PARTICIPATION AGREEMENT
AMONG
METROPOLITAN LIFE INSURANCE COMPANY
ALLIANCE CAPITAL MANAGEMENT L.P.
AND
ALLIANCE FUND DISTRIBUTORS, INC.
DATED AS OF
September 1, 2000
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the first day of September,
2000 ("Agreement"), by and among Metropolitan Life Insurance Company, an
insurance company ("Insurer") (on behalf of itself and its "Separate Account,"
defined below); Alliance Capital Management L.P., a Delaware limited partnership
("Adviser"), the investment adviser of the Fund referred to below; and Alliance
Fund Distributors, Inc., a Delaware corporation ("Distributor"), the Fund's
principal Distributor (collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and Alliance Variable Products Series
Fund, Inc. (the "Fund") desire that Class B shares of the Fund's Growth & Income
Portfolio, Premier Growth Portfolio, and Technology Portfolio, (the
"Portfolios"; reference herein to the "Fund" includes reference to each
Portfolio to the extent the context requires) be made available by Distributor
to serve as underlying investment media for Variable life insurance contracts of
Insurer that are the subject of Insurer's Form S-6 registration statement filed
with the Securities and Exchange Commission (the "SEC"), File No. 33-57320 (the
"Contracts"), to be offered through the Insurer and other registered
broker-dealer firms as agreed to by Insurer; and
WHEREAS the Contracts provide for the allocation of net amounts received by
Insurer to separate series (the "Divisions"; reference herein to the "Separate
Account" includes reference to each Division to the extent the context requires)
of the Separate Account for investment in Class B shares of corresponding
Portfolios of the Fund that are made available through the Separate Account to
act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make Class B shares of the
Portfolios available to Insurer
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for this purpose at net asset value and with no sales charges, all subject to
the following provisions:
Section 1. Additional Portfolios
The Fund has and may, from time to time, add additional Portfolios, which
will become subject to this Agreement, if, upon the written consent of each of
the Parties hereto, they are made available as investment media for the
Contracts.
Section 2. Processing Transactions
2.1 Distributor agrees to sell to the Insurer those shares of the Fund
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 2.1, the Insurer shall
be the designee of the Fund for receipt of such orders from the Accounts that
correspond to Contract transactions that are not within the Insurer's discretion
and receipt by such designee shall constitute receipt by the Fund; provided that
the Fund receives such orders by 8:00 a.m., Eastern Time, on the next following
Business Day. "Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Fund calculates its net asset
value pursuant to the rules of the Commission.
2.2 The Fund agrees to make its shares available for purchase at the
applicable net asset value per share by the Insurer and its Accounts on those
days on which the Fund calculates its Portfolios' net asset values on each day
on which the New York Stock Exchange is open for trading. Notwithstanding the
foregoing, the board of directors of the Fund (hereinafter the "Board") may
refuse to sell shares of any Portfolio to any person, or suspend or terminate
the offering of shares of any Portfolio if such action is required by law or by
regulatory authorities
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having jurisdiction or is, in the sole discretion of the Board acting in good
faith and in light of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of that
Portfolio. When practicable, the Fund will provide Insurer with 30 days written
notice of its intention to refuse to sell Fund shares pursuant to this
Agreement.
2.3 The Fund and Distributor agree that shares of the Fund will be sold
only to participating insurance companies and their separate accounts. No shares
of any Portfolio will be sold to the general public.
2.4. The Fund and Distributor will not sell Fund shares to any insurance
company or separate account unless an agreement containing provisions
substantially the same as Sections 5.1(b), 5.1(d), 5.3, 5.4, 5.5, 5.6, and 13 of
this Agreement in its effect to govern such sales.
2.5 The Fund agrees to redeem, on the Insurer's request, any full or
fractional shares of the Fund held by the Insurer, 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. For purposes of this Section 2.5,
the Insurer shall be the designee of the Fund for receipt of requests for
redemption from each Account that correspond to Contract transactions that are
not within the Insurer's discretion and receipt by that designee shall
constitute receipt by the Fund; provided that the Fund receives the request for
redemption by 8:00 a.m., Eastern Time, on the next following Business Day.
2.6 The Insurer shall pay for Fund shares by 9:00 a.m., Eastern Time, on
the next following Business Day after an order to purchase Fund shares is made
in accordance with the provisions of Section 2.1 hereof. Payment shall be in
federal funds transmitted by wire.
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2.7 Issuance and transfer of the Fund shares will be by book entry only.
Stock certificates will not be issued to the Insurer or any Account. Shares
ordered from the Insurer will be recorded in an appropriate title for each
Account or the appropriate sub account of each Account.
2.8 The Fund shall furnish same day notice (by wire or telephone, followed
by written confirmation) to the insurer of any income, dividends or capital gain
distributions payable on the Portfolios' shares. The Insurer hereby elects to
receive all income dividends and capital gain distributions payable on a
Portfolio's shares in additional shares of that Portfolio. The Insurer 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 Insurer of the
number of shares issued as payment of dividends and distributions.
2.9 The Fund shall make the net asset value per share for each Portfolio
available to the Insurer on a daily basis, in accordance with mutually agreed
upon guidelines for electronic transmission, as soon as reasonably practical
after the net asset value per share is calculated and shall use its best efforts
to make those per-share net asset values available by 6:00 p.m. Eastern Time.
2.10 If the Fund provides materially incorrect share net asset value
information, the Insurer shall receive adjustment to the number of shares
purchased or redeemed to reflect the correct net asset value per share (and, if
and to the extent necessary, the Insurer shall make adjustments to the number of
units credited, and/or unit values for the Contracts for the periods affected).
In the event adjustments are required to correct any error in the computation of
the Fund's net asset value per share, or dividend or capital gain distribution,
Adviser or the Fund shall promptly notify the Insurer after discovering the need
for such adjustments. If an
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adjustment is necessary to correct an error which has caused Contract owners to
be credited with more or less than the amount to which they are entitled,
Adviser shall make all necessary adjustments to the number of shares owned by
the Account and distribute to the Account the amount of the underpayment. The
Insurer will adjust the number of units of each Contract owner and credit the
appropriate amount of such payment to each Contract owner. In no event shall the
Insurer be liable to Contract owner for any such adjustments or underpayments
amounts, provided that the underpayment was not caused by the Insurer. In no
event shall the Insurer be liable to the Fund or the Adviser for any such
adjustments or overpayment amounts, provided that the overpayment was not caused
by the Insurer. In the event that any known overpayment are made to Contract
owners, as a result of any such error, Insurer will take commercially reasonable
steps, within the constraints of state and federal law, to recover overpayment
amounts. All of the Insurer's reasonable expenses incident to any adjustments
required hereunder (including any uncollected, overpaid amounts) shall be borne
by Adviser, provided that the need for the adjustment was not caused by the
Insurer.
Section 3. Costs and Expenses
3.1 General.
Except as otherwise specifically provided herein, each Party will bear all
expenses incident to its performance under this Agreement.
3.2 Registration.
The Fund will bear the cost of its registering as a management investment
company under the 1940 Act and registering its shares under the Securities Act
of 1933, as amended (the "1933 Act"), and keeping such registrations current and
effective; including, without limitation, the preparation of and filing with the
SEC of Forms N-SAR and Rule 24f-2 Notices respecting the Fund
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and its shares and payment of all applicable registration or filing fees with
respect to any of the foregoing. Insurer will bear the cost of registering the
Separate Account as a unit investment trust under the 1940 Act and registering
units of interest under the Contracts under the 1933 Act and keeping such
registrations current and effective; including, without limitation, the
preparation and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices
respecting the Separate Account and its units of interest and payment of all
applicable registration or filing fees with respect to any of the foregoing.
3.3 Other (Non-Sales-Related) Expenses.
If requested by the Insurer, the Fund shall provide camera-ready film
containing the Fund's prospectus and all alternate forms of prospectuses for
each funding option or any combination of funding options that the Insurer is
offering (collectively "Prospectus" for this Section 3.3), Statement of
Additional Information, and such other assistance as is reasonably necessary,
including a diskette in the form sent to the financial printer, in order for the
Insurer once each year (or more frequently if the Prospectus and/or Statement of
Additional Information for the Fund is amended during the year) to have the
prospectus for the Contracts, other funds and the Fund's Prospectus printed
together in one document, and to have the Statement of Additional Information
for the Fund and the Statement of Additional Information for the Contracts
printed together in one document. The Insurer may print the Fund's Prospectus or
its Statement of Additional Information in combination with other fund
companies' prospectuses and statements of additional information. Except as
provided in the following three sentences, all expenses of printing and
distributing Fund Prospectuses and Statements of Additional Information shall be
the expense of the Insurer. For Prospectuses and Statements of Additional
Information provided by the Insurer to its existing owners of Contracts in order
to update
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disclosure annually as required by the 1933 Act and/or the 1940 Act, the cost of
printing shall be borne by the Fund. The Fund will bear the costs of printing in
quantity and delivering to existing Participants the documents as to which it
bears the cost of preparation as set forth above in this Section 3.3, it being
understood that reasonable cost allocations will be made in cases where any such
Fund and Insurer documents are printed or mailed on a combined or coordinated
basis. The same procedures shall be followed with respect to the Fund's
Statement of Additional Information.
The Insurer agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any Prospectuses or Statements of
Additional Information other than those actually distributed to existing owners
of the Contracts.
The Insurer agrees that it shall not alter in any way the forms of the
Fund's Prospectus and Statement of Additional Information provided to it,
including but not limited to the contents, layout and format of those documents.
The Fund agrees to cooperate with the Insurer to make the Prospectuses of
the Fund available to the Insurer in a format that will facilitate making the
prospectus available to contract holders and prospects on the internet (e.g. in
HTML or PDF file formats). The Insurer will be familiar with all federal, state,
and SRO rules and regulations concerning: the electronic offer and sale of
securities and the electronic distribution of advertising and sales literature,
and will conform its materially and procedures to these rules and regulations,
in the event that these means are used by the Insurer with respect to any offer
or sale of the Fund's shares.
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3.4 Other Sales-Related Expenses.
Expenses of distributing the Portfolio's shares and the Contracts will be
paid by the Insurer and other parties, as they shall determine by separate
agreement.
3.5 Parties to Cooperate.
The Adviser, Insurer, and Distributor each agrees to cooperate with the
others, as applicable, in arranging to print, mail and/or deliver combined or
coordinated prospectuses or other materials of the Fund and Separate Account.
Section 4. Sales Material and Information.
4.1 Except with respect to "fact sheets", the Insurer shall furnish, or
shall cause to be furnished, to the Fund or its designee, each piece of sales
literature or other promotional material in which the Fund, Adviser or
Distributor is named, at least fifteen Business Days prior to its use. No such
material shall be used if the Fund or its designee reasonably objects to such
use within fifteen Business Days after receipt of such material. The Insurer
intends to create and provide Contract owners with "fact sheets" of
participating Funds on a regular basis. The Insurer will initially provide a
template fact sheet to the Fund for the Fund's approval. Thereafter, the Insurer
will provide the Portfolio with samples of the fact sheets for approval by the
Fund only if the content or format of the report changes substantially.
Generally, the Fund and the Insurer agree to good faith mutual cooperation in
the resolution of novel or controversial issues concerning sales literature that
may arise pursuant to this Agreement. Upon request of the Insurer, the Fund
agrees to provide the Insurer with the information necessary to complete the
fact sheet not later than 10 business days after the end of the quarter for
which the information is requested.
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4.2 The Insurer 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 for the Fund shares, or Fund Prospectus
as such registration statement and Fund Prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Distributor, except with the permission of the Fund or the
Distributor or designee of either.
4.3 The Fund, Distributor, or its designee shall furnish, or shall cause to
be furnished, to the Insurer or its designee, each piece of sales literature or
other promotional material in which the Insurer and/or its separate account(s),
is named at least fifteen Business Days prior to its use. No such material shall
be used if the Insurer or its designee reasonably objects to such use within
fifteen Business Days after receipt of such material.
4.4 The Fund and Distributor shall not give any information, except as
required by law, or make any representations on behalf of the Insurer or
concerning the Insurer, the Separate Account, or the Contracts other than the
information or representations contained in a registration statement for the
Contract or Separate Account Prospectus, as such registration statement and
Prospectus may be amended or supplemented from time to time, or in published
reports for the Separate Account which are in the public domain or approved by
the Insurer for distribution to Contract owners, or in sales literature or other
promotional material approved by the Insurer or its designee, except with the
permission of the Insurer.
4.6 For the purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper,
9
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, and registration statements,
prospectuses, statements of additional information, shareholder reports, and
proxy materials.
4.8. At the request of any Party to this Agreement, each other Party will
make available to the other Party's independent auditors and/or representatives
of the appropriate regulatory agencies, all relevant records, data and access to
operating procedures that may be reasonably requested. The Fund agrees that the
Insurer shall have the right to inspect, audit and copy all relevant records
pertaining to the performance of services under this Agreement pursuant to the
requirements of any state insurance regulator(s). However, the Fund shall own
and control all of its respective records pertaining to its performance of the
services under this Agreement.
4.9 The Fund shall send to the Insurer(i) confirmations of activity in the
Separate Account within five (5) business days after each date on which a
purchase or redemption of shares of the Fund is effected for the Separate
Account, which the parties acknowledge can be through DST Vision when available,
and (ii) statements detailing activity in the Separate Account no less
frequently than quarterly.
4.10 The Fund shall provide the Insurer with any information it reasonably
requests from time to time, in connection with the Insurer's performance of this
Agreement, and reporting
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to management and customers. This information will be provided by the Fund
within a reasonable time period after receiving such request from the Insurer.
Section 5. Legal Compliance
5.1 Tax Laws.
(a) The Adviser will use its best efforts to qualify and to maintain
qualification of each Portfolio as a regulated investment company ("RIC") under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Adviser or Distributor will notify Insurer immediately upon having a
reasonable basis for believing that a Portfolio has ceased to so qualify or that
it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the Contracts
will be treated as life insurance, annuity or endowment contracts under
applicable provisions of the Code and that it will make every effort to maintain
such treatment. Insurer will notify the Fund and Distributor immediately upon
having a reasonable basis for believing that any of the Contracts have ceased to
be so treated or that they might not be so treated in the future.
(c) The Fund will use its best efforts to comply and to maintain each
Portfolio's compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5(b) of the regulations under the
Code, and the Fund, Adviser or Distributor will notify Insurer immediately upon
having a reasonable basis for believing that a Portfolio has ceased to so comply
or that a Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the Separate
Account is a "segregated asset account" and that interests in the Separate
Account are offered exclusively through the purchase of or transfer into a
"variable contract," within the meaning of such terms under Section 817(h) of
the Code and the regulations thereunder. Insurer will make every effort to
11
continue to meet such definitional requirements, and it will notify the Fund and
Distributor immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the future.
(e) The Adviser will manage the Fund as a RIC in compliance with Subchapter
M of the Code and will use its best efforts to manage to be in compliance with
Section 817(h) of the Code and regulations thereunder. The Fund has adopted and
will maintain procedures for ensuring that the Fund is managed in compliance
with Subchapter M and Section 817(h) and regulations thereunder. On a quarterly
basis, not more than 30 days after quarter end, the Adviser shall provide the
Insurer with a Certificate of Compliance of the Fund's compliance with Section
817(h) of the Code and the regulations thereunder, in the form of the attached
Schedule A.
(f) Should the Distributor or Adviser become aware of a failure of Fund, or
any of its Portfolios, to be in compliance with Subchapter M of the Code or
Section 817(h) of the Code and regulations thereunder, they represent and agree
that they will immediately notify Insurer of such in writing.
5.2 Insurance and Certain Other Laws.
(a) The Adviser will use its best efforts to cause the Fund to comply with
any applicable state insurance laws or regulations, to the extent specifically
requested in writing by Insurer. If it cannot comply, it will so notify Insurer
in writing.
(b) Insurer represents and warrants that (i) it is an insurance company
duly organized, validly existing and in good standing under the laws of the
State of New York and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains the
12
Separate Account as a segregated asset account under New York Law, and (iii) the
Contracts comply in all material respects with all other applicable federal and
state laws and regulations.
(c) Distributor represents and warrants that it is a business corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware and has full corporate power, authority and legal right to
execute, deliver, and perform its duties and comply with its obligations under
this Agreement.
(d) Distributor represents and warrants that the Fund is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
(e) Adviser represents and warrants that it is a limited partnership, duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
5.3 Securities Laws.
(a) Insurer represents and warrants that (i) interests in the Separate
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act and the Contracts will be duly authorized for
issuance and sold in compliance with New York law, (ii) the Separate Account is
and will remain registered under the 1940 Act to the extent required by the 1940
Act, (iii) the Separate Account does and will comply in all material respects
with the applicable requirements of the 1940 Act and the rules thereunder, (iv)
the Separate Account's 1933 Act registration statement relating to the
Contracts, together with any amendments thereto, will, at
13
all times comply in all material respects with the requirements of the 1933 Act
and the rules thereunder, and (v) the Separate Account Prospectus will at all
times comply in all material respects with the requirements of the 1933 Act and
the rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i) Fund shares
sold pursuant to this Agreement will be registered under the 1933 Act to the
extent required by the 1933 Act and duly authorized for issuance and sold in
compliance with Maryland law, (ii) the Fund is and will remain registered under
the 1940 Act to the extent required by the 1940 Act, (iii) the Fund will amend
the registration statement for its shares under the 1933 Act and itself under
the 1940 Act from time to time as required in order to effect the continuous
offering of its shares, (iv) the Fund does and will comply in all material
respects with the requirements of the 1940 Act and the rules thereunder, (v) the
Fund's 1933 Act registration statement, together with any amendments thereto,
will at all times comply in all material respects with the requirements of the
1933 Act and rules thereunder, and (vi) the Fund Prospectus will at all times
comply in all material respects with the requirements of the 1933 Act and the
rules thereunder.
(c) The Fund will register and qualify its shares for sale in accordance
with the laws of any state or other jurisdiction only if and to the extent
reasonably deemed advisable by the Fund, Insurer or any other life insurance
company utilizing the Fund.
(d) Distributor and Insurer each represents and warrants that it is
registered as a broker- dealer with the SEC under the Securities Exchange Act of
1934, as amended, and is a member in good standing of the National Association
of Securities Dealers Inc. (the "NASD").
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5.4 Notice of Certain Proceedings and Other Circumstances.
(a) Distributor or the Fund shall immediately notify Insurer of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to the Fund's registration statement
under the 1933 Act or the Fund Prospectus, (ii) any request by the SEC for any
amendment to such registration statement or Fund Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose relating
to the registration or offering of the Fund's shares, or (iv) any other action
or circumstances that may prevent the lawful offer or sale of Fund shares in any
state or jurisdiction, including, without limitation, any circumstances in which
the Fund's shares are not registered and, in all material respects, issued and
sold in accordance with applicable state and federal law or such law precludes
the use of such shares as an underlying investment medium of the Contracts
issued or to be issued by Insurer. Distributor and the Fund will make every
reasonable effort to prevent the issuance of any such stop order, cease and
desist order or similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
(b) Insurer shall immediately notify the Fund of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order or similar
order with respect to the Separate Account's registration statement under the
1933 Act relating to the Contracts or the Separate Account Prospectus, (ii) any
request by the SEC for any amendment to such registration statement or Separate
Account Prospectus, (iii) the initiation of any proceedings for that purpose or
for any other purpose relating to the registration or offering of the Separate
Account interests pursuant to the Contracts, or (iv) any other action or
circumstances that may prevent the lawful offer or sale of said interests in any
state or jurisdiction, including, without limitation, any circumstances in which
said interests are not registered and, in all material respects, issued and sold
in accordance
15
with applicable state and federal law. Insurer will make every reasonable effort
to prevent the issuance of any such stop order, cease and desist order or
similar order and, if any such order is issued, to obtain the lifting thereof at
the earliest possible time.
5.5 Insurer to Provide Documents.
Upon request, Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and amendments to
any of the above, that relate to the Separate Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
5.6 Fund to Provide Documents.
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and final
proxy material, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
Section 6. Mixed and Shared Funding
6.1 General.
The Fund has obtained an order exempting it from certain provisions of the
1940 Act and rules thereunder so that the Fund is available for investment by
certain other entities, including, without limitation, separate accounts funding
variable life insurance policies and separate accounts of insurance companies
unaffiliated with Insurer ("Mixed and Shared Funding Order"). The Parties
16
recognize that the SEC has imposed terms and conditions for such orders that are
substantially identical to many of the provisions of this Section 6.
6.2 Disinterested Directors.
The Fund agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of Adviser or Distributor within the meaning of Section 2(a)(19) of the
1940 Act.
6.3 Monitoring for Material Irreconcilable Conflicts.
The Fund agrees that its Board of Directors will monitor for the existence
of any material irreconcilable conflict between the interests of the
participants in all separate accounts of life insurance companies utilizing the
Fund, including the Separate Account. Insurer agrees to inform the Board of
Directors of the Fund of the existence of or any potential for any such material
irreconcilable conflict of which it is aware. The concept of a "material
irreconcilable conflict" is not defined by the 1940 Act or the rules thereunder,
but the Parties recognize that such a conflict may arise for a variety of
reasons, including, without limitation:
(a) an action by any state insurance or other 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 Portfolio are being managed;
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(e) a difference in voting instructions given by variable annuity contract
and variable life insurance contract participants or by participants of
different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to disregard
the voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any issue raised,
including information as to a decision by Insurer to disregard voting
instructions of Participants.
6.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the members of
the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, Insurer and the other life insurance
companies utilizing the Fund will, at their own expense and to the extent
reasonably practicable (as determined by a majority of the Disinterested
Directors), take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, which steps may include, but are not limited
to:
(i) withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such assets in
a different investment medium, including another Portfolio of the
Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected participants and, as
appropriate, segregating the assets of any particular group (e.g.,
annuity contract owners or participants, life insurance contract
owners or all
18
contract owners and participants of one or more life insurance
companies utilizing the Fund) that votes in favor of such segregation,
or offering to the affected contract owners or participants the option
of making such a change; and
(ii) establishing a new registered investment company of the type defined
as a "Management Company" in Section 4(3) of the 1940 Act or a new
separate account that is operated as a Management Company.
(b) If the material irreconcilable conflict arises because of Insurer's
decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, Insurer may be
required, at the Fund's election, to withdraw the Separate Account's investment
in the Fund. No charge or penalty will be imposed as a result of such
withdrawal. Any such withdrawal must take place within 180 days after the Fund
gives notice to Insurer that this provision is being implemented, and until such
withdrawal Distributor and the Fund shall continue to accept and implement
orders by Insurer for the purchase and redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to Insurer conflicts with the majority
of other state regulators, then Insurer will withdraw the Separate Account's
investment in the Fund within 180 days after the Fund's Board of Directors
informs Insurer that it has determined that such decision has created a material
irreconcilable conflict, and until such withdrawal Distributor and Fund shall
continue to accept and implement orders by Insurer for the purchase and
redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and with a
view only to the interests of Participants.
19
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will the Fund or Distributor be
required to establish a new funding medium for any Contracts. Insurer will not
be required by the terms hereof to establish a new funding medium for any
Contracts if an offer to do so has been declined by vote of a majority of
Participants materially adversely affected by the material irreconcilable
conflict.
6.5 Notice to Insurer.
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable conflict,
a description of the facts that give rise to such conflict and the implications
of such conflict.
6.6 Information Requested by Board of Directors.
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of Directors
may reasonably request so that the Board of Directors may fully carry out the
obligations imposed upon it by the provisions hereof, and said reports,
materials and data will be submitted at any reasonable time deemed appropriate
by the Board of Directors. All reports received by the Board of Directors of
potential or existing conflicts, and all Board of Directors actions with regard
to determining the existence of a conflict, notifying life insurance companies
utilizing the Fund of a conflict, and determining whether any proposed action
adequately remedies a conflict, will be properly recorded in the minutes of the
Board of Directors or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
20
6.7 Compliance with SEC Rules.
If, at any time during which the Fund is serving an investment medium for
variable life insurance policies, 1940 Act Rules 6e-3(T) or, if applicable, 6e-2
are amended or Rule 6e-3 is adopted to provide exemptive relief with respect to
mixed and shared funding, the Parties agree that they will comply with the terms
and conditions thereof and that the terms of this Section 6 shall be deemed
modified if and only to the extent required in order also to comply with the
terms and conditions of such exemptive relief that is afforded by any of said
rules that are applicable.
Section 7. Termination
7.1 Events of Termination.
Subject to Section 7.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least 180 days advance
written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least sixty days advance written
notice to the other parties, and (ii) approval by a majority of the
disinterested Directors upon a reasonable good faith finding that a continuation
of this Contract would have a material adverse impact on the Fund, or a majority
vote of the shares of the affected Portfolio in the corresponding Division of
the Separate Account (pursuant to the procedures set forth in Section 12 of this
Agreement for voting Trust shares in accordance with Participant instructions).
(c) at the option of the Fund upon institution of formal proceedings
against Insurer by the NASD, the SEC, any state insurance regulator or any other
regulatory body regarding Insurer's obligations under this Agreement or related
to the sale of the Contracts, the operation of the Separate Account, or the
purchase of the Fund shares, if, in each case, the Fund reasonably
21
determines that such proceedings, or the facts on which such proceedings would
be based, have a material likelihood of imposing material adverse consequences
on the Portfolio to be terminated; or
(d) at the option of Insurer upon institution of formal proceedings against
the Fund, Adviser, or Distributor by the NASD, the SEC, or any state insurance
regulator or any other regulatory body regarding the Fund's, Adviser's or
Distributor's obligations under this Agreement or related to the operation or
management of the Fund or the purchase of Fund shares, if, in each case, Insurer
reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on Insurer or the Division corresponding to the Portfolio
to be terminated; or
(e) at the option of any Party in the event that (i) the Portfolio's shares
are not registered and, in all material respects, issued and sold in accordance
with any applicable state and federal law or (ii) such law precludes the use of
such shares as an underlying investment medium of the Contracts issued or to be
issued by Insurer; or
(f) upon termination of the corresponding Division's investment in the
Portfolio pursuant to Section 6 hereof; or
(g) at the option of Insurer if the Portfolio ceases to qualify as a RIC
under Subchapter M of the Code or under successor or similar provisions; or
(h) at the option of Insurer if the Portfolio fails to comply with Section
817(h) of the Code or with successor or similar provisions; or
(i) at the option of Insurer if Insurer reasonably believes that any change
in a Fund's investment adviser or investment practices will materially increase
the risks incurred by Insurer.
22
7.2 Funds to Remain Available.
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 6 of this Agreement, or (iv) with respect to any Portfolio
as to which this Agreement has terminated, Insurer shall not redeem Fund shares
attributable to the Contracts, or prevent Participants from allocating payments
to or transferring amounts from a Portfolio that was otherwise available under
the Contracts, until, in either case, 60 calendar days after Insurer shall have
notified the Fund or Distributor of its intention to do so.
7.3 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of this
Agreement.
7.4 Continuance of Agreement for Certain Purposes.
Notwithstanding any termination of this Agreement, the Distributor shall
continue to make available shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (the "Existing Contracts"), except as otherwise
provided under Section 6 of this Agreement. Specifically, and without
limitation, the Distributor shall facilitate the sale and purchase of shares of
the Portfolios as necessary in order to process premium payments, surrenders and
other withdrawals, and transfers or reallocations of values under Existing
Contracts.
Section 8. Parties to Cooperate Respecting Termination
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
23
Section 9. Assignment
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
Section 10. Class B Distribution Payments
From time to time during the term of this Agreement the Distributor may
make payments to the Insurer pursuant to a distribution plan adopted by the Fund
with respect to the Class B shares of the Portfolios pursuant to Rule 12b-l
under the 1940 Act (the "Rule 12b-l Plan") in consideration of the Insurer's
furnishing distribution services relating to the Class B shares of the
Portfolios and providing administrative, accounting and other services,
including personal service and/or the maintenance of Participant accounts, with
respect to such shares. The Distributor has no obligation to make any such
payments, and the Insurer waives any such payment, until the Distributor
receives monies therefor from the Fund. Any such payments made pursuant to this
Section 10 shall be subject to the following terms and conditions:
(a) Any such payments shall be in such amounts as the Distributor may from
time to time advise the Insurer in writing but in any event not in excess of the
amounts permitted by the Rule 12b-l Plan. Such payments may include a service
fee in the amount of .25 of 1% per annum of the average daily net assets of the
Fund attributable to the Class B shares of a Portfolio held by clients of the
Insurer. Any such service fee shall be paid solely for personal service and/or
the maintenance of Participant accounts.
(b) The provisions of this Section 10 relate to a plan adopted by the Fund
pursuant to Rule 12b-l. In accordance with Rule 12b-1, any person authorized to
direct the disposition of monies paid or payable by the Fund pursuant to this
Section 10 shall provide the Fund's Board of
24
Directors, and the Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made.
(c) The provisions of this Section 10 shall remain in effect for not more
than a year and thereafter for successive annual periods only so long as such
continuance is specifically approved at least annually in conformity with Rule
12b-l and the 1940 Act. The provisions of this Section 10 shall automatically
terminate in the event of the assignment (as defined by the 0000 Xxx) of this
Agreement, in the event the Rule 12b-l Plan terminates or is not continued or in
the event this Agreement terminates or ceases to remain in effect. In addition,
the provisions of this Section 10 may be terminated at any time by the vote of a
majority of the Fund's Board, or by a vote of a majority of the outstanding
shares as provided in the Plan, on sixty (60) days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party, without payment
of any penalty.
Section 11. Notices
Notices and communications required or permitted by Section 2 hereof will
be given by means mutually acceptable to the Parties concerned. Each other
notice or communication required or permitted by this Agreement will be given to
the following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
Metropolitan Life Insurance Company, Inc.
000-X Xxxxx Xxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
FAX: (000) 000-0000
25
Metropolitan Life Insurance Company, Inc.
0 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
FAX: (000) 000-0000
Alliance Fund Distributors, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxx
FAX: (000) 000-0000
Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn: Xxxxxx X. Xxxxxx
FAX: (000) 000-0000
Section 12. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 hereof,
Insurer will distribute all proxy material furnished by the Fund to Participants
and will vote Fund shares in accordance with instructions received from
Participants. Insurer will vote Fund shares that are (a) not attributable to
Participants or (b) attributable to Participants, but for which no instructions
have been received, in the same proportion as Fund shares for which said
instructions have been received from Participants. Insurer agrees that it will
disregard Participant voting instructions only to the extent it would be
permitted to do so pursuant to Rule 6e-3 (T)(b)(15)(iii) under the 1940 Act if
the Contracts were variable life insurance policies subject to that rule. Other
participating life insurance companies utilizing the Fund will be responsible
for calculating voting privileges in a manner consistent with that of Insurer,
as prescribed by this Section 12.
26
Section 13. Foreign Tax Credits
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
Section 14. Indemnification
14.1 Indemnification By The Insurer
14.1 (a). The Insurer agrees to indemnify and hold harmless the Fund,
Adviser, and Distributor, and each director of the Board and officers and each
person, if any, who controls the Fund, Adviser, and Distributor, within the
meaning of Section 15 of the 1933 Act ("Indemnified Party" and collectively, the
"Indemnified Parties" for purposes of this Section 14.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Insurer) 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 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 or in connection with the
registration statement, Separate Account, Prospectus, Contracts, or sales
literature 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
27
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 Insurer by or on behalf of the Fund for use in the
registration statement for the Contracts or Separate Account Prospectus or in
the Contracts or sales literature (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 sales literature of the Fund not supplied by Insurer or persons
under its control) or wrongful conduct of the Insurer 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 a registration statement, Prospectus, or sales
literature 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 Insurer; or
(iv) arise as a result of any failure by Insurer 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 Insurer in this Agreement or arise out of or result from
any other material breach of this Agreement by Insurer, as limited by and in
accordance with the provisions of Section 14.1(b) and 14.1(c) hereof.
28
14.l(b) Insurer shall not be liable under this Section 14 with respect to
any losses, claims, damages, liabilities or litigation incurred or assessed
against an Indemnified Party as such may arise from such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by the reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to the Fund,
whichever is applicable.
14.l(c) Insurer shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless that
Indemnified Party shall have notified the Insurer 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 that Indemnified Party (or after
the Indemnified Party shall have received notice of such service on any
designated agent). Notwithstanding the foregoing, the failure of any Indemnified
Party to give notice as provided herein shall not relieve Insurer of its
obligations hereunder except to the extent that the Insurer has been prejudiced
by such failure to give notice. In addition, any failure by the Indemnified
Party to notify Insurer of any such claim shall not relieve the Insurer 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 the Indemnified Parties, the insurer shall be
entitled to participate, at its own expense, in the defense of the action. The
Insurer also shall be entitled to assume the defense thereof, with counsel
reasonably satisfactory to the party named in the action; provided, however,
that if the Indemnified Party shall have reasonably concluded that there may be
defenses available to it which are different from or additional to those
available to Insurer, Insurer shall not have the right to assume said defense,
but shall pay the costs and expenses thereof (except that in no event
29
shall the Insurer be liable for the fees and expenses of more than one counsel
for Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances). After notice from Insurer to the
Indemnified Party of Insurer's election to assume the defense thereof, and in
the absence of such a reasonable conclusion that there may be different or
additional defenses available to the Indemnified Party, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
Insurer will not be liable to that party under this Agreement for any legal or
other expenses subsequently incurred by the party independently in connection
with the defense thereof other than reasonable costs of investigation.
14.1(d)The Indemnified Parties will promptly notify Insurer in writing 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.
14.2 Indemnification by the Adviser
14.2(a) The Adviser agrees to indemnify and hold harmless Insurer and each
of its directors and officers and each person, if any, who controls Insurer
within the meaning of Section 15 of the 1933 Act ("Indemnified Party" and
collectively, the "Indemnified Parties" for purposes of this Section 14.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Distributor) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund shares or the
Contracts and:
30
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or sales
literature of the Fund (or any amendment or supplement to any of the foregoing),
or Fund Prospectus or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Adviser or Fund by or
on behalf of the Insurer for use in the registration statement or in sales
literature of the Fund (or any amendment or supplement) or Fund Prospectus 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 sales literature for the Contracts not supplied by Distributor or
persons under its control) or wrongful conducts of the Fund, Adviser or
Distributor 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 a registration statement, or sales literature
covering the Contracts or Separate Account Prospectus, 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 statement
or statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to Insurer by or on behalf of the Fund; or
31
(iv) arise as a result of any failure by the Distributor, Fund or Adviser
to provide the services and furnish the material 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 Articles
VI of this Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Distributor or Adviser in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Distributor, Fund or Adviser; as limited by in accordance with the provisions of
Sections 14.2(b) and 14.2(c) hereof.
14.2(b)The Adviser shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
the Indemnified Party would otherwise by subject by reason of such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to Insurer
or the Separate Account, whichever is applicable.
14.2(c) The Adviser shall not be liable under this indemnification
provision with respect to any claim made against the Indemnified Party unless
the Indemnified Party shall have notified Adviser in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Indemnified Party (or after
the Indemnified Party shall have received notice of such service on any
designated agent). Notwithstanding the foregoing, the failure of the Indemnified
Party to give notice as provided herein shall not relieve Adviser of its
obligations hereunder except to the extent that Adviser has been prejudiced by
such failure to give notice. In addition, any failure by the Indemnified Party
to notify Adviser of any such claim shall not relieve Adviser from any liability
that it may have
32
to the Indemnified Party against whom such action is brought otherwise than
account of this indemnification provision. In case any such action is brought
against the Indemnified Party, Adviser will be entitled to participate, at its
own expense, in the defense thereof. Unless the Indemnified Party releases
Adviser from any further obligation under this Section 14.2, Adviser also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action; provided, however, that if the Indemnified Party
shall have reasonably concluded that there may be defenses available to it which
are different from or additional to those available to Adviser, Adviser shall
not have the right to assume said defense, but shall pay the costs and expenses
thereof (except that in no event shall Adviser be liable for the fees and
expenses of more than one counsel for the Indemnified Party in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances).
After notice from Adviser to the Indemnified Party of Adviser's election to
assume the defense thereof, and in the absence of such a reasonable conclusion
that there may be different or additional defenses available to the Indemnified
Party, the Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and Adviser will not be liable to that party under this
Agreement for any legal or other expenses subsequently incurred by that party
independently in connection with the defense thereof other than reasonable costs
of investigation. Notwithstanding any other provision of this Paragraph 14.2(c)
Insurer shall be entitled to refuse any request by Adviser to assume the defense
of any action brought against Insurer by the Internal Revenue Service ("IRS") or
any other tax authority, provided that following such refusal, Adviser shall be
released from any further obligation for costs of defense under this Section
14.2. If they are so allowed by rules of procedure, however, Adviser and Insurer
will be entitled to participate in the defense of any action brought against
Adviser by the
33
IRS or any other tax authority, with any and all costs associated with the
Adviser's or Insurer's defense to be the responsibility of Adviser or Insurer.
14.2(d)The Insurer agrees promptly to notify the Adviser 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 the Separate Account.
14.3 Indemnification By the Distributor
14.3(a)The Distributor agrees to indemnify and hold harmless Insurer and
each of its directors and officers and each person, if any, who controls Insurer
within the meaning of Section 15 of the 1933 Act ("Indemnified Party" and
collectively, the "Indemnified Parties" for purposes of this Section 14.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Advisor) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund 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 or sales
literature of the Fund (or any amendment or supplement to any of the foregoing),
or Fund Prospectus 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 Distributor or Fund by
or on behalf of the Insurer for use in the
34
registration statement or in sales literature of the Fund (or any amendment or
supplement) or Fund Prospectus 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 sales literature for the Contracts not supplied by Adviser or
persons under its control) or wrongful conducts of the Fund, Distributor or
Adviser 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 a registration statement, or sales literature
covering the Contracts or Separate Account Prospectus, 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 statement
or statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to Insurer by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Adviser, Fund or Distributor
to provide the services and furnish the material 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 Articles
VI of this Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Adviser or Distributor in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Adviser, Fund or A; as limited by in accordance with the provisions of Sections
14.3(b) and 14.3(c) hereof.
35
14.3(b)The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which the Indemnified Party would otherwise by subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
Insurer or the Separate Account, whichever is applicable.
14.3(c)The Distributor shall not be liable under this indemnification
provision with respect to any claim made against the Indemnified Party unless
the Indemnified Party shall have notified Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
Indemnified Party (or after the Indemnified Party shall have received notice of
such service on any designated agent). Notwithstanding the foregoing, the
failure of the Indemnified Party to give notice as provided herein shall not
relieve Distributor of its obligations hereunder except to the extent that
Distributor has been prejudiced by such failure to give notice. In addition, any
failure by the Indemnified Party to notify Distributor of any such claim shall
not relieve Distributor from any liability that it may have to the Indemnified
Party against whom such action is brought otherwise than account of this
indemnification provision. In case any such action is brought against the
Indemnified Party, Distributor will be entitled to participate, at its own
expense, in the defense thereof. Unless the Indemnified Party releases
Distributor from any further obligation under this Section 14.3, Distributor
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action; provided, however, that if the Indemnified
Party shall have reasonably concluded that there may be defenses available to it
which are different from or additional to those available to A, Distributor
shall not have the right
36
to assume said defense, but shall pay the costs and expenses thereof (except
that in no event shall Distributor be liable for the fees and expenses of more
than one counsel for the Indemnified Party in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances). After notice from Distributor to
the Indemnified Party of A's election to assume the defense thereof, and in the
absence of such a reasonable conclusion that there may be different or
additional defenses available to the Indemnified Party, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
Distributor will not be liable to that party under this Agreement for any legal
or other expenses subsequently incurred by that party independently in
connection with the defense thereof other than reasonable costs of
investigation. Notwithstanding any other provision of this Paragraph 14.3(c)
Insurer shall be entitled to refuse any request by Distributor to assume the
defense of any action brought against Insurer by the IRS or any other tax
authority, provided that following such refusal, Distributor shall be released
from any further obligation for costs of defense under this Section 14.3. If
they are so allowed by rules of procedure, however, Distributor and Insurer will
be entitled to participate in the defense of any action brought against
Distributor by the IRS or any other tax authority, with any and all costs
associated with the A's or Insurer's defense to be the responsibility of
Distributor or Insurer.
14.3(d) The Insurer agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Separate Account.
37
Section 15. Applicable Law
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
Section 16. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
Section 17. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
Section 18. Rights Cumulative
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, that the Parties are entitled to under federal and state
laws.
Section 19. Restrictions on Sales of Fund Shares
Insurer agrees that the Fund will be permitted (subject to the other terms
of this Agreement) to make its shares available to separate accounts of other
life insurance companies.
Section 20. Headings
The headings used in this Agreement are for purposes of reference only and
shall not limit or define the meaning of the provisions of this Agreement.
38
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
METROPOLITAN LIFE INSURANCE
COMPANY, INC.
By: /s/ Xxxx Xxxx
-----------------------------------
Name: Xxxx Xxxx
Title: VP
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, its General Partner
By: /s/ illegible
-----------------------------------
Name:
Title:
ALLIANCE FUND DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title:
39
SCHEDULE A
CERTIFICATE OF COMPLIANCE
Name of Fund(s):
____________________________
To: Metropolitan Life Insurer, Inc.
000-X Xxxxx Xxx Xxxxx, Xxxxx 000
Xxxxxx,XX 08830
Attn: Xxxxxxx Xxxxxxxx
FAX: (000) 000-0000
Metropolitan Life Insurer, Inc.
0 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
FAX: (000) 000-0000
We have reviewed compliance of the Fund(s) named above with respect to
certain investment diversification requirements for the Fund(s) for the quarter
ending ____________________. The review was limited to verifying whether the
Fund complied with the quarterly diversification requirements described in
Section 817(h) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (the "Section 817(h) Diversification Requirements").
The review did not include testing compliance with any other investment
limitations in the prospectus of Statement of Additional Information of the
Fund(s).
As of ________________ the Fund was in compliance with the Section 817(h)
Diversification Requirements.
Dated:
By:
Name:
Title:
40
AMENDMENT TO
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of May 1, 2004 ("Agreement"), by
and among Metropolitan Life Insurance Company, an insurance company ("Insurer"),
Alliance Capital Management L.P., a Delaware limited partnership ("Adviser"),
the investment adviser of the Fund referred to below; and AllianceBernstein
Investment Research and Management, Inc. (formerly Alliance Fund Distributors,
Inc.), a Delaware corporation ("Distributor"), the Fund's principal underwriter
(collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS the Insurer, the Distributor, and the Adviser have entered into a
Participation Agreement, dated as of September 1, 2000, whereby Class B shares
of the AllianceBernstein Premier Growth, AllianceBernstein Growth and Income and
AllianceBernstein Technology Portfolios (the "Portfolios") of AllianceBernstein
Variable Products Series Fund, Inc. (the "Fund") are made available by
Distributor to serve as underlying investment media for variable annuity
contracts and variable life insurance contracts of Insurer that are the subject
of Insurer's Form S-6 Registration Statement filed with the SEC, File No.
33-57320 (the "Contracts"), to be offered through the Insurer and other
registered broker-dealer firms as agreed to by insurer; and
WHEREAS, the Parties now desire to amend the Participation Agreement to
make shares of the Fund's AllianceBernstein U.S. Government/High Grade
Securities Portfolio available by Distributor to serve as underlying investment
media for the Contracts;
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereby amend the Participation Agreement to
reflect the availability of the
Fund's AllianceBernstein U.S. Government/High Grade Securities Portfolio to
serve as underlying investment media for the Contracts.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Xxxx Xxxx
Name: Xxxx Xxxx
Title: VP
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, its General Partner
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
Acting General Counsel
ALLIANCEBERNSTEIN INVESTMENT
RESEARCH AND MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Managing Director and Senior
Vice President
AMENDMENT NO. 2 TO
PARTICIPATION AGREEMENT
THIS AMENDMENT, made and entered into as of May 1, 2007 (the "Amendment"),
by and among Metropolitan Life Insurance Company, an insurance company
("Insurer"), AllianceBernstein L.P. (formerly Alliance Capital Management L.P.),
a Delaware limited partnership ("Adviser"), the investment adviser of the Fund
referred to below; and AllianceBernstein Investments, Inc. (formerly
AllianceBernstein Investment Research and Management, Inc. and Alliance Fund
Distributors, Inc.), a Delaware corporation ("Distributor"), the Fund's
principal underwriter (collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS, the Insurer, the Distributor, and the Adviser have entered into a
Participation Agreement, dated as of September 1, 2000 (as amended to the date
hereof, the "Participation Agreement"), whereby Class B shares of the
AllianceBernstein U.S. Government/High Grade Securities, AllianceBernstein
Premier Growth, AllianceBernstein Growth and Income and AllianceBernstein
Technology Portfolios of AllianceBernstein Variable Products Series Fund, Inc.
(the "Fund") are made available by the Distributor to serve as underlying
investment media for variable annuity contracts and variable life insurance
contracts of Insurer that are the subject of Insurer's Form S-6 Registration
Statement filed with the SEC, File No. 33-57320 (the "Contracts");
WHEREAS, at the time the Insurer entered into the Participation Agreement,
the Insurer was registered as a broker-dealer with the Securities and Exchange
Commission and was a member of the NASD;
WHEREAS, on or around May 1, 2007, subject to regulatory approval, the
Insurer will deregister as a broker-dealer with the Securities and Exchange
Commission and will no longer be a member of the NASD;
WHEREAS, the Parties now desire to amend the Participation Agreement to
reflect the change in the Insurer's status;
NOW, THEREFORE, in consideration of their mutual promises, the Parties
hereby amend the Participation Agreement as follows:
Section 5.3(d) shall be amended and restated in its entirety as follows:
"(d) Distributor represents and warrants that it is registered as a
broker-dealer with the SEC under the Securities and Exchange Act of 1934, as
amended, and is a member in good standing of the NASD."
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be executed in its name and on its behalf by its duly authorized representative.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ illegible
------------------------------------
Name:
Title:
ALLIANCEBERNSTEIN L.P.
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
AMENDMENT NO. 3 DATED APRIL 28, 2008
TO THE PARTICIPATION AGREEMENT DATED SEPTEMBER 1, 2000
Amendment to the Participation Agreement (the "Agreement") by and among
Metropolitan Life Insurance Company ("MetLife") on behalf of itself and certain
of its separate accounts, AllianceBernstein L.P. ("Adviser") and
AllianceBernstein Investments, Inc. ("Distributor").
WHEREAS, the parties desire to amend the Agreement to expand the list of
Portfolios available to MetLife's separate accounts and to provide a schedule of
the MetLife separate accounts and contracts for which the Portfolios will serve
as investment media.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions set forth herein and for other good and valuable
consideration, each of the parties amends the Agreement as follow:
1. In accordance with the terms of the Agreement, the Distributor, and
Alliance Variable Products Series Fund, Inc. ("Fund") agree to make
the Portfolios of the Fund listed in Schedule A available to serve as
underlying investment media for variable annuity contracts and
variable life insurance contracts of Insurer ("Contracts") that are
listed on Schedule A. The MetLife separate accounts that support the
Contracts are also listed on Schedule A.
Except as expressly supplemented, amended or consented to hereby, all of the
representations and conditions of the Agreement will remain unamended and will
continue to be in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto have caused this Amendment No. 3
to be executed in their names and on their behalf by and through their duly
authorized officers signing below.
METROPOLITAN LIFE INSURANCE COMPANY (on behalf of the Accounts and itself)
By: /s/ illegible
--------------------------------
Its: Vice President
ALLIANCEBERNSTEIN L.P.
By:
--------------------------------
Its:
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By:
--------------------------------
Its:
SCHEDULE A
Separate Accounts:
Metropolitan Life Separate Account UL
Metropolitan Life Separate Account DCVL
Separate Account No. 13S
Separate Account No. 485
Metropolitan Life Variable Annuity Separate Account I
Metropolitan Life Variable Annuity Separate Account II
AllianceBernstein Variable Products Series Fund, Inc.:
AllianceBernstein Global Technology Portfolio - Class B
AllianceBernstein International Value Portfolio - Class A
AllianceBernstein Large Cap Growth Portfolio - Class B
AllianceBernstein Growth and Income Portfolio - Class B
AllianceBernstein Intermediate Bond Portfolio (formerly, AllianceBernstein U.S.
Government/High Grade Securities Portfolio) - Class A and Class B
