STOCK SALE AGREEMENT
This Agreement dated as of June 4, 1993, between NEW YORK LIFE
INSURANCE AND ANNUITY CORPORATION, a stock company organized under the laws of
Delaware ("NYLIAC"), and NEW YORK LIFE MFA SERIES FUND, INC., a corporation
organized under the laws of Maryland ("MFA Series Fund"):
W I T N E S S E T H:
WHEREAS, MFA Series Fund will serve as the investing medium for
separate accounts established by NYLIAC ("Separate Accounts") under Section
2932 of the Delaware Insurance Code and other separate accounts; and
WHEREAS, the beneficial interests in MFA Series Fund are divided into
several series of shares, each designated a "Portfolio" and representing
interests in a particular managed portfolio of securities and other assets; and
WHEREAS, MFA Series Fund has obtained an order from the Securities and
Exchange Commission, dated October 30, 1992 (File No. 812-7974), granting MFA
Series Fund exemptions from the provisions of sections 9(a), 13(a), 15(a) and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rule 6e-2(b)(15) thereunder, to the extent necessary to permit shares
of MFA Series Fund to be held by certain registered separate accounts of NYLIAC
offering variable annuity contracts and scheduled premium variable life
insurance contracts and in the event that MFA Series Fund offers and sells its
shares to any flexible premium variable life insurance separate account that
NYLIAC or an affiliated insurer may establish (the "Mixed Funding Exemptive
Order"); and
WHEREAS, MFA Series Fund desires to sell its shares to the Separate
Accounts, to NYLIAC itself and to organizations approved by NYLIAC (the
Separate Accounts, NYLIAC and the other organizations being herein collectively
called "Prospective Purchasers"); and
WHEREAS, some of the Prospective Purchasers now desire to purchase
shares of MFA Series Fund and other Prospective Purchasers may desire to do so.
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants herein contained and other good and valuable consideration the
receipt whereof is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Sales of Shares to Prospective Purchasers. MFA Series Fund will
sell its shares (i) on the terms and conditions and (ii) at the "net
asset value" of such shares (as defined in the prospectus, dated
January 29, 1993, as supplemented June 30, 1993, and as hereafter
amended, forming part of the registration statement of MFA Series Fund
(File No. 2-86082 under the Securities Act of 1933)) to such of the
Prospective Purchasers as shall request MFA Series Fund to sell its
shares to them. Such sales will be made by MFA Series Fund in such
amounts as may be requested from time to time by the Prospective
Purchasers at the net asset value as next determined after any such
request is received by MFA Series Fund. MFA Series Fund will take such
steps as may be necessary to provide a sufficient number of its shares
to meet the requests of the Prospective Purchasers. Neither NYLIAC nor
any of the other Prospective Purchasers shall be under any obligation
to purchase shares of MFA Series Fund at any time or in any amount.
2. No Sales to Others; Redemptions. MFA Series Fund will not, so long
as this Agreement remains in effect,
(a) sell its shares to any person other than Prospective
Purchasers; or
(b) change the terms and conditions for the redemption of its
shares set forth in the prospectus referred to in paragraph 1.
3. Board of Directors. MFA Series Fund undertakes to use all
reasonable efforts to have at all times a board of directors, a
majority of whom are not interested persons of MFA Series Fund. In any
case, to the extent it decides to finance distribution expenses
pursuant to Rule 12b-1, MFA Series Fund undertakes to have a board of
directors, a majority of whom are not interested persons of MFA Series
Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
4. Diversification. MFA Series Fund will at all times invest money
from the sale of its shares in such a manner as to ensure that the
contracts issued by the Separate Accounts will be treated as variable
contracts under the Internal Revenue Code (the "Code") and the
regulations issued thereunder. Without limiting the scope of the
foregoing, MFA Series Fund will use reasonable efforts to comply with
Section 817(h) of the Code and any regulations thereunder, concerning
diversification of the assets of the Portfolios of MFA Series Fund,
provided that NYLIAC will promptly advise MFA Series Fund of any
changes in such Code provisions after the date of this Agreement.
5. Potential Conflicts. (a) The Board of Directors (the "Board") of
MFA Series Fund will monitor MFA Series Fund for the existence of any
material irreconcilable conflict between the interests of the contract
owners of all separate accounts investing in MFA Series Fund. An
irreconcilable material conflict may arise for a variety of reasons,
including: (i) an action by any state insurance regulatory authority;
(ii) 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; (iii) an
administrative or judicial decision in any relevant proceeding; (iv)
the manner in which the investments of any Portfolio are being
managed; (v) a difference in voting instructions given by variable
annuity contract owners and variable life insurance contract owners;
or (vi) a decision by an insurer to disregard the voting instructions
of contract owners. The Board shall promptly inform NYLIAC if it
determines that an irreconcilable material conflict exists and the
implications thereof.
(b) NYLIAC will report any potential or existing conflicts of
which it is aware to the Board. NYLIAC will assist the Board in
carrying out its responsibilities under the relevant provisions of the
federal securities laws including Rule 6e-3(T)(b)(15) and the Mixed
Funding Exemptive Order, 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 by NYLIAC to inform the
Board whenever contract owner voting instructions are disregarded.
(c) If it is determined by a majority of the Board, or a majority
of its disinterested directors, that a material irreconcilable
conflict exists, NYLIAC and other Prospective Purchasers shall, at
their 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 irreconcilable material conflict,
up to and including: (i), withdrawing the assets allocable to some or
all of the separate accounts from MFA Series Fund or any Portfolio and
reinvesting such assets in a different investment medium, including
(but not limited to) another Portfolio of MFA Series Fund, or
submitting the question 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 Prospective Purchasers) that votes in favor of
such segregation, or offering to the affected contract owners the
option of making such a change; and (ii), establishing a new
registered management investment company or managed separate account.
(d) If a material irreconcilable conflict arises because of a
decision by NYLIAC to disregard contract owner voting instructions and
that decision represents a minority position or would preclude a
majority vote, NYLIAC may be required, at MFA Series Fund's election,
to withdraw the affected
Separate Account's investment in MFA Series Fund and terminate this
Agreement with respect to such account; provided, however that such
withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after
MFA Series Fund gives written notice that this provision is being
implemented, and until the end of that six month period MFA Series
Fund shall continue to accept and implement orders by NYLIAC for the
purchase (and redemption) of shares of MFA Series Fund.
(e) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to NYLIAC
conflicts with the majority of other state regulators, then NYLIAC
will withdraw the affected Separate Account's investment in MFA Series
Fund and terminate this Agreement with respect to such Separate
Account within six months after the Board informs NYLIAC 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
the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Until the end of
the foregoing six month period, MFA Series Fund shall continue to
accept and implement orders by NYLIAC for the purchase (and
redemption) of shares of MFA Series Fund.
(f) For purposes of Sections 5(c) through 5(f) 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 MFA Series Fund
be required to establish a new funding medium for the contracts.
NYLIAC shall not be required by Section 5(c) 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 NYLIAC will withdraw
the Separate Account's investment in MFA Series Fund and terminate
this Agreement within six (6) months after the Board informs NYLIAC 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.
(g) If and to the extent that Rules 6e-2 and/or 6e-3(T) under
the Act are amended to provide exemptive relief from any provision of
the Act or the rules promulgated thereunder with respect to mixed
funding (as defined in the Mixed Funding Exemptive Order) on terms and
conditions materially different from those contained in the Mixed
Funding Exemptive Order, then (i) MFA Series Fund and/or the
Prospective Purchasers, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and/or Rule 6e-3(T) to the
extent such rules are applicable; and (ii) Sections 5(a) through 5(f)
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 as so amended.
6. Termination of Agreement.
(a) Notice of Termination. This Agreement may be terminated
at any time by NYLIAC on 360 days' written notice to MFA
Series Fund or by MFA Series Fund on 360 days' written notice
to NYLIAC.
(b) Effect of Termination. Notwithstanding any termination of
this Agreement, MFA Series Fund shall at the option of
NYLIAC, continue to make available additional shares of MFA
Series Fund 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 MFA Series Fund, redeem investments
in MFA Series Fund and/or invest in MFA Series Fund upon the
making of additional purchase payments
under the Existing Contracts. The parties agree that this
Section 6(b) shall not apply to any terminations under
Section 5 and the effect of such Section 5 terminations shall
be governed by Section 5 of this Agreement.
7. Notices. Any notice under this Agreement shall be in writing and if to MFA
Series Fund, delivered or mailed postage prepaid to it at 00 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at any other address that MFA Series Fund may
hereafter designate by written notice to NYLIAC, and if to NYLIAC, delivered or
mailed postage prepaid to it at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
at any other address that NYLIAC may hereafter designate by written notice to
MFA Series Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their corporate names, and their respective corporate seals to
be affixed and attached, all as of the date first above written.
NEW YORK LIFE INSURANCE
AND ANNUITY CORPORATION
[Seal] By: /s/Xxxxxx X. Rock
----------------------
Attest:
/s/Xxxxxx X. Xxxxxx
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Assistant Secretary
[Seal] NEW YORK LIFE MFA SERIES FUND, INC.
By: /s/Xxxx X. Xxxxxxx
Attest: ----------------------
/s/Xxxxxxx Xxxxxxxx
----------------------
Assistant Secretary
