filing fees
with respect to any of the foregoing.
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3.3 Other (Non-Sales-Related) Expenses.
-----------------------------------
The Fund will bear the costs of preparing, filing with the SEC and setting
for printing the Fund's prospectus, statement of additional information and
any amendments or supplements thereto (collectively, the "Fund
Prospectus"), periodic reports to shareholders, Fund proxy material and
other shareholder communications and any related requests for voting
instructions from Participants (as defined below). Insurer will bear the
costs of preparing, filing with the SEC and setting for printing, the
Separate Account's prospectus, statement of additional information and any
amendments or supplements thereto (collectively, the "Separate Account
Prospectus"), any periodic reports to owners, annuitants or participants
under the Contracts (collectively, "Participants"), and other Participant
communications. The Fund and Insurer each will bear the costs of printing
in quantity and delivering to existing Participants the documents as to
which it bears the cost of preparation as set forth above in this Section
3.3, it being understood that reasonable cost allocations will be made in
cases where any such Fund and Insurer documents are printed or mailed on a
combined or coordinated basis. If requested by Insurer, the Fund will
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provide annual Prospectus text to Insurer on diskette for printing and
binding with the Separate Account Prospectus.
3.4 Other Sales-Related Expenses.
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Expenses of distributing the Portfolio's shares and the Contracts will be
paid by Contracts Distributor and other parties, as they shall determine by
separate agreement.
3.5 Parties to Cooperate.
---------------------
The Adviser, Insurer, Contracts Distributor, and Distributor each agrees to
cooperate with the others, as applicable, in arranging to print, mail
and/or deliver combined or coordinated prospectuses or other materials of
the Fund and Separate Account.
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Section 4. Legal Compliance
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4.1 Tax Laws.
(a) The Adviser will qualify and maintain qualification of each Portfolio
as a regulated investment company ("RIC") under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), and the Adviser or
Distributor will notify Insurer immediately upon having a reasonable basis
for believing that a Portfolio has ceased to so qualify or that it might
not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the Contracts
will be treated as [annuity] contracts under applicable provisions of the
Code and that it will make every effort to maintain such treatment. Insurer
will notify the Fund and Distributor immediately upon having a. reasonable
basis for believing that any of the Contracts have ceased to be so treated
or that they might not be so treated in the future.
(c) The Fund will comply and maintain each Portfolio's compliance with the
diversification requirements set forth In Section 817(h) of the Code and
Section 1.817-5(b) of the regulations under the Code, and the Fund, Adviser
or Distributor will notify Insurer immediately upon having a reasonable
basis for believing that a Portfolio has ceased to so comply or that a
Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the Separate
Account is a "segregated asset account" and that interests in the Separate
Account are offered exclusively through the purchase of or transfer into a
"variable contract," within the meaning of such terms under Section 817(h)
of the Code and the regulations thereunder. Insurer will make every effort
to continue to meet
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such definitional requirements, and it will notify the Fund and Distributor
immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the
future.
(e) The Adviser will manage the Fund as a RIC in compliance with Subchapter
M of the Code and will use its best efforts to manage to be in compliance
with Section 817(h) of the Code and regulations thereunder. The Fund has
adopted and will maintain procedures for ensuring that the Fund is managed
in compliance with Subchapter M and Section 817(h) and regulations
thereunder.
(f) Should the Distributor or Adviser become aware of a failure of Fund, or
any of its Portfolios, to be in compliance with Subchapter M of the Code or
Section 817(h) of the Code and regulations thereunder, they represent and
agree that they will immediately notify Insurer of such in writing.
4.2 Insurance and Certain Other Laws.
(a) The Adviser will use its best efforts to cause the Fund to comply with
any applicable state insurance laws or regulations, to the extent'
specifically requested in writing by Insurer. If it cannot comply, it will
so notify insurer in writing.
(b) Insurer represents and warrants that (i) it is an insurance company
duly organized, validly existing and in good standing under the laws of the
State of Missouri and has full corporate power, authority and legal right
to execute, deliver and perform its duties and comply with its obligations
under this Agreement, (ii) it has legally and validly established and
maintains the Separate Account as a segregated asset account under Missouri
State Law, and (iii) the Contracts comply in all material respects with all
other applicable federal and state laws and regulations.
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(c) Insurer and Contracts Distributor represent and warrant that Contracts
Distributor is a business corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware and has full
corporate power, authority and legal right to execute, deliver, and perform
its duties and comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business corporation
duly organized, validly existing, and in good standing under the laws of
the State of Delaware and has full corporate power, authority and legal
right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
(e) Distributor represents and warrants that the Fund is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Maryland and has full power, authority, and legal right to
execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
(f) - Adviser represents and warrants that it is a limited partnership,
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full power, authority, and legal right to
execute, deliver, and perform its duties and comply with its obligations
under this Agreement.
4.3 Securities Laws.
(a) Insurer represents and warrants that (i) interests in the Separate
Account pursuant to the Contracts will be registered under the 1933 Act to
the extent required by the 1933 Act and the Contracts will be duly
authorized for issuance and sold in compliance with Missouri state law,
(ii) the Separate Account is and will remain registered under the 1940 Act
to the extent required by the 1940
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Act, (iii) the Separate Account does and will comply in all material
respects with the requirements of the 1940 Act and the rules thereunder,
(iv) the Separate Account's 1933 Act registration statement relating to the
Contracts, together with any amendments thereto, will, at all times comply
in all material respects with the requirements of the 1933 Act and the
rules thereunder, and (v) the Separate Account Prospectus will at all times
comply in all material respects with the requirements of the 1933 Act and
the rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i) Fund shares
sold pursuant to this Agreement will be registered under the 1933 Act to
the extent required by the 1933 Act and duly authorized for issuance and
sold in compliance with Maryland law, (ii) the Fund is and will remain
registered under the 1940 Act to the extent required by the 1940 Act, (iii)
the Fund will amend the registration statement for its shares under the
1933 Act and itself under the 1940 Act from time to time as required in
order to effect the continuous offering of its shares, (iv) the Fund does.
and will comply in all material respects with the requirements of the 1940
comply in all material respects with the requirements of the 1933 Act and
rules thereunder; and (vi) the Fund Prospectus will at all times comply in
all material respects with the requirements of the 1933 Act and the rules
thereunder. (c) The Fund will register and qualify its shares for sale in
accordance with the laws of any state or other jurisdiction only if and to
the extent reasonably deemed advisable by the Fund, Insurer or any other
life insurance company utilizing the Fund.
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(d) Distributor and Contracts Distributor each represents and warrants that
it is registered as a broker-dealer with the SEC under the Securities
Exchange Act of 1934, as amended, and is a member in good standing of the
National Association of Securities Dealers Inc. (the "NASD").
4.4 Notice of Certain Proceedings and Other Circumstances.
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(a) Distributor or the Fund shall immediately notify Insurer of (i) the
issuance by any court or regulatory body of any stop order, cease and
desist order, or other similar order with respect to the Fund's
registration statement under the 1933 Act or the Fund Prospectus, (ii) any
request by the SEC for any amendment to such registration statement or Fund
Prospectus, (iii) the initiation of any proceedings for that purpose or for
any other purpose relating to the registration or offering of the Fund's
shares, or (iv) any other action or circumstances that may prevent the
lawful offer or sale of Fund shares in any state or jurisdiction,
including, without limitation, any circumstances in which (x) the Fund's
shares are not registered and, in all material respects, issued and sold in
accordance with applicable state and federal law or (y) such law precludes
the use of such shares' as an underlying investment medium of the Contracts
issued or to be issued by Insurer. Distribution of' and the Fund will make
every reasonable effort to prevent the issuance of any such stop order,
cease and desist order or similar order and, if any such order is issued,
to obtain the lifting thereof at the earliest possible time.
(b) Insurer and Contracts Distributor shall immediately notify the Fund of
(i) the issuance by any court or regulatory body of any stop order, cease
and desist order or similar order with respect to the Separate Account's
registration statement under the 1933 Act relating to the Contracts or the
Separate Account Prospectus, (ii) any request by the SEC for any amendment
to such registration statement or Separate Account Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose
relating to the registration or offering of the Separate Account interests
pursuant
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to the Contracts, or (iv) any other action or circumstances that may
prevent the lawful offer or sale of said interests in any state or
jurisdiction, including, without limitation, any circumstances in which
said interests are not registered and, in all material respects, issued and
sold in accordance with applicable state and federal law. Insurer and
Contracts Distributor will make every reasonable effort to prevent the
issuance of any such stop order, cease and desist order or similar order
and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
4.5 Insurer to Provide Documents.
Upon request, Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account
Prospectuses, reports, any preliminary and final voting instruction
solicitation material, applications for exemptions, requests for no-action
letters, and amendments to any of the above, that relate to the Separate
Account or the Contracts, contemporaneously with the filing of such
document with the SEC or other regulatory authorities.
4.6 Fund to Provide Documents.
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and
final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document with the SEC
or other regulatory authorities.
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Section 5. Mixed and Shared Funding
-----------------------------------
5.1 General.
The Fund has obtained an order exempting it from certain provisions of the
1940 Act and rules thereunder so that the Fund is available for investment
by certain other entities, including, without limitation, separate accounts
funding variable life insurance policies and separate accounts of insurance
companies unaffiliated with Insurer ("Mixed and Shared Funding Order"). The
Parties recognize that the SEC has imposed terms and conditions for such
orders that are substantially identical to many of the provisions of this
Section 5.
5.2 Disinterested Directors.
The Fund agrees that its Board of Directors shall at all times consist of
directors a majority of "Disinterested Directors") are not interested
persons of Adviser or Distributor within the meaning of Section 2(a)(19) of
the 1940 Act.
5.3 Monitoring for Material Irreconcilable Conflicts.
------------------------------------------------
The Fund agrees that its Board of Directors will monitor for the existence
of any material irreconcilable conflict between the interests of the
participants in all separate accounts of life insurance companies utilizing
the Fund, including the Separate Account. Insurer agrees to inform the
Board of Directors of the Fund of the existence of or any potential for any
such material irreconcilable conflict of which it is aware. The concept of
a "material irreconcilable conflict" is not defined by the 1940 Act or the
rules thereunder, but the Parties recognize that such a conflict may arise
for a variety of reasons, including, without limitation:
(a) an action by any state insurance or other regulatory authority;
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(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 Portfolio are being managed;
(e) a difference in voting instructions given by variable annuity contract
and variable life insurance contract participants or by participants of
different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to disregard
the voting instructions of participants. Insurer will assist the Board of
Directors in carrying out its responsibilities by providing the Board of
Directors with all information reasonably necessary for the Board of
Directors to consider any issue raised, including information as to a
decision by Insurer to disregard voting instructions of Participants.
5.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the members of
the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, Insurer and the other life
insurance companies utilizing the Fund will, at their own expense and to
the extent reasonably practicable (as determined by a majority of the
Disinterested Directors), take
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whatever steps are necessary to remedy or eliminate the material
irreconcilable conflict, which steps may include, but are not limited to:
(i) withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such assets in
a different investment medium, including another Portfolio of the
Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected participants and, as
appropriate, segregating the assets of any particular group (e.g.,
annuity contract owners or participants, life insurance contract
owners or all contract owners and participants of one or more life
insurance companies utilizing the Fund) that votes in favor of such
segregation, or offering to the affected contract owners or
participants the option of making such a change; and
(ii) establishing a new registered investment company of the type
defined as a "Management Company (in Section 4(3) of the 1940 Act or a
new separate account that is operated as a Management Company.
(b) If the material irreconcilable conflict arises because of Insurer's
decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, Insurer
may be required, at the Fund's election, to withdraw the Separate Account's
investment in the Fund. No charge or penalty will be imposed as a result of
such withdrawal. Any such withdrawal must take place within six months
after the Fund gives notice to Insurer that this provision is being
implemented, and until such withdrawal Distributor and the Fund shall
continue to accept and implement orders by Insurer for the purchase and
redemption of shares of the Fund.
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(c) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to Insurer conflicts with the
majority of other state. regulators, then Insurer will withdraw the
Separate Account's investment in the Fund within six months after the
Fund's Board of Directors informs Insurer that it has determined that such
decision has created a material irreconcilable conflict, and until such
withdrawal Distributor and Fund shall continue to accept and implement
orders by Insurer for the purchase and redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and
with a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any
material irreconcilable conflict. In"DQ event, however, will the Fund or
Distributor be required to establish a new funding medium for any
Contracts. Insurer will not be required by the terms hereof to establish a
new funding medium for any Contracts if an offer to do, so has been
declined by vote of a majority of Participants materially adversely
affected by the material irreconcilable conflict.
5.5 Notice to Insurer.
The Fund will promptly make known in writing to Insurer the Board of
Directors determination of the existence of a material irreconcilable
conflict, a description of the facts that give rise to such conflict and
the implications of such conflict.
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5.6 Information Requested by Board of Directors.
--------------------------------------------
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of
Directors may reasonably request so that the Board of Directors may fully
carry out the obligations imposed upon it by the provisions hereof, and
said reports, materials and data will be submitted at any reasonable time
deemed appropriate by the Board of Directors. All reports received by the
Board of Directors of potential or existing conflicts, and all Board of
Directors actions with regard to determining the existence of a conflict,
notifying life insurance companies utilizing the Fund of a conflict, and
determining whether any proposed action adequately remedies a conflict,
will be properly recorded in the minutes of the Board of Directors or other
appropriate records, and such minutes or other records will be made
available to the SEC upon request.
5.7 Compliance with SEC Rules.
--------------------------
If, at any time during which the Fund is serving as an investment medium
for variable life insurance policies, 1940 Act Rules 6e-3(T) or, if
applicable, 6e-2 are amended or Rule 6e-3 is adopted to provide exemptive
relief with respect to mixed and shared funding, the Parties agree that
they will comply with the terms and conditions thereof and that the terms
of this Section 5 shall be deemed modified if and only to the extent
required in order also to comply with the terms and' conditions of such
exemptive relief that is afforded by any of said rules that are applicable.
Section 6. Termination
6.1 Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
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(a) at the option of Insurer or Distributor upon at least six months
advance written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least sixty days advance written
notice to the other parties, and (ii) approval by (x) a majority of the
disinterested Directors upon a finding that a continuation of this Contract
is contrary to the best interests of the Fund, or (y) a majority vote of
the shares of the affected Portfolio in the corresponding Division of the
Separate Account (pursuant to the procedures set forth in Section II of
this Agreement for voting Trust shares in accordance with Participant
instructions).
(c) at the option of the Fund upon institution of formal proceedings
against Insurer or Contracts Distributor by the NASD, the SEC, any state
insurance regulator or any other regulatory body regarding Insurer's
obligations under this Agreement or related to the sale of the Contracts,
the operation of the Separate Account, or the purchase of the Fund shares,
if, in each case, the Fund reasonably determines that such proceedings, or
the facts on which such proceedings would be based, have a material
likelihood of imposing material adverse consequences on the Portfolio, to
be terminated; or
(d) at the option of Insurer upon institution of formal proceedings against
the Fund, Adviser, or Distributor by the NASD, the SEC, or any state
insurance regulator or any other regulatory body regarding the Fund's,
Adviser's or Distributor's obligations under this Agreement or related to
the operation or management of the Fund or the purchase of Fund shares, if,
in each case, Insurer reasonably determines that such proceedings, or the
facts on which such proceedings would be based, have a material likelihood
of imposing material adverse consequences on Insurer, Contracts Distributor
or the Division corresponding to the Portfolio to be terminated; or
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(e) at the option of any Party in the event that (i) the Portfolio's shares
are not registered and, in all material respects, issued and sold in
accordance with any applicable state and federal law or (ii) such law
precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer; or
(f) upon termination of the corresponding Division's investment in the
Portfolio pursuant to Section 5 hereof; or
(g) at the option of Insurer if the Portfolio ceases to qualify as a RIC
under Subchapter M of the Code or under successor or similar provisions; or
(h) at the option of Insurer if the Portfolio fails to comply with Section
817(h) of the Code or with successor or similar provisions;
(i) at the option of Insurer if Insurer reasonably believes that any change
in a Fund's investment adviser or investment practices will materially
increase the risk incurred by Insurer;.
(j) at the option of the Insurer, upon the breach of any material provision
of this Agreement by the Fund, Adviser or Distributor, which breach has not
been cured to the satisfaction of the Insurer within ten days after written
notice of such breach is delivered to the breaching party; or
(k) at the option of Fund, upon the Insurer's breach of any material
provision of this Agreement, which breach has not been cured to the
satisfaction of Fund within ten days after written notice of such breach is
delivered to the Insurer.
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6.2 Funds to Remain Available.
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (Hi) as required
pursuant to Section 5 of this Agreement, or (iv) with respect to any
Portfolio as to which this Agreement has terminated, Insurer shall not (x)
redeem Fund shares attributable to the Contracts, or (y) prevent
Participants from allocating payments to or transferring amounts from a
Portfolio that was otherwise available under the Contracts, until, in
either case, 30 calendar days after Insurer shall have notified the Fund or
Distributor of its intention to do so.
6.3 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of this
Agreement.
6.4 Continuance of Agreement for Certain Purposes.
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Notwithstanding any termination of this Agreement, the Distributor shall
continue to make available shares of the Portfolios pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (the "Existing Contracts"),
except as otherwise provided under Section 5 of this Agreement.
Specifically, and without limitation, the Distributor shall facilitate the
sale and purchase of shares of the Portfolios as necessary in order to
process premium payments, surrenders and other withdrawals, and transfers
or reallocations of values under Existing Contracts.
20
Section 7. Parties to Cooperate Respecting Termination
------------------------------------------------------
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the final termination date with respect thereto.
Section 8. Assignment
---------------------
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
Section 9. Class B Distribution Payments
----------------------------------------
From time to time during the term of this Agreement the Distributor may
make payments to the Contracts Distributor pursuant to a distribution plan
..adopted by the Fund with respect to the Class B shares of the Portfolios
pursuant to Rule 12b-1 under the 1940 Act (the "Rule 12b-l Plan) in
consideration of the Contracts Distributor's furnishing distribution services
relating to the Class B shares of the Portfolios and providing administrative,
accounting and other services, including personal service and/or the maintenance
of Participant accounts, with respect to such shares. The Distributor has no
obligation to make any such payments, and the Contracts Distributor waives any
such payment, until the Distributor receives monies therefor from the Fund. Any
such payments made pursuant to this Section 9 shall be subject to the following
terms and conditions:
(a) Any such payments shall be in such amounts as the Distributor may from
time to time advise the Contracts Distributor in writing but in any event
not in excess of the amounts permitted by the Rule 12b-1 Plan. Such
payments will include a service fee in the amount of .25
21
of 1% per annum of the average daily net assets of the Fund attributable to
the Class B shares of a Portfolio held by clients of the Contracts
Distributor. Any such service fee shall be paid solely for personal service
and/or the maintenance of Participant accounts.
(b) The provisions of this Section 9 relate to a plan adopted by the Fund
pursuant to Rule 12b-l. In accordance with Rule 12b-l, any person
authorized to direct the disposition of monies paid or payable by the Fund
pursuant to this Section 9 shall provide the Fund's Board of Directors, and
the Directors shall review, at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
(c) The provisions of this Section 9 shall remain in effect for not more
than a year and thereafter for successive annual periods only so long as
such continuance is specifically approved at least annually in conformity
with Rule 12b-1 and the 1940 Act. The provisions of this Section 9 shall
automatically terminate in the event of the assignment (as defined by the
0000 Xxx) of this Agreement, or in the event the Rule "12b-1' Plan
terminates or is not continued. In the event this Agreement is terminated,
Section 9 shall remain in effect until the earlier of either: (a) the
Insurer obtaining a substitution order from the SEC with respect to any
fund substitution undertaken by the Insurer as a result of such termination
or (b) six months from the date of such termination.
Section 10. Notices
Notices and communications required or permitted by Section 2 hereof will
be given by means mutually acceptable to the Parties concerned. Each other
notice or communication required or permitted by this Agreement will be given to
the following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
22
MetLife Investors Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx, Xxx. 0000
Xxxxxxx, XX. 00000
Attn.: Xxxxxxx Xxxxxxx, Esq.
MetLife Investors Distribution Company
000 Xxxxxxx Xxxxxx Xxxxx, Xxx. 0000
Xxxxxxx, XX. 00000
Attn.: Xxxxxxx Xxxxxxx, Esq.
Alliance Fund Distributors, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn.: Xxxxxx X. Xxxxxx, Xx.
FAX: (000) 000-0000
Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx.
FAX: (000) 000-0000
Section 11. Voting Procedures
-----------------------------
Subject to the cost allocation procedures set forth in Section 3 hereof,
Insurer will distribute all proxy material furnished by the Fund, to.
Participants and will vote Fund shares in accordance with instructions received
from Participants. Insurer will vote Fund shares that are (a) not attributable
to Participants or (b) attributable to Participants, but for which no
instructions have been received, in the same proportion as Fund shares for which
said instructions have been received from Participants. Insurer agrees that it
will disregard Participant voting instructions only to the extent it would be
permitted to do so pursuant to Rule 6e-3(T)(b)(15)(iii) under the 1940 Act if
the Contracts were variable life insurance policies subject to that rule. Other
participating life insurance companies utilizing the Fund will be responsible
for calculating voting privileges in a manner consistent with that of Insurer,
as prescribed by this Section 11.
23
Section 12. Foreign Tax Credits
-------------------------------
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
Section 13. Indemnification
13.1 Indemnification of Fund, Distributor and Adviser by Insurer.
------------------------------------------------------------
(a) Except to the extent provided in Sections 13.1(b) and 13.1(c), below,
Insurer agrees to indemnify and hold harmless the Fund, Distributor and
Adviser, each of their directors and officers, and each person, if any, who
controls the Fund, Distributor or Adviser within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of
this Section 13.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Insurer)
or actions in respect thereof (inc1uding, to the extent reasonable, legal
and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or actions are related to the sale,
acquisition, or holding of the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Separate
Account's 1933 Act registration statement, the Separate Account
Prospectus, the Contracts or, to the extent prepared by Insurer or
Contracts Distributor, sales literature or advertising 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
24
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 Insurer or
Contracts Distributor by or on behalf of the Fund, Distributor or
Adviser for use in the Separate Account's 1933 Act registration
statement, the Separate Account Prospectus, the Contracts, or sales
literature or advertising (or any amendment or supplement to any of
the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained in
the Fund's 1933 Act registration statement, Fund Prospectus, sales
literature or advertising of the Fund, or any amendment or. supplement
to any of the foregoing, not supplied for use therein by or on behalf
of Insurer or Contracts Distributor) or the negligent, illegal or
fraudulent conduct of Insurer or Contracts Distributor or persons
under their control (including, without limitation, their employees
and "Associated Persons," as that term is defined in paragraph (m) of
Article I of the NASD's By-Laws), in connection with the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or supplement to any of the
foregoing, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
25
statements therein not misleading if such a statement or omission was
made in once upon and in conformity with information furnished to the
Fund, Adviser or Distributor by or on behalf of Insurer or Contracts
Distributor for use in the Fund's 1933 Act registration statement,
Fund Prospectus, sales literature or advertising of the Fund, or any
amendment or supplement to any of the foregoing; or
(iv) arise as a result of any failure by Insurer or Contracts
Distributor to perform the obligations, provide the services or
furnish the materials required of them under the terms of this
Agreement.
(b) Insurer shall not be liable under this Section 13.1 with respect to any
losses, claims, damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of that Indemnified Party's reckless disregard of
obligations or duties ;under this Agreement or to Distributor or to the
Fund.
(c) Insurer shall not be liable under this Section 13.1 with respect to any
action against an Indemnified Party unless the Fund, Distributor or Adviser
shall have notified Insurer in writing within a reasonable time after the
summons or other first legal process giving information of the nature of
the action 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 Insurer of any such action shall
not relieve Insurer from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
Section 13. I. In case any such action is brought against an Indemnified
Party, Insurer shall be entitled to participate, at its own expense, in the
defense of such action. Insurer also shall be entitled to assume the
defense thereof,
26
with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably withheld. After notice from Insurer to
such Indemnified Party of Insurer's election to assume the defense thereof,
the Indemnified Party will cooperate fully with Insurer and shall bear the
fees and expenses of any additional counsel retained by it, and Insurer
will not be liable to such Indemnified Party under this Agreement for any
legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof, other than reasonable
costs of investigation.
13.2 Indemnification of Insurer and Contracts Distributor by Adviser.
----------------------------------------------------------------
(a) Except to the extent provided in Sections 13.2(d) and 13.2(e), below,
Adviser agrees to indemnify and hold harmless Insurer and Contracts
Distributor, each of their directors and officers, and each person, if any,
who controls Insurer or Contracts Distributor within the meaning of
Section15 of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 13.2) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of Adviser) or actions in respect thereof (including, to the extent
reasonable legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or actions are related to the
sale, acquisition, or holding of the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or
advertising of the Fund or, to the extent not prepared by Insurer or
Contracts Distributor, sales literature or advertising for the
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based
27
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 Distributor,
Adviser or the Fund by or on behalf of Insurer or Contracts
Distributor for use in the Fund's 1933 Act registration statement,
Fund Prospectus, or in sales literature or advertising (or any
amendment or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations contained in
the Separate Account's 1933 Act registration statement, Separate
Account Prospectus, sales literature or advertising for the Contracts,
or any amendment or supplement to any of the foregoing, not supplied
for use therein by or on behalf of Distributor, Adviser, or the Fund)
or the negligent, illegal or fraudulent conduct of the Fund,
Distributor, Adviser or persons under their control (including,
without limitation, their employees and Associated Persons), in
connection with the sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Separate
Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising covering the Contracts, or
any amendment or supplement to any of the foregoing, or the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, if such statement or omission was made
28
in reliance upon arid in conformity with information furnished to
Insurer or Contracts Distributor by or on behalf of the Fund,
Distributor or Adviser for use in the Separate Account's 1933 Act
registration statement, Separate Account Prospectus, sales literature
or advertising covering the Contracts, or any amendment or supplement
to any of the foregoing; or
(iv) arise as a result of any failure by the Fund, Adviser or
Distributor to perform the obligations, provide the services and
furnish the materials required of them under the terms of this
Agreement;
(b) Except to the extent provided in Sections 13.2(d) and 13.2(e) hereof,
Adviser agrees to indemnity and hold harmless the Indemnified Parties from
and against any and all losses, claims, damages, liabilities (including
amounts paid in settlement thereof with, except as set forth in Section
13.2(c) below, the written consent of Adviser) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses) to
which the Indemnified Parties may become subject directly or indirectly
under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or actions directly or indirectly result from
or arise out of the failure of any Portfolio to operate as a regulated
investment company in compliance with (i) Subchapter M of the Code and
regulations thereunder and (ii) Section 817(h) of the Code and regulations
thereunder (except to the extent that such failure is caused by Insurer),
including, without limitation, any income taxes and related penalties,
rescission charges, liability under state law to Contract owners or
Participants asserting liability against Insurer or Contracts Distributor
pursuant to the Contracts, the costs of any ruling and closing agreement or
other settlement with the Internal Revenue Service, and the cost of any
substitution by Insurer of shares of another investment company or
portfolio for those of any
29
adversely affected Portfolio as a funding medium for the Separate Account
that Insurer deems necessary or appropriate as a result of the
noncompliance.
(c) The written consent of Adviser referred to in Section 13.2(b) above
shall not be required with respect to amounts paid in connection with any
ruling and closing agreement or other settlement with the Internal Revenue
Service.
(d) Adviser shall not be liable under this Section 13.2 with respect to any
losses, claims; damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of such Indemnified Party's reckless disregard of
its obligations and duties under this Agreement or to Insurer, Contracts
Distributor or the Separate Account.
(e) Adviser shall not be liable under this Section 13.2 with respect to any
action against an Indemnified Party unless Insurer or Contracts Distributor
shall have notified Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature of
the action 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 Adviser of any such action shall
not relieve Adviser from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
Section
13.2. In case any such action is brought against an Indemnified Party,
Adviser will be entitled to participate, at its own expense, in the defense of
such action. Adviser also shall be entitled to assume the defense thereof (which
shall include, without limitation, the conduct of any ruling request and closing
agreement or other settlement proceeding with the Internal Revenue Service),
with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably
30
withheld. After notice from Adviser to such Indemnified Party of Adviser's
election to assume the defense thereof, the Indemnified Party will cooperate
fully with Adviser and shall bear the fees and expenses of any additional
counsel retained by it, and Adviser will not be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof,
other than reasonable costs of investigation.
13.3 Effect of Notice.
Any notice given by the indemnifying Party to an Indemnified Party referred
to in Section 13.1(c) or 13.2(e) above of participation in or control of
any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or
responsibility, and the indemnifying Party will remain free to contest
liability with respect to the claim among the Parties or otherwise.
Section 14. Applicable Law
--------------------------
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
Section 15. Execution in Counterparts
-------------------------------------
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
31
Section 16. Severability
------------------------
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 17. Rights Cumulative
-----------------------------
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, that the Parties are entitled to under federal and state
laws.
Section 18. Restrictions on Sales of Fund Shares
Insurer agrees that the Fund will be permitted (subject to the other terms
of this Agreement) to make its shares available to separate accounts of other
life insurance companies.
Section 19. Headings
--------------------
The Table of Contents and headings' used in this Agreement are for purposes
of reference only and shall not limit or define the meaning of the provisions of
this Agreement.
32
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
METLIFE INVESTORS INSURANCE COMPANY ()
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
METLIFE INVESTORS DISTRIBUTION COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ALLIANCE CAPITAL MANAGEMENT LP
By: Alliance Capital Management Corporation,
its General Partner
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ALLIANCE FUND DISTRIBUTORS, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
33
SCHEDULE A
1. Marketing Name: Navigator Select
Policy Form Nos.: XX-000 XX-000
XX-000 XX-000
Xxxxxxxx Account: MetLife Investors Variable Annuity Account One
(formed 10/23/91)
SEC File No: 811-05200
2. Marketing Name: Class AA
Policy Form Nos.: 7010
Separate Account: MetLife Investors Variable Annuity Account One
(formed 10/23/91)
SEC File No: 811-05200
34
