EXHIBIT 8(IV)
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is entered into as of this 30th day of April, 2001 among NEW
ENGLAND LIFE INSURANCE COMPANY ("New England Financial"), a life insurance
company organized under the laws of the Commonwealth of Massachusetts (on behalf
of itself and certain of its separate accounts); AMERICAN FUNDS INSURANCE SERIES
("Series"), an open-end management investment company organized under the laws
of the Commonwealth of Massachusetts, and CAPITAL RESEARCH AND MANAGEMENT
COMPANY ("CRMC"), a corporation organized under the laws of the State of
Delaware.
WITNESSETH:
WHEREAS, New England Financial proposes to issue certain multi-manager
variable annuity contracts and variable life insurance policies that provide
certain funds ("Funds") of the Series as investment options (the "Contracts");
WHEREAS, New England Financial has established pursuant to Massachusetts
insurance law one or more separate accounts (each, an "Account") for purposes of
issuing the Contracts and has or will register each Account (unless the Account
is exempt from such registration) with the United States Securities and Exchange
Commission (the "Commission") as a unit investment trust under the Securities
Act of 1933 (the "1933 Act") and the Investment Company Act of 1940 (the "1940
Act");
WHEREAS, the Contracts, which are or will be registered by New England
Financial with the Commission for offer and sale, will be in compliance with all
applicable laws prior to being offered for sale;
WHEREAS, the Series has received a "Mixed and Shared Funding Order" from
the Commission granting relief from certain provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit shares of the Series to be
sold to variable annuity and life insurance separate accounts of unaffiliated
insurance companies;
WHEREAS, the Series is divided into various Funds, each Fund being subject
to certain fundamental investment policies which may not be changed without a
majority vote of the shareholders of such Fund;
WHEREAS, certain Funds listed in Attachment A to this Agreement will serve
as certain of the underlying investment mediums for the Contracts; and
WHEREAS, CRMC is the investment adviser for the Series.
NOW, THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
New England Financial the Series and CRMC hereby agree as follows:
1. The Series and CRMC each represents and warrants to New England
Financial that: (a) a registration statement under the 1933 Act and under the
1940 Act with respect to the Series has been filed with the Commission in the
form previously delivered to New England Financial, and copies of any and all
amendments thereto will be forwarded to New England Financial at the time that
they are filed with the Commission; (b) the Series is, and shall be at all times
while this Agreement is in force, lawfully organized, validly existing, and
properly qualified as an open-end management investment company in accordance
with the laws of the Commonwealth of Massachusetts; and (c) the Series'
registration statement and any further amendments thereto will, when they become
effective, and all definitive prospectuses and statements of additional
information and any further supplements thereto (the "Prospectus") shall,
conform in all material respects to the requirements of the 1933 Act and the
1940 Act and the rules and regulations of the Commission thereunder, and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statement therein
not misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Series by New England Financial
expressly for use therein.
2. The Series will furnish to New England Financial such information with
respect to the Series in such form and signed by such of its officers as New
England Financial may reasonably request, and will warrant that the statements
therein contained when so signed will be true and correct. The Series will
advise New England Financial immediately of: (a) the issuance by the Commission
of any stop order suspending the effectiveness of the registration statement of
the Series or the initiation of any proceeding for that purpose; (b) the
institution of any proceeding, investigation or hearing involving the offer or
sale of the Contracts or the Series of which it becomes aware; or (c) the
happening of any material event, if known, which makes untrue any statement made
in the registration statement of the Series or which requires the making of a
change therein in order to make any statement made therein not misleading.
3. The Series will use best efforts to register for sale under the 1933
Act and, if required, under state securities laws, such additional shares of the
Series as may reasonably be necessary for use as the funding vehicle for the
Contracts.
4. The Series agrees to make Class 2 shares of the Funds listed on
Attachment A hereto available to the Contracts. New England Financial will be
entitled to a Rule 12b-1 service fee to be accrued daily and paid monthly at an
annual rate of 0.25% of the average daily net assets of the Class 2 shares of
each Fund attributable to the Contracts for personal services and account
maintenance services for Contract owners with investments in subaccounts
corresponding to the Class 2 shares of each Fund (each, a "Subaccount") for as
long as the Series' Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act (the "12b-1 plan") remains in effect. Fund shares to be made available to
Accounts for the Contracts shall be sold by the Series and purchased by New
England Financial for a given Account at the net asset value of the respective
class of the respective Fund (without the imposition of a sales load) next
computed after receipt of each order by the Series or its designee, as
established in accordance with the provisions of the then current Prospectus of
the Series. For purposes of this Xxxxxxxxx 0,
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Xxx Xxxxxxx Financial shall be a designee of the Series for receipt of such
orders from each Account, and receipt by such designee by 4:00 p.m. Eastern time
(or other such time the Board of Trustees of the Series shall so designate)
shall constitute receipt by the Series; provided that the Series receives notice
of such order by 10:00 a.m. Eastern time on the following Business Day ("Next
Business Day"). "Business Day" shall mean any day on which the New York Stock
Exchange ("NYSE") is open for trading and on which the Series calculates the net
asset values of each class of shares of each Fund pursuant to the rules of the
Commission. The Series will make the shares of each class of each Fund available
indefinitely for purchase at the applicable net asset value per share by each
Company and its Accounts on those days on which the Series calculates the net
asset values of each such class pursuant to the rules of the Commission, and the
Series shall use its best efforts to calculate such net asset values on each day
on which the NYSE is open for trading. The Series shall make the net asset value
per share for each class of each Fund available to New England Financial on a
daily basis as soon as reasonably practical after the Series calculates such net
asset values per share, and the Series shall use its best efforts to make such
net asset values per share available by 6:30 p.m. Eastern time. If the Series
provides incorrect net asset values to New England Financial with respect to any
class of shares of any Fund on any Business Day, New England Financial shall be
entitled (on behalf of each affected Account) to an adjustment to the number of
shares purchased or redeemed of such class of shares to reflect the correct net
asset value per share. Any error in the calculation or reporting of net asset
values per share, dividends, or capital gain information shall be reported
promptly to New England Financial. Any costs incurred by New England Financial
with respect to correcting Contract owner accounts, including, but not limited
to, amounts paid to Contract owners and administrative expenses, shall be
promptly reimbursed by CRMC. The Series and CRMC are responsible for maintaining
net asset values for each class of each Fund in accordance with the requirements
of the 1940 Act and the Series' then current Prospectus. Payments for shares
purchased will be made in federal funds transmitted by wire on the Next Business
Day, and the Company and the Fund shall each use commercially reasonable efforts
to wire (or cause to be wired) funds to the other, for the purpose of settling
net purchase orders or orders of redemption, by 3:00 p.m. Eastern time on the
Next Business Day.
The Series reserves the right to temporarily suspend sales if the
Board of Trustees of the Series deems it appropriate and in the best interests
of the Series or in response to the order of an appropriate regulatory
authority. New England Financial reserves the right to refuse, to impose
limitations on, or to limit any transaction request if the request would tend to
disrupt Contract administration or is not in the best interest of the Contract
holders or an Account or Subaccount.
5. The Contracts funded through each Account will provide for the
allocation of net amounts among certain Subaccounts for investment in shares of
a class of the Funds as may be offered from time to time in the Contracts. The
selection of the particular Subaccount is to be made by the Contract owner and
such selection may be changed in accordance with the terms of the Contracts.
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6. Transfer of the Series' shares will be by book entry only. No stock
certificates will be issued to the Account. Shares ordered from a particular
Fund will be recorded by the Series as instructed by New England Financial in an
appropriate title for the corresponding Account or Subaccount.
7. The Series shall furnish notice promptly to New England Financial of
any dividend or distribution payable on any shares underlying Subaccounts. New
England Financial hereby elects to receive all such dividends and distributions
as are payable on shares of a Fund recorded in the title for the corresponding
Subaccount in additional shares of that Fund. The Series shall notify New
England Financial of the number of shares so issued. New England Financial
reserves the right to revoke this election and to receive all such income
dividends and capital gain distributions in cash.
8. The Series shall redeem its shares in accordance with the terms of its
then current Prospectus. For purposes of this Xxxxxxxxx 0, Xxx Xxxxxxx
Financial shall be a designee of the Series for receipt of requests for
redemption from each Account, and receipt by such designee by 4:00 p.m. Eastern
time (or other such time the Board of Trustees of the Series shall so designate)
shall constitute receipt by the Series; provided that the Series receives notice
of such request for redemption by 10:00 a.m. Eastern time on the Next Business
Day. New England Financial shall purchase and redeem the shares of Funds
offered by the then current Prospectus of the Series in accordance with the
provisions of such Prospectus.
9. The Series shall pay all expenses incidental to its performance under
this Agreement. The Series shall see to it that all of its shares are
registered and authorized for issue in accordance with applicable federal and
state laws prior to their purchase for the Account. The Series shall bear the
expenses for the cost of registration of its shares, preparation of prospectuses
and statements of additional information to be sent to existing Contract owners
(upon request in the case of the statement of additional information), proxy
statements and related materials and annual and semi-annual shareholder reports,
the printing and distribution of such items to each Contract owner who has
allocated net amounts to any Subaccount, the preparation of all statements and
notices required from it by any federal or state law, and taxes on the issue or
transfer of the Series' shares subject to this Agreement. The Series will
provide New England Financial, at least once a year, with enough copies of its
Statement of Additional Information to be able to distribute one to each
Contract owner or prospective Contract owner who requests such Statement of
Additional Information.
10. New England Financial shall bear the expenses for the cost of
preparation and delivery of Series prospectuses (and supplements thereto) to be
sent to prospective Contract owners. The Series shall provide, at its expense,
such documentation (in camera-ready or other mutually agreeable form) and other
assistance as is reasonably necessary in order for New England Financial once
each year (or more frequently if the prospectus for the Series is amended), and
twice each year in the case of the annual and semi-annual shareholder reports,
to have the prospectus or prospectuses, and the annual and semi-annual
shareholder reports for the Contracts and the Series, printed together in one or
more documents (such printing to be done at New England Financial's expense with
respect to prospective investors).
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11. New England Financial represents and warrants to the Series that any
information furnished in writing by New England Financial to the Series for use
in the registration statement of the Series will not result in the registration
statement's failing to conform in all respects to the requirements of the 1933
Act and the 1940 Act and the rules and regulations thereunder or containing any
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
12. New England Financial and its affiliates shall make no representations
concerning the Series' shares except those contained in the then current
Prospectus of the Series, in such printed information subsequently issued on
behalf of the Series or other funds managed by CRMC as supplemental to the
Series' Prospectus, in information published on the Series' or CRMC's internet
site, or in materials approved by AFD, as provided in the Business Agreement in
effect among New England Financial, AFD, and CRMC dated as of April 30, 2001
(the "Business Agreement").
13. Shares of the Series may be offered to separate accounts of various
insurance companies in addition to New England Financial. The Series and the
Company each represents, warrants and covenants that no shares of the Series
shall be sold to the general public in contravention of Section 817 of the
Internal Revenue Code of 1986 as amended and the regulations thereunder (the
"Code") ("Section 817"). The Series agrees that each Fund will comply with the
diversification requirements of Section 817. The Series also agrees to maintain
each Fund's qualification as a "regulated investment company" ("RIC") under the
Code. The Series will provide New England Financial with securities holdings
reports for each Fund within ten days after each calendar quarter.
14. The parties to this Agreement recognize that due to differences in tax
treatment or other considerations, the interests of various Contract owners
participating in one or more Funds might, at some time, be in conflict. Each
party shall report to the other party any potential or existing conflict of
which it becomes aware. The Board of Trustees of the Series shall promptly
notify New England Financial of the existence of irreconcilable material
conflict and its implications. If such a conflict exists, New England Financial
will, at its own expense, take whatever action it deems necessary to remedy such
conflict; in any case, Contract owners will not be required to bear such
expenses.
15. New England Financial agrees to indemnify and hold the Series harmless
against, any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) to which the Series may be 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
arising as a result of New England Financial's: (a) making untrue statements of
material facts or omitting material facts in a Contract's registration
statement, prospectus, statement of additional information, semi-annual or
annual reports to Contract owners or sales literature for the Contracts; (b)
making untrue statements of material facts that the Series includes in the same
materials of the Series, provided that Series relies on information supplied by
New England Financial; (c) unlawful conduct, bad faith, willful malfeasance, or
gross negligence by New England Financial with respect to the sale of the
Contracts or Fund shares; and (d) breaching this Agreement or a representation
or warranty.
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16. The Series and CRMC each agrees to indemnify and hold New England
Financial harmless against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses) which New England Financial may
be 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 arising as a result of the Series', or CRMC's: (a) making untrue
statements of material facts or omitting material facts in the Series'
registration statement, prospectuses or statements of additional information,
semi-annual and annual reports to shareholders, and sales literature; (b) making
untrue statements of material facts that the Series includes in its materials,
provided New England Financial relies on information supplied by the Series; (c)
unlawful conduct, bad faith, willful malfeasance, or gross negligence by the
Series with respect to the sale of the Contracts or Fund shares or the operation
of the Series or a Fund; (d) failure of the Series to comply with any Fund's
investment objectives, policies and restrictions; and (e) breaching this
Agreement or a representation or warranty, including, but not limited to, the
representations, warranties and covenants in Section 13.
17. New England Financial shall be responsible for assuring that the
Account calculates pass-through voting privileges of Contract owners in a manner
consistent with the method of calculating pass-through voting privileges set
forth in the current Contract.
18. The parties understand that there is no intention to create a joint
venture in the subject matter of this Agreement. Accordingly, the right to
terminate this Agreement and to engage in any activity not inconsistent with
this Agreement is absolute. This Agreement will terminate:
(a) by mutual agreement at any time; or
(b) any party at any time upon six months written notice to the other
parties; or
(c) at the option of New England Financial or the Series upon ten calendar
days prior written notice to the other party if a final non-appealable
administrative or judicial decision is entered against the other party
which has a material impact on the Contracts;
(d) at the option of New England Financial, upon ten calendar days prior
written notice, if shares of the Series are not reasonably available;
(e) at the option of New England Financial, immediately upon written
notice, if the Series or CRMC fails to meet the requirements for
either diversification under Section 817 or RIC status under the Code,
or if the Board of the Series terminates the 12b-1 plan; or
(f) in the event the Series' shares 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 an underlying investment for the
Contracts issued or to be issued by New England Financial; in such
event prompt notice shall be given by New England Financial or the
Series to the other party.
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The effective date for termination pursuant to any notice given under this
Paragraph shall be calculated beginning with the date of receipt of such notice.
19. All notices, consents, waivers, and other communications under this
Agreement must be in writing, and will be deemed to have been duly received:
(a) when delivered by hand (with written confirmation of receipt); (b) when sent
by telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested; or (c) the day after it is
sent by a nationally recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice to the other
parties):
IF TO NEW ENGLAND FINANCIAL:
New England Financial
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Associate General Counsel
Facsimile No.: 000-000-0000
WITH A COPY TO:
New England Financial
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. XxXxxxxx, Senior Vice President
Facsimile No.: 000-000-0000
IF TO SERIES:
American Funds Insurance Series
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President
Facsimile No.: 000-000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: 000-000-0000
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IF TO CRMC:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President and Legal Counsel,
Fund Business Management Group, and Secretary
Facsimile No.: 000-000-0000
WITH A COPY TO:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Vice President and Senior Counsel,
Fund Business Management Group
Facsimile No.: 000-000-0000
20. If this Agreement terminates, any provision of this Agreement
necessary to the orderly windup of business under it will remain in effect as to
that business, after termination.
21. If this Agreement terminates, the Series, at New England Financial's
option, will continue to make additional shares of the Series available for all
existing Contracts as of the effective date of termination (under the same terms
and conditions as were in effect prior to termination of this Agreement with
respect to existing Contract owners), unless the Series liquidates or applicable
laws prohibit further sales. New England Financial agrees not to redeem shares
unless (i) the Agreement is terminated pursuant to Section 18(e) or 18(f); (ii)
legitimately required to do so according to a Contract owner's request; or (iii)
under an order from the Commission or pursuant to vote of Contract owners.
22. The obligations of the Series under this Agreement are not binding
upon any of the Trustees, officers, employees, or shareholders (except CRMC if
it is a shareholder) of the Series individually, but bind only the Series'
assets. When seeking satisfaction for any liability of the Series in respect of
this Agreement, New England Financial and the Account agree not to seek recourse
against said Trustees, officers, employees, or shareholders, or any of them, or
any of their personal assets for such satisfaction. Notwithstanding the
foregoing, if New England Financial seeks satisfaction for any liability of the
Series in respect of this Agreement, New England Financial (on behalf of itself
or any Account) may seek recourse against CRMC.
23. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
24. This Agreement and the parties' rights, duties, and obligations under
this Agreement are not transferable or assignable by any of them without the
express, prior written consent of the other party hereto. Any attempt by a
party to transfer or assign this Agreement or any of its rights, duties or
obligations under this Agreement without such consent is void; provided,
however, that a merger of, reinsurance arrangement by, or change of control of
a party shall not be deemed to be an assignment for purposes of this Agreement.
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25. The following Paragraphs shall survive any termination of this
Agreement: 4, 15, 16, 17, 20, 21-26.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above written.
NEW ENGLAND LIFE INSURANCE COMPANY
(on behalf of itself and each Account)
Attest:
By: /s/ Xxxx X. Xxxxxx
--------------------------
/s/ Xxxxx Xxxxxx Its: Senior Vice President
-----------------------
Xxxxx Xxxxxx
AMERICAN FUNDS INSURANCE SERIES
Attest:
By: /s/ Xxxxxxx Xxxxxx
---------------------------
----------------------- Its: Senior Vice President
CAPITAL RESEARCH AND MANAGEMENT COMPANY
Attest:
By: /s/ Xxxxxxx Xxxxxx
---------------------------
----------------------- Its: Senior Vice President, Fund Business
Management Group, Legal Counsel
and Secretary
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Attachment A
------------
American Funds Insurance Series:
o Global Small Capitalization Fund
o Growth Fund
o Growth-Income Fund
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