PARTICIPATION AGREEMENT
Among
NEW ENGLAND ZENITH FUND
METROPOLITAN LIFE INSURANCE COMPANY
and
SECURITY FIRST LIFE INSURANCE COMPANY
AGREEMENT, made and entered into as of the 1st day of ________ by and
among NEW ENGLAND ZENITH FUND, a corporation organized under the laws of
the State of _________(the "Fund"), SECURITY FIRST LIFE INSURANCE COMPANY (the
"Company") on its own behalf and on behalf of Security First Life Separate
Account A and any current or future separate account which invests in the Fund
(each an "Account"), each a separate account of the Company and METROPOLITAN
LIFE INSURANCE COMPANY ("MetLife"), the investment adviser of and principal
underwriter of the Fund.
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 MetLife and its affiliates ("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 rules and regulations 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
affiliated life insurance companies (hereinafter the "Exemptive Order"); and
WHEREAS, MetLife acts as the investment adviser to all of the Series
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 interests in the
Accounts which fund certain variable life and/or variable annuity contracts
under the 1933 Act; if required, and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act, if required; and
WHEREAS, MetLife 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 ("Series") on behalf of each Account to fund certain variable life and
variable annuity contracts (each, a "Contract") and MetLife 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 MetLife agree as follows:
1. Sale of Fund Shares.
-------------------
1.1 Subject to the terms of the Distribution Agreement in effect from time
to time between the Fund and MetLife, MetLife 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. For purposes of this Section 1.1, the Company is
the Fund's designee. "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. The Company
shall use commercially reasonable efforts to communicate notice of
orders for the purchase of shares of each Series to the Fund's
custodian by 10:00 a.m. Eastern time on the following business day (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. of the Next Business Day.
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 Directors of the Fund
(hereinafter the "Board" or the "Directors") 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 Directors 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 MetLife 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, MetLife or the Fund's transfer agent may have
established governing purchases and redemptions of shares of the Series
generally.
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 Fund's 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. Eastern time. The Fund shall furnish the Company's daily
share balance to the Company as soon as reasonably practicable.
2. Representations and Warranties.
------------------------------
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 State of Maryland
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 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 MetLife.
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 Subject to Section 6.1, the Company represents that the Contracts are
currently treated as modified 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 MetLife 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 MetLife 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 MetLife 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 State of Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.9 Each of the Fund and MetLife 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 $5,000,000 or, if applicable,
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 in an amount not less than $5,000,000. 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 MetLife, 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.
-----------------------------------------
3.1 MetLife (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, MetLife (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 MetLife (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.
4. Sales Material and Information.
------------------------------
4.1 The Company shall be solely responsible for sales literature or other
promotional material in which the Fund, a Series, any subadviser to any
Series or MetLife (in its capacity as distributor or adviser of the
Fund) is named, the substance of which is contained in the then current
prospectus or statement of additional information of the Fund. Other
sales literature or other promotional material may also be used by the
Company if such sales literature or other promotional material (or the
substance thereof) has been previously approved by the Fund or its
designee. All other sales literature or other promotional material
shall not be used by the Company until it has been approved by the Fund
or its designee. The Company shall deliver such draft sales literature
or other promotional material 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 ten days.
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
MetLife, except with the approval of the Fund or MetLife or the
designee of either.
4.3 The obligations set forth in Section 4.1 herein shall apply mutatis
mutandis to the Fund and MetLife with respect to each piece of sales
literature or other promotional material in which the Company and/or
any Account is named.
4.4 The Fund and MetLife 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,
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.
-----------------
5.1 The Fund and MetLife 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 MetLife may make payments to the Company or
to the underwriter. Each party acknowledges that MetLife may pay
service or administrative fees to the Company and other Participating
Insurance Companies pursuant to separate agreements.
6. Diversification.
---------------
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.
-------------------
7.1 To the extent required by the Exemptive Order or by applicable law, 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 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
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 directors, 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.
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 Exemptive Order)
on terms and conditions materially different from those contained in
the 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.
---------------
8.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund and each
of its Directors 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 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 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 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 MetLife
(a) MetLife agrees to indemnify and hold harmless the Company and each
of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (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 MetLife) or litigation
(including legal and other expenses) to which the Indemnified Parties
may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to
the sale or acquisition of the 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 MetLife 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 MetLife or the Fund or
persons under their control) or wrongful conduct of MetLife 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 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 MetLife or the Fund; or (iv) arise as a result of any failure
by MetLife 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 MetLife or the Fund in this
Agreement or arise out of or result from any other material breach of
this Agreement by MetLife or the Fund; as limited by and in accordance
with the provisions of Sections 8.2(b) and 8.2(c) hereof.
(b) MetLife shall not 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 MetLife 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
MetLife and the Fund of any such claim shall not relieve MetLife from
any liability which it may have to the Indemnified Party against whom
such action is brought under this indemnification provision unless
MetLife'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 MetLife 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, MetLife will be entitled to participate, at their own expense,
in the defense thereof. MetLife shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action.
After notice from MetLife to such party of the election of MetLife to
assume the defense thereof, the Indemnified Party shall bear the fees
and expenses of any additional counsel retained by it, and MetLife 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 MetLife.
(d) The Company agrees promptly to notify MetLife 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 State of New York.
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 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 or MetLife
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 or MetLife to perform its obligations
under this Agreement; or
(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 or MetLife, if (1) the Fund or MetLife,
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 or MetLife, as the case may be, (2)
the Fund or MetLife 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 or MetLife 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
or MetLife 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 and MetLife in writing
of such determination and its intent to terminate the Agreement, and
(3) after considering the actions taken by the Fund and/or MetLife 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
(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 7, 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 MetLife 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 MetLife:
If to the Company:
Security First Life Insurance Company
00000 X. Xxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, President
12. Miscellaneous.
-------------
12.1 A copy of the Articles of Incorporation establishing the Fund is on
file with the Secretary of the State of ________, 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
directors, 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.
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.
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.
SECURITY FIRST LIFE INSURANCE COMPANY
By: __________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
Date: ____________
NEW ENGLAND ZENITH FUND
By: ___________________________
Name:
Title:
Date: _________________
METROPOLITAN LIFE INSURANCE COMPANY
By: ___________________________
Name:
Title:
Date: _____________
PARTICIPATION AGREEMENT
Among
NEW ENGLAND ZENITH FUND
METROPOLITAN LIFE INSURANCE COMPANY
and
SECURITY FIRST 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.
