AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AMONG
MFS VARIABLE INSURANCE TRUST
MFS VARIABLE INSURANCE TRUST II,
METROPOLITAN LIFE INSURANCE COMPANY
AND
MASSACHUSETTS FINANCIAL SERVICES COMPANY
THIS AGREEMENT, made and entered into this 1st day of May 2009, by and
among MFS VARIABLE INSURANCE TRUST, a Massachusetts business trust (the "Trust
I"), MFS VARIABLE INSURANCE TRUST II, a Massachusetts business trust (the "Trust
II") (Trust I and Trust II each referred to, individually, as the "Trust" and,
collectively, as the "Trusts"), METROPOLITAN LIFE INSURANCE COMPANY, a New York
corporation (the "Company") on its own behalf and on behalf of each of the
segregated asset accounts of the Company set forth in Schedule A hereto, as may
be amended from time to time (the "Accounts"), and MASSACHUSETTS FINANCIAL
SERVICES COMPANY, a Delaware corporation ("MFS"). This Agreement shall amend and
supersede the following Participation Agreements:
. Dated May 1, 2004, as amended, by and among Trust I, the Company and
MFS,
. Dated October 21, 1995, as amended, by and among Trust I, Paragon Life
Insurance Company (which merged into the Company on May 1, 2006) and
MFS,
. Dated November 30, 1994, as amended, by and among Trust I, Citicorp
Life Insurance Company (which merged into the Company on October 20,
2006) and MFS, and
. Dated November 30, 1994, as amended, by and among Trust I, the First
Citicorp Life Insurance Company (which merged into the Company on
October 20, 2006) and MFS.
WHEREAS, each Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and its shares are registered or will be registered under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, shares of beneficial interest of each Trust are divided into
several series of shares, each representing the interests in a particular
managed pool of securities and other assets;
WHEREAS, certain series of shares of each Trust are divided into two
separate share classes, an Initial Class and a Service Class, and each Trust on
behalf of the Service Class has adopted a Rule 12b-1 plan under the 1940 Act
pursuant to which the Service Class pays a distribution fee;
WHEREAS, the series of shares of each Trust (each, a "Portfolio," and,
collectively, the "Portfolios") and the classes of shares of those Portfolios
(the "Shares") offered by each Trust to the Company and the Accounts are set
forth on Schedule A attached hereto;
WHEREAS, Massachusetts Financial Services Company ("MFS") is duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, and any applicable state securities law, and is each Trust's
investment adviser;
WHEREAS, the Company will issue certain variable annuity and/or variable
life insurance contracts (individually, the "Policy" or, collectively, the
"Policies") which, if required by applicable law, will be registered under the
1933 Act;
WHEREAS, the Accounts are duly organized, validly existing segregated asset
accounts, established by resolution of the Board of Directors of the Company, to
set aside and invest assets attributable to the aforesaid variable annuity
and/or variable life insurance contracts that are allocated to the Accounts (the
Policies and the Accounts covered by this Agreement, and each corresponding
Portfolio covered by this Agreement in which the Accounts invest, is specified
in Schedule A attached hereto as may be modified from time to time);
WHEREAS, the Company has registered or will register the Accounts as unit
investment trusts under the 1940 Act (unless exempt therefrom);
WHEREAS, MFS Fund Distributors, Inc. (the "Underwriter") is registered as a
broker-dealer with the Securities and Exchange Commission (the "SEC") under the
Securities Exchange Act of 1934, as amended (hereinafter, the "1934 Act"), and
is a member in good standing of the Financial Industry Regulatory Authority
("FINRA");
WHEREAS, MetLife Investors Distribution Company, the underwriter for the
individual variable annuity and the variable life policies, is registered as a
broker-dealer with the SEC under the 1934 Act and is a member in good standing
of FINRA; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase the Shares of the Portfolios as
specified in Schedule A attached hereto on behalf of the Accounts to fund the
Policies, and the Trusts intends to sell such Shares to the Accounts at net
asset value; and
WHEREAS, the parties intend that this agreement will supersede all prior
agreements among the parties or their predecessor entities with respect to the
subject matter of this agreement.
NOW, THEREFORE, in consideration of their mutual promises, each Trust, MFS,
and the Company agree as follows:
ARTICLE I. SALE OF TRUST SHARES
--------------------
1.1. Each Trust agrees to sell to the Company those Shares which the
Accounts order (based on orders placed by Policy holders prior to the
pricing time set forth in the applicable Portfolio's prospectus, E.G., the
close of regular trading on the New York Stock Exchange, Inc. (the "NYSE")
on that Business Day, as defined below) and which are available for
purchase by such Accounts,
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executing such orders on a daily basis at the net asset value next computed
after receipt by such Trust or its designee of the order for the Shares.
For purposes of this Section 1.1, the Company shall be the designee of each
Trust for receipt of such orders from Policy owners and receipt by such
designee shall constitute receipt by each Trust; provided that such Trust
receives notice of such orders by 9:00 a.m. New York time on the next
following Business Day. "Business Day" shall mean any day on which the NYSE
is open for trading and on which such Trust calculates its net asset value
pursuant to the rules of the SEC. The Company will ensure that orders for
transactions in Shares by Policy owners comply with each Portfolio's
prospectus (including statement of additional information) restrictions
with respect to purchases, redemptions and exchanges. The Company will not
engage in, authorize or facilitate market timing or late trading in Shares
and has implemented controls designed to identify and prevent market timing
and late trading in Shares by Policy holders.
1.2. Each Trust agrees to make the Shares available indefinitely for
purchase at the applicable net asset value per share by the Company and the
Accounts on those days on which the Trust calculates its net asset value
pursuant to rules of the SEC and each Trust shall calculate such net asset
value on each day which the NYSE is open for trading. Notwithstanding the
foregoing, the Board of Trustees of the relevant Trust (the "Board") may
refuse to sell any Shares to the Company and the Accounts, or suspend or
terminate the offering of the Shares if such action is required by law or
by regulatory authorities having jurisdiction or is, 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, necessary in the best interest
of the Shareholders of such Portfolio.
1.3. Each Trust and the Underwriter agree that the Shares will be sold only
to insurance companies which have entered into participation agreements
with the relevant Trust and MFS or its affiliates (the "Participating
Insurance Companies") and their separate accounts, qualified pension and
retirement plans and MFS or its affiliates, and any other person or plan
permitted to hold shares of such Trust pursuant to Treasury Regulation
1.817-5 without impairing the ability of the Company, on behalf of its
separate accounts, to consider the Shares as constituting investments of
the separate accounts for the purpose of satisfying the diversification
requirements of Section 817(h). Each Trust and the Underwriter will not
sell such Trust shares to any insurance company or separate account unless
an agreement containing provisions substantially the same as Articles II,
III, VI and VII of this Agreement is in effect to govern such sales. The
Company will not resell the Shares except to such Trust or its agents. Each
Trust does not currently make its shares available to qualified pension and
retirement plans. Before making the shares available to such plans, such
Trust agrees to notify the Company and adopt due diligence procedures
consistent with IRS regulations and rulings.
1.4. Each Trust agrees to redeem for cash or, if mutually agreed upon by
the parties and to the extent permitted by applicable law, in-kind, on the
Company's request, any full or fractional Shares held by the Accounts
(based on orders placed by Policy owners prior to the close of regular
trading on the NYSE on that Business Day), executing such requests on a
daily basis at the net asset value next computed after receipt by such
Trust or its designee of the request for redemption. For purposes of this
Section 1.4, the Company shall be the designee of such Trust for receipt of
requests for redemption from Policy owners and receipt by such designee
shall constitute receipt by such Trust; provided that such Trust receives
notice of such request for redemption by 10:00 a.m. New York time on the
next following Business Day.
1.5. Each purchase, redemption and exchange order placed by the Company
shall be placed separately for each Portfolio and shall not be netted with
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respect to any Portfolio. However, with respect to payment of the purchase
price by the Company and of redemption proceeds by the Trusts, the Company
and the relevant Trust shall net purchase and redemption orders with
respect to each Portfolio and shall transmit one net payment for all of the
Portfolios in accordance with Section 1.6 hereof.
1.6. In the event of net purchases, the Company shall pay for the Shares by
close of business (5:00 p.m.) New York time on the next Business Day after
an order to purchase the Shares is made in accordance with the provisions
of Section 1.1. hereof. In the event of net redemptions, each Trust shall
pay the redemption proceeds by close of business (5:00 p.m.) New York time
on the next Business Day after an order to redeem the shares is made in
accordance with the provisions of Section 1.4. hereof. All such payments
shall be in federal funds transmitted by wire.
1.7. Issuance and transfer of the Shares will be by book entry only. Stock
certificates will not be issued to the Company or the Accounts. The Shares
ordered from each Trust will be recorded in an appropriate title for the
Accounts or the appropriate subaccounts of the Accounts.
1.8. Each Trust shall furnish same day notice (by wire or telephone
followed by written confirmation) to the Company of any dividends or
capital gain distributions payable on the Shares. The Company hereby elects
to receive all such dividends and distributions as are payable on a
Portfolio's Shares in additional Shares of that Portfolio. Each Trust shall
notify the Company of the number of Shares so issued as payment of such
dividends and distributions.
1.9. Each Trust or its custodian shall make the net asset value per share
for each Portfolio available to the Company on each Business Day as soon as
reasonably practical after the net asset value per share is calculated and
shall use its best efforts to make such net asset value per share available
by 6:30 p.m. New York time. In the event that such Trust is unable to meet
the 6:30 p.m. time stated herein, it shall provide additional time for the
Company to place orders for the purchase and redemption of Shares. Such
additional time shall be equal to the additional time which such Trust
takes to make the net asset value available to the Company. If such Trust
provides materially incorrect share net asset value information, such Trust
shall make an adjustment to the number of shares purchased or redeemed for
the Accounts to reflect the correct net asset value per share and such
Trust shall bear the cost of adjusting the error. Any material error in the
calculation or reporting of net asset value per share, dividend or capital
gains information shall be reported promptly upon discovery to the Company.
1.10 Each party or its designee shall maintain and preserve all records as
required by law to be maintained and preserved in connection with providing
the services hereunder and in making Shares available to the Policy
holders. Upon the request of the Underwriter or a Trust, the Company shall
provide copies of all the historical records relating to transactions
between the Portfolios and the Policy holders, written communications
regarding the Portfolios to or from such Policy holders' accounts and other
materials, in each case to the extent necessary for the Underwriter or such
Trust to meet its recordkeeping obligations under applicable law or
regulation, including to comply with any request of a governmental body or
self-regulatory organization.
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ARTICLE II. CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS
-------------------------------------------------
2.1. The Company represents and warrants that the Policies are or will be
registered under the 1933 Act or are exempt from or not subject to
registration thereunder, and that the Policies will be issued, sold, and
distributed in compliance in all material respects with all applicable
state and federal laws, including without limitation the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940
Act. The Company further represents and warrants that it is an insurance
company duly organized and in good standing under applicable law and that
it has legally and validly established the Account as a segregated asset
account under applicable law and has registered or, prior to any issuance
or sale of the Policies, will register the Accounts as unit investment
trusts in accordance with the provisions of the 1940 Act (unless exempt
therefrom) to serve as segregated investment accounts for the Policies, and
that it will maintain such registration for so long as any Policies are
outstanding. The Company shall amend the registration statements under the
1933 Act for the Policies and the registration statements under the 1940
Act for the Accounts from time to time as required in order to effect the
continuous offering of the Policies or as may otherwise be required by
applicable law. The Company shall register and qualify the Policies for
sales in accordance with the securities laws of the various states only if
and to the extent deemed necessary by the Company.
2.2. The Company represents and warrants that the Policies are currently
and at the time of issuance will be treated as life insurance, endowment or
annuity contract under applicable provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), that it will maintain such treatment and
that it will notify the Trusts or MFS immediately upon having a reasonable
basis for believing that the Policies have ceased to be so treated or that
they might not be so treated in the future.
2.3. The Company represents and warrants that MetLife Investors
Distribution Company, the underwriter for the individual variable annuity
and the variable life policies, is a member in good standing of FINRA and
is a registered broker-dealer with the SEC. The Company represents and
warrants that the Company and MetLife Investor Distribution Company will
sell and distribute such policies in accordance in all material respects
with all applicable state and federal securities laws, including without
limitation the 1933 Act, the 1934 Act, and the 0000 Xxx.
2.4. Each Trust and MFS represent and warrant that the Shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized
for issuance and sold in compliance with the laws of The Commonwealth of
Massachusetts and all applicable federal and state securities laws and that
such Trust is and shall remain registered under the 1940 Act. Each Trust
shall amend the registration statement for its Shares under the 1933 Act
and the 1940 Act from time to time as required in order to effect the
continuous offering of its Shares. Each Trust shall register and qualify
the Shares for sale in accordance with the laws of the various states only
if and to the extent deemed necessary by such Trust.
2.5. The Underwriter represents and warrants that it is a member in good
standing of FINRA and is registered as a broker-dealer with the SEC. Each
Trust and MFS represent that such Trust and the Underwriter will sell and
distribute the Shares in accordance in all material respects with all
applicable state and federal securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 0000 Xxx.
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2.6. Each Trust represents that it is lawfully organized and validly
existing under the laws of The Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act and any
applicable regulations thereunder.
2.7. The Underwriter, on behalf of MFS, represents and warrants that MFS is
and shall remain duly registered under all applicable federal securities
laws and that MFS shall perform its obligations for the Trusts in
compliance in all material respects with any applicable federal securities
laws and with the securities laws of The Commonwealth of Massachusetts. The
Underwriter, on behalf of MFS, represents and warrants that MFS is not
subject to state securities laws other than the securities laws of The
Commonwealth of Massachusetts and that MFS is exempt from registration as
an investment adviser under the securities laws of The Commonwealth of
Massachusetts.
2.8. No less frequently than annually, the Company shall submit to each
Board such reports, material or data as such Board may reasonably request
so that it may carry out fully the obligations imposed upon it by the
conditions contained in the exemptive application pursuant to which the SEC
has granted exemptive relief to permit mixed and shared funding (the "Mixed
and Shared Funding Exemptive Order").
2.9. The Company acknowledges that, with respect to Service Class Shares of
a Portfolio, it or its affiliate(s) may receive payments under a Trust's
Rule 12b-1 plan. The Company, and not the relevant Trust, MFS or the
Underwriter, is responsible for providing any disclosures relating to this
Agreement and/or payments made to the Company to Policy owners.
2.10 The Trusts and the Underwriter, on behalf of MFS, severally represent
that MFS will use reasonable best efforts to prevent any Portfolio of such
Trust in which the Company invests from engaging, directly or indirectly,
in a "listed transaction" as defined in Treas. Regs. Section 1.6011-4(b)(2)
or successor provision (a "Listed Transaction"). If such Trust or MFS
reasonably determines that a Portfolio of such Trust in which the Company
invests has engaged in a Listed Transaction, MFS will, upon the Company's
request, provide all information relating to such Listed Transaction which
the Company would need in order to comply with its disclosure obligations
under applicable state and Federal rules, provided, however, that MFS shall
be entitled to consult with counsel before providing such information and
shall not be required to provide such information if and to the extent that
it has been advised by counsel that providing such information shall cause
MFS, the Trusts or any of their affiliates to violate any applicable law.
In addition, the Trusts or MFS will, upon the Company's request, notify the
Company of any required filings by the Portfolio of IRS Form 8886,
(Reportable Transaction Disclosure Statement), or any successor form.
ARTICLE III. PROSPECTUS AND PROXY STATEMENTS; VOTING
---------------------------------------
3.1. At least annually, each Trust or its designee shall provide the
Company, free of charge, with as many copies of the current prospectus
(describing only the Portfolios listed in Schedule A hereto) for the Shares
as the Company may reasonably request for distribution to existing Policy
owners whose Policies are funded by such Shares. Each Trust or its designee
shall provide the Company, at the Company's expense, with as many copies of
the current prospectus for the Shares as the Company may reasonably request
for distribution to prospective purchasers of Policies. If requested by the
Company in lieu thereof, a Trust or its designee shall provide such
documentation (including a "camera ready" copy of the new prospectus as set
in type or, at the request of the Company, as a diskette in the form sent
to the financial printer) and other assistance as is reasonably necessary
in
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order for the parties hereto once each year (or more frequently if the
prospectus for the Shares is supplemented or amended) to have the
prospectus for the Policies and the prospectus for the Shares printed
together in one document; the expenses of such printing to be apportioned
between (a) the Company and (b) the relevant Trust(s) or its designee in
proportion to the number of pages of the Policy and Shares' prospectuses,
taking account of other relevant factors affecting the expense of printing,
such as covers, columns, graphs and charts; such Trust or its designee to
bear the cost of printing the Shares' prospectus portion of such document
for distribution to owners of existing Policies funded by the Shares and
the Company to bear the expenses of printing the portion of such document
relating to the Accounts; provided, however, that the Company shall bear
all printing expenses of such combined documents where used for
distribution to prospective purchasers or to owners of existing Policies
not funded by the Shares. In the event that the Company requests that a
Trust or its designee provides such Trust's prospectus in a "camera ready"
electronic file format, such Trust shall be responsible for providing the
prospectus in the format in which it or MFS is accustomed to formatting
prospectuses and shall bear the expense of providing the prospectus in such
format (e.g., typesetting expenses), and the Company shall bear the expense
of adjusting or changing the format to conform with any of its
prospectuses.
3.2. The prospectus for the Shares shall state that the statement of
additional information for the Shares is available from the relevant Trust
or its designee. Each Trust or its designee, at its expense, shall print
and provide such statement of additional information to the Company (or a
master of such statement suitable for duplication by the Company) for
distribution to any owner of a Policy funded by the Shares. Each Trust or
its designee, at the Company's expense, shall print and provide such
statement to the Company (or a master of such statement suitable for
duplication by the Company) for distribution to a prospective purchaser who
requests such statement or to an owner of a Policy not funded by the
Shares.
3.3. Each Trust or its designee shall provide the Company free of charge
copies, if and to the extent applicable to the Shares, of such Trust's
proxy materials, reports to Shareholders and other communications to
Shareholders in such quantity as the Company shall reasonably require for
distribution to Policy owners.
3.4. Notwithstanding the provisions of Sections 3.1, 3.2, and 3.3 above, or
of Article V below, the Company shall pay the expense of printing or
providing documents to the extent such cost is considered a distribution
expense. Distribution expenses would include by way of illustration, but
are not limited to, the printing of the Shares' prospectus or prospectuses
for distribution to prospective purchasers or to owners of existing
Policies not funded by such Shares.
3.5. Each Trust hereby notifies the Company that it may be appropriate to
include in the prospectus pursuant to which a Policy is offered disclosure
regarding the potential risks of mixed and shared funding.
3.6. If and to the extent required by the 1940 Act or other applicable law,
the Company shall:
(a) solicit voting instructions from Policy owners;
(b) vote the Shares in accordance with instructions received from
Policy owners; and
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(c) vote the Shares for which no instructions have been received in
the same proportion as the Shares of such Portfolio for which
instructions have been received from Policy owners;
so long as and to the extent that the SEC continues to interpret the 1940
Act to require pass through voting privileges for variable contract owners.
The Company will in no way recommend action in connection with or oppose or
interfere with the solicitation of proxies for the Shares held for such
Policy owners. The Company reserves the right to vote shares held in any
segregated asset account in its own right, to the extent permitted by law.
Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts holding Shares calculates voting privileges
in the manner required by the Mixed and Shared Funding Exemptive Order.
Each Trust and MFS will notify the Company of any changes of
interpretations or amendments to the Mixed and Shared Funding Exemptive
Order.
ARTICLE IV. SALES MATERIAL AND INFORMATION
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to each
Trust or its designee, each piece of sales literature or other promotional
material in which such Trust, MFS, any other investment adviser to such
Trust, or any affiliate of MFS are named, at least three (3) Business Days
prior to its use. No such material shall be used if such Trust, MFS, or
their respective designees reasonably objects to such use within three (3)
Business Days after receipt of such material.
4.2. The Company shall not give any information or make any representations
or statement on behalf of any Trust, MFS, any other investment adviser to
any Trust, or any affiliate of MFS or concerning such Trust or any other
such entity in connection with the sale of the Policies other than the
information or representations contained in the registration statement,
prospectus or statement of additional information for the Shares, as such
registration statement, prospectus and statement of additional information
may be amended or supplemented from time to time, or in reports or proxy
statements for such Trust, or in sales literature or other promotional
material approved by such Trust, MFS or their respective designees, except
with the permission of such Trust, MFS or their respective designees. Each
Trust, MFS or their respective designees each agrees to respond to any
request for approval on a prompt and timely basis. The Company shall adopt
and implement procedures reasonably designed to ensure that information
concerning a Trust, MFS or any of their affiliates which is intended for
use only by brokers or agents selling the Policies (i.e., information that
is not intended for distribution to Policy owners or prospective Policy
owners) is so used, and neither the Trusts, MFS nor any of their affiliates
shall be liable for any losses, damages or expenses relating to the
improper use of such broker only materials.
4.3. Each Trust or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature
or other promotional material in which the Company and/or the Accounts is
named, at least three (3) Business Days prior to its use. No such material
shall be used if the Company or its designee reasonably objects to such use
within three (3) Business Days after receipt of such material.
4.4. The Trusts and the Underwriter shall not give, and agree that MFS
shall not give, any information or make any representations on behalf of
the Company or concerning the Company, the Accounts, or the Policies in
connection with the sale of the Policies other than the information or
representations contained in a registration statement, prospectus, or
statement of additional
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information for the Policies, as such registration statement, prospectus
and statement of additional information may be amended or supplemented from
time to time, or in reports for the Accounts, or in sales literature or
other promotional material approved by the Company or its designee, except
with the permission of the Company. The Company or its designee agrees to
respond to any request for approval on a prompt and timely basis. The
Trusts and MFS may not alter any material so provided by the Company or its
designee (including, without limitation, presenting or delivering such
material in a different medium, e.g., electronic or internet) without the
prior written consent of the Company. The parties hereto agree that this
Section 4.4. is neither intended to designate nor otherwise imply that MFS
is an underwriter or distributor of the Policies.
4.5. Upon request of the other party, the Company and each Trust (or its
designee in lieu of the Company or such Trust, as appropriate) will each
provide to the other at least one complete copy of all registration
statements, prospectuses, statements of additional information, reports,
proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Policies, or to such
Trust or its Shares, prior to or contemporaneously with the filing of such
document with the SEC or other regulatory authorities. The Company and a
Trust shall also each promptly inform the other of the results of any
examination by the SEC (or other regulatory authorities) that relates to
the Policies, such Trust or its Shares, and the party that was the subject
of the examination shall provide the other party with a copy of relevant
portions of any "deficiency letter" or other correspondence or written
report regarding any such examination. For avoidance of doubt, a "relevant
portion" of a deficiency letter is such portion of such letter that
addresses a material aspect of a Trust's operations as it pertains to the
Company or the Policies.
4.6. No party shall use any other party's names, logos, trademarks or
service marks, whether registered or unregistered, without the prior
written consent of such other party, or after written consent therefor has
been revoked, provided that separate consent is not required under this
Section 4.6 to the extent that consent to use a party's name, logo,
trademark or service xxxx in connection with a particular piece of
advertising or sales literature has previously been given by a party under
Sections 4.2 and 4.4 of this Agreement. The Company shall not use in
advertising, publicly or otherwise the name of the Trusts, MFS or any of
their affiliates nor any trade name, trademark, trade device, servicemark,
symbol or any abbreviation, contraction or simulation thereof of the
Trusts, MFS, or their affiliates without the prior written consent of the
relevant Trust or MFS in each instance. The Trusts and MFS shall not use in
advertising, publicly or otherwise the name of the Company or any of its
affiliates nor any trade name, trademark, trade device, servicemark, symbol
or any abbreviation, contraction or simulation thereof of the Company or
its affiliates without the prior written consent of the Company in each
instance.
4.7. Each Trust and the Underwriter will provide the Company with as much
notice as is reasonably practicable of any proxy solicitation for any
Portfolio, and of any material change in such Trust's registration
statement, particularly any change resulting in change to the registration
statement or prospectus or statement of additional information for any
Account. Each Trust and MFS will cooperate with the Company so as to enable
the Company to solicit proxies from Policy owners or to make changes to its
prospectus, statement of additional information or registration statement,
in an orderly manner. Each Trust and MFS will make reasonable efforts to
attempt to have changes affecting Policy prospectuses become effective
simultaneously with the annual updates for such prospectuses.
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4.8. For purpose of this Article IV and Article VIII, the phrase "sales
literature or other promotional material" includes but is not limited to
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone or
tape recording, videotape display, signs or billboards, motion pictures, or
other public media), and sales literature (such as brochures, circulars,
reprints or excerpts or any other advertisement, sales literature, or
published articles), distributed or made generally available to customers
or the public, educational or training materials or communications
distributed or made generally available to some or all agents or employees.
ARTICLE V. FEES AND EXPENSES
-----------------
5.1. Each Trust shall pay no fee or other compensation to the Company under
this Agreement, and the Company shall pay no fee or other compensation to
either Trust, except that, to the extent a Trust or any Portfolio has
adopted and implemented a plan pursuant to Rule 12b-1 under the 1940 Act to
finance distribution and for Shareholder servicing expenses, then such
Trust may make payments to the Company or to the Underwriter for the
Policies in accordance with such plan. Each party, however, shall, in
accordance with the allocation of expenses specified in Articles III and V
hereof, reimburse other parties for expenses initially paid by one party
but allocated to another party. In addition, nothing herein shall prevent
the parties hereto from otherwise agreeing to perform, and arranging for
appropriate compensation for, other services relating to such Trust and/or
to the Accounts.
5.2. Each Trust or its designee shall bear the expenses for the cost of
registration and qualification of the Shares under all applicable federal
and state laws, including preparation and filing of such Trust's
registration statement, and payment of filing fees and registration fees;
preparation and filing of such Trust's proxy materials and reports to
Shareholders; setting in type and printing its prospectus and statement of
additional information (to the extent provided by and as determined in
accordance with Article III above); setting in type and printing the proxy
materials and reports to Shareholders (to the extent provided by and as
determined in accordance with Article III above); such preparation of all
statements and notices required of such Trust by any federal or state law
with respect to its Shares; all taxes on the issuance or transfer of the
Shares; and the costs of distributing such Trust's prospectuses and proxy
materials to owners of Policies funded by the Shares and any expenses
permitted to be paid or assumed by such Trust pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act. Such Trust shall not bear any expenses
of marketing the Policies.
5.3. The Company shall bear the expenses of distributing the Shares'
prospectus or prospectuses in connection with new sales of the Policies and
of distributing a Trust's Shareholder reports to Policy owners. The Company
shall bear all expenses associated with the registration, qualification,
and filing of the Policies under applicable federal securities and state
insurance laws; the cost of preparing, printing and distributing the Policy
prospectus and statement of additional information; and the cost of
preparing, printing and distributing annual individual account statements
for Policy owners as required by state insurance laws.
5.4. With respect to the Service Class Shares of a Portfolio, the relevant
Trust may make payments quarterly to the Underwriter under a Portfolio's
Rule 12b-1 plan, and the Underwriter may in turn use these payments to pay
or reimburse the Company for expenses incurred or paid (as the case may be)
by the Company attributable to Policies offered by the Company, provided
--------
that no such
- 10 -
payment shall be made with respect to any quarterly period in excess of an
amount determined from time to time by such Trust's Board of Trustees and
disclosed in such Trust's prospectus. The Underwriter shall not be required
to provide any payment to the Company with respect to any quarterly period
pursuant to a Trust's Rule 12b-1 plan unless and until the Underwriter has
received the corresponding payment from such Trust pursuant to the Trust's
Rule 12b-1 plan. The Underwriter shall not be required to provide any
payment to the Company with respect to any quarterly period pursuant to a
Trust's Rule 12b-1 plan if (i) such Trust's Rule 12b-1 plan is no longer in
effect during such quarterly period; or (ii) regulatory changes result in
the rescission of Rule 12b-1 or otherwise prohibit the making of such
payments. Each Trust's prospectus or statement of additional information
may provide further details about such payments and the provisions and
terms of such Trust's Rule 12b-1 plan, and the Company hereby agrees that
neither such Trust, MFS nor the Underwriter has made any representations to
the Company with respect to such Trust's Rule 12b-1 plan in addition to, or
conflicting with, the description set forth in such Trust's prospectus.
5.5. In calculating the payments due under this Agreement, the Company
agrees that it will permit MFS or its representatives to have reasonable
access to its employees and records for the purposes of monitoring of the
quality of the services provided hereunder, verifying the Company's
compliance with the terms of this Agreement and verifying the accuracy of
any information provided by the Company that forms the basis of the fee
calculations. In addition, if requested by MFS, the Company will provide a
certification (which may take the form of a control report or set of agreed
upon standards) satisfactory to MFS that certifies the performance of the
services by the Company and the accuracy of information provided by the
Company.
ARTICLE VI. DIVERSIFICATION AND RELATED LIMITATIONS
---------------------------------------
6.1. Each Trust represents and warrants that, subject to compliance by the
Company with its representations in Section 2.2, each Portfolio: (i)
qualifies as a look-through entity within the meaning of Treas. Reg.
section 1.817-5(f), and (ii) shall at all times invest money from the
Contracts and conduct its operations to ensure that: (a) the assets of the
Portfolio are diversified within the meaning of Treas. Reg. section
1.817-5(b); (b) the Contracts shall be treated as variable contracts under
the Code and the regulations issued there under; and (c) no Contract owner
shall be treated as the owner of the assets of an Account solely due to
purchase of shares of a Portfolio by an Account. Each Trust will notify the
Company immediately upon having a reasonable basis for believing that a
Portfolio is in breach of the foregoing representation and warranty or that
a Portfolio might be in breach in the future. In addition, each Trust will
immediately take all steps necessary to cure any breach to achieve
compliance with the foregoing representations and warranties.
6.2. Each Trust and the Underwriter, on behalf of MFS, represent that each
Portfolio will elect to be qualified as a Regulated Investment Company
under Subchapter M of the Code and that they will maintain such
qualification (under Subchapter M or any successor or similar provision).
ARTICLE VII. POTENTIAL MATERIAL CONFLICTS
----------------------------
7.1. Each Trust agrees that the relevant Board, constituted with a majority
of disinterested trustees, will monitor each Portfolio of such Trust for
the existence of any material irreconcilable conflict between the interests
of the variable annuity contract owners and the variable life insurance
- 11 -
policy owners of the Company and/or affiliated companies ("contract
owners") investing in such Trust. The relevant Board shall have the sole
authority to determine if a material irreconcilable conflict exists, and
such determination shall be binding on the Company only if approved in the
form of a resolution by a majority of the relevant Board, or a majority of
the disinterested trustees of the relevant Board. The relevant Board will
give prompt notice of any such determination to the Company.
7.2. The Company agrees that it will be responsible for assisting each
Board in carrying out its responsibilities under the conditions set forth
in the Trusts' exemptive application pursuant to which the SEC has granted
the Mixed and Shared Funding Exemptive Order by providing each Board, as it
may reasonably request, with all information necessary for such Board to
consider any issues raised and agrees that it will be responsible for
promptly reporting any potential or existing conflicts of which it is aware
to such Board including, but not limited to, an obligation by the Company
to inform such Board whenever contract owner voting instructions are
disregarded. The Company also agrees that, if a material irreconcilable
conflict arises, it will at its own cost remedy such conflict up to and
including (a) withdrawing the assets allocable to some or all of the
Accounts from the relevant Trust(s) or any Portfolio and reinvesting such
assets in a different investment medium, including (but not limited to)
another Portfolio of a Trust, or submitting to a vote of all affected
contract owners whether to withdraw assets from a Trust or any Portfolio
and reinvesting such assets in a different investment medium and, as
appropriate, segregating the assets attributable to any appropriate group
of contract owners that votes in favor of such segregation, or offering to
any of the affected contract owners the option of segregating the assets
attributable to their contracts or policies, and (b) establishing a new
registered management investment company and segregating the assets
underlying the Policies, unless a majority of Policy owners materially
adversely affected by the conflict have voted to decline the offer to
establish a new registered management investment company.
7.3. A majority of the disinterested trustees of the relevant Board shall
determine whether any proposed action by the Company adequately remedies
any material irreconcilable conflict. In the event that a Board determines
that any proposed action does not adequately remedy any material
irreconcilable conflict, the Company will withdraw from investment in the
relevant Trust each of the Accounts designated by the disinterested
trustees and terminate this Agreement within six (6) months after the
relevant Board informs the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required to remedy any such material
irreconcilable conflict as determined by a majority of the disinterested
trustees of the relevant Board.
7.4. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or
shared funding (as defined in the Mixed and Shared Funding Exemptive Order)
on terms and conditions materially different from those contained in the
Mixed and Shared Funding Exemptive Order, then (a) the Trusts and/or the
Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with Rule 6e-2 and 6e-3(T), as amended, and Rule
6e-3, as adopted, to the extent such rules are applicable; and (b) Sections
3.5, 7.1, 7.2, 7.3 and 7.4 of this Agreement shall continue in effect only
to the extent that terms and conditions substantially identical to such
Sections are contained in such Rule(s) as so amended or adopted.
- 12 -
ARTICLE VIII. INDEMNIFICATION
---------------
8.1. INDEMNIFICATION BY THE COMPANY
------------------------------
The Company agrees to indemnify and hold harmless each Trust, the
Underwriter, any affiliates of the Underwriter, and each of their
respective directors/trustees, officers and each person, if any, who
controls each Trust or the Underwriter within the meaning of Section 15 of
the 1933 Act, and any agents or employees of the foregoing (each an
"Indemnified Party," or collectively, the "Indemnified Parties" for
purposes of this Section 8.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent
of the Company) or expenses (including reasonable counsel fees) to which
any Indemnified Party may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the Shares or the Policies and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information for the Policies or contained in the Policies or
sales literature or other promotional material for the Policies
(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 reasonable
reliance upon and in conformity with information furnished to the
Company or its designee by or on behalf of the relevant Trust or
the Underwriter for use in the registration statement, prospectus
or statement of additional information for the Policies or in the
Policies or sales literature or other promotional material (or
any amendment or supplement) or otherwise for use in connection
with the sale of the Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material of
relevant Trust not supplied by the Company or its designee, or
persons under its control and on which the Company has reasonably
relied) or wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the Policies
or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the registration statement,
prospectus, statement of additional information, or sales
literature or other promotional literature of the relevant Trust,
or any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or omission
was made in reliance upon information furnished to the relevant
Trust by or on behalf of the Company; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company; or
- 13 -
(e) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.2. INDEMNIFICATION BY THE TRUSTS
-----------------------------
Each Trust severally 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, and
any agents or employees of the foregoing (each an "Indemnified Party," or
collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of such Trust) or expenses
(including reasonable counsel fees) to which any Indemnified Party may
become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition of
the Shares or the Policies and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material of
such Trust (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement 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 reasonable
reliance upon and in conformity with information furnished to
such Trust, MFS, the Underwriter or their respective designees by
or on behalf of the Company for use in the registration
statement, prospectus or statement of additional information for
such Trust or in sales literature or other promotional material
for such Trust (or any amendment or supplement) or otherwise for
use in connection with the sale of the Policies or Shares; or
(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus, statement of additional
information or sales literature or other promotional material for
the Policies not supplied by such Trust, MFS, the Underwriter or
any of their respective designees or persons under their
respective control and on which any such entity has reasonably
relied) or wrongful conduct of such Trust or persons under its
control, with respect to the sale or distribution of the Policies
or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of
a material fact contained in the registration statement,
prospectus, statement of additional information, or sales
literature or other promotional literature of the Accounts or
relating to the Policies, 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
- 14 -
such statement or omission was made in reliance upon information
furnished to the Company by or on behalf of such Trust, MFS or
the Underwriter; or
(d) arise out of or result from any material breach of any
representation and/or warranty made by such Trust in this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement) or arise
out of or result from any other material breach of this Agreement
by such Trust; or
(e) arise out of or result from the materially incorrect or untimely
calculation or reporting of the daily net asset value per share
or dividend or capital gain distribution rate; or
(f) arise as a result of any failure by such Trust to provide the
services and furnish the materials under the terms of the
Agreement;
as limited by and in accordance with the provisions of this Article VIII.
8.3. In no event shall any Trust be liable under the indemnification
provisions contained in this Agreement to any individual or entity,
including without limitation, the Company, or any Participating Insurance
Company or any Policy holder, with respect to any losses, claims, damages,
liabilities or expenses that arise out of or result from (i) a breach of
any representation, warranty, and/or covenant made by the Company hereunder
or by any Participating Insurance Company under an agreement containing
substantially similar representations, warranties and covenants; (ii) the
failure by the Company or any Participating Insurance Company to maintain
its segregated asset account (which invests in any Portfolio) as a legally
and validly established segregated asset account under applicable state law
and as a duly registered unit investment trust under the provisions of the
1940 Act (unless exempt therefrom); or (iii) the failure by the Company or
any Participating Insurance Company to maintain its variable annuity and/or
variable life insurance contracts (with respect to which any Portfolio
serves as an underlying funding vehicle) as life insurance, endowment or
annuity contracts under applicable provisions of the Code.
8.4. Neither the Company nor any Trust shall be liable under the
indemnification provisions contained in this Agreement with respect to any
losses, claims, damages, liabilities or expenses to which an Indemnified
Party would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, willful misconduct, 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.
8.5. Promptly after receipt by an Indemnified Party under this Section 8.5.
of notice of commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under
this section, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any Indemnified Party otherwise
than under this section. In case any such action is brought against any
Indemnified Party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnified Party. After notice
from the indemnifying party of its intention to assume the defense of an
action, the Indemnified Party shall bear the expenses of any additional
counsel obtained by it, and the
- 15 -
indemnifying party shall not be liable to such Indemnified Party under this
section for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation.
8.6. Each of the parties agrees promptly to notify the other parties of the
commencement of any litigation or proceeding against it or any of its
respective officers, directors, trustees, employees or 1933 Act control
persons in connection with the Agreement, the issuance or sale of the
Policies, the operation of the Accounts, or the sale or acquisition of
Shares.
8.7. A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
ARTICLE IX. APPLICABLE LAW
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the
SEC may grant and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. NOTICE OF FORMAL PROCEEDINGS
----------------------------
Each Trust, and the Underwriter, on its own behalf and on behalf of MFS,
agree that each such party shall promptly notify the other parties to this
Agreement, in writing, of the institution of any formal proceedings brought
against such party or its designees by FINRA, the SEC, or any insurance
department or any other regulatory body regarding such party's duties under this
Agreement or related to the sale of the Policies, the operation of the Accounts,
or the purchase of the Shares.
ARTICLE XI. CONTROLS AND PROCEDURES
11.1. The Company has implemented controls and procedures that are
reasonably designed to ensure compliance with applicable laws and
regulations, as well as the terms of this Agreement. Without limiting the
foregoing, these controls and procedures are reasonably designed to ensure,
and the Underwriter or a Trust may request certifications on an annual
basis with respect to, each of the following:
(a) Orders for Shares received by the Company for each Portfolio
comply with the Portfolio's restrictions with respect to
purchases, transfers, redemptions and exchanges as set forth in
each Portfolio's prospectus and statement of additional
information;
(b) Orders for Shares received by the Company prior to the
Portfolio's pricing time set forth in its prospectus (E.G., the
close of the New York Stock Exchange - normally 4:00 p.m. Eastern
time) are segregated from those received by the Company at or
after such time, and are properly transmitted to the Portfolios
(or their agents) for
- 16 -
execution at the current day's net asset value ("NAV"); and
orders received by the Company at or after such time are properly
transmitted to the Portfolios (or their agents) for execution at
the next day's NAV;
(c) Late trading in Shares by Policy holders is identified and
prevented and market timing is appropriately addressed;
(d) Compliance with applicable state securities laws, including
without limitation "blue sky" laws and related rules and
regulations;
(e) Compliance with all applicable federal, state and foreign laws,
rules and regulations regarding the detection and prevention of
money laundering activity; and
(f) Effective business continuity and disaster recovery systems with
respect to the services contemplated by the Agreement.
11.2 The Company shall ensure that any other party to whom the Company
assigns or delegates any services hereunder is responsible for, and has
controls and procedures that are reasonably designed to ensure, each of the
items set forth in Section 11.1 above.
ARTICLE XII. TERMINATION
-----------
12.1. This Agreement shall terminate with respect to the Accounts, or one,
some, or all Portfolios:
(a) at the option of any party upon six (6) months' advance written
notice to the other parties; or
(b) at the option of the Company to the extent that the Shares of
Portfolios are not reasonably available to meet the requirements
of the Policies or are not "appropriate funding vehicles" for the
Policies, as reasonably determined by the Company. Without
limiting the generality of the foregoing, the Shares of a
Portfolio would not be "appropriate funding vehicles" if, for
example, such Shares did not meet the diversification or other
requirements referred to in Article VI hereof; or if the Company
would be permitted to disregard Policy owner voting instructions
pursuant to Rule 6e-2 or Rule 6e-3(T) under the 1940 Act. Prompt
notice of the election to terminate for such cause and an
explanation of such cause shall be furnished to the relevant
Trust(s) by the Company; or
(c) at the option of a Trust or the Underwriter upon institution of
formal proceedings against the Company by FINRA, the SEC, or any
insurance department or any other regulatory body that would have
a material adverse impact on the Company's duties under this
Agreement or related to the sale of the Policies, the operation
of the Accounts, or the purchase of the Shares; or
(d) at the option of the Company upon institution of formal
proceedings against a Trust by FINRA, the SEC, or any state
securities or insurance department or any other regulatory body
that would have a material adverse impact on such Trust's or the
Underwriter's duties under this Agreement or related to the sale
of the Shares; or
- 17 -
(e) at the option of the Company, a Trust or the Underwriter upon
receipt of any necessary regulatory approvals and/or the vote of
the Policy owners having an interest in the Accounts (or any
subaccounts) to substitute the shares of another investment
company for the corresponding Portfolio Shares in accordance with
the terms of the Policies for which those Portfolio Shares had
been selected to serve as the underlying investment media. The
Company will give thirty (30) days' prior written notice to the
relevant Trust(s) of the Date of any proposed vote or other
action taken to replace the Shares; or
(f) termination by either a Trust or the Underwriter by written
notice to the Company, if either one or both of such Trust or the
Underwriter respectively, shall determine, in their sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, financial condition,
or prospects since the date of this Agreement or is the subject
of material adverse publicity; or
(g) termination by the Company by written notice to a Trust and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that such Trust or MFS has suffered a
material adverse change in this business, operations, financial
condition or prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; or
(i) upon assignment of this Agreement, unless made with the written
consent of the parties hereto.
(j) at the option of the Company if a Trust fails to meet the
diversification requirements specified in Article VI (other than
any failure caused by the Company's actions or omissions) or the
Company has a reasonable expectation that such Trust will fail to
meet these diversification requirements in the future.
12.2. The notice shall specify the Portfolio or Portfolios, Policies and,
if applicable, the Accounts as to which the Agreement is to be terminated.
12.3. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 12.1(a) may be exercised for
cause or for no cause.
12.4. Except as necessary to implement Policy owner initiated transactions,
or as required by state insurance laws or regulations, the Company shall
not redeem the Shares attributable to the Policies (as opposed to the
Shares attributable to the Company's assets held in the Accounts), until
ten (10) days after the Company shall have notified the relevant Trust of
its intention to do so.
12.5. Notwithstanding any termination of this Agreement, each Trust and the
Underwriter shall, at the option of the Company, continue to make available
additional shares of the Portfolios pursuant to the terms and conditions of
this Agreement, for all Policies in effect on the effective date of
termination of this Agreement (the "Existing Policies"), except as
otherwise provided under Article VII of this Agreement. Specifically,
without limitation, the owners of the Existing Policies shall be
- 18 -
permitted to transfer or reallocate investment under the Policies, redeem
investments in any Portfolio and/or invest in each Trust upon the making of
additional purchase payments under the Existing Policies.
ARTICLE XIII. NOTICES
-------
Any notice shall be sufficiently given when sent by registered or certified
mail, overnight courier or facsimile to the other party at the address of such
party set forth below or at such other address as such party may from time to
time specify in writing to the other party.
If to Trust I:
MFS VARIABLE INSURANCE TRUST
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Assistant Secretary
If to Trust II:
MFS VARIABLE INSURANCE TRUST II
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Assistant Secretary
If to the Company:
Metropolitan Life Insurance Company
Specialized Benefit Resources
000X Xxxxx Xxx Xxxxx, 0xx Xxxxx
Iselin, N.J. 08830
Attention: Xxxxxxx X. Xxxxxxxx
Metropolitan Life Insurance Company
GVUL
000 Xxxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attn: Xxxxxxxxx Xxxx
With a copy to Metropolitan Life Insurance Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Law Department
- 19 -
If to MFS:
Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
ARTICLE XIV. MISCELLANEOUS
-------------
14.1. Subject to the requirement of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of
the owners of the Policies and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted
by this Agreement or as otherwise required by applicable law or regulation,
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 it may come into the public domain.
14.2. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
14.3. This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together shall constitute one and the
same instrument.
14.4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
14.5. The Schedule attached hereto, as modified from time to time, is
incorporated herein by reference and is part of this Agreement.
14.6. Each party hereto shall cooperate with each other party in connection
with inquiries by appropriate governmental authorities (including without
limitation the SEC, FINRA, and state insurance regulators) relating to this
Agreement or the transactions contemplated hereby.
14.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
14.8. A copy of each Trust's Declaration of Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts. The Company
acknowledges that the obligations of or arising out of this instrument are
not binding upon any of each Trust's trustees, officers, employees, agents
or shareholders individually, but are binding solely upon the assets and
property of the relevant Trust in accordance with its proportionate
interest hereunder. The Company further acknowledges that the assets and
liabilities of each Portfolio are separate and distinct and that the
obligations of or arising out of this instrument are binding solely upon
the assets or property of the Portfolio on whose behalf the relevant Trust
has executed this instrument. The Company also agrees that the obligations
of each Portfolio hereunder shall be several and not joint, in accordance
with its proportionate interest hereunder, and the Company agrees not to
proceed against any Portfolio for the obligations of another Portfolio.
- 20 -
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 above.
METROPOLITAN LIFE INSURANCE COMPANY
/s/ Xxxx X. Xxxxxx Xx.
-----------------------------------------------
By its authorized officer,
By: Xxxx X. Xxxxxx Xx.
-------------------------------------------
Title: Vice President
----------------------------------------
MFS VARIABLE INSURANCE TRUST,
ON BEHALF OF THE PORTFOLIOS
By its authorized officer and not individually,
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Xxxxx X. Xxxxxx
Assistant Secretary
MFS VARIABLE INSURANCE TRUST II,
ON BEHALF OF THE PORTFOLIOS
By its authorized officer and not individually,
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Xxxxx X. Xxxxxx
Assistant Secretary
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxx X. Xxxxxxx
President
- 21 -
As of May 1, 2009
SCHEDULE A
ACCOUNTS, POLICIES AND PORTFOLIOS
SUBJECT TO THE PARTICIPATION AGREEMENT
--------------------------------------
And any other Portfolios or series of shares of the Trusts that are available
and open to new investors on or after the effective date of this agreement.
NAME OF SEPARATE
ACCOUNT AND DATE
ESTABLISHED BY POLICIES FUNDED SHARE CLASS TRUST PORTFOLIOS
BOARD OF DIRECTORS BY SEPARATE ACCOUNT (INITIAL OR SERVICE CLASS) (TRUST I OR TRUST II) APPLICABLE TO POLICIES
---------------------- -------------------- -------------------------- --------------------- ---------------------------------
Paragon Separate Group Variable Life Initial Class Trust I MFS Growth Series
Account A Insurance Policies MFS New Discovery Growth Series
October 30, 1997 MFS Total Return Series
Paragon Separate Group Variable Life Initial Class Trust I MFS Core Equity Series
Account B Insurance Policies MFS Global Equity Series
January 4, 1993 MFS Growth Series
MFS High Income Series
MFS Investors Growth Stock Series
MFS Investors Trust Series
MFS Mid-Cap Growth Series
MFS Money Market Series
MFS New Discovery Series
MFS Research Bond Series
MFS Research Series
MFS strategic Income Series
MFS Total Return Series
MFS Utilities Series
MFS Value Series
Group Variable Life Trust II MFS Money Market II*
Insurance Policies
(MFS)
Paragon Separate Individual Variable Initial Class Trust I MFS Growth Series
Account D Universal Life
January 3, 1995 Policies (IVUL)
Joint Survivor
Variable Universal
Life Policies (JSVUL)
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Separate Account UL MetFlex Service Class Trust I Global Equity Series
Established High Income Series
December,1988 Value Series
New Discover Series
Separate Account Private Placement Initial Class Trust I Global Equity Series
DCVL Group Variable Life High Income Series
November, 2003 Insurance Polices New Discover Series
(PPVL)
Private Placement
Individual Variable
Life Insurance
Policies (IPPVL)
Metropolitan Life Flexible Premium Initial Class Trust I MFS Research Bond Series
Variable Annuity Deferred Variable
Separate Account I Annuity Contacts
July 6, 1994 (CitiVariable)
Metropolitan Life Flexible Premium Initial Class Trust I MFS Research Bond Series
Variable Annuity Variable Annuity
Separate Account II Contracts
July 6, 1994 (CitiVariable)
* MFS Money Market II shall not be available to any other separate account or
policy.
INDEMNIFICATION AGREEMENT
BETWEEN
MASSACHUSETTS FINANCIAL SERVICES COMPANY
AND
METROPOLITAN LIFE INSURANCE COMPANY
THIS AGREEMENT (the "Agreement") is made and entered into this 1st day of
May 2009, by and between MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware
corporation ("MFS"), and METROPOLITAN LIFE INSURANCE COMPANY (the "Company"), on
its own behalf and on behalf of segregated asset accounts of the Company (the
"Accounts").
WHEREAS, MFS and the Company, on its own behalf and on behalf of the
Accounts, have entered into a Participation Agreement with MFS Variable
Insurance Trust, a Massachusetts business trust (the "Trust I"), MFS Variable
Insurance Trust II, a Massachusetts business trust (the "Trust II") (Trust I and
Trust II each referred to, individually, as the "Trust" and, collectively, as
the "Trusts"), dated as of May 1, 2009 (the "Participation Agreement");
NOW, THEREFORE, in consideration of their mutual promises as set forth in
the Participation Agreement, MFS and the Company agree as follows:
ARTICLE I. DEFINITIONS
-----------
All capitalized terms not defined herein shall have the meanings as set
forth in the Participation Agreement.
ARTICLE II. APPLICABILITY
-------------
The indemnification provided by MFS under this Agreement shall relate
solely to certain losses, claims, damages, liabilities and expenses that may
arise in connection with the performance by each Trust or MFS of its obligations
and duties under the Participation Agreement.
ARTICLE III. INDEMNIFICATION
---------------
3.1. MFS agrees to indemnify and hold harmless the Company and each of its
directors, officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act and any agents or
employees of the foregoing (each an "Indemnified Party" or,
collectively, the "Indemnified Parties") against any and all losses,
claims, damages, liabilities (including amounts paid in settlement
with the written consent of MFS) or expenses (including reasonable
counsel fees) to which an Indemnified Party may become subject under
any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements are related to the sale or acquisition
of the Shares or the Policies and:
(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
registration statement, prospectus or statement of additional
information ("SAI") of each Trust or sales literature for each
Trust (or any amendment or supplement to any of the foregoing),
or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall not
--------
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reasonable
reliance upon and in conformity with information furnished to
each Trust, MFS or the Underwriter by or on behalf of the Company
for use in the registration statement, prospectus, or SAI of each
Trust or in sales literature or other promotional material for
each Trust (or any amendment or supplement) or otherwise for use
in connection with the sales of the Policies or Shares; or
(b) arise out of or as a result of material statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI or sales
literature or other promotional literature for the Policies not
supplied by either Trust, MFS, the Underwriter or their
respective designees or persons under their control and on which
each Trust has reasonably relied) or wrongful conduct of either
Trust, MFS, the Underwriter or persons under their control, with
respect to the sale or distribution of the Policies or Shares; or
(c) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement,
prospectus, SAI or sales literature or other promotional
literature covering the Policies, 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 each
Trust; or
(d) arise as a result of any material failure by either Trust or MFS
to provide the services and furnish the materials under the terms
of the Participation Agreement (including a failure, whether
unintentional or in good faith or otherwise, of either Trust to
comply with the diversification requirements specified in Article
VI of the Participation Agreement); or
(e) arise out of or result from any material breach of any
representation and/or warranty made by MFS in the Participation
Agreement or any other material breach of the Participation
Agreement by MFS; or
(f) arise out of or result from the materially incorrect or untimely
calculation or reporting by MFS 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 this Article III.
3.2. In no event shall MFS be liable under the indemnification provisions
contained in this Agreement to any individual or entity, including,
without limitation, the Company, any Participating Insurance Company
or any Policy holder, with respect to any losses, claims, damages,
liabilities or expenses that arise out of or result from (i) a breach
of any representation, warranty, and/or covenant made by the Company
under the Participation Agreement or by any Participating Insurance
Company under an agreement containing substantially similar
representations, warranties and covenants; (ii) the failure by the
Company or any Participating Insurance Company to maintain its
segregated asset account (which invests in any Portfolio) as a
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legally and validly established segregated asset account under
applicable state law and as a duly registered unit investment trust
under the provisions of the 1940 Act (unless exempt therefrom); or
(iii) the failure by the Company or any Participating Insurance
Company to maintain its variable annuity and/or variable life
insurance contracts (with respect to which any Portfolio serves as an
underlying funding vehicle) as life insurance, endowment or annuity
contracts under applicable provisions of the Code.
3.3. MFS shall not be liable under this Agreement with respect to any
losses, claims, damages, liabilities or expenses to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, willful misconduct, or gross
negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations
and duties under this Agreement or the Participation Agreement.
3.4. Promptly after receipt by an Indemnified Party under this Section 3.4
of commencement of an action, such Indemnified Party will, if a claim
in respect thereof is to be made against MFS under this section,
notify MFS of the commencement thereof; but the omission so to notify
MFS will not relieve it from any liability that it may have to any
Indemnified Party otherwise than under this section. In case any such
action is brought against any Indemnified Party, and it notified MFS
of the commencement thereof, MFS will be entitled to participate
therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such Indemnified Party. After
notice from MFS of its intention to assume the defense of an action,
the Indemnified Party shall bear the expenses of any additional
counsel obtained by it, and MFS shall not be liable to such
Indemnified Party under this section for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation.
3.5. Each party hereto shall promptly notify the other parties to the
Participation Agreement of the commencement of any litigation or
proceeding against it or any of its respective officers, directors,
trustees, employees or 1933 Act control persons in connection with
this Agreement and the Participation Agreement, the issuance or sale
of the Policies, the operation of the Accounts, or the sale or
acquisition of Shares.
3.6. A successor by law of the parties to this Agreement and the
Participation Agreement shall be entitled to the benefits of the
indemnification contained herein. The indemnification provisions
contained herein shall survive any termination of this Agreement and
the Participation Agreement.
ARTICLE IV. DURATION AND TERMINATION
------------------------
This Agreement shall be effective upon execution and shall terminate with
respect to the Accounts, or one, some or all Portfolios, immediately upon
termination of the Participation Agreement with respect to the Accounts, or one,
some or all Portfolios, in accordance with the provisions of Article XII
thereof.
ARTICLE V. CONFIDENTIALITY
---------------
Except as required by applicable law or pursuant to the written consent of
MFS, the Company shall treat as confidential the indemnification provided
pursuant to this Agreement, all information reasonably related to this
Agreement, and the existence of this Agreement. This Article V shall survive the
termination of this Agreement.
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ARTICLE VI. MISCELLANEOUS
-------------
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts. This
Agreement may be executed simultaneously in one or more counterparts, each of
which taken together shall constitute one and the same instrument. The captions
in this Agreement are included for convenience of reference only. Any notice
required by this Agreement shall be sent to the persons so specified to receive
notice in the Participation Agreement.
IN WITNESS WHEREOF, both of the parties hereto have 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.
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By its authorized officer,
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
President
METROPOLITAN LIFE INSURANCE COMPANY
/s/ Xxxx X. Xxxxxx Xx.
----------------------------------------
By its authorized officer,
By: Xxxx X. Xxxxxx Xx.
------------------------------------
Title: Vice President
---------------------------------
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