EXHIBIT 99.(H)(9)
PARTICIPATION AGREEMENT
Among
NEW ENGLAND ZENITH FUND,
NEW ENGLAND INVESTMENT MANAGEMENT, INC.,
NEW ENGLAND SECURITIES CORPORATION
and
________________________ LIFE INSURANCE COMPANY
AGREEMENT, made and entered into the 1st day of May, 2000 by and among NEW
ENGLAND ZENITH FUND, a business trust organized under the laws of the
Commonwealth of Massachusetts ( the "Fund"), _____________________ Life
Insurance Company (the "Company") on its own behalf and on behalf of
[_______________ Variable Life Account], [_______________ Variable Annuity
Account], and [Group Pension Account] and any other current or future separate
account which invests in the Fund (each an "Account"), each a separate account
of the Company, NEW ENGLAND INVESTMENT MANAGEMENT, INC. (the "Adviser") and NEW
ENGLAND SECURITIES CORPORATION (the "Underwriter").
WHEREAS, the Fund 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 under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, the Fund serves as an investment vehicle underlying variable life
insurance policies and variable annuity contracts (collectively, "Variable
Insurance Products") offered by insurance companies ("Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares, each representing the interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from certain
provisions of the 1940 Act and certain thereunder, to the extent necessary to
permit shares of the Fund to be sold to and held by both variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies (hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Adviser acts as the investment adviser and/or administrator or
subadministrator to each series of the Fund and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Company has registered or will register certain variable life
and/or variable annuity contracts under the 1933 Act;
WHEREAS, the Underwriter is registered as a broker dealer with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of certain series of the
Fund (the "Series") on behalf of each Account to fund certain variable life and
variable annuity contracts (each, a "Contract") and the Underwriter is
authorized to sell such shares to each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
1. Sale of Fund Shares.
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1.1 Subject to the terms of the Distribution Agreement in effect from time
to time between the Fund and the Underwriter, the Underwriter agrees to
sell to the Company those shares of each Series which each Account
orders, executing such orders on a daily basis at the net asset value
next computed after receipt by the Fund or its designee of the order for
the shares of the Fund. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which the Fund
calculates the net asset value of shares of the Series.
1.2 The Fund agrees to make its shares available for purchase at the
applicable net asset value per share by the Company and its Accounts on
those days on which the Fund calculates its net asset value. The Fund
agrees to use reasonable efforts to calculate such net asset value on
each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Trustees of the Fund
(hereinafter the "Board" or the "Trustees") may refuse to sell shares of
any Series to any person, or suspend or terminate the offering of shares
of any Series, if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the
Trustees acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, in the best interests of
the shareholders of such Series.
1.3 The Fund and the Underwriter agree that shares of the Fund will be sold
only to Participating Insurance Companies and their separate accounts,
or to other purchasers of the kind specified in Treas. Reg. Section
1.817-5 (f)(3) (or any successor regulation) as from time to time in
effect.
1.4 The Fund agrees to redeem, on the Company's request, any full or
fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption.
1.5 The Company agrees that all purchases and redemptions by it of the
shares of each Series will be in accordance with the provisions of the
then current prospectus and statement of additional information of the
Fund for the respective Series and in accordance with any procedures
that the Fund, the Underwriter or the Fund's transfer agent may have
established governing purchases and redemptions of shares of the Series
generally.
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1.6 The Company shall pay for Fund shares on the next Business Day after an
order to purchase Fund shares is made in accordance with the provisions
of Section 1.1. hereof. Payment shall be in federal funds transmitted by
wire to the Fund's custodian.
1.7 Issuance and transfer of the Funds' shares will be by book entry only.
Share certificates will not be issued. Shares ordered from the Fund will
be recorded on the transfer records of the Fund in an appropriate title
for each Account or the appropriate subaccount of each Account.
1.8 The Fund shall furnish same day notice (by e-mail, fax or telephone,
followed by written confirmation) to the Company of any income,
dividends or capital gain distributions payable on the shares of any
Series. The Company hereby elects to receive all such income dividends
and capital gain distributions as are payable on the Series shares in
additional shares of that Series. The Company reserves the right to
revoke this election and to receive all such income dividends and
capital gain distributions in cash. The Fund shall notify the Company of
the number of shares so issued as payment of such dividends and
distributions.
1.9 The Fund shall make the net asset value per share for each Series
available to the Company on a daily basis 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
7:00 p.m. Boston time.
2. Representations and Warranties.
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2.1 The Company represents and warrants that each Contract shall be either
(i) registered, or prior to the purchase of shares of any Series in
connection with the funding of such Contract, will be registered under
the 1933 Act or (ii) exempt from such registration; that the Contracts
will be issued and sold in compliance in all material respects with all
applicable federal and state laws, including all applicable customer
suitability requirements. 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
each Account as a separate account pursuant to relevant state insurance
law prior to any issuance or sale of any Contract by such Account and
that each Account shall be either (i) registered or, prior to any
issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act; or
(ii) exempt from such registration.
2.2 The Fund represents and warrants that Fund 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 the Fund is and shall remain registered under the 1940 Act. The
Fund agrees that it will amend the registration statement for its shares
under the 1933 Act and the 1940 Act from time to time as required in
order to permit the continuous public offering of its shares in
accordance with the 1933 Act. The Fund shall register and
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qualify the shares for sale in accordance with the laws of the various
states only if and to the extent deemed advisable by the Fund or the
Underwriter.
2.3 The Fund represents that each Series is currently qualified as a
"regulated investment company" under subchapter M of the Internal
Revenue Code of 1986, as amended, (the "Code") and agrees that it will
make every effort to maintain such qualification (under Subchapter M or
any successor or similar provision) and that it will notify the Company
promptly upon having a reasonable basis for believing that it has ceased
to so qualify or that it might not so qualify in the future.
2.4 The Company represents that the Contracts are currently treated as
endowment, annuity or life insurance contracts under applicable
provisions of the Code and agrees that it will make every effort to
maintain such treatment and that it will notify the Fund and the
Underwriter immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not
be so treated in the future.
2.5 The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of
the various states.
2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
2.7 The Underwriter further represents that it will sell and distribute the
Fund shares in accordance with all applicable state and federal
securities laws, including without limitation the 1933 Act, the 1934 Act
and the 0000 Xxx.
2.8 The Fund 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.
2.9 Each of the Fund, the Adviser and the Underwriter represent and warrant
that all of their directors, officers and employees dealing with the
money and/or securities of the Fund are and shall continue to be at all
times covered by a blanket fidelity bond or similar coverage for the
benefit of the Fund in an amount not less than the minimal coverage as
required by Rule 17g-(1) under the 1940 Act or any successor regulations
as may be promulgated from time to time. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.10 The Company represents and warrants that all of its directors, officers,
employees and other individuals/entities dealing with the money and/or
securities representing amounts intended for the purchase of shares of
the Fund or proceeds of the redemption of shares of the Fund are and
shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund, in an amount not less than
the amount required of the Fund, the Adviser and the Underwriter under
Section 2.9. hereof.
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The aforesaid Bond shall include coverage for larceny and embezzlement
and shall be issued by a reputable bonding company.
2.11 The Company represents and warrants that it will not, without the prior
written consent of the Fund and the Adviser, purchase Fund shares with
Account assets derived from the sale of Contracts to individuals or
entities which would cause the investment policies of any Series to be
subject to any limitations not in the Fund's then current prospectus or
statement of additional information with respect to any Series.
3. Prospectuses and Proxy Statements; Voting.
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3.1 The Underwriter (or the Fund) shall provide the Company with as many
copies of the Fund's current prospectus as the Company may reasonably
request (at the Company's expense with respect to other than existing
Contract owners). If requested by the Company in lieu thereof, the
Underwriter (or the Fund) shall provide such documentation (including a
final copy of the new prospectus as set in type at the Fund's expense)
and other assistance as is reasonably necessary in order for the Company
once each year (or more frequently if the prospectus for the Fund is
amended) to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document (such printing to be at the
Company's expense with respect to other than existing Contract owners).
3.2 The Underwriter (or the Fund), at its expense, shall print and provide
the Fund's then current statement of additional information free of
charge to the Company and to any owner of a Contract or prospective
owner who requests such statement.
3.3 The Fund, at its expense, shall provide the Company with copies of its
proxy material, reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require
for distribution (at the Fund's expense) to Contract owners.
3.4 So long as and to the extent that the SEC or its staff continues to
interpret the 1940 Act to require pass-through voting privileges for
variable contract owners, or if and to the extent required by law, the
Company shall: (i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions received from
Contract owners; and (iii) vote Fund shares for which no instructions
have been received in the same proportion as Fund shares of such Series
for which instructions have been received. The Company reserves the
right to vote Fund shares held in any Account in its own right, to the
extent permitted by law. The Company shall be responsible for assuring
that each Account participating in the Fund calculates voting privileges
in a manner consistent with the standards set forth on Schedule A
hereto, which standards will also be provided to the other Participating
Insurance Companies.
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4. Sales Material and Information.
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4.1 The Company shall be solely responsible for ensuring that sales
literature in which the Fund, a Series, the Adviser, any subadviser to
any Series or the Underwriter (in its capacity as distributor of the
Fund) is named, eligible for use under Rule 134 or Rule 482 under the
1933 Act or other sales literature the substance of which is contained
in the then current prospectus or statement of additional information of
the Fund. The Company may, if it so chooses, deliver other draft sales
literature to the Fund or its designee, at least thirty Business days
prior to its use. The Fund or such designee shall use commercially
reasonable efforts to review sales literature so delivered within
fifteen days. Any sales literature so delivered shall not be used by the
Company if the Fund or its designee objects to such use within fifteen
Business Days after receipt of such material.
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection
with the sale of the Contracts other than the information or
representations contained in the registration statement, prospectus or
statement of additional information for the Fund shares, as such
registration statement and prospectus or statement of additional
information may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or
other promotional material approved by the Fund or its designee or by
the Underwriter, except with the approval of the Fund or the Underwriter
or the designee of either.
4.3 The obligations set forth in Section 4.1 herein shall apply mutatis
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mutandis to the Fund and the Underwriter with respect to each piece of
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sales literature or other promotional material in which the Company
and/or any Account is named.
4.4 The Fund and the Underwriter shall not give any information or make any
representations on behalf of the Company or concerning the Company, any
Account or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts,
as such registration statement and prospectus may be amended or
supplemented from time to time, or in published reports for each Account
which are in the public domain or approved by the Company for
distribution to Contract owners, or in sales literature or other
promotional material approved by the Company or its designee, except
with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional
information, shareholder annual, semi-annual or other reports, proxy
statements, applications for exemptions, requests for no-action letters
and any amendments to any of the above, that relate to any Series,
promptly after the filing of each such document with the SEC or any
other regulatory authority.
4.6 The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, statements of additional
information, shareholder annual, semi-annual or other reports,
solicitations for voting instructions, applications for exemptions,
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requests for no-action letters and any amendments to any of the above,
that relate to the Contracts or any Account, promptly after the filing
of such document with the SEC or any other regulatory authority. Each
party hereto will provide to each other party, to the extent it is
relevant to the Contracts or the Fund, a copy of any comment letter
received from the staff of the SEC or the NASD, and the Company's
response thereto, following any examination or inspection by the staff
of the SEC or the NASD.
4.7 As used herein, 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), sales literature (i.e., any written communication distributed or
made generally available to customers or the public, including
brochures, circulars, research reports, market letters, form letters,
seminar texts, reprints or excerpts of any other advertisement, sales
literature or published article), educational or training materials or
other communications distributed or made generally available to some or
all agents or employees.
5. Fees and Expenses.
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5.1 The Fund, the Adviser and the Underwriter shall pay no fee or other
compensation to the Company under this agreement, except that if the
Fund or any Series adopts and implements a plan pursuant to Rule 12b-1
to finance distribution expenses, then the Underwriter may make payments
to the Company or to the underwriter. Each party acknowledges that the
Adviser may pay service or administrative fees to the Company and other
Participating Insurance Companies pursuant to separate agreements.
6. Diversification.
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6.1 The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will at all times comply
with Section 817(h) of the Code and any Treasury Regulations thereunder
relating to the diversification requirements for variable annuity,
endowment or life insurance contracts, as from time to time in effect.
7. Potential Conflicts.
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7.1 To the extent required by the Shared Funding Exemptive Order or by
applicable law, the Board of Trustees of the Fund (the "Board") will
monitor the Fund for the existence of any material irreconcilable
conflict between the interests of the contract owners of all separate
accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretative letter, or
any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of
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any Series are being managed; (e) a difference in voting instructions
given by variable annuity contract and variable life insurance contract
owners; or (f) a decision by an insurer to disregard the voting
instructions of contract owners. The Fund shall promptly inform the
Company if it determines that an irreconcilable material conflict exists
and the implications thereof.
7.2 The Company will report to the Board any potential or existing conflicts
between the interests of contract owners of different separate accounts
of which the Company is or becomes aware. The Company will assist the
Board in carrying out its responsibilities under the Shared Funding
Exemptive Order and under applicable law, by providing the Board with
all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation of
the Company to inform the Board whenever contract owner voting
instructions are disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists,
the Company and other Participating Insurance Companies shall, at their
expense take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (1)
withdrawing the assets allocable to some or all of the separate accounts
from the Fund or any Series and reinvesting such assets in a different
investment medium, including (but not limited to) another series of the
Fund, or submitting the question of whether such segregation should be
implemented to a vote of all affected Contract owners and, as
appropriate, segregating the assets of any appropriate group (i.e.,
annuity contract owners, life insurance contract owners, or variable
contract owners of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected contract
owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority
vote, the Company may be required, at the Fund's election, to withdraw
the relevant Account's investment in the Fund and terminate this
Agreement; provided, however, that such withdrawal and termination shall
be limited to the extent required by such material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board. Any such withdrawal and termination will take place within six
(6) months after the Fund gives written notice that this provision is
being implemented.
7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw
the affected Account's investment in the Fund and terminate this
Agreement within six months after the Board informs the Company in
writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such
withdrawal and termination shall be limited to the extent required by
such material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
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7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a new
funding medium for the Contracts. The Company shall not be required by
Section 7.3 to establish a new funding medium for the Contracts if an
offer to do so has been declined by vote of a majority of Contract
owners materially adversely affected by the irreconcilable material
conflict. In the event that the Board determines that any proposed
action does not adequately remedy any irreconcilable material conflict,
then the Company will withdraw the Account's investment in the Fund and
terminate this Agreement within six (6) months after the Board informs
the Company in writing of the foregoing determination, provided,
however, that such withdrawal and termination shall be limited to the
extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested members of the Board.
7.7 If and to the extent that Rule 6e-2 and Rule 6e-3(T) under the 1940 Act
are amended, or Rule 6e-3 is adopted, to provide exemptive relief from
any provision of the Act or the rules promulgated thereunder with
respect to mixed or shared funding (as defined in the Shared Funding
Exemptive Order) on terms and conditions materially different from those
contained in the Shared Funding Exemptive Order, then (a) the Fund
and/or Participating Insurance Companies, as appropriate, shall take
such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such rules are
applicable; and (b) Sections 3.4, 7.1, 7.2, 7.3, 7.4, and 7.5 of this
Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
8. Indemnification.
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8.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund and each
of its Trustees and officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company) or litigation
(including legal and other expenses), to which the Indemnified Parties
may become subject under any statute, 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 Fund's shares or the Contracts and: (i)
arise out of or are based upon any untrue statements or alleged untrue
statements of any material fact contained in the registration statement
or prospectus or statement of additional information (if applicable) for
the Contracts or contained in the Contracts or sales literature or other
promotional material for the Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
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misleading, provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Fund for use
in the registration statement or prospectus or statement of additional
information (if applicable) for the Contracts or in the Contracts or
sales literature or other promotional material (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Contracts or Fund shares; or (ii) arise out of or as a result of
statements or representations (other than statements or representations
contained in the registration statement, prospectus or statement of
additional information (if applicable) or sales literature or other
promotional material of the Fund not supplied by the Company, or persons
under its control) or wrongful conduct of the Company or persons under
its control, with respect to the sale or distribution of the Contracts
or Fund Shares; or (iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in any registration
statement, prospectus or statement of additional information (if
applicable) or sales literature or other promotional material of the
Fund or any amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading if
such a statement or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or (iv) arise as a
result of any failure by the Company to provide the services and furnish
the materials under the terms of this Agreement; or (v) arise out of or
result from any material breach of any representation and/or warranty
made by the Company in this Agreement or arise out of or result from any
other material breach of this Agreement by the Company, as limited by
and in accordance with the provisions of Section 8.1(b) and 8.1(c)
hereof.
(b) The Company shall not be liable under this Section 8.1 with respect
to any losses, claims, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject if such loss, claim,
damage, liability or litigation is caused by or arises out of such
Indemnified Party's willful misfeasance, bad faith or gross negligence
or by reason of such Indemnified Party's reckless disregard of
obligations or duties under this Agreement or to the Fund, whichever is
applicable.
(c) Each Indemnified Party shall notify the Company of any claim made
against an Indemnified Party in writing within a reasonable time after
the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party
(or after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability which it
may have to the Indemnified Party against whom such action is brought
under this indemnification provision unless the Company's ability to
defend against the claim shall have been materially prejudiced by the
Indemnified Party's failure to give such notice and shall not in any way
relieve the Company from any liability which it may have to the
Indemnified Party against whom the action is brought otherwise than on
account of this indemnification provision. In case any such action is
brought against one or more Indemnified Parties, the Company shall be
entitled to participate, at its own expense, in
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the defense of such action. The Company also shall be entitled to assume
the defense thereof, with counsel satisfactory to each Indemnified Party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by
it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such
party independently in connection with the defense thereof other than
reasonable costs of investigation. An Indemnified Party shall not settle
any claim involving a remedy including other than monetary damages
without the prior written consent of the Company.
(d) The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the
operation of the Fund.
8.2 Indemnification by the Adviser and the Underwriter
(a) The Adviser and the Underwriter agree to indemnify and hold harmless
the Company and each of its directors and officers and each person, if
any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 8.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Adviser and the Underwriter) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any
statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares
or the Contracts and: (i) 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, or sales literature or other promotional material of the
Fund (or any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to the
Adviser, the Underwriter, or Fund by or on behalf of the Company for use
in the registration statement, prospectus or statement of additional
information for the Fund or in sales literature or other promotional
material (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or (ii) arise
out of or as a result of statements or representations (other than
statements or representations contained in the registration statement,
prospectus or statement of additional information or sales literature or
other promotional material for the Contracts not supplied by the
Adviser, the Underwriter or the Fund or persons under their control) or
wrongful conduct of the Adviser, the Underwriter or the Fund or persons
under their control, with respect to the sale or distribution of the
Contracts or Fund Shares; or (iii) arise out of any untrue statement or
alleged untrue statement of a material fact contained in any
registration statement, prospectus or statement of additional
information or sales literature or other promotional material
11
covering the Contracts, or any amendment thereof or supplement thereto,
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on behalf of
the Adviser, the Underwriter, or the Fund; or (iv) arise as a result of
any failure by the Adviser, the Underwriter or the Fund to provide the
services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or
otherwise, to comply with the diversification requirements specified in
Article VI of this Agreement; or (v) arise out of or result from any
material breach of any representation and/or warranty made by the
Adviser, the Underwriter, or the Fund in this Agreement or arise out of
or result from any other material breach of this Agreement by the
Adviser, the Underwriter, or the Fund; as limited by and in accordance
with the provisions of Sections 8.2(b) and 8.2(c) hereof.
(b) Neither the Adviser nor the Underwriter shall be liable under this
Section 8.2 with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject if
such loss, claim, damage, liability or litigation is caused by or arises
out of such Indemnified Party's willful misfeasance, bad faith or gross
negligence or by reason of such Indemnified Party's reckless disregard
of obligations and duties under this Agreement or to the Company or each
Account, whichever is applicable.
(c) Each Indemnified Party shall notify each of the Adviser, the
Underwriter, and the Fund of any claim made against the Indemnified
Party within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have been
served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but
failure to notify each of the Adviser, the Underwriter, and the Fund of
any such claim shall not relieve the Adviser or the Underwriter from any
liability which it may have to the Indemnified Party against whom such
action is brought under this indemnification provision unless the
Adviser or the Underwriter's ability to defend against the claim shall
have been materially prejudiced by the Indemnified Party's failure to
give such notice and shall not in any way relieve the Company from any
liability which it may have to the Indemnified Party against whom the
action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against one or more
Indemnified Parties, the Adviser and the Underwriter will be entitled to
participate, at their own expense, in the defense thereof. The Adviser
and/or the Underwriter shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice
from the Adviser and/or the Underwriter to such party of the election of
the Adviser and/or the Underwriter to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and the Adviser and/or the Underwriter will not
be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
An Indemnified Party shall not settle any claim involving any remedy
other than monetary damages without the prior written consent of the
Adviser and/or the Underwriter.
12
(d) The Company agrees promptly to notify the Adviser, the Underwriter
and the Fund of the commencement of any litigation or proceedings
against it or any of its officers or directors in connection with the
issuance or sale of the Contracts or the operation of each Account.
9. 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 (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed
in accordance therewith.
10. Termination.
-----------
10.1 This Agreement shall terminate:
(a) at the option of any party upon 180 days' advance written notice to
the other parties; provided, however, that such notice shall not be
given earlier than one year following the date of this Agreement; or
(b) at the option of the Company to the extent that shares of a Series
are not reasonably available to meet the requirements of the Contracts
as determined by the Company, provided however, that such termination
shall apply only to those Series the shares of which are not reasonably
available. Prompt notice of the election to terminate for such cause
shall be furnished by the Company; or
(c) at the option of the Fund in the event that formal administrative
proceedings are instituted against the Company by the NASD, the SEC, any
state insurance department or commissioner or similar insurance
regulator or any other regulatory body regarding the Company's duties
under this Agreement or related to the sale of the Contracts, with
respect to the operation of any Account or the purchase by any Account
of Fund shares, provided, however, that the Fund determines in its sole
judgment, exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of the
Company to perform its obligations under this Agreement; or
(d) at the option of the Company in the event that formal administrative
proceedings are instituted against the Fund, the Adviser or the
Underwriter by the NASD, the SEC or any state securities or insurance
department or commissioner or any other regulatory body, provided,
however, that the Company determines in its sole judgment exercised in
good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Fund, the Adviser or the
Underwriter to perform its obligations under this Agreement; or
13
(e) with respect to any Account, upon requisite authority (by vote of
the Contract owners having an interest in such Account or any subaccount
thereof, or otherwise) to substitute the shares of another investment
company (or separate series thereof) for the shares of any Series in
accordance with the terms of the Contracts for which shares of that
Series had been selected to serve as the underlying investment medium.
The Company will give 90 days' prior written notice to the Fund of the
date of any proposed vote to replace the Fund's shares or of the filing
by the Company with the SEC of any application relating to any such
substitution; or
(f) at the option of the Company, in the event any shares of any Series
are not registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares as the
underlying investment medium of the Contracts issued or to be issued by
the Company; or
(g) at the option of the Company, if any Series ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code or under any
successor or similar provision, or if the Company reasonably believes
that any Series may fail to so qualify; or
(h) at the option of the Company, if the Fund fails to meet the
diversification requirements specified in Section 6 hereof; or
(i) at the option of the Fund, the Adviser or the Underwriter, if (1)
the Fund, the Adviser or the Underwriter, as the case may be, shall
determine, in its sole judgment reasonably exercised in good faith, that
the Company has suffered a material adverse change in its business or
financial condition or is the subject of material adverse publicity and
such material adverse change or material adverse publicity will have a
material adverse impact on the business and operations of the Fund, the
Adviser or the Underwriter, as the case may be, (2) the Fund, the
Adviser or the Underwriter shall notify the Company in writing of such
determination and its intent to terminate this Agreement, and (3) after
considering the actions taken by the Company and any other changes in
circumstances since the giving of such notice, such determination of the
Fund, the Adviser or the Underwriter shall continue to apply on the
sixtieth (60th) day following the giving of such notice, which sixtieth
day shall be the effective date of termination; or
(j) at the option of the Company, if (1) the Company shall determine, in
its sole judgment reasonably exercised in good faith, that the Fund, the
Adviser or the Underwriter has suffered a material adverse change in its
business or financial condition or is the subject of material adverse
publicity and such material adverse change or material adverse publicity
will have a material adverse impact upon the business and operations of
the Company, (2) the Company shall notify the Fund, the Adviser and the
Underwriter in writing of such determination and its intent to terminate
the Agreement, and (3) after considering the actions taken by the Fund,
the Adviser and/or the Underwriter and any other changes in
circumstances since the giving of such notice, such determination shall
continue to apply on the sixtieth (60th) day following the giving of
such notice, which sixtieth day shall be the effective date of
termination; or
14
(k) in the case of an Account not registered under the 1933 Act or 1940
Act, the Company shall give the Fund 90 days' prior written notice if
the Company chooses to cease using any Series as an investment vehicle
for such Account.
It is understood and agreed that the right of any party hereto to terminate this
Agreement pursuant to Section 10.1(a) may be exercised for any reason or for no
reason.
10.2 Notice Requirement. No termination of this Agreement shall be effective
unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its intent to
terminate which notice shall set forth the basis for such termination.
Furthermore, in the event that any termination is based upon the
provisions of Article VII, or the provision of Section 10.1(a), 10.1(i)
or 10.1(j) of this Agreement, such prior written notice shall be given
in advance of the effective date of termination as required by such
provisions; and
10.3 In the event that any termination is based upon the provisions of
Section 10.1(c) or 10.1(d) of this Agreement, such prior written notice
shall be given at least ninety (90) days before the effective date of
termination.
10.4 Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall, at the option of the
Company, continue to make available additional shares of each Series
pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts
shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties
agree that this Section 10.4 shall not apply to any terminations under
Section 10.1(b) or Section 7, and in the case of terminations under
Section 7 terminations, the effect of such terminations shall be
governed by Section 7 of this Agreement.
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 Fund or to the Adviser:
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Secretary
15
If to the Company:
_________________ Life Insurance Company
[address]
Attention: ________________
If to the Underwriter:
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Secretary
12. Miscellaneous.
-------------
12.1 A copy of the Agreement and Declaration of Trust establishing New
England Zenith Fund is on file with the Secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is
executed on behalf of the Fund by officers of the Fund as officers and
not individually and that the obligations of or arising out of this
Agreement are not binding upon any of the trustees, officers or
shareholders of the Fund individually but are binding only upon the
assets and property belonging to the Series.
12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of
the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize
such names and addresses and other confidential information until such
time as it may come into the public domain without the express written
consent of the affected party.
12.3 The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the
same instrument.
12.5 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
SEC, the NASD and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection
with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
16
12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled
to under state and federal laws.
17
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
________________________ LIFE INSURANCE COMPANY
By:
-------------------------------------
Name:
Title:
Date:
-----------------------------------
NEW ENGLAND ZENITH FUND
By:
-------------------------------------
Name:
Title:
Date:
-----------------------------------
NEW ENGLAND INVESTMENT MANAGEMENT, INC.
By:
-------------------------------------
Name:
Title:
Date:
-----------------------------------
NEW ENGLAND SECURITIES CORPORATION
By:
-------------------------------------
Name:
Title:
Date:
-----------------------------------
18
PARTICIPATION AGREEMENT
Among
NEW ENGLAND ZENITH FUND,
NEW ENGLAND INVESTMENT MANAGEMENT, INC.,
NEW ENGLAND SECURITIES CORPORATION
and
________________________ LIFE INSURANCE COMPANY
SCHEDULE A
With respect to each Account, all shares of each Series attributable to such
policies and contracts for which no owner instructions have been received by the
Company and all shares of the Series attributable to charges assessed by the
Company against such policies and contracts will be voted for, voted against, or
withheld from voting on any proposal in the same proportions as are the shares
for which owner instructions have been received by the Company with respect to
policies or contracts issued by such Account. To the extent the Company has so
agreed with respect to an Account not registered with the SEC under the 1940
Act, all shares of each Series held by the Account will be voted for, voted
against or withheld from voting on any proposal in the same proportions as are
the shares of such Series for which contract owners' voting instructions have
been received. If the Company has not so agreed, the shares of each Series
attributable to such unregistered Account will be voted for, voted against, or
withheld from voting on any proposal in the same proportions as are all other
shares for which the Company has received voting instructions.
19
