Participation Agreement (MFS)
THIS AGREEMENT, dated as of the 11th day of October, 2002, by and among ML Life Insurance
Company of New York (the “Company”), a New York life insurance company, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (hereinafter referred to individually and collectively as the “Account”)
and MFS Fund Distributors, Inc. (the “Underwriter”), a Delaware company.
WHEREAS, the shares of beneficial interests of the Funds listed on Schedule B, attached hereto
(“Funds”), are divided into several series of shares, each designated a “Portfolio” and
representing the interest in a particular managed portfolio of securities and other assets;
WHEREAS, each Fund is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended, (the “1940 Act”) and shares of the Portfolios are
registered under the Securities Act of 1933, as amended (the “1933 Act”);
WHEREAS, Massachusetts Financial Services Company (the “Adviser”), a Delaware company,
which serves as investment adviser to the Fund, is duly registered as an investment adviser
under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Underwriter, which serves as distributor to the Fund, is registered as a
broker-dealer with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and is a member in good standing of the National
Association of Securities Dealers, Inc. (the “NASD”);
WHEREAS, the Account is duly established and maintained as a segregated asset account, duly
established by the Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to variable annuity contracts set forth in Schedule A hereto, as it
may be amended from time to time by mutual written agreement (the “Contracts”);
WHEREAS, each Portfolio issues shares to the general public;
WHEREAS, the Company intends to purchase shares of other open-end management investment
companies that offer shares to the general public to fund the Contracts;
WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Company
intends to purchase shares in the Portfolios (and classes thereof) listed in Schedule B hereto, as
it may be amended from time to time by mutual written agreement (the “Designated Portfolios”) on
behalf of the Account to fund the aforesaid Contracts, and the Underwriter is authorized to sell
such shares in the Designated Portfolios, and classes thereof, to the Account at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund, and the
Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Underwriter agrees to make shares of the Designated Portfolios and classes thereof
listed on Schedule B to this Agreement (the “Shares”) available to the Company for purchase on
behalf of the Account, such purchases to be effected at net asset value in accordance with Section
1.3 of this Agreement. Notwithstanding the foregoing, the Board of Trustees of the Fund (the
“Board”) may suspend or terminate the offering of Shares of any Designated Portfolio or class
thereof, if such action is required by law or by regulatory authorities having jurisdiction or if,
in the sole discretion of the Board acting in good faith and in light of its fiduciary duties under
federal and any applicable state laws, suspension or termination is necessary in the best interests
of the shareholders of such Designated Portfolio.
1.2. The Fund shall redeem, at the Company’s request, any full or fractional Shares held by
the Company on behalf of the Account, such redemptions to be effected at net asset value in
accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Company shall
not redeem Shares attributable to Contract owners except in the circumstances permitted in Section
9.3 of this Agreement, and (ii) the Fund may delay redemption of Shares of any Designated Portfolio
to the extent permitted by the 1940 Act, and any rules, regulations, or orders thereunder.
1.3. Purchase and Redemption Procedures
The Fund hereby appoints the Company as an agent of the Fund for the limited purpose of receiving
purchase and redemption requests on behalf of the Account (but not with respect to any Fund shares
that may be held in the general account of the Company) for the Shares made available hereunder,
based on allocations of amounts to the Account or subaccounts thereof under the Contracts and other
transactions relating to the Contracts or the Account. All transactions in Account shares shall be
executed through the Omnibus Accounts of Company’s affiliate Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx,
Inc. (“Omnibus Accounts”). Any such request (or relevant transactional information therefor)
received by the Company on any day 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 SEC (a “Business Day”) prior to
the time that the Fund ordinarily calculates its net asset value as described from time to time in
the Fund Prospectus (which as of the date of execution of this Agreement is 4:00 p.m. Eastern Time)
shall be executed by the Underwriter at the net asset value determined as of the close of
trading on that same Business Day, provided that the Underwriter receives notice of such request by
9:00 a.m. Eastern Time on the next following Business Day, or in the event of systems issues
necessitating later delivery of such purchase and redemption requests by 11 a.m. Eastern Time on
the next following Business Day. Company and Fund understand that it is the intent of the parties
that Fund receive such purchase and redemption requests from Company on behalf of the Account by
6:30 a.m. Eastern Time on the next following Business Day. Company will provide to the Underwriter
or its designee via the NSCC Fund SERV DCC & S platform (which utilizes the “as of record layout
within Fund/SERV) one or more files detailing the instructions received with respect to each Plan
prior to 4:00 p.m. Eastern Time on the prior Business Day for each of the Funds. If for any reason
Company or its affiliate is unable to transmit the file(s) with respect to any Business Day,
Company or its affiliate will notify the Underwriter or its designee by 11:00 a.m. Eastern Time on
the next following Business Day.
(b) The Company shall pay for Shares on the same day that it notifies the
Fund of a purchase request for such Shares. Payment for Shares shall be made in federal funds
transmitted to the Fund via the NSCC Fund/SERV DCC&S platform to be received by the Fund by 6:30
p.m. Eastern Time on the day the Fund is notified of the purchase request for Shares. Upon receipt
of federal funds transmitted via the NSCC Fund/SERV DCC&S platform, such funds shall cease to be
the responsibility of the Company and shall become the responsibility of the Fund. Notwithstanding
any provision of this Agreement to the contrary, for purchase and redemption instructions with
respect to any Shares, Company and the Fund will settle the purchase and redemption transactions
referred to herein, via the NSCC Fund/SERV platform settlement process on the next Business Day
following the effective trade date. The Fund will provide to Company a daily transmission of
positions and trading activity taking place in the Omnibus Accounts using Company’s affiliate’s
proprietary Inventory Control System (“ICS”)
(c) Payment for Shares redeemed by the Account or the Company shall be made in federal
funds transmitted via the NSCC Fund/SERV DCC&S platform to the Company on the next Business Day
after the Fund is properly notified of the redemption order of such Shares, except that the Fund
reserves the right to redeem Shares in assets other than cash and to delay payment of redemption
proceeds to the extent permitted under Section 22(e) of the 1940 Act and any Rules thereunder, and
in accordance with the procedures and policies of the Fund as described in the then current
prospectus. The Fund shall not bear any responsibility whatsoever for the proper disbursement or
crediting of redemption proceeds by the Company; the Company alone shall be responsible for such
action.
1.4. The Fund shall, subject to availability, use its best efforts to make the closing net
asset value per Share for each Designated Portfolio available to the Company by 6:30 p.m. Eastern
Time each Business Day via the NSCC Profile 1 platform, and in any event, as soon as reasonably
practicable after the closing net asset value per Share for such Designated Portfolio is
calculated, and shall calculate such closing net asset value, including any applicable daily
dividend factor, in accordance with the Fund’s Prospectus. In the event the Fund is unable to make
the 6:30 p.m. deadline stated herein, it shall provide additional time for the Company to place
orders for the purchase and redemption of Shares. Such additional time shall be equal to the
additional time that the Fund takes to make the closing net asset value available to the Company.
Neither the Fund, any Designated Portfolio, the Underwriter, nor any of their affiliates shall be
liable for any information provided to the Company pursuant to this Agreement which information is
based on incorrect information supplied by the Company to the Fund or the Underwriter. Any
material error in the calculation or reporting of the closing net asset value, as determined under
the Fund’s then-current NAV error correction policy (the “NAV Error Correction Policy” attached
hereto as Schedule D) including any applicable daily dividend factor per Share shall be reported
promptly upon discovery to the Company. In such event the Company shall be entitled to an
adjustment to the number of Shares purchased or redeemed to reflect the correct closing net asset
value, including any applicable daily dividend factor per Share to the extent provided under the
NAV Error Correction Policy.
1.5. Notwithstanding anything to the contrary contained in this Agreement, the Fund will make
available for purchase by the Company, on its behalf and on behalf of the Account a class of
shares available at net asset value which are not subject to a contingent deferred sales charge or
redemption fee. In addition, no exchange fees will be applicable to shares of the Funds purchased
by the Company, on its behalf and on behalf of the Account. The Fund shall furnish notice (via the
NSCC Profile II platform to the Company as soon as reasonably practicable of any income dividends
or capital gain distributions payable on any Shares. The form of payment of dividends and capital
gains distributions will be determined in accordance with the Company’s operational procedures in
effect at the time of the payment of such dividend or distribution. At this time the Company, on
its behalf and on behalf of the Account, hereby elects to receive all such dividends and
distributions as are payable on any Shares in the form of additional Shares of that Designated
Portfolio. Company will reinvest the additional Shares of that Designated Fund through a trade
processed via the NSCC platform. The Company reserves the right, on its behalf and on behalf of
the Account, to revoke this election and to receive all such dividends and capital gain
distributions in the form of cash. The parties understand and agree that all transactions of
Account shares contemplated herein shall be executed through the Omnibus Account and that
Company’s affiliate, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Inc. will receive all such dividends
and distributions in the form of cash which Company, in turn, will immediately reinvest in the
form of additional Shares of that Designated Portfolio. The Underwriter shall notify the Company
promptly of the number of Shares so issued as payment of such dividends and distributions.
1.6. Issuance and transfer of Shares shall be by book entry only and executed through the
Omnibus Accounts. Stock certificates will not be issued to the Company or the Account. Purchase and
redemption orders for Fund shares shall be recorded in an appropriate ledger for the Account or the
appropriate subaccount of the Account.
1.7 Fund Information.
(a) The Underwriter will provide (or cause to be provided) to Company the information set
forth in Schedule C hereto. In addition, notwithstanding anything contained in this Agreement to
the contrary, the Underwriter hereby agrees that Company may use such information in
communications prepared for the Contracts, including, but not limited to, application, marketing,
sales and other communications materials. The Underwriter will provide timely notification to
Company of any change to the information described in Part I of Schedule C. In addition, the
Underwriter shall provide notification of any change to the CUSIP number or symbol designation of
a Fund at least ten (10) Business Days prior to the effective date of the change.
(b) Notwithstanding anything to the contrary in this Agreement, upon request, the Underwriter
will provide Company with prospectuses, proxy materials, financial statements, reports and other
materials relating to each Fund in sufficient quantity for each Contract owner invested in the
Fund.
(c) With the exception of (i) listings of product offerings; (ii) materials in the public
domain (e.g., magazine articles and trade publications); and (iii) materials used by on an internal
basis only, Company agrees not to furnish or cause to be furnished to any third parties or to
display publicly or publish any information or materials relating to the Funds, except such
materials and information as may be distributed to Company by Fund or approved for distribution by
Fund upon Company’s request.
1.8. The parties hereto acknowledge that: (1) the arrangement contemplated by this
Agreement is not exclusive; (2) the Fund’s shares may be sold to other investors and the cash
value of the Contracts may be invested in other investment companies; (3) the Funds and Portfolios
are management investment companies generally sold to retail investors and not insurance-dedicated
funds; and (4) the Funds are not diversified or qualified to be sold exclusively to insurance
companies as provided by IRC §817(h).
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are, or prior to issuance will be,
registered under the 1933 Act, or are not registered because they are properly exempt from
registration under the 1933 Act or will be offered exclusively in transactions that are properly
exempt from registration under the 1933 Act. The Company further represents and warrants that the
Contracts will be issued and sold in compliance in all material respects with all applicable
federal securities and state securities and insurance laws and that the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in good standing under
applicable law, that it has legally and validly established the Account prior to any issuance or
sale thereof as a segregated asset account under Arkansas insurance laws, and that it (a) has
registered or, prior to any issuance or sale of the Contracts, will register the Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts, or alternatively (b) has not registered the Account in proper
reliance upon an exclusion from registration under the 1940 Act. The Company shall register and
qualify the Contracts or interests therein as securities in accordance with the laws of the various
states only if and to the extent deemed advisable by the Company.
2.2. The Underwriter represents and warrants that Shares sold pursuant to this Agreement shall
be registered under the 1933 Act, duly authorized for issuance and sold in compliance with
applicable state and federal securities laws and that the Fund is and shall remain registered under
the 0000 Xxx. The Fund shall amend the registration statement for its shares 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 Fund shall register and qualify the shares for sale in accordance with the laws of the
various states only if and to the extent deemed advisable by the Fund, the Adviser, or the
Underwriter.
2.3 To the extent the Underwriter deems feasible, Underwriter agrees to reasonably cooperate
with Company in complying with any applicable state insurance laws or regulations (including the
furnishing of information not otherwise available to the Company which is required by state
insurance law to enable the Company to obtain the authority needed to issue the Contracts in any
applicable state, and including cooperating with the Company in any filings of sales literature for
the Contracts).
2.4. The Underwriter represents that each Fund is lawfully 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.
2.5. The Underwriter represents and warrants that it is a member in good standing of the NASD
and is registered as a broker-dealer with the SEC. The Underwriter further represents that it will
sell and distribute the Fund shares in accordance with any applicable state and federal securities
laws.
2.6. The Underwriter represents and warrants that all of its and the Funds’
trustees/directors, officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not
less than the minimum coverage as required currently by Rule 17g-l of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
ARTICLE
III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many copies of the Fund’s current
prospectus describing the Classes of the Designated Portfolios listed on Schedule B as the Company
may reasonably request. The Fund or the Underwriter shall bear the expense of printing copies of
the current prospectus for the Fund that will be distributed to existing Contract owners, and the
Company shall bear the expense of printing copies of the Contract prospectus that are used in
connection with offering the Contracts issued by the Company. The Underwriter further agrees to
provide the Company, at the Underwriter’s expense, with as many copies of the Fund prospectuses as
the Company may reasonably request for distribution to prospective Contract owners. If requested by
the Company in lieu thereof, the Fund shall provide such documentation (including a final copy of
the new prospectus on diskette at the Fund’s or Underwriter’s expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more frequently if the prospectus
for the Fund is amended) to have the prospectus for the Contracts and the Fund’s prospectus printed
together in one document (such printing of the Fund’s prospectus for existing Contract owners to be
at the Fund’s or Underwriter’s expense). In the event that Company determines to have the
prospectus and/or periodic shareholder reports for the Contracts and the Fund’s prospectus and/or
periodic reports to shareholders printed together in one document the Fund or its designee shall
reimburse the Company for the pro-rata share of the printing costs (excluding any non-printing
costs such as composition and document layout costs) for those pages that contain the Funds’
prospectus or periodic reports to shareholders that the Company may reasonably print for
distribution to existing and prospective Contract owners whose Contracts are funded by Shares of
the Fund.
3.2. The Fund’s prospectus shall state that the current Statement of Additional Information
(“SAI”) for the Fund is available, and the Underwriter (or the Fund), at its expense, shall provide
a reasonable number of copies of such SAI free of charge to the Company for itself and for any
owner of a Contract who requests such SAI.
3.3. The Fund shall provide the Company with information regarding the Fund’s expenses, which
information may include a table of fees and related narrative disclosure for use in any prospectus
or other descriptive document relating to a Contract.
3.4. The Fund, at its or the Underwriter’s expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to shareholders in such
quantity as the Company shall reasonably require for distributing to Contract owners.
3.5. The Company shall:
(i) | solicit voting instructions from Contract owners; | ||
(ii) | vote the Shares in accordance with instructions received from Contract owners; and | ||
(iii) | vote Shares for which no instructions have been received in the same proportion as Shares of such portfolio for which instructions have been received, |
so long as and to the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners or to the extent otherwise required by
law. The Company will vote Shares held in any segregated asset account in the same proportion as
Shares of such portfolio for which voting instructions have been received from Contract owners, to
the extent permitted by law.
ARTICLE IV. Sales Material and Information
4.1. As set forth in Section 1.7 (a) herein, the Company shall furnish, or shall cause to be
furnished, to the Underwriter, sales literature or other promotional material that the Company
develops and in which a Fund (or a Designated Portfolio thereof) or the Underwriter is named or
describes a Fund or the Underwriter other than as set forth in the Fund prospectus or the materials
listed on Part I of Schedule C attached hereto. The parties understand and agree that the
Underwriter has reviewed and approved a description of Fund(s) for use in Contract prospectus and
initial Contract rollout sales materials No other material prepared by the Company shall be used
until approved by the Underwriter or its designee. The Underwriter or its designee will be deemed
to have approved such sales literature or promotional material unless the Fund or its designee
objects or provides comments to the Company within ten (10) Business Days after receipt of such
material. The Underwriter or its designee reserves the right to reasonably object to the continued
use of any such sales literature or other promotional material in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named, and no such material shall be used
if the Fund or its designee so object.
4.2. The Company shall not give any information or make any representations or statements on
behalf of the Fund or concerning the Fund or the Adviser or the Underwriter in connection with the
sale of the Contracts other than the information or representations contained in the registration
statement or prospectus or S AI for the Fund shares, as such registration statement and prospectus
or SAI 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 Underwriter, except with the permission of the Fund or the Underwriter or the designee of
either.
4.3. The Fund and the Underwriter, or their designee, shall furnish, or cause to be furnished,
to the Company, each piece of sales literature or other promotional material that it develops and
in which the Company, and/or its Account, is named. No such material shall be used until approved
by the Company. The Company will be deemed to have approved such sales literature or promotional
material unless the Company objects or provides comments to the Fund, the Underwriter, or their
designee within ten Business Days after receipt of such material. The Company reserves the right to
reasonably object to the continued use of any such sales literature or other promotional material
in which the Company and/or its Account is named, and no such material shall be used if the Company
so objects.
4.4. The Fund and the Underwriter shall not give any information or make any representations
on behalf of the Company or concerning the Company, the Account, or the Contracts other than the
information or representations contained in a registration statement and prospectus (which shall
include an offering memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), or SAI for the Contracts, as such registration statement,
prospectus, or SAI may be amended or supplemented from time to time, or in published reports for
the Account which are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Underwriter will provide to the Company at least one complete copy of all
registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other
promotional materials, and all amendments to any of the above, that relate to the Fund or its
shares, promptly after the filing of such document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all 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 1933 Act), SAIs, reports,
solicitations for voting instructions, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts or the Account, promptly after the
filing of such document(s) with the SEC or other regulatory authorities.
4.7. The Underwriter will provide the Company with as much notice as is reasonably practicable
of any proxy solicitation for any Designated Portfolio, and of any material change in the Fund’s
registration statement, particularly any change resulting in a change to the registration statement
or prospectus for any Account. The Underwriter will work with the Company so as to enable the
Company to solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner.
4.8. For purposes of this Article IV, the phrase “sales literature and other promotional
materials” 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, 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, 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, SAIs, shareholder
reports, proxy materials, and any other communications distributed or made generally available with
regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. All expenses incident to performance by the Underwriter under this Agreement shall be
paid by the Underwriter. The Fund shall bear the expenses for the cost of registration and
qualification of the Fund’s shares, preparation and filing of the Fund’s prospectus and
registration statement, proxy materials and reports, setting the prospectus in type, setting in
type and printing the proxy materials and reports to shareholders (including the costs of printing
a prospectus that constitutes an annual report), the preparation of all statements and notices
required by any federal or state law, and all taxes on the issuance or transfer of the Fund’s
shares.
5.2. The Company shall bear the expenses of distributing the Fund’s prospectus to owners of
Contracts issued by the Company and of distributing the Fund’s proxy materials and reports to such
Contract owners.
ARTICLE VI. Qualification
6.1. The Underwriter represents that the Fund is or will be qualified as a Regulated
Investment Company under Subchapter M of the Code, and that it will seek to maintain such
qualification (under Subchapter M or any successor or similar provisions) and that the Underwriter
will notify the Company immediately upon having a reasonable basis for believing that the Fund has
ceased to so qualify or that it might not so qualify in the future.
ARTICLE VII. Indemnification
7.1. Indemnification By the Company
7.1(a). The Company agrees to indemnify and hold harmless the Fund and the Underwriter and
each of its trustees/directors and officers, and each person, if any, who controls the Fund or the
Underwriter within the meaning of Section 15 of the 1933 Act or who is under common control with
the Underwriter (collectively, the “Indemnified Parties” for purposes of this Section 7.1) against
any and all losses, claims, damages, liabilities (including amounts paid in settlement with the
written consent of the Company) or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements:
(i) arise out of or are based upon any untrue statement or alleged untrue
statements of any material fact contained in the registration statement, prospectus
(which shall include a written description of a Contract that is not registered
under the 1933 Act), or SAI for the Contracts or contained in 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 statements
therein not misleading, provided that this agreement to indemnify shall not apply as
to any Indemnified Party if such statement or omission was made in reliance upon and
in conformity with information furnished to the Company by or on behalf of the Fund
for use in the registration statement, prospectus or SAI for the Contracts 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,
SAI, or sales literature of the Fund not supplied by the Company or persons under
its control) or wrongful conduct of the Company or its agents or persons under the
Company’s authorization or 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, SAI, or sales
literature of the Fund or any amendment thereof or supplement thereto or the
omission or alleged omissionor alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the Company to provide the
services and furnish the materials under the terms of this Agreement (including a
failure, whether unintentional or in good faith or otherwise, to comply with the
qualification requirements specified in Section 6.1 of this Agreement); or
(v) arise out of or result from any material breach of any representation
and/or warranty made by the Company in this Agreement or arise out of or result from
any other material breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and 7.1(c) hereof.
7.1(b). The Company shall not be liable under this indemnification provision with respect to
any losses, claims, damages, liabilities or litigation to which an Indemnified Party would
otherwise be 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 its obligations or duties under this Agreement.
7.1(c). The Company shall not be liable under this indemnification provision with respect to
any claim made against an Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company from any liability
which it may have to the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought against an
Indemnified Party, the Company shall be entitled to participate, at its own expense, in the defense
of such action. The Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Company to such party of the
Company’s election to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the Company of the commencement of any
litigation or proceedings against them in connection with the issuance or sale of the Fund shares
or the Contracts or the operation of the Fund.
7.2. Indemnification by the Underwriter
7.2(a). The Underwriter agrees to indemnify and hold harmless the Company and each of its
directors and officers and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section
7.2) against any and all losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Underwriter) or litigation (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(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 prospectus
or SAI or sales literature of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in conformity with
information furnished to the Underwriter or the Fund by or on
behalf of the Company for use in the registration statement, prospectus or SAI for
the Fund or in 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,
SAI or sales literature for the Contracts not supplied by the Underwriter or persons
under their control) or wrongful conduct of the Fund or the Underwriter 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, prospectus, SAI or sales
literature covering the Contracts, or any amendment thereof or supplement thereto,
or the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund or the Underwriter; or
(iv) arise as a result of any failure by the Underwriter to provide the
services and furnish the materials under the terms of this Agreement (including a
failure of the Fund, whether unintentional or in good faith or otherwise, to comply
with the qualification requirements specified in Section 6.1 of this Agreement); or
(v) arise out of or result from any material breach of any representation and/or
warranty made by the Underwriter in this Agreement or arise out of or result from
any other material breach of this Agreement by the Fund or the Underwriter;
as limited by and in accordance with the provisions of Sections 7.2(b) and 7.2(c) hereof.
7.2(b). The Underwriter shall not be liable under this indemnification provision with respect
to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party’s willful misfeasance, bad faith, or gross
negligence in the performance or such Indemnified Party’s duties or by reason of such Indemnified
Party’s reckless disregard of obligations and duties under this Agreement or to the Company or the
Account, whichever is applicable.
7.2(c). The Underwriter shall not be liable under this indemnification provision with respect
to any claim made against an Indemnified Party unless such Indemnified Party shall have notified
the Underwriter in writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such Indemnified Party
(or after such Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Underwriter of any such claim shall not relieve the Underwriter
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be entitled to assume the
defense thereof. After notice from the Underwriter to such party of the Underwriter’s election to
assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Underwriter will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of investigation.
7.2(d). The Indemnified Party will promptly notify the Underwriter 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 Account.
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof interpreted under and in
accordance with the laws of the State of New York.
8.2. This Agreement shall be subject to the provisions of the 1933, 1934, and 1940 Acts, and
the rules and regulations and rulings thereunder, including such exemptions from those statutes,
rules, and regulations as the SEC may grant and the terms hereof shall be interpreted and construed
in accordance therewith.
ARTICLE IX. Termination
9.1. This Agreement shall continue in full force and effect until the first to occur of:
(a) | termination by any party, for any reason with respect to some or all Designated Portfolios, by three (3) months advance written notice delivered to the other parties; or | ||
(b) | termination by the Company by written notice to the Fund and the Underwriter based upon the Company’s determination that shares of the Fund are not reasonably available to meet the requirements of the Contracts; or | ||
(c) | termination by the Company by written notice to the Fund and the Underwriter in the event any of the Shares are not registered, issued, or sold in accordance with applicable state and/or federal law or such law precludes the use of such Shares as the underlying investment media of the Contracts issued or to be issued by the Company; or | ||
(d) | termination by the Fund or the Underwriter in the event that formal administrative proceedings are instituted against the Company by the |
NASD, the SEC, the Insurance Commissioner, or like official of any state or any other regulatory body regarding the Company’s duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Shares; provided, however, that the Fund or the Underwriter determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Company to perform its obligations under this Agreement; or | |||
(e) | termination by the Company in the event that formal administrative proceedings are instituted against the Fund or the Underwriter by the NASD, the SEC, or any state securities or insurance department, or any other regulatory body; provided, however, that the Company determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of the Fund or the Underwriter to perform its obligations under this Agreement; or | ||
(f) | termination by the Company by written notice to the Fund and the Underwriter with respect to any Designated Portfolio in the event that such Portfolio ceases to qualify as a Regulated Investment Company under Subchapter M as specified in Section 6.1 hereof, or if the Company reasonably believes that such Portfolio may fail to so qualify or comply; or | ||
(g) | termination by the Fund or the Underwriter by written notice to the Company, if the Fund or the Underwriter respectively, shall determine, in their sole judgment exercised in good faith, that the Company 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; or | ||
(h) | termination by the Company by written notice to the Fund and the Underwriter, if the Company shall determine, in its sole judgment exercised in good faith, that the Fund, the Adviser, or the Underwriter 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; or | ||
(i) | termination by the Company upon any substitution of the shares of another investment company or series thereof for Shares in accordance with the terms of the Contracts, provided that the Company has given at least 45 days prior written notice to the Fund and the Underwriter of the date of substitution. |
9.2. Notwithstanding any termination of this Agreement, the Fund and the Underwriter
shall, at the option of the Company, continue to make available additional Shares 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”), unless the
Underwriter requests that the Company seek an order pursuant to Section 26(c) of the 1940 Act to
permit the substitution of other securities for the Shares. The Underwriter agree to split the cost
of seeking such an order, and the Company agrees that it shall reasonably cooperate with the
Underwriter and seek such an order upon request. Specifically, the owners of the Existing Contracts
may be permitted to reallocate investments in the Fund, redeem investments in the Fund, and/or
invest in the Fund upon the making of additional purchase payments under the existing Contracts
(subject to any such election by the Underwriter). The parties agree that this Section 9.2 shall
not apply to any terminations under Section 9.1(i) of this Agreement.
9.3. The Company shall not redeem Shares attributable to the Contracts (as opposed to Shares
attributable to the Company’s assets held in the Account) except (i) as necessary to implement
Contract owner initiated or approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application (hereinafter referred to as
a “Legally Required Redemption”), (iii) upon 45 days prior written notice to the Fund and
Underwriter, as permitted by an order of the SEC pursuant to Section 26(c) of the 1940 Act, but
only if a substitution of other securities for the Shares is consistent with the terms of the
Contracts, or (iv) as permitted under the terms of the Contract. Upon request, the Company will
promptly furnish to the Fund and the Underwriter reasonable assurance that any redemption pursuant
to clause (ii) above is a Legally Required Redemption. Furthermore, except in cases where permitted
under the terms of the Contacts, the Company shall not prevent Contract owners from allocating
payments to a Portfolio that was otherwise available under the Contracts without first giving the
Fund or the Underwriter 45 days notice of its intention to do so.
9.4. Notwithstanding any termination of this Agreement, each party’s obligation under Article
VII to indemnify the other parties shall survive.
ARTICLE X. 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 Company: | Xxxxx X. Xxxxxxxx, Esq. Senior Vice President and General Counsel Xxxxxxx Xxxxx Life Insurance Company 0 Xxxxxx Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 |
||
If to the Underwriter: | MFS Fund Distributors,
Inc. 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000 Attn: President |
||
With copies to: | Massachusetts Financial Services Company 000 Xxxxxxxx Xxxxxx Xxxxxx, XX 00000 Attn: General Counsel |
ARTICLE XI. Miscellaneous
11.1. Subject to the requirements of legal process and regulatory authority, each party hereto
shall treat as confidential the names and addresses of the owners of the Contracts and all
information reasonably identified as confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses
and other confidential information without the express written consent of the affected party until
such time as such information has come into the public domain.
11.2. 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.
11.3. This Agreement may be executed simultaneously in two or more counterparts, each of which
taken together shall constitute one and the same instrument.
11.4. 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.
11.5. To the extent feasible, each party hereto agrees to reasonably cooperate with each other
party and all appropriate governmental authorities (including without limitation the SEC, the NASD,
and state insurance regulators) and shall permit such authorities reasonable access to its books
and records in connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.
11.6. 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.
11.7. This Agreement or any of the rights and obligations hereunder may not be assigned
by any party, except to an affiliate, without the prior written consent of all parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its
name and on its behalf by its duly authorized representative and its seal to be hereunder affixed
hereto as of the date specified below.
ML LIFE INSURANCE COMPANY OF NEW YORK:
By its authorized officer |
||||
By: | /s/ Xxxx X. Xxxxx | |||
Xxxx X. Xxxxx | ||||
Title: Vice President & Secretary | ||||
Date: _________________ | ||||
MFS FUND DISTRIBUTORS, INC.
By its authorized officer |
||||
By: | /s/ Xxxxx X. XxxxXxxxxx | |||
Xxxxx X. XxxxXxxxxx | ||||
Title: President | ||||
Date: _________________ |
Schedule A
SEPARATE ACCOUNTS OF THE COMPANY
Dated: October 15, 2002
Xxxxxxx Xxxxx Life Variable Annuity Separate Account D
MLNY-VA-006
Schedule B
DESIGNATED FUNDS, PORTFOLIOS AND CLASSES
MFS Series Trust I
• | MFS Core Growth Fund | Class A | ||
• | MFS Research International Fund Class A | Class A |
MFS Series Trust IV
• | MFS Mid Cap Growth Fund Class A | Class A |
Dated: October 15, 2002
Schedule C
FUND MATERIALS
Part I. Fund Description
• | The Underwriter will provide to Company or a common service provider designated by Company within ten (10) days of the end of each month, the Fund’s average annual return for the 1, 5, and 10 year periods ending the current month on a Net Asset Value basis. | ||
• | The Underwriter will provide to Company, within ten (10) days of the end of each quarter, a description of the Fund including top holdings, portfolio composition, largest sectors and geographical allocation and a statement of objective in a mutually acceptable format. |
Part II. Fund Information and Materials
The Underwriter will provide to Company the following information and materials on an as needed basis, as requested by Company: |
• | A supply of materials relating to the Funds (prospectuses, quarterly reports and other brochures) to include with contract application sales, marketing and communication materials in quantities mutually agreeable to the Company and the Underwriter. | ||
• | Specific investment performance information that may be requested that cannot be obtained from the prospectus, to the extent consistent with the Fund’s policies relating to disclosure of such information. This would include specific calculations on various performance parameters and will require an aggressive turnaround time (usually 5 business days). |
Schedule D
MFS Fund Distributors, Inc.
NAV Error Correction Policy
NAV Error Correction Policy