PRINCIPAL UNDERWRITING AGREEMENT
This Principal Underwriting Agreement (hereinafter called the
"Agreement") is made effective as of the 28th day of April, 2014, between NEW
ENGLAND LIFE INSURANCE COMPANY ("Insurance Company") (on behalf of itself and
certain of its separate accounts (the "Separate Accounts">>) and METLIFE
INVESTORS DISTRIBUTION COMPANY ("Principal Underwriter"). The Insurance Company
and Principal Underwriter are herein sometimes referred to individually as a
"party" and collectively as the "parties".
WHEREAS, the Insurance Company desires to obtain from the Principal
Underwriter the underwriting and distribution services provided for herein; and
WHEREAS, the Principal Underwriter desires to provide to the Insurance
Company the underwriting and distribution services provided for herein;
NOW, THEREFORE, the parties agree as follows:
1. ISSUE AND SALE OF CONTRACTS.
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Insurance Company proposes to issue and sell certain variable annuity
contracts and variable life insurance policies (collectively the "Contracts") to
the public through the Principal Underwriter. The Contracts will be offered
through the Separate Accounts. The Principal Underwriter agrees to provide
underwriting and distribution services subject to the terms and conditions
hereof. The Contracts to be offered are more fully described in the registration
statements and prospectuses hereinafter mentioned.
2. GRANT AND ACCEPTANCE OF RIGHTS TO BE DISTRIBUTOR.
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Insurance Company grants Principal Underwriter the exclusive right,
during the term of this Agreement, subject to registration requirements of the
Securities Act of 1933 and the Investment Company Act of 1940 and the provisions
of the Securities Exchange Act of 1934 (" 1934 Act"), to be the distributor of
the Contracts issued through the Separate Accounts, and the Principal
Underwriter accepts such rights. Principal Underwriter shall also provide
distribution-related services as required by Insurance Company to purchasers of
variable annuity contracts and variable life insurance policies that were issued
by Insurance Company but previously distributed through New England Securities
Corporation ("Existing Contracts"). Principal Underwriter will sell the
Contracts and service Existing Contracts under such terms as set by Insurance
Company and will make such sales to purchasers permitted to buy such Contracts
as specified in the applicable prospectus. Principal Underwriter also shall be
authorized to contract with duly registered broker dealers reasonably acceptable
to Insurance Company for the sale of the Contracts to purchasers permitted to
buy such Contracts as specified in the applicable prospectus.
3. COMPENSATION.
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As further provided in this Section, Insurance Company agrees to
reimburse Principal Underwriter at cost for services provided by Principal
Underwriter pursuant to this Agreement. Insurance Company shall pay to Principal
Underwriter a fee in an amount equal to all expenses, direct and indirect,
reasonably and equitably determined by Principal Underwriter to be attributable
to the underwriting and distribution services provided by Principal Underwriter
to Insurance Company pursuant hereto, including commissions and other
compensation related costs paid by Principal Underwriter to broker dealers,
except to the extent that Massachusetts law otherwise requires. As may be agreed
by the parties, Insurance Company may discharge its obligations under this
section by making payment of such expenses to third parties on behalf of
Principal Underwriter or its creditors in accordance with applicable law.
Principal Underwriter shall credit the full
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amount of any such payments to third parties by Insurance Company against any
amounts otherwise due and owing under this section.
The bases for determining all such charges to Insurance Company shall
be consistent with applicable laws and regulations. Such bases shall be modified
and adjusted where necessary or appropriate to reflect fairly and equitably the
actual incidence of cost incurred by Principal Underwriter on behalf of
Insurance Company.
Principal Underwriter's determination of the charges hereunder shall be
conclusive as between the parties, except that if Insurance Company objects to
any such determination, it shall so advise Principal Underwriter in accordance
with Section 18(j) hereof within thirty (30) days of receipt of notice of said
determination. Unless the parties can reconcile such objection, or otherwise
agree, they shall select a firm of independent accountants which shall determine
the charges properly allocable to Principal Underwriter and shall, within a
reasonable time not to exceed one hundred eighty (180) days, submit such
determination, together with the basis therefore, in writing to both parties,
whereupon such determination shall be binding. The expenses of any such
determination by a firm of independent certified public accountants shall be
borne as determined to be equitable by such accountants.
4. PAYMENT
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Insurance Company shall pay Principal Underwriter all fees due to
Principal Underwriter under Section 3 hereof in the amount shown in Principal
Underwriter's records. Such records shall include reasonably sufficient details
(e.g., expenses, charges, credits, liabilities, etc.) to evidence actual fee
due. Process for paying such fee and the frequency of payments shall be agreed
upon between the parties from time to time.
5. INDEMNIFICATION
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Insurance Company shall indemnify, defend, and hold harmless Principal
Underwriter from and against all liabilities and expenses arising out of any
claims, demands, proceedings, suits, or actions, and any reasonable attorney's
fees and costs in connection therewith (collectively the "Legal Expenses"),
arising out of Principal Underwriter's underwriting and distribution services,
sale of the Contracts and servicing of Existing Contracts pursuant to this
Agreement; provided that Insurance Company shall not indemnify Principal
Underwriter for any Legal Expenses arising out of any intentional, willful, or
grossly negligent act or omission by Principal Underwriter, or its officers or
employees.
6. DOCUMENTS TO BE FURNISHED.
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On behalf of the Separate Accounts, Insurance Company shall furnish
Principal Underwriter with copies of all prospectuses, financial statements and
other documents which Principal Underwriter reasonably requests for use in
connection with the distribution of the Contracts or provide ongoing services in
connection with Existing Contracts. Insurance Company shall provide to Principal
Underwriter such number of copies of the current effective prospectuses as
Principal Underwriter shall request.
7. RESTRICTIONS ON REPRESENTATIONS.
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Principal Underwriter is not authorized to give any information or to
make any representations concerning the Contracts or the Separate Accounts of
Insurance Company other than those contained in the current registration
statements or prospectuses relating to the Separate Accounts filed with the
Securities and
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Exchange Commission ("SEC") or such sales literature as may be authorized by
Insurance Company, which shall be subject to applicable laws and regulations.
Principal Underwriter shall not have authority, on behalf of Insurance Company,
to waive any Contract or Existing Contract provision, to extend the time of
paying any purchase payments, or to receive any monies or purchase payments
(except for the sole purpose of forwarding monies or purchase payments to
Insurance Company). Principal Underwriter shall not expend, nor contract for the
expenditure of, the funds of Insurance Company. Principal Underwriter
acknowledges and agrees that Insurance Company shall have the right at any time
to suspend or limit public offering of the Contracts.
8. PREPARATION AND FILING OF CONTRACTS, EXISTING CONTRACTS AND
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PROSPECTUSES.
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Insurance Company shall be responsible for preparing the Contract and
Existing Contract forms and filing them with applicable state insurance
regulatory authorities, and for preparing the prospectuses and registration
statements and filing them with the SEC and state regulatory authorities, to the
extent required. Insurance Company agrees to forward to Principal Underwriter
copies of any and all amendments to the registration statement. Insurance
Company agrees to advise Principal Underwriter immediately of: (1) any request
by the SEC (i) for amendment of the registration statement or (ii) for
additional information that Insurance Company determines is material to
Principal Underwriter; (2) the issuance by the SEC of any stop order suspending
the effectiveness of the registration statement or the initiation of any
proceedings for that purpose; and (3) the occurrence of any material event, if
known by Insurance Company, that makes untrue any material statement made in the
registration statement or that requires the making of a change therein in order
to make any material statement made therein not misleading.
9. RULE 10b-10 REQUIREMENTS.
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Insurance Company, or its appointed designee, as agent for Principal
Underwriter, shall confirm to each applicant for and purchaser of a Contract or
an Existing Contract in accordance with Rule 10b-l 0 under the 1934 Act the
acceptance of purchase payments and such other transactions as are required by
Rule l0b-l0 or administrative interpretations thereunder, or by any other SEC or
FINRA rule requiring the delivery of such information.
10. MAINTENANCE OF BOOKS.
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Each party shall maintain its own books, accounts and records in such a way to
disclose clearly and accurately the nature and details of the transactions
between them, including such accounting information as is necessary to support
the charges under this Agreement, and such additional information as either of
the parties may reasonably request for purposes of its internal bookkeeping and
accounting operations. Principal Underwriter shall keep such books, accounts and
records, insofar as they pertain to the computation of charges hereunder,
available for audit, inspection and copying by Insurance Company and persons
authorized by Insurance Company or any governmental agency having jurisdiction
over the parties during all reasonable business hours upon reasonable prior
notice.
11. OWNERSHIP AND CUSTODY OF RECORDS.
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All records, books and files established and maintained by Principal
Underwriter by reason of its performance of services under this Agreement, which
absent this Agreement would have been established and maintained by Insurance
Company, shall be deemed the property of Insurance Company and shall be
maintained in accordance with applicable laws and regulations. Such records
shall be available, upon reasonable prior notice, during normal business hours
for inspection by Insurance Company, anyone authorized by Insurance Company, and
any governmental agency that has regulatory authority over
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Insurance Company's business activities. Such records shall also be available
upon reasonable prior notice, during normal business hours for inspection by any
governmental agency or self-regulatory organization that has regulatory
authority over Principal Underwriter's business activities. Copies of such
records, books and files shall be delivered to Insurance Company upon reasonable
prior notice. Principal Underwriter shall promptly deliver to Insurance Company
such records, books and files upon termination of this Agreement.
Notwithstanding the foregoing, Principal Underwriter may retain a copy of such
records, books and files to satisfy Principal Underwriter's recordkeeping
obligations under applicable laws, rules and regulations.
Both parties to this Agreement agree to keep the necessary records as
indicated by applicable state and federal law and to render the necessary
assistance to one another for the accurate and timely preparation of such
records.
12. AUDIT.
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Insurance Company and persons authorized by it or any governmental
agency having jurisdiction over Insurance Company shall have the right, at
Insurance Company's expense, to conduct an audit of the relevant books, accounts
and records of Principal Underwriter in connection with the services under this
Agreement upon giving reasonable notice of its intent to conduct such an audit.
In the event of such audit, Principal Underwriter shall give to the party
requesting the audit reasonable cooperation and access to all books, accounts
and records necessary to audit during normal business hours.
13. BOOKS OF ACCOUNT.
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During the term of this Agreement, all of Insurance Company's books of
account shall be maintained by Insurance Company and no books of account of
Insurance Company shall be maintained by Principal Underwriter. All of Insurance
Company's books of account shall be maintained in accordance with applicable
laws and regulations. If applicable, a computer terminal linked to an electronic
system that generates the electronic records that constitute Insurance Company's
books of account shall be kept and maintained at Insurance Company's principal
office. During all normal business hours, upon reasonable prior notice, there
shall be ready availability and easy access through such terminal (either
directly by insurance regulatory personnel or indirectly with the aid of
Insurance Company's personnel) to the electronic media used to maintain the
records comprising Insurance Company's books of account. The electronic records
shall be convertible into records that are in a readable form.
14. CONFIDENTIALITY.
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The parties agree that during the term of this Agreement they may wish
to exchange information which the party providing such information deems
confidential. Therefore, the parties agree that the recipient of Confidential
Information (as defined below) shall not, at any time, duplicate or disclose
such information to any other person, firm, corporation or entity or use it for
its own benefit except to faithfully perform its obligations under this
Agreement and shall use the same degree of care to avoid disclosure, duplication
or use of such Confidential Information as the recipient of the Confidential
Information employs with respect to its own confidential information of like
importance.
The obligation of confidentiality with respect to Confidential
Information will not apply to any information disclosed by the recipient of
Confidential Information (a) if and to the extent that disclosure by such
recipient is required by applicable law or any court, governmental agency or
regulatory authority or by subpoena or discovery request in pending litigation,
(b) if the information is or becomes available from public information (other
than as a result of prior unauthorized disclosure by such recipient), (c) if the
information is or was received from a third party not known by such recipient to
be under a confidentiality obligation with
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regard to such information or (d) if the information was in the possession of
such recipient other than by reason of the services performed pursuant to this
Agreement.
The term "Confidential Information" shall include any trade secret or
information that is for the time being confidential to the provider of the
information and is not in the public domain.
Except as provided herein, no rights to the Confidential Information
are transferred to the recipient of the Confidential Information. All
Confidential Information and any copies shall, at the option and written request
of the provider of the Confidential Information, either be promptly returned to
the provider of the Confidential Information or be destroyed.
15. SAFEGUARDING CUSTOMER INFORMATION.
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Principal Underwriter shall implement and maintain appropriate measures
designed to comply with applicable laws and regulations with respect to
safeguarding Insurance Company's customer information and customer information
systems. Principal Underwriter shall adjust its information security program at
the request of Insurance Company for any relevant changes dictated by Insurance
Company's assessment of risk around its customer information and customer
information systems to the extent to comply with applicable laws and
regulations. Reasonable confirming evidence that Principal Underwriter has
satisfied its obligations under this Agreement shall be made available, during
normal business hours, for inspection by Insurance Company, anyone authorized by
Insurance Company, and any government agency that has regulatory authority over
Insurance Company's business.
16. EFFECTIVENESS AND TERMINATION.
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This Agreement shall be effective upon the execution hereof and will
remain in effect unless terminated as hereinafter provided. This Agreement shall
remain in effect until terminated by either Insurance Company or Principal
Underwriter upon giving ninety (90) days or more advance written notice,
provided that electronic data processing services related to Contracts, Existing
Contracts and the services under this Agreement, shall not be terminated by
either party until one hundred and eighty (180) days or more advance written
notice of termination. Subject to the terms (including any limitations and
restrictions) of any applicable software licensing agreement then in effect
between Principal Underwriter and any licensor, Principal Underwriter shall,
upon termination of this Agreement, grant to Insurance Company a perpetual
license, without payment of any fee, in any electronic data processing software
developed or used by Principal Underwriter in connection with the services
provided to Insurance Company hereunder, if such software is not commercially
available and is necessary, in Insurance Company's reasonable judgment, for
Insurance Company to perform subsequent to termination the functions provided by
Principal Underwriter hereunder. Upon termination, Principal Underwriter shall
promptly deliver to Insurance Company all books and records that are, or are
deemed by this Agreement to be, the property of Insurance Company; provided,
however, that Principal Underwriter may retain a copy of such books and records
to satisfy Principal Underwriter's recordkeeping obligations under applicable
laws, rules and regulations.
17. ARBITRATION.
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a) When Arbitration Required. All disputes and differences between the
parties, other than those seeking injunctive relief or a restraining
order under this Agreement, or arising with respect to the use of
Customer Information or Confidential Information under Sections 14 and
15, must be decided by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, regardless
of the insolvency of either party, unless the conservator, receiver,
liquidator or
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statutory successor is specifically exempted from an arbitration
proceeding by applicable state law.
b) Initiation of Arbitration. Either party may initiate arbitration by
providing written notification to the other party. Such written notice
shall set forth (i) a brief statement of the issue(s); (ii) the failure
of the parties to reach agreement; and (iii) the date of the demand for
arbitration.
c) Arbitration Panel. The arbitration panel shall consist of three
arbitrators. The arbitrators must be impartial and must be or must have
been officers of life insurance and or securities companies other than
the parties or their affiliates.
d) Selection of Arbitrators. Each party shall select an arbitrator within
thirty (30) days from the date of the demand. If either party shall
refuse or fail to appoint an arbitrator within the time allowed, the
party that has appointed an arbitrator may notify the other party that,
if it has not appointed its arbitrator within the following ten (10)
days, an arbitrator shall be appointed on its behalf. The two (2)
arbitrators shall select the third arbitrator within thirty (30) days
of the appointment of the second arbitrator. If the two arbitrators
fail to agree on the selection of the third arbitrator within the time
allowed, each arbitrator shall submit to the other a list of three (3)
candidates. Each arbitrator shall select one name from the list
submitted by the other and the third arbitrator shall be selected from
the two names chosen by drawing lots.
e) Rules: Place for Meetings; Majority Vote. The arbitrators shall
determine all arbitration schedules and procedural rules.
Organizational and other meetings shall be held in Boston, unless the
arbitrators select another location. The arbitrators shall decide all
matters by majority vote.
f) Decision Final. The decisions of the arbitrators shall be final and
binding on both parties. The arbitrators may, at their discretion,
award costs and expenses, as they deem appropriate, including but not
limited to legal fees and interest. The arbitrators may not award
exemplary or punitive damages. Judgment may be entered upon the final
decision of the arbitrators in any court of competent jurisdiction.
g) Fees and Expenses. Each party shall be responsible for (a) all fees and
expenses of its respective counsel, accountants, actuaries and any
other representatives in connection with the arbitration and (b) unless
the arbitrators shall provide otherwise, one-half (1/2) of the expenses
of the arbitration, including the fees and expenses of the arbitrators.
18. MISCELLANEOUS.
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a. Entire Agreement. This Agreement constitutes the entire agreement of
the parties; and no other agreement, statement or promise not contained
in this Agreement shall be valid or binding.
b. Amendment. This Agreement may be amended only upon mutual agreement of
the parties hereto in writing subject to the approval of the MA
Insurance Department.
c. Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their transferees, successors and assigns. The
benefits of and the right to enforce this Agreement shall accrue to the
parties and their transferees, successors and assigns.
d. Assignment. Neither this Agreement nor any of the rights, obligations
or liabilities of either party hereto shall be assigned without the
written consent of the other party and the approval of the MA Insurance
Department.
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e. Intended Beneficiaries. Nothing in this Agreement shall be construed to
give any person or entity other than the parties hereto any legal or
equitable claim, right or remedy. Rather, this Agreement is intended to
be for the sole and exclusive benefit of the parties hereto.
f. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall together
constitute one and the same instrument.
g. Applicable Law. This Agreement shall be interpreted, construed, and
enforced in accordance with the laws o[the State of Massachusetts
without reference to the conflict of law provisions thereof.
h. Severability. If any portion of this Agreement shall be found to be
invalid or unenforceable by a court or tribunal or regulatory agency or
competent jurisdiction, the remainder shall not be affected thereby,
but shall have the same force and effect as if the invalid or
unenforceable portion had not been inserted
i. Contact Person. Insurance Company and Principal Underwriter each shall
appoint one or more individuals who shall serve as contact persons for
the purpose of carrying out this Agreement. Effective upon execution of
this Agreement, the initial contact persons shall be those set forth in
Appendix A.
j. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been
given on the date of service if served personally on the party to whom
notice is to be given, or on the date of mailing if sent by First Class
Mail, Registered or Certified, postage prepaid and properly addressed.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed on their behalf by their respective officers thereunto duly
authorized.
NEW ENGLAND LIFE INSURANCE COMPANY
By:
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Name:
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Title: Attest:
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METLIFE INVESTORS DISTRIBUTION COMPANY
By:
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Name:
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Title: Attest:
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