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EXHIBIT 1.A.(3)(a)
DISTRIBUTION AGREEMENT
AGREEMENT dated as of January 11, 1993, by and between ML
Life Insurance Company of New York ("ML of New York"), a New York corporation,
on its own behalf and on behalf of the ML of New York Variable Life Separate
Account II (the "Separate Account") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("MLPF&S"), a Delaware corporation.
WITNESSETH:
WHEREAS, the Separate Account is an account established and
maintained by ML of New York pursuant to the laws of the State of New York (the
"Contracts"), under which income, gains and losses, whether or not realized,
from assets allocated to such account, are, in accordance with the Contracts,
credited to or charged against such account without regard to other income,
gains, or losses of ML of New York;
WHEREAS, ML of New York has registered the Separate Account
as a unit investment trust under the Investment Company Act of 1940 (the
"Investment Company Act");
WHEREAS, MLPF&S is registered as a broker-dealer under the
Securities Exchange Act of 1934 (the "Exchange Act") and is a member of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, ML of New York has registered the Contracts under
the Securities Act of 1933 (the "1933 Act") and issues and sells the Contracts
through the Separate Account to the public through MLPF&S acting as its general
agent;
NOW, THEREFORE, ML of New York and MLPF&S hereby agree as
follows:
1. PRINCIPAL UNDERWRITER. ML of New York grants to MLPF&S the
exclusive right, during the term of this Agreement, subject to the
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registration requirements of the 1933 Act and the Investment Company Act and
the provisions of the Exchange Act, to be the distributor and principal
underwriter of Contracts issued through the Separate Account. In that
connection, MLPF&S shall arrange for the offer, sale and distribution of the
Contracts by persons or entities acting as general agents ("GAs") of ML of New
York at premium rates to be set by ML of New York.
2. SALES AGREEMENTS. MLPF&S is hereby authorized to arrange
for persons or entities qualified to act as GAs of ML of New York in various
jurisdictions to enter into separate written agreements, on such terms and
conditions as ML of New York may determine not inconsistent with this
Agreement, with organizations (including Xxxxxxx Xxxxx Life Agencies pursuant
to sales agreements) which agree to act as GAs of ML of New York and to
participate in the distribution of the Contracts and to use their best efforts
to solicit applications for the Contracts. Such organizations and their agents
or representatives soliciting applications for contracts shall be duly and
appropriately licensed, registered or otherwise qualified for the sale of such
Contracts (and the riders and other contracts offered in connection therewith)
under the insurance laws and any applicable blue-sky laws of each state or
other jurisdiction in which such Contracts may be lawfully sold and in which ML
of New York is licensed to sell the Contracts.
MLPF&S shall have the responsibility for supervision of all
such organizations to the extent required by law and shall assume any legal
responsibilities of ML of New York for the acts, commissions or defalcations of
any such organizations.
3. LIFE INSURANCE AGENTS. MLPF&S is authorized to help
arrange for the appointment of the organizations described in paragraph 2 above
as
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independent general agents of ML of New York for the sale of the Contracts and
any riders or contracts in connection therewith. ML of New York will undertake
to apply for life insurance agent licenses in the appropriate states or
jurisdictions for the designated agents or representatives of those GAs so
appointed by MLPF&S; provided that ML of New York reserves the right to refuse
to appoint any proposed agent, or once appointed to terminate the same.
4. SUITABILITY. ML of New York wishes to ensure that
Contracts distributed by MLPF&S will be issued to purchasers for whom the
Contract will be suitable. MLPF&S shall take reasonable steps to ensure that
the various agents which it arranges to be appointed do not make
recommendations to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the Contract is suitable for
such applicant. While not limited to the following, a determination of
suitability shall be based on information furnished to an agent after
reasonable inquiry of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and the likelihood of
whether the applicant will persist with the Contract for such a period of time
that ML of New York's acquisition costs are amortized over a reasonable period
of time.
5. PROMOTION MATERIALS. MIPF&S shall have the responsibility
for consulting with respect to the design, drafting, legal review and filing of
sales promotion materials, and for the preparation of individual sales
proposals related to the sale of the Contracts.
6. RECORDS. MLPF&S shall maintain and preserve for the
periods prescribed such accounts, books, and other documents as are required of
it by applicable laws and regulations.
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7. INDEPENDENT CONTRACTOR. MIPF&S shall act as an independent
contractor and nothing herein contained shall constitute MIPF&S or its agents
or employees as employees of ML of New York in connection with the sale of the
Contracts.
8. INVESTIGATION AND PROCEEDINGS.
(a) MLPF&S and ML of New York agree to cooperate fully in any
insurance regulatory investigation or proceeding or judicial proceeding arising
in connection with the Contracts distributed under this Agreement. MIPF&S and
ML of New York further agree to cooperate fully in any securities regulatory
investigation or proceeding or judicial proceeding with respect to ML of New
York, MIPF&S, their affiliates and their agents or representatives to the
extent that such investigation or proceeding is in connection with Contracts
distributed under this Agreement. Without limiting the foregoing:
(i) MIPF&S will be notified promptly of any customer
complaint or notice of any regulatory investigation or proceeding or
judicial proceeding received by ML of New York with respect to ML of
New York and/or NIPF&S or any agent or representative or which may
affect ML of New York's issuance of any Contract marketed under this
Agreement.
(ii) MLPF&S will promptly notify ML of New York of any
customer complaint or notice of any regulatory investigation or
proceeding received by MIPF&S or its affiliates with respect to NLPF&S
and/or NL of New York or any agent or representative in connection
with any Contract distributed under this Agreement or any activity in
connection with any such Contract.
(b) In the case of a substantive customer complaint, MIPF&S
and NL of New York will cooperate in investigating such complaint and any
response
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to such complaint will be sent to the other party to this Agreement for
approval not less than five business days prior to its being sent to the
customer or regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone or
telegraph.
9. INDEMNIFICATION.
(a) ML of New York agrees to indemnify and hold harmless
MIPF&S and each officer and director thereof against any losses, claims,
damages or liabilities, joint or several, to which MIPF&S or such officer or
director may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact, required to be stated therein or necessary to make the
statements therein not misleading, contained (i) in any Registration Statement
relating to the Contracts or any post-effective amendment thereof or in the
Prospectuses or any amendment or supplement to the Prospectuses relating to the
Contracts, or (ii) in any blue-sky application or other document executed by ML
of New York specifically for the purpose of qualifying any or all of the
Contracts for sale under the securities. laws of any jurisdiction, and NL of
New York will reimburse MLPF&S and each such officer or director, for any legal
or other expenses reasonably incurred by NIPF&S or such officer or director in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided that NL of New York will not be liable in any
such case to the extent that such loss, claim, damage or liability arises out
of, or is based upon, an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in
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conformity with information (including, without limitation, negative responses
to inquiries) furnished to ML of New York by or on behalf of MIPF&S
specifically for use in the preparation of any Registration Statement or any
post-effective amendment thereof or any such blue-sky application or any
amendment thereof or supplement thereto.
(b) MLPF&S agrees to indemnify and hold harmless ML of New
York and its directors (including any person named in the Registration
Statement, with his or her consent, as about to become a director), each of its
officers who has signed any of the Registration Statements and each person, if
any, who controls ML of New York within the meaning of the 1933 Act or the
Exchange Act, against any losses, claims, damages or liabilities to which NL of
New York and any such director or officer or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon:
(i) Any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading, contained (i) in any of the Registration
Statements or any post-effective amendments thereof, or (ii) in any
blue-sky application, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with information (including, without limitation, negative
responses to inquiries) furnished to ML of New York by MLPF&S
specifically for use in
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the preparation of any of the Registration Statements or any such
post-effective amendments thereof or any such blue-sky application or
any such amendment thereof or supplement thereto; or
(ii) Any unauthorized use of sales materials or any verbal or
written misrepresentations or any unlawful sales practices concerning
the Contracts by NLPF&S; or
(iii) Claims by agents or representatives or employees of
MIPF&S for commissions, service fees, development allowances or other
compensation or remuneration of any type;
and MIPF&S will reimburse ML of New York and any director or officer or
controlling person for any legal or other expenses reasonably incurred by ML of
New York, such director or officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which MLPF&S may
otherwise have.
(c) Promptly after receipt by a party entitled to
indemnification ("indemnified party") under this paragraph 9 of notice of the
commencement of any action, if a claim in respect thereof is to be made against
any person obligated to provide indemnification under this paragraph 9
("indemnifying party"), such indemnified party will notify the indemnifying
party in writing of the commencement thereof, and the omission so to notify the
indemnifying party will not relieve it from any liability under this paragraph
9, except to the extent that the omission results in a failure of actual notice
to the indemnifying party and such indemnifying party is damaged solely as a
result of the failure to give such notice. In case any such
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action is brought against any indemnified party and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
the extent it may wish, jointly with any other indemnifying party similarly
notified, to participate in the defense thereof, with separate counsel. Such
participation shall not relieve such indemnifying party of the obligation to
reimburse the indemnified party for reasonable legal and other expenses
incurred by such indemnified party in defending himself or herself, except for
such expenses incurred after the indemnifying party has deposited funds
sufficient to effect the settlement, with prejudice, of the claim in respect of
which indemnity is sought. Any such indemnifying party shall not be liable to
any such indemnified party on account of any settlement of any claim or action
effected without the consent of such indemnifying party.
The indemnity agreements contained in this paragraph 9 shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of MLPF&S or any officer or director thereof
or by or on behalf of ML of New York, (ii) delivery of any Contracts and
payments therefor, and (iii) any termination of this Agreement. A successor by
law of MLPF&S or of any of the parties to this Agreement, as the case may be,
shall be entitled to the benefits of the indemnity agreements contained in this
paragraph 9.
10. GUARANTEE. ML of New York undertakes to guarantee the
performance of all of MIPF&S's obligations, imposed by Section 27(f) of the
Investment Company Act, as amended, and paragraph (b) of Rule 27d-2 adopted by
the Securities and Exchange Commission, to make refunds of charges required of
the principal underwriter of Contracts issued in connection with the Separate
Account.
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11. TERMINATION. This Agreement shall terminate automatically
if it shall be assigned. This Agreement may be terminated at any time by either
party hereto on 60 days' written notice to the other party hereto, without the
payment of any penalty. Upon termination of this Agreement all authorizations,
rights and obligations shall cease except (i) the obligation to settle accounts
hereunder, including commissions on premiums subsequently received for
Contracts in effect at the time of termination; (ii) the agreements contained
in paragraph 8 hereof; and (iii) the indemnity set forth in paragraph 9 hereof.
12. REGULATION. This Agreement shall be subject to the
provisions of the Investment Company Act and the Exchange Act and the rules,
regulations, and rulings thereunder and of the NASD, from time to time in
effect, including such exemptions from the Investment Company Act as the
Securities and Exchange Commission may grant, and the terms hereof shall be
interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall not include any
transaction exempted from section 15(b)(2) of the Investment Company Act.
MLPF&S shall submit to all regulatory and administrative
bodies having jurisdiction over the operations of ML of New York or the
Separate Account, present or future, any information, reports or other material
which any such body by reason of this Agreement may request or require pursuant
to applicable laws or regulations.
13. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
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14. APPLICABLE LAW. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
Attest: ML LIFE INSURANCE COMPANY
OF NEW YORK
/S/ XXXXX X. XXXXX By /S/ XXXX X. CIRINCOIN
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Xxxxx X. Xxxxx Xxxx X. Xxxxxxxxx
Vice President and Senior Counsel
Attest: XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
/S/ XXXXXXXX X. XXXXX By /S/ XXXXXXX X. XXXXXXXXX, XX.
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Xxxxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxxxx, Xx.
First Vice President
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