EXHIBIT 23(e)
DISTRIBUTION AGREEMENT
AGREEMENT made this ____ day of May, 2002, between MLIG Variable
Insurance Trust, a business trust organized under the laws of Delaware (the
"Trust"), and FAM Distributors, Inc., a __________________corporation (the
"Distributor");
WITNESSETH:
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), as a diversified open-end
investment company; and
WHEREAS, the Trust issues shares of beneficial interest (the
"shares"), an unlimited number of which are registered under the Securities
Act of 1933, as amended (the "Securities Act") pursuant to a registration
statement initially filed with the Securities and Exchange Commission (the
"SEC") on February 20, 2002, as amended from time to time (the "Registration
Statement"); and
WHEREAS, it is affirmatively in the interest of the Trust to offer its
shares for sale continuously to certain insurance companies for their
respective separate accounts pursuant to a currently effective Registration
Statement; and
WHEREAS, the Trust currently is comprised of twenty-one (21)
Portfolios, but may be comprised of additional separate portfolios, each of
which existing or additional portfolios will pursue its investment objective
through separate investment policies (such existing portfolios and any
additional portfolio being referred to as "Funds"); and
WHEREAS, the Distributor is a securities firm engaged in the business
of selling shares of investment companies either directly to purchasers or
through other securities dealers; and
WHEREAS, the Trust and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of shares to certain
insurance companies for their respective separate accounts, in order to
promote the growth of the Funds and facilitate the distribution of their
shares.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints
the Distributor as the principal underwriter and distributor of the Funds to
sell their respective shares to such insurance companies as the Trust may
designate in writing from time to time for their respective separate accounts
and the Distributor hereby accepts such appointment. The Trust during the term
of this Agreement shall sell its shares to the Distributor upon the terms and
conditions set forth below.
Section 2. Exclusive Nature of Duties. The Distributor shall be the
exclusive representative of the Trust to act as principal underwriter and
distributor of the shares.
Section 3. Purchase of Shares from the Trust.
(a) The Trust will offer its shares and the Distributor shall
have the right to buy from the Trust the shares needed, but not more than the
shares needed to fill unconditional orders for the shares placed with the
Distributor by the designated insurance companies for their separate accounts.
The price which the Distributor shall pay for the shares so purchased from the
Trust shall be the net asset value per share, determined as set forth in Section
3(c) hereof.
(b) The shares of each Fund are to be resold by the Distributor
to the designated insurance companies for their separate accounts at the net
asset value per share of such Fund.
(c) The net asset value of the shares of each Fund shall be
determined by the Trust or any agent of the Trust at such time and on such
days as is designated in the Registration Statement, in accordance with the
method set forth in the Registration Statement of the Trust and guidelines
established by the Board of Trustees of the Trust. The Trust may also cause
the net asset value of the shares to be determined in substantially the same
manner or estimated in such manner and as of such other hour or hours as may
from time to time be agreed upon in writing by the Trust and the Distributor.
All payments to the Trust hereunder shall be made in the manner set forth in
Section 3 (e).
(d) The Trust shall have the right to suspend the sale of the
shares at times when redemption of any such shares is suspended pursuant to
the condition set forth in Section 4 (b) hereof. The Trust shall also have the
right to suspend the sale of the shares if trading on the New York Stock
Exchange shall have been suspended, if a banking moratorium shall have been
declared by federal or New York authorities, or if there shall have been some
other extraordinary event, which, in the judgment of the Trust, makes it
impracticable to sell any such shares. Notwithstanding any other provision
hereof, the Board of Trustees of the Trust may refuse to sell shares of any
Fund, or suspend or terminate the offering of shares of any Fund 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 interests of the shareholders of
such Fund.
(e) The Trust, or any agent of the Trust designated in writing by
the Trust, shall be promptly advised of all purchase orders for the shares
received by the Distributor. The Trust (or its agent) will confirm orders upon
their receipt, will make appropriate book entries and upon receipt by the
Trust (or its agent) of payment thereof, will deliver deposit receipts or
certificates for such shares pursuant to the instructions of the Distributor.
Payment shall be made to the Trust in New York Clearing House funds. The
Distributor agrees to cause such payment and such instructions to be delivered
promptly to the Trust (or its agent).
Section 4. Repurchase or Redemption of Shares by the Trust
(a) Any of the outstanding shares may be tendered for redemption
at any time, and the Trust agrees to repurchase or redeem any such shares so
tendered in accordance with its obligations as set forth in Article 4 of its
Declaration of Trust, as amended from time to time, and in accordance with the
applicable provisions set forth in the Registration Statement of the Trust.
The price to be paid to redeem or repurchase shares shall be equal to the net
asset value per share calculated in accordance with the provisions of Section
3 (c) hereof. All payments by the Trust hereunder shall be made in the manner
set forth below.
The Trust shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of the Distributor
in New York Clearing House funds on or before the fourth business day
subsequent to its having received the notice of redemption in proper form.
(b) Redemption of shares of a Fund or payment thereof may be
suspended at times when the New York Stock Exchange is closed, when trading on
said Exchange is closed, when trading on said Exchange is restricted, when an
emergency exists as a result of which disposal by the Trust of securities
owned by it for such Fund is not reasonably practicable for the Trust fairly
to determine the value of the net assets of the Fund, or during any other
period when the SEC, by order, so permits.
Section 5. Duties of the Trust
(a) The Trust shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of shares of
the Trust, and this shall include one certified copy, upon request by the
Distributor, of all financial statements prepared for the Trust by independent
public accountants. The Trust shall make available to the Distributor such
number of copies of its Registration Statement as the Distributor shall
reasonably request.
(b) The Trust shall take all necessary action to register as many
shares under the Securities Act as investors may reasonably be expected to
purchase.
(c) The Trust shall use its best efforts to qualify and maintain
the qualification of the shares for sale under the securities law of such
states as the Distributor and the Trust may approve, if such qualification is
required by such securities laws. Any such qualifications may be withheld,
terminated or withdrawn by the Trust at any time in its discretion. The
expense of qualification and maintenance of qualification of the shares shall
be borne by the Trust. The Distributor shall furnish such information
and other material relating to its affairs and activities as may be required
by the Trust in connection with such qualification.
(d) The Trust will furnish, in reasonable quantities upon request
by the Distributor, copies of annual and semi-annual reports of the Trust.
Section 6. Duties of the Distributor.
(a) The Distributor shall devote reasonable time and effort to
effect sales of shares of the Trust, but shall not be obligated to sell any
specific number of shares. The services of the Distributor hereunder are not
to be deemed exclusive and nothing herein contained shall prevent the
Distributor from entering into distribution arrangements with other investment
companies so long as the performance of its obligations hereunder is not
impaired thereby.
(b) In selling the shares of the Trust, the Distributor shall use
its best efforts in all respects duly to conform with the requirements of all
federal and state laws and regulations and the regulations of the National
Association of Securities Dealers, Inc. (the "NASD"), relating to the sale of
such securities. Neither the Distributor nor any Selected Dealer nor any other
person is authorized by the Trust to give any information or to make any
representations, other than those contained in the registration statement or
related prospectus and any sales literature specifically approved by the
Trust.
Section 7. Payment of Expenses.
(a) The Trust shall bear all costs and expenses of the Trust
relating to the Funds, including fees and disbursements of its counsel and
auditors, in connection with the preparation and filing of any required
registration statements and prospectuses under the Investment Company Act and
the Securities Act, and all amendments and
supplements thereto and the expense of preparing, printing, mailing and
otherwise distributing prospectuses, annual or semi-annual reports to
shareholders and proxy materials.
(b) The Trust shall bear the costs and expenses of qualification
of the shares for sale, and, if necessary or advisable in connection
therewith, the Trust shall bear the cost and expense of qualifying the Trust
as a broker or dealer, in such states of the United States or other
jurisdictions as shall be selected by the Trust and the Distributor pursuant
to Section 5(c) hereof and the cost and expenses payable to each such state
for continuing qualification therein until the Company decides to discontinue
such qualification pursuant to Section 5(c) hereof.
Section 8. Indemnification.
(a) The Trust shall indemnify and hold harmless the Distributor
and each person, if any, who controls the Distributor against any loss,
liability, claim, damage or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damage or
expense and reasonable counsel fees incurred in connection therewith) arising
by reason of any person acquiring any shares, which may be based upon the
Securities Act, or on any other statute or at common law, on the ground that
the registration statement or related prospectus, as from time to time amended
and supplemented, or the annual or semi-annual reports to shareholders of the
Trust relating to the Funds, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, information
furnished to the Trust in connection therewith by or on
behalf of the Distributor; provided, however, that in no case (i) is the
indemnity of the Trust in favor of the Distributor and any such controlling
persons to be deemed to protect the Distributor or any such controlling
persons thereof against any liability to the Trust or its shareholders to
which the Distributor or any such controlling persons would otherwise be
subject by reason or willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its
obligations and duties under this Agreement. If not going to sell shares to
qualified plans add the following language or by reason of the sale of shares
to persons other than the separate accounts of insurance companies, or (ii) is
the Trust to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Distributor or such
controlling persons, unless the Distributor or such controlling persons, as
the case may be, shall have notified the Trust in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Distributor or such
controlling persons (or after the Distributor or such controlling persons
shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which it may have to the person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Trust elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to
the Distributor or such controlling person or persons; defendant or defendants
in the suit. In the event the Trust elects to assume the defense of any such
suit and retain such
counsel, the Distributor or such controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case the Trust does not elect to assume the
defense of any such suit, it will reimburse the Distributor or such
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Trust shall
promptly notify the Distributor of the commencement of any litigation or
proceedings against it or any of its officers or directors in connection with
the issuance or sale of the shares.
(b) The Distributor shall indemnify and hold harmless the Trust
and each of its trustees and officers and each person, if any, who controls
the Trust against loss, liability, claim, damage or expense described in the
foregoing indemnity contained in subsection (a) of this Section, but only with
respect to statements or omissions made in reliance upon, and in conformity
with, information furnished to the Trust in writing by or on behalf of the
Distributor for use in connection with the registration statement or related
prospectus, as from time to time amended, or the annual or semi-annual reports
to shareholders. In case any action shall be brought against the Trust or any
persons so indemnified, in respect of which indemnity may be sought against
the Distributor, the Distributor shall have the rights and duties given to the
Trust and the Trust and each person or persons so indemnified shall have the
rights and duties given to the Distributor by the provisions of subsection (a)
of this Section 8.
(c) The Distributor acknowledges that it has received notice of
and accepts the limitations on the Trust's liability as set forth in the
Trust's Declaration of Trust, as amended from time to time. In accordance
therewith, the Distributor agrees that the
Trust's obligations hereunder shall be limited to the assets of the Funds, and
with respect to each Fund shall be limited to the assets of such Fund, and no
party shall seek satisfaction of any such obligation from any shareholder of
the Trust, nor from any trustee, officer, employee or agent of the Trust.
Section 9. Duration and Termination of This Agreement. This Agreement
shall become effective upon approval by the Board of Trustees, including a
majority of trustees who are not parties to this Agreement or interested
persons of any such party to this Agreement. It shall become effective as to
any subsequently created Fund when it has been approved by the Board
specifically for such Fund. As to each Fund, the Agreement shall continue in
effect for two years and shall thereafter continue in effect from year to year
so long as such continuance is specifically approved for each Fund at least
annually by: (1) the Board, or by the vote of a majority of the outstanding
votes attributable to the shares representing an interest in the Fund; and (2)
a majority of those trustees who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for
the purpose of voting on such approval.
This Agreement may be terminated at any time, without penalty, by vote
of the Board or by vote of the holders of a majority of the outstanding shares
of the Trust, or by the Distributor, on sixty (60) days' written notice to the
other party. This Agreement may be terminated at any time without the payment
of any penalty by vote of the Board in the event that it shall have been
established by a court of competent jurisdiction that the Distributor or any
officer or director of the Distributor has taken any action which results in a
breach of the covenants of the Distributor set forth therein. This Agreement
shall automatically terminate in the event of its assignment.
The terms "control," "vote of a majority of the outstanding voting
securities," "assignment," "affiliated persons" and "interested person," when
used in this Agreement, shall have the respective meaning specified in the
Investment Company Act.
Section 10. Amendments of This Agreement. No provision of this
Agreement may be changed, waived, discharged, or terminated orally, but only
by an instrument in writing signed by the party against which an enforcement
of the change, waiver, discharge or termination is sought.
Section 11. Notices.Any notice shall be sufficiently given when sent
by registered or certified mail to the other party at the address of such
party set forth below or at such other address as such party may from time to
time specify in writing to the other party.
If to the Trust:
MLIG Variable Insurance Trust
0 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
If to the Distributor:
FAM Distributors, Inc.
Attn: _______________________
Section 12. Governing Law. This Agreement shall be construed and the
provisions hereof interpreted under and in accordance with the laws of the
State of New York. This Agreement shall be subject to the provisions of the
Securities Act, the Securities Exchange Act of 1934, and the Investment
Company Act, 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. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
Section 13. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
Section 14. Captions. 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.
Section 15. Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which taken together shall constitute
one and the same instrument.
Section 16. Cooperation with Authorities. Each party hereto shall
cooperate with the other party and all appropriate governmental authorities
(including without limitation the SEC, the NASD, and state insurance
regulators) and shall permit such authorities reasonable access to its books
and records in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
Section 17. Cumulative Rights. 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
MLIG VARIABLE INSURANCE TRUST
By:____________________________
President
FAM DISTRIBUTORS, INC.
By:____________________________
President
