▇▇▇▇ ▇▇▇▇▇ & COMPANY, INCORPORATED
PARTICIPATION AGREEMENT
THIS AGREEMENT is effective as of the 17th day of November, 2014, by and
among The ▇▇▇▇▇ Portfolios (the "Trust"), an open-end management investment
company organized as a Massachusetts business trust, MetLife Insurance Company
USA, a life insurance company organized as a corporation under the laws of the
State of Delaware, (the "Company"), on its own behalf and on behalf of each
segregated asset account of the Company set forth in Schedule A, as may be
amended from time to time (the "Accounts"), and ▇▇▇▇ ▇▇▇▇▇ & Company,
Incorporated, a Delaware corporation, the Trust's distributor (the
"Distributor").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"), and has an
effective registration statement relating to the offer and sale of the various
series of its shares under the Securities Act of 1933, as amended (the "1933
Act");
WHEREAS, the Trust and the Distributor desire that Trust shares be used as
an investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts to be offered by life
insurance companies which have entered into fund participation agreements with
the Trust (the "Participating Insurance Companies");
WHEREAS, shares of beneficial interest in the Trust are divided into the
following series, which are available for purchase by the Company for the
Accounts: with two classes of Shares (Class I-2 and Class S Shares) ▇▇▇▇▇
Capital Appreciation Portfolio, ▇▇▇▇▇ Large Cap Growth Portfolio, and ▇▇▇▇▇ Mid
Cap Growth Portfolio, and; and with one class of Shares (Class I-2 Shares) ▇▇▇▇▇
Balanced Portfolio, ▇▇▇▇▇ Growth & Income Portfolio, ▇▇▇▇▇ ▇▇▇▇ Cap Growth
Portfolio, and ▇▇▇▇▇ Small Cap Growth Portfolio;
WHEREAS, the Trust has received an order from the Commission, dated
February 17, 1989 (File No. 812-7076), granting Participating Insurance
Companies and their separate accounts exemptions from the provisions of Sections
9(a), 13(a), 15(a) and 15(b) of the 1940 Act, and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the
Portfolios of the Trust to be sold to and held by variable annuity and variable
life insurance separate accounts of both affiliated and unaffiliated life
insurance companies (the "Shared Funding Exemptive Order");
WHEREAS, the Company has registered or will register under the 1933 Act
(unless an exemption from registration under the 1933 Act is available), certain
variable life insurance policies and variable annuity contracts to be issued by
the Company under which the Portfolios are to be made available as investment
vehicles (the "Contracts");
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act unless an exemption from registration
under the 1940 Act is available and the Trust has been so advised;
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WHEREAS, the Company desires to use shares of the specified class or
classes of the portfolios indicated on Schedule A (the "Portfolios") as
investment vehicles for the Accounts;
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE I.
Purchase and Redemption of Trust Portfolio Shares
-------------------------------------------------
1.1. For purposes of this Article I, the Company shall be the Trusts agent for
the receipt from each account of purchase orders and requests for
redemption pursuant to the Contracts relating to each Portfolio, provided
that the Company notifies the Trust of such purchase orders and requests
for redemption by 9:30 a.m. Eastern time on the next following Business
Day, as defined in Section 1.3.
1.2. The Trust shall make shares of a specified class or classes of the
Portfolios available to the Accounts at the net asset value next computed
after receipt of a purchase order by the Trust (or its agent), as
established in accordance with the provisions of the then current
prospectus of the Trust describing Portfolio purchase procedures. The
Company will transmit orders from time to time to the Trust for the
purchase and redemption of shares of the Portfolios. The Trustees of the
Trust (the "Trustees") 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 having
jurisdiction or if, in the sole discretion of the Trustees acting in good
faith and in light of their fiduciary duties under federal and any
applicable state laws, such action is deemed in the best interests of the
shareholders of such Portfolio.
1.3. The Company shall pay for the purchase of shares of a Portfolio on behalf
of an Account with federal funds to be transmitted by wire to the Trust,
with the reasonable expectation of receipt by the Trust by 2:00 p.m.
Eastern Time on the next Business Day after the Trust (or its agent)
receives the purchase order. Upon receipt by the Trust of the federal
funds so wired, such funds shall cease to be the responsibility of the
Company and shall become the responsibility of the Trust for this purpose.
"Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which the Trust calculates its net asset value
pursuant to the rules of the Commission.
1.4. The Trust will redeem for cash any full or fractional shares of any
Portfolio, when requested by the Company on behalf of an Account, at the
shares' net asset value next computed after receipt by the Trust (or its
agent) of the request for redemption, as established in accordance with
the provisions of the then current prospectus of the Trust describing
Portfolio redemption procedures. The Trust shall make payment for such
shares in the manner established from time to time by the Trust. Proceeds
of redemption with respect to a Portfolio will normally be paid to the
Company for an Account in federal funds transmitted by wire to the Company
by order of the Trust with the reasonable expectation of receipt by the
Company by 2:00 p.m. Eastern time on the next
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Business Day after the receipt by the Trust (or its agent) of the request
for redemption. Such payment may be delayed if, for example, the
Portfolio's cash position so requires or if extraordinary market
conditions exist, but in no event shall payment be delayed for a greater
period than is permitted by the 1940 Act. The Trust reserves the right to
suspend the right of redemption, consistent with Section 22(e) of the 1940
Act and any rules thereunder.
1.5. Payments for the purchase of shares of the Trust's Portfolios by the
Company under Section 1.3 and payments for the redemption of shares of the
Trust's Portfolios under Section 1.4 on any Business Day may be netted
against one another for the purpose of determining the amount of any wire
transfer.
1.6. Issuance and transfer of the Trust's Portfolio shares will be by book
entry only. Stock certificates will not be issued to the Company or the
Accounts. Portfolio Shares purchased from the Trust will be recorded in
the appropriate title for each Account or the appropriate subaccount of
each Account.
1.7. The Trust shall furnish, on or before the ex-dividend date, notice to the
Company of any income dividends or capital gain distributions payable on
the applicable class of shares of any Portfolio of the Trust. The Company
hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares
of the same class of that Portfolio. The Trust shall notify the Company of
the number of shares so issued as payment of such dividends and
distributions.
1.8. The Trust shall calculate the net asset value of each class of each
Portfolio on each Business Day, as defined in Section 1.3. The Trust shall
make the net asset value per share for each class of each Portfolio
available to the Company or its designated agent on a daily basis as soon
as reasonably practical after the net asset values are calculated and
shall use its best efforts to make such net asset values are available to
the Company by 6:30 p.m. Eastern time each Business Day.
1.9. The Trust and Distributor agree that Portfolio shares will be sold only to
Participating Insurance Companies and their segregated asset accounts, to
the Trust's investment adviser or its affiliates, and to such other
entities as may be permitted by Section 817(h) of the Internal Revenue
Code of 1986, as amended (the "Code"), the rules and regulations
thereunder, or judicial or administrative interpretations thereof. No
shares of any Portfolio will be sold directly to the general public. The
Company agrees that it will use Trust shares only for the purposes of
funding the Contracts through the Accounts listed in Schedule A, as
amended from time to time.
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1.10. The Trust agrees that all Participating Insurance Companies shall have the
obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding materially to those contained in
Section 2.11 and Article IV of this Agreement.
1.11. If adjustments are required to correct an error in the computation of the
net asset value of a class of a Portfolio's shares, in the distribution
rate for the Trust's shares, or otherwise, the Fund or Distributor (or
their designee) promptly shall notify the Company upon discovering the
need for such adjustments and shall implement corrections for such errors
in accordance with the Trust's error correction procedures. Notices
pursuant to this Section shall be provided to ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President, Metropolitan Life Insurance Company, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Company agrees to comply with reasonable requests
made by the Trust or Distributor (or their designee) in connection with
its efforts to resolve such errors.
ARTICLE II.
Obligations of the Parties
--------------------------
2.1. The Trust shall prepare and be responsible for filing with the Commission
and any state regulators requiring such filing all shareholder reports,
notices, proxy materials (or similar materials such as voting instruction
solicitation materials), prospectuses and statements of additional
information of the Trust. The Trust shall bear the costs of registration
and qualification of shares of the Portfolios, preparation and filing of
the documents listed in this Section 2.1 and all taxes to which an issuer
is subject on the issuance and transfer of its shares.
2.2. The Company shall distribute such prospectuses, proxy statements and
periodic reports of the Trust to the Contract owners as required to be
distributed to such Contract owners under applicable federal or state law.
2.3. The Trust shall provide such documentation (including a final copy of the
Trust's prospectus as set in type or in camera-ready copy) and other
assistance as is reasonably necessary in order for the Company to print
together in one document the current prospectus for the Contracts issued
by the Company and the current prospectus for the Trust. The Trust shall
bear the expense of printing copies of its current prospectus that will be
distributed to existing Contract owners, and the Company shall bear the
expense of printing copies of the Trust's prospectus that are used in
connection with offering the Contracts issued by the Company.
2.4. The Trust and the Distributor shall provide (1) at the Trust's expense,
one copy of the Trust's current Statement of Additional Information
("SAI") to the Company and to any Contract owner who requests such ▇▇▇,
(2) at the Company's expense, such additional copies of the Trust's
current SAI as the Company shall reasonably request and that the Company
shall require in accordance with applicable law in connection with
offering the Contracts issued by the Company. The Distributor shall make
electronic delivery of Trust Prospectuses and Statements, Alternative
Disclosure Statements (if any), periodic reports and proxy solicitation
materials available to shareholders in accordance with applicable laws
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and regulations. The Company shall use its best efforts to encourage its
clients who buy portfolio shares to receive such materials electronically.
These efforts shall include, but not be limited to, obtaining such client
consent to electronic delivery as is required by law, rule or regulation,
and participating in the Investor Communication Services Electronic
Delivery program or other suitable electronic delivery program.
2.5. The Trust, at its expense, shall provide the Company with copies of its
proxy material, periodic reports to shareholders and other communications
to shareholders in such quantity as the Company shall reasonably require
for purposes of distributing to Contract owners. The Trust, at the
Company's expense, shall provide the Company with copies of its periodic
reports to shareholders and other communications to shareholders in such
quantity as the Company shall reasonably request for use in connection
with offering the Contracts issued by the Company. If requested by the
Company in lieu thereof, the Trust shall provide such documentation
(including a final copy of the Trust's proxy materials, periodic reports
to shareholders and other communications to shareholders, as set in type
or in camera-ready copy) and other assistance as reasonably necessary in
order for the Company to print such shareholder communications for
distribution to Contract owners.
2.6. The Company agrees and acknowledges that the Distributor is the sole owner
of the name and ▇▇▇▇ "▇▇▇▇▇" and that all use of any designation comprised
in whole or part of such name or ▇▇▇▇ under this Agreement shall inure to
the benefit of the Distributor. Except as provided in Section 2.5, the
Company shall not use any such name or ▇▇▇▇ on its own behalf or on behalf
of the Accounts or Contracts in any registration statement, advertisement,
sales literature or other materials relating to the Accounts or Contracts
without the prior written consent of the Distributor. Upon termination of
this Agreement for any reason, the Company shall cease all use of any such
name or ▇▇▇▇ as soon as reasonably practicable.
2.7. The Company shall furnish, or cause to be furnished, to the Trust or its
designee a copy of each Contract prospectus and/or statement of additional
information describing the Contracts, each report to Contract owners,
proxy statement, application for exemption or request for no-action letter
in which the Trust or the Distributor is named contemporaneously with the
filing of such document with the Commission. The Company shall furnish, or
shall cause to be furnished, to the Trust or its designee each piece of
sales literature or other promotional material in which the Trust or the
Distributor is named, at least five Business Days prior to its use. No
such material shall be used if the Trust or its designee reasonably
objects to such use within three Business Days after receipt of such
material.
2.8. The Company shall not give any information or make any representations or
statements on behalf of the Trust or concerning the Trust or the
Distributor in connection with the sale of the Contracts other than
information or representations contained in and accurately derived from
the registration statement or prospectus for the Trust shares (as such
registration statement and prospectus may be amended or supplemented from
time to time), annual and semi-annual reports of the Trust, Trust-
sponsored proxy statements, or in sales literature or other promotional
material approved by the Trust or its designee,
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except as required by legal process or regulatory authorities or with the
prior written permission of the Trust, the Distributor or their respective
designees. The Trust and the Distributor agree to respond to any request
for approval on a prompt and timely basis. The Company shall adopt and
implement procedures reasonably designed to ensure that "broker only"
materials including information therein about the Trust or the Distributor
are not distributed to existing or prospective Contract owners.
2.9. The Trust shall use its best efforts to provide the Company, on a timely
basis, with such information about the Trust, the Portfolios and the
Distributor, in such form as the Company may reasonably require, as the
Company shall reasonably request in connection with the preparation of
registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the ▇▇▇▇ ▇▇▇) and annual and semi-annual
reports pertaining to the Contracts.
2.10. The Trust and the Distributor shall not give, and agree that no affiliate
of either of them shall give, any information or make any representations
or statements on behalf of the Company or concerning the Company, the
Accounts or the Contracts other than information or representations
contained in and accurately derived from the registration statement or
prospectus for the Contracts (as such registration statement and
prospectus may be amended or supplemented from time to time), or in
materials approved by the Company for distribution including sales
literature or other promotional materials, except as required by legal
process or regulatory authorities or with the prior written permission of
the Company. The Company agrees to respond to any request for approval on
a prompt and timely basis.
2.11. So long as, and to the extent that, the Commission interprets the 1940 Act
to require pass-through voting privileges for Contract owners, the Company
will provide pass-through voting privileges to Contract owners whose cash
values are invested, through the registered Accounts, in shares of one or
more Portfolios of the Trust. The Trust shall require all Participating
Insurance Companies to calculate voting privileges in the same manner and
the Company shall be responsible for assuring that the Accounts calculate
voting privileges in the manner established by the Trust. With respect to
each registered Account, the Company will vote shares of each Portfolio of
the Trust held by a registered Account and for which no timely voting
instructions from Contract owners are received in the same proportion as
those shares for which voting instructions are received. The Company and
its agents will in no way recommend or oppose or interfere with the
solicitation of proxies for Portfolio shares held to fund the Contacts
without the prior written consent of the Trust, which consent may be
withheld in the Trust's sole discretion.
2.12. The Company and the Trust will each provide to the other information about
the results of any regulatory examination relating to the Contracts or the
Trust, including relevant portions of any "deficiency letter" and any
response thereto.
2.13. No compensation shall be paid by the Trust to the Company, or by the
Company to the Trust, under this Agreement (except for specified expense
reimbursements).
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ARTICLE III.
Representations and Warranties
------------------------------
3.1. The Company represents and warrants that it is an insurance company duly
organized and in good standing under the laws of the State of Delaware and
that it has legally and validly established each Account as a segregated
asset account under such law as of the date set forth in Schedule A, and
that the principal underwriter for the Contracts is registered as a
broker-dealer under the Securities Exchange Act of 1934 and is a member in
good standing of Financial Industry Regulatory Authority ("FINRA") or is
exempt from such registration.
3.2. The Company represents and warrants that it has registered or, prior to
any issuance or sale of the Contracts, will register each Account as a
unit investment trust in accordance with the provisions of the 1940 Act
and cause each Account to remain so registered to serve as a segregated
asset account for the Contracts, unless an exemption from registration is
available.
3.3. The Company represents and warrants that the Contracts will be registered
under the 1933 Act unless an exemption from registration is available
prior to any issuance or sale of the Contracts; the Contracts will be
issued and sold in compliance in all material respects with all applicable
federal and state laws; and the sale of the Contracts shall comply in all
material respects with state insurance law suitability requirements.
3.4. The Trust represents and warrants that it is duly organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act and the
rules and regulations thereunder.
3.5. The Trust and the Distributor represent and warrant that the Portfolio
shares offered and sold pursuant to this Agreement will be registered
under the 1933 Act and sold in accordance with all applicable federal and
state laws, and the Trust shall be registered under the 1940 Act prior to
and at the time of any issuance or sale of such shares. The Trust shall
amend its registration statement under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Trust shall register and qualify its shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Trust.
3.6. The Trust and Distributor represent and warrant that the investments of
each Portfolio will comply with the diversification requirements for
variable annuity, endowment or life insurance contracts set forth in
Section 817(h) of the Code, and the rules and regulations thereunder,
including without limitation Treasury Regulation 1.817-5, and will notify
the Company immediately upon having a reasonable basis for believing any
Portfolio has ceased to comply or might not so comply and will immediately
use best efforts to adequately diversify the Portfolio to achieve
compliance within the grace period afforded by Regulation 1.817-5.
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3.7. The Trust and Distributor represent and warrant that the Trust is
currently qualified as a "regulated investment company" under Subchapter M
of the Code, that it will make every effort to maintain such qualification
and will notify the Company immediately upon having a reasonable basis for
believing it has ceased to so qualify or might not so qualify in the
future.
3.8. The Trust represents and warrants that it, its directors, officers,
employees and others dealing with the money or securities, or both, of a
Portfolio shall at all times be covered by a blanket fidelity bond or
similar coverage for the benefit of the Trust in an amount not less than
the minimum coverage required by Rule 17g-l or other applicable
regulations under the 1940 Act. Such bond shall include coverage for
larceny and embezzlement and be issued by a reputable bonding company.
3.9. The Distributor represents that it is duly organized and validly existing
under the laws of the State of Delaware and that it is registered, and
will remain registered, during the term of this Agreement, as a broker-
dealer under the Securities Exchange Act of 1934 and is a member in good
standing of FINRA.
ARTICLE IV.
Potential Conflicts
-------------------
4.1. The parties acknowledge that a Portfolio's shares may be made available
for investment to other Participating Insurance Companies. In such event,
the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of
all Participating Insurance Companies. A material irreconcilable conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or
state insurance, tax or securities laws or regulations, or a public
ruling, private letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax, or securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding; (d)
the manner in which the investments of any Portfolio are being managed; or
(e) a difference in voting instructions given by variable annuity contract
and variable life insurance contract owners. The Trust shall promptly
inform the Company of any determination by the Trustees that a material
irreconcilable conflict exists and of the implications thereof.
4.2. The Company agrees to report promptly any potential or existing conflicts
of which it is aware to the Trustees. The Company will assist the Trustees
in carrying out their responsibilities under the Shared Funding Exemptive
Order by providing the Trustees with all information reasonably necessary
for and requested by the Trustees to consider any issues raised. All
communications from the Company to the Trustees may be made in care of the
Trust.
4.3. If it is determined by a majority of the disinterested Trustees, that a
material irreconcilable conflict exists that affects the interests of
contract owners, the Company shall, in cooperation with other
Participating Insurance Companies whose contract
8
owners are also affected, at its own expense and to the extent reasonably
practicable (as determined by the Trustees) take whatever steps are
necessary to remedy or eliminate the material irreconcilable conflict,
which steps could include: (a) withdrawing the assets allocable to some or
all of the Accounts from the Trust or any Portfolio and reinvesting such
assets in a different investment medium, including (but not limited to)
another Portfolio of the Trust, or submitting the question of whether or
not such segregation should be implemented to a vote of all affected
Contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the
affected Contract owners the option of making such a change; and (b)
establishing a new registered management investment company or managed
separate account.
4.4. If a material irreconcilable conflict arises because a particular state
insurance regulators decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Trust and terminate this Agreement
with respect to such Account within six (6) months after the Trustees
inform the Company in writing that the Trust has determined that such
decision has created a material irreconcilable 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 Trustees. Until the end of
such six (6) month period, the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares
of the Trust.
4.5. For purposes of Section 4.3 through 4.5 of this Agreement, a majority of
the disinterested Trustees shall determine whether any proposed action
adequately remedies any material irreconcilable conflict, but in no event
will the Trust be required to establish a new funding medium for any
Contract. The Company shall not be required 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
material irreconcilable conflict. In the event that the Trustees determine
that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the Account's
investment in the Trust and terminate this Agreement within six (6) months
after the Trustees inform the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination
shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested
Trustees.
4.6. The Company shall at least annually submit to the Trustees such reports,
materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed upon them by the Shared
Funding Exemptive Order, and said reports, materials and data shall be
submitted more frequently if reasonably deemed appropriate by the
Trustees.
4.7. If and to the extent that Rule 6e-3(T) is amended, or Rule 6e-3 is
adopted, to provide exemptive relief from any provision of the 1940 Act or
the rules promulgated thereunder
9
with respect to mixed or shared funding (as defined in the Shared Funding
Exemptive Order) on terms and conditions materially different from those
contained in the Shared Funding Exemptive Order, then the Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps
as may be necessary to comply with Rule 6e-3(T), as amended, or Rule 6e-3,
as adopted, to the extent such rules are applicable.
ARTICLE V.
Compliance
----------
5.1. The Trust, the Distributor and the Company shall comply with all
applicable federal and state laws, rules, and regulations, in conducting
their activities, including but not limited to: federal and state
securities laws; all rules, regulations and interpretations by
governmental and regulatory bodies and self-regulatory organizations
having jurisdiction over the Trust, the Distributor and the Company,
including but not limited to the Commission and FINRA; all rules,
regulations, and procedures of the National Securities Clearing
Corporation (the "NSCC"); and all federal and state banking and insurance
laws, as applicable. The Distributor shall have full authority to take
such action as the Distributor may deem advisable with respect to all
matters pertaining to the continuous offering, distribution and redemption
of shares of the Trust and this Agreement.
5.2. Upon request, the Distributor will inform the Company as to the states and
jurisdictions which, to the best information and belief of the
Distributor, the shares of the Trust have been registered for sale or are
exempt from the requirement of the respective securities laws of such
states and jurisdictions. The Distributor assumes no responsibility or
obligation as to the Company's right to sell shares of the Trust in any
state or jurisdiction.
5.3. The parties each acknowledge that certain information made available to
the other party hereunder may be deemed nonpublic personal information
under federal or state privacy laws (as amended) and the rules and
regulations promulgated thereunder (collectively, the "Privacy Laws"). The
parties hereby agree (a) not to disclose or use such information except as
required to carry out their respective duties under this Agreement or as
otherwise permitted by the Privacy Laws in their ordinary course of
business; (b) to establish and maintain written procedures reasonably
designed to assure the security and privacy of all such information and
(c) to cooperate with each other and provide reasonable assistance in
ensuring compliance with such Privacy Laws to the extent applicable to
either or both of the parties. The obligations contained in this Section
5.3 shall survive the termination of this Agreement with respect to such
information
5.4. Each party shall comply with Title III of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT) Act of 2001, as amended, and the rules promulgated
thereunder, and all federal, state, self-regulatory organization and
Commission anti-money laundering laws, rules, and regulations.
5.5. The parties acknowledge that neither the Distributor nor the Trust shall
compensate the Company for promoting or selling the shares of the Trust by
having the Trust's portfolio
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securities transactions or any form of remuneration resulting from such
transactions directed to the Company or the underwriter for the Contracts.
Each party further agrees that it has not entered into any agreement with
or on behalf of the Trust pursuant to which the Trust or any affiliate is
expected to direct portfolio transactions or remuneration received in
connection therewith to any party to compensate that party for promoting
or selling shares of the Trust. The Trust has implemented policies and
procedures reasonably designed to ensure compliance with Rule 12b-1(h)
under the ▇▇▇▇ ▇▇▇.
5.6. The Company agrees that it will make no offers or sales of shares of the
Trust in any foreign jurisdiction, except with the express written consent
of the Distributor.
5.7. The Company agrees to notify the Distributor within a reasonable time of
any claim or complaint or any enforcement action or other proceeding with
respect to shares of the Trust offered hereunder against the Company or
its affiliates, employees or agents. The Company agrees to cooperate with
the Distributor in resolving any such customer complaint. The Company
further agrees to cooperate in any regulatory examination of the
Distributor to the extent that examination involves the Agreement or the
Company's sales of shares of the Trust.
ARTICLE VI.
Indemnification
---------------
6.1. Indemnification By the Company. The Company agrees to indemnify and hold
-------------------------------
harmless the Distributor, the Trust and each of its Trustees, officers,
employees and agents and each person, if any, who controls the Trust
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 6.1) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Company, which consent shall
not be unreasonably withheld) or expenses (including the reasonable costs
of investigating or defending any alleged loss, claim, damage, liability
or expense and reasonable legal counsel fees incurred in connection
therewith) (collectively, "Losses"), to which the Indemnified Parties may
become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses are related to the sale or acquisition
of the Contracts or Trust shares and:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a registration
statement or prospectus for the Contracts or in the Contracts
themselves or in sales literature generated or approved by the Company
on behalf of the Contracts or Accounts (or any amendment or supplement
to any of the foregoing) (collectively, "Company Documents" for the
purposes of this Article VI), 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 indemnity 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 was accurately
derived from written information furnished to the Company by or on
behalf of the Trust for use in Company Documents or
11
otherwise for use in connection with the sale of the Contracts or Trust
shares; or
(b) arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived
from Trust Documents as defined in Section 6.2(a)) or wrongful conduct
of the Company or persons under its control, with respect to the sale
or acquisition of the Contracts or Portfolio shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Trust Documents as defined in
Section 6.2(a) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was
made in reliance upon and accurately derived from written information
furnished to the Trust by or on behalf of the Company; or
(d) arise out of or result from any failure by the Company to provide
the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company; or
(f) arise out of or result from the provision by the Company to the
Trust of insufficient or incorrect information regarding the purchase
or sale of shares of any Portfolio, or the failure of the Company to
provide such information on a timely basis.
6.2. Indemnification by the Distributor. The Distributor agrees to indemnify
-----------------------------------
and hold harmless the Company and each of its directors, officers,
employees, and agents and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for the purposes of this Section 6.2) against any
and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Distributor, which consent
shall not be unreasonably withheld) or expenses (including the reasonable
costs of investigating or defending any alleged loss, claim, damage,
liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulation, or at common
law or otherwise, insofar as such Losses are related to the sale or
acquisition of the Contracts or Trust shares and:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration
statement or prospectus for the Trust (or any amendment or supplement
thereto) (collectively, "Trust Documents" for the purposes of this
Article VI), 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 indemnity shall not apply as to any Indemnified
12
Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from
written information furnished to the Distributor or the Trust by or on
behalf of the Company for use in Trust Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Distributor or
persons under its control, with respect to the sale or acquisition of
the Contracts or Portfolio shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Company by
or on behalf of the Trust; or
(d) arise out of or result from any failure by the Distributor or the
Trust to provide the services or furnish the materials required under
the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor or the Trust in
this Agreement or arise out of or result from any other material breach
of this Agreement by the Distributor or the Trust. The Distributor is
primarily liable for the failure of the Trust, whether in good faith or
otherwise, to comply with the diversification requirements applicable
to the Trust and the qualification requirements applicable to a
Registered Investment Company.
6.3. None of the Company, the Trust or the Distributor shall be liable under
the indemnification provisions of Sections 6.1 or 6.2, as applicable, with
respect to any Losses incurred or assessed against an Indemnified Party
that arise from 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 or
duties under this Agreement.
6.4. None of the Company, the Trust or the Distributor shall be liable under
the indemnification provisions of Sections 6.1 or 6.2, as applicable, with
respect to any claim made against an Indemnified party unless such
Indemnified Party shall have notified the other party in writing within a
reasonable time after the summons, or other first written notification,
giving information of the nature of the claim that has been served upon or
otherwise received by such Indemnified Party (or after such Indemnified
Party shall have received notice of service upon or other notification to
any designated agent), but failure to notify the party against whom
indemnification is sought of any such claim shall not relieve that party
from any liability which it may have to the Indemnified Party in the
13
absence of Sections 6.1 and 6.2.
6.5. In case any such action is brought against an Indemnified Party, the
indemnifying party shall be entitled to participate, at its own expense,
in the defense of such action. The indemnifying party also shall be
entitled to assume the defense thereof, with counsel reasonably
satisfactory to the party named in the action. After notice from the
indemnifying party to the Indemnified Party of an election to assume such
defense, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the indemnifying party will not be
liable to the Indemnified Party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
ARTICLE VII.
Termination
-----------
7.1. This Agreement shall terminate:
(a) at the option of any party upon 60 days' advance written notice to
the other parties, unless a shorter time is agreed to by the parties;
(b) at the option of the Trust or the Distributor if the Contracts
issued by the Company cease to qualify as annuity contracts or life
insurance contracts, as applicable, under the Code or if the Contracts
are not registered (unless an exemption from registration is
available), issued or sold in accordance with applicable state and/or
federal law; or
(c) at the option of any party upon a determination by a majority of
the disinterested Trustees of the Trust that a material irreconcilable
conflict exists; or
(d) at the option of the Company upon institution of formal proceedings
against the Trust or the Distributor by FINRA, the Commission, or any
state securities or insurance department or any other regulatory body
regarding the Trust's or the Distributor's duties under this Agreement
or related to the sale of Trust shares or the operation of the Trust;
or
(e) at the option of the Company if the Trust or a Portfolio fails to
meet the diversification requirements specified in Section 3.6 hereof;
or
(f) at the option of the Company if shares of the Series are not
reasonably available to meet the requirements of the Variable Contracts
issued by the Company, as determined by the Company, and upon prompt
notice by the Company to the other parties; or
(g) at the option of the Company in the event any of the shares of the
Portfolio are not registered, issued or sold in accordance with
applicable state and/or
14
federal law, or such law precludes the use of such shares as the
underlying investment media of the Variable Contracts issued or to be
issued by the Company; or
(h) at the option of the Company, if the Portfolio fails to qualify as
a Regulated Investment Company under Subchapter M of the Code; or
(i) at the option of the Distributor if it shall determine in its sole
judgment exercised in good faith, that the Company and/or its
affiliated companies has suffered a material adverse change in its
business, operations, financial condition or prospects since the date
of this Agreement or is the subject of material adverse publicity.
7.2. Notwithstanding any termination of this Agreement, the Trust shall, at the
option of the Company, continue to make available additional shares of any
Portfolio and redeem shares of any Portfolio pursuant to the terms and
conditions of this Agreement for all Contracts in effect on the effective
date of termination of this Agreement.
7.3. The provisions of Article VI and Section 5.3 shall survive the termination
of this Agreement, and the provisions of Article IV and Section 2.9 shall
survive the termination of this Agreement as long as shares of the Trust
are held on behalf of Contract owners in accordance with Section 7.2.
ARTICLE VII.
Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust: The ▇▇▇▇▇ Portfolios
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
If to the Distributor: ▇▇▇▇ ▇▇▇▇▇ & Company, Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
If to the Company: Law Department
MetLife
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15
ARTICLE IX.
Miscellaneous
-------------
9.1. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
9.2. This Agreement may be executed in two or more counterparts, each of which
taken together shall constitute one and the same instrument.
9.3. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
9.4. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York. It shall
also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the Commission
granting exemptive relief therefrom and the conditions of such orders.
Copies of any such orders shall be promptly forwarded by the Trust to the
Company.
9.5. All liabilities of the Trust arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, shall be satisfied solely
out of the assets of the Trust and no Trustee, officer, agent or holder of
shares of beneficial interest of the Trust shall be personally liable for
any such liabilities.
9.6. Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the Commission,
FINRA and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
9.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
9.8. This Agreement shall not be exclusive in any respect.
9.9. Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written approval of the other
party.
9.10. No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by both
parties.
16
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Participation Agreement as of the date and year first above
written.
▇▇▇▇ ▇▇▇▇▇ & Company, Incorporated
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
The ▇▇▇▇▇ Portfolios
By: /s/ ▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Secretary
MetLife Insurance Company USA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
17
SCHEDULE A
----------
The ▇▇▇▇▇ Portfolios:
▇▇▇▇▇ Capital Appreciation Portfolio Class I-2 and Class S
▇▇▇▇▇ Large Cap Growth Portfolio Class I-2 and Class S
▇▇▇▇▇ Mid Cap Growth Portfolio Class I-2 and Class S
▇▇▇▇▇ Small Cap Growth Portfolio Class I-2
▇▇▇▇▇ Balanced Portfolio Class I-2
▇▇▇▇▇ Growth & Income Portfolio Class I-2
▇▇▇▇▇ ▇▇▇▇ Cap Growth Portfolio Class I-2
The Accounts:
MetLife Investors USA Separate Account A
MetLife of CT Separate Account Eleven for Variable Annuities
18
