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Exhibit 14(v)
PARTICIPATION AGREEMENT
Among
METROPOLITAN SERIES FUND, INC.,
METROPOLITAN LIFE INSURANCE COMPANY
and
NEW ENGLAND LIFE INSURANCE COMPANY
AGREEMENT, made and entered into as of the 1st day of May, 2000 by and
among METROPOLITAN SERIES FUND, INC., a corporation organized under the laws of
the State of Maryland ( the "Fund"), NEW ENGLAND LIFE INSURANCE COMPANY (the
"Company") on its own behalf and on behalf of New England Variable Life Separate
Account, New England Variable Annuity Separate Account, Variable Life Separate
Account P of New England Life Insurance Company, certain separate accounts of
the Company established for the pooling of contributions under certain
tax-qualified group annuity contracts, and any other current or future separate
account which invests in the Fund (each an "Account"), each a separate account
of the Company and METROPOLITAN LIFE INSURANCE COMPANY ("MetLife"), the
investment adviser and principal underwriter of the Fund.
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and its shares are registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, the Fund serves as an investment vehicle underlying variable life
insurance policies and variable annuity contracts (collectively, "Variable
Insurance Products") offered by MetLife and its affiliates ("Participating
Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several series
of shares, each representing the interest in a particular managed portfolio of
securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from certain
provisions of the 1940 Act and certain rules and regulations thereunder, to the
extent necessary to permit shares of the Fund to be sold to and held by both
variable annuity and variable life insurance separate accounts of affiliated
life insurance companies (hereinafter the "Exemptive Order"); and
WHEREAS, MetLife acts as the investment adviser to all of the Series and is
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended; and
WHEREAS, the Company has registered or will register interests in the
Accounts which fund certain variable life and/or variable annuity contracts
under the 1933 Act, if required; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act, if required; and
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WHEREAS, MetLife is registered as a broker dealer with 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"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of certain series of the
Fund ("Series") on behalf of each Account to fund certain variable life and
variable annuity contracts (each, a "Contract") and MetLife is authorized to
sell such shares to each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and MetLife agree as follows:
1. SALE OF FUND SHARES.
1.1 Subject to the terms of the Distribution Agreement in effect from time to
time between the Fund and MetLife, MetLife agrees to sell to the Company
those shares of each Series which each Account orders, executing such
orders on a daily basis at the net asset value next computed after receipt
by the Fund or its designee of the order for the shares of the Fund. For
purposes of this Section 1.1, the Company is the Fund's designee. "Business
Day" shall mean any day on which the New York Stock Exchange is open for
trading and on which the Fund calculates the net asset value of shares of
the Series. The Company shall use commercially reasonable efforts to
communicate notice of orders for the purchase of shares of each Series to
the Fund's custodian by 10:00 a.m. Eastern time on the following business
day (the "Next Business Day"), and the Company and the Fund shall each use
commercially reasonable efforts to wire (or cause to be wired) funds to the
other, for the purpose of settling net purchase orders or orders of
redemption, by 3:00 p.m. of the Next Business Day.
1.2 The Fund agrees to make its shares available for purchase at the applicable
net asset value per share by the Company and its Accounts on those days on
which the Fund calculates its net asset value. The Fund agrees to use
reasonable efforts to calculate such net asset value on each day which the
New York Stock Exchange is open for trading. Notwithstanding the foregoing,
the Board of Directors of the Fund (hereinafter the "Board" or the
"Directors") may refuse to sell shares of any Series to any person, or
suspend or terminate the offering of shares of any Series, if such action
is required by law or by regulatory authorities having jurisdiction or is,
in the sole discretion of the Directors acting in good faith and in light
of their fiduciary duties under federal and any applicable state laws, in
the best interests of the shareholders of such Series.
1.3 The Fund and MetLife agree that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts, or to other
purchasers of the kind specified in Treas. Reg. Section 1.817-5 (f)(3) (or
any successor regulation) as from time to time in effect.
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1.4 The Fund agrees to redeem, on the Company's request, any full or fractional
shares of the Fund held by the Company, executing such requests on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the request for redemption.
1.5 The Company agrees that all purchases and redemptions by it of the shares
of each Series will be in accordance with the provisions of the then
current prospectus and statement of additional information of the Fund for
the respective Series and in accordance with any procedures that the Fund,
MetLife or the Fund's transfer agent may have established governing
purchases and redemptions of shares of the Series generally.
1.6 The Company shall pay for Fund shares on the next Business Day after an
order to purchase Fund shares is made in accordance with the provisions of
Section 1.1. hereof. Payment shall be in federal funds transmitted by wire
to the Fund's custodian.
1.7 Issuance and transfer of the Funds' shares will be by book entry only.
Share certificates will not be issued. Shares ordered from the Fund will be
recorded on the transfer records of the Fund in an appropriate title for
each Account or the appropriate subaccount of each Account.
1.8 The Fund shall furnish same day notice (by e-mail, fax or telephone,
followed by written confirmation) to the Company of any income, dividends
or capital gain distributions payable on the shares of any Series. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Series shares in additional shares of
that Series. The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash.
The Fund shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.9 The Fund shall make the net asset value per share for each Series available
to the Company on a daily basis as soon as reasonably practical after the
net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 7:00 p.m. Eastern time.
The Fund shall furnish the Company's daily share balance to the Company as
soon as reasonably practicable.
2. REPRESENTATIONS AND WARRANTIES.
2.1 The Company represents and warrants that each Contract shall be either (i)
registered, or prior to the purchase of shares of any Series in connection
with the funding of such Contract, will be registered under the 1933 Act or
(ii) exempt from such registration; that the Contracts will be issued and
sold in compliance in all material respects with all applicable federal and
state laws, including all applicable customer suitability requirements. The
Company further represents and warrants that it is an insurance company
duly organized and in good standing under applicable law and that it has
legally and validly established each Account as a separate account pursuant
to relevant state insurance law prior to any issuance or sale of any
Contract by such Account and that each
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Account shall be either (i) 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; or (ii) exempt from such
registration.
2.2 The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Maryland and
all applicable federal and state securities laws and that the Fund is and
shall remain registered under the 1940 Act. The Fund agrees that it will
amend the registration statement for its shares under the 1933 Act and the
1940 Act from time to time as required in order to permit the continuous
public offering of its shares in accordance with the 1933 Act. 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 or MetLife.
2.3 The Fund represents that each Series is currently qualified as a "regulated
investment company" under subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and agrees that it will make every effort to
maintain such qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company promptly upon having a
reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.
2.4 Subject to Section 6.1, the Company represents that the Contracts are
currently treated as modified endowment, annuity or life insurance
contracts under applicable provisions of the Code and agrees that it will
make every effort to maintain such treatment and that it will notify the
Fund and MetLife immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be
so treated in the future.
2.5 The Fund makes no representation as to whether any aspect of its operations
(including, but not limited to, fees and expenses and investment policies)
complies with the insurance laws or regulations of the various states.
2.6 MetLife represents and warrants that it is a member in good standing of the
NASD and is registered as a broker-dealer with the SEC.
2.7 MetLife further represents that it will sell and distribute the Fund shares
in accordance with all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act and the 1940 Act.
2.8 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Maryland and that it does and will comply in
all material respects with the 1940 Act.
2.9 Each of the Fund and MetLife represent and warrant that all of their
directors, officers and employees dealing with the money and/or securities
of the Fund are and shall
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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 $5,000,000
or, if applicable, the minimal coverage as required by Rule 17g-1 under the
1940 Act or any successor regulations 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.
2.10 The Company represents and warrants that all of its directors, officers,
employees and other individuals/entities dealing with the money and/or
securities representing amounts intended for the purchase of shares of the
Fund or proceeds of the redemption of shares of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond in an amount
not less than $5,000,000. The aforesaid Bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company.
2.11 The Company represents and warrants that it will not, without the prior
written consent of the Fund and MetLife, purchase Fund shares with Account
assets derived from the sale of Contracts to individuals or entities which
would cause the investment policies of any Series to be subject to any
limitations not in the Fund's then current prospectus or statement of
additional information with respect to any Series.
3. PROSPECTUSES AND PROXY STATEMENTS; VOTING.
3.1 MetLife (or the Fund) shall provide the Company with as many copies of the
Fund's current prospectus as the Company may reasonably request (at the
Company's expense with respect to other than existing Contract owners). If
requested by the Company in lieu thereof, MetLife (or the Fund) shall
provide such documentation (including a final copy of the new prospectus as
set in type at the Fund'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 to be at the Company's expense with respect to other than existing
Contract owners).
3.2 MetLife (or the Fund), at its expense, shall print and provide the Fund's
then current statement of additional information free of charge to the
Company and to any owner of a Contract or prospective owner who requests
such statement.
3.3 The Fund, at its 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
distribution (at the Fund's expense) to Contract owners.
3.4 So long as and to the extent that the SEC or its staff continues to
interpret the 1940 Act to require pass-through voting privileges for
variable contract owners, or if and to the extent required by law, the
Company shall: (i) solicit voting instructions from Contract owners; (ii)
vote the Fund shares in accordance with instructions received from Contract
owners; and (iii) vote Fund shares for which no instructions have been
received in the same
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proportion as Fund shares of such Series for which instructions have been
received. The Company reserves the right to vote Fund shares held in any
Account in its own right, to the extent permitted by law. The Company shall
be responsible for assuring that each Account participating in the Fund
calculates voting privileges in a manner consistent with the standards set
forth on Schedule A hereto, which standards will also be provided to the
other Participating Insurance Companies.
4. SALES MATERIAL AND INFORMATION.
4.1 The Company shall be solely responsible for sales literature or other
promotional material, in which the Fund, a Series, any subadviser to any
Series or MetLife (in its capacity as distributor or adviser of the Fund)
is named, the substance of which is contained in the then current
prospectus or statement of additional information of the Fund. Other sales
literature or other promotional material may also be used by the Company if
such sales literature or other promotional material (or the substance
thereof) has been previously approved by the Fund or its designee. All
other sales literature or other promotional material shall not be used by
the Company until it has been approved by the Fund or its designee. The
Company shall deliver such draft sales literature or other promotional
material to the Fund or its designee, at least thirty Business days prior
to its use. The Fund or such designee shall use commercially reasonable
efforts to review sales literature so delivered within ten days.
4.2 The Company shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement, prospectus or statement of
additional information for the Fund shares, as such registration statement
and prospectus or statement of additional information 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 MetLife, except with the approval of the Fund or
MetLife or the designee of either.
4.3 The obligations set forth in Section 4.1 herein shall apply MUTATIS
MUTANDIS to the Fund and MetLife with respect to each piece of sales
literature or other promotional material in which the Company and/or any
Account is named.
4.4 The Fund and MetLife shall not give any information or make any
representations on behalf of the Company or concerning the Company, any
Account or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as
such registration statement and prospectus may be amended or supplemented
from time to time, or in published reports for each 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.
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4.5 The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional
information, shareholder annual, semi-annual or other reports, proxy
statements, applications for exemptions, requests for no-action letters and
any amendments to any of the above, that relate to any Series, promptly
after the filing of each such document with the SEC or any other regulatory
authority.
4.6 The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, statements of additional
information, shareholder annual, semi-annual or other reports,
solicitations for voting instructions, applications for exemptions,
requests for no-action letters and any amendments to any of the above, that
relate to the Contracts or any Account, promptly after the filing of such
document with the SEC or any other regulatory authority. Each party hereto
will provide to each other party, to the extent it is relevant to the
Contracts or the Fund, a copy of any comment letter received from the staff
of the SEC or the NASD, and the Company's response thereto, following any
examination or inspection by the staff of the SEC or the NASD.
4.7 As used herein, the phrase "sales literature or other promotional material"
includes, but is not limited to, 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,
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees.
5. FEES AND EXPENSES.
5.1 The Fund and MetLife shall pay no fee or other compensation to the Company
under this Agreement, except that if the Fund or any Series adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses,
then MetLife may make payments to the Company or to the underwriter. Each
party acknowledges that MetLife may pay service or administrative fees to
the Company and other Participating Insurance Companies pursuant to
separate agreements.
6. DIVERSIFICATION.
6.1 The Fund will at all times invest money from the Contracts in such a manner
as to ensure that the Contracts will be treated as variable contracts under
the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of
the Code and any Treasury Regulations thereunder relating to the
diversification requirements for variable annuity, endowment or life
insurance contracts, as from time to time in effect.
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7. POTENTIAL CONFLICTS.
7.1 To the extent required by the Exemptive Order or by applicable law, the
Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material
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 Series are being
managed; (e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract owners; or (f) a decision by
an insurer to disregard the voting instructions of contract owners. The
Fund shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2 The Company will report to the Board any potential or existing conflicts
between the interests of contract owners of different separate accounts of
which the Company is or becomes aware. The Company will assist the Board in
carrying out its responsibilities under the Exemptive Order and under
applicable law, by providing the Board with all information reasonably
necessary for the Board to consider any issues raised. This includes, but
is not limited to, an obligation of the Company to inform the Board
whenever contract owner voting instructions are disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested directors, that a material irreconcilable conflict exists,
the Company and other Participating Insurance Companies shall, at their
expense take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (1)
withdrawing the assets allocable to some or all of the separate accounts
from the Fund or any Series and reinvesting such assets in a different
investment medium, including (but not limited to) another series of the
Fund, or submitting the question of whether such segregation should be
implemented to a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract
owners, life insurance contract owners, or variable contract owners of one
or more 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 (2) establishing a new registered management
investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision by the
Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the relevant
Account's investment in the Fund and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the
extent required by such material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination will take
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place within six (6) months after the Fund gives written notice that this
provision is being implemented.
7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's 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 Fund and terminate this Agreement
within six months after the Board informs the Company in writing that it
has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by such material irreconcilable conflict as
determined by a majority of the disinterested members of the Board.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of
the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a
new funding medium for the Contracts if an offer to do so has been declined
by vote of a majority of Contract owners materially adversely affected by
the irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six
(6) months after the Board informs 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 members of the
Board.
7.7 If and to the extent that Rule 6e-2 and Rule 6e-3(T) under the 1940 Act are
amended, or Rule 6e-3 is adopted, to provide exemptive relief from any
provision of the Act or the rules promulgated thereunder with respect to
mixed or shared funding (as defined in the Exemptive Order) on terms and
conditions materially different from those contained in the Exemptive
Order, then (a) the Fund and/or Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rules
6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 3.4, 7.1, 7.2, 7.3, 7.4, and 7.5 of
this Agreement shall continue in effect only to the extent that terms and
conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
8. INDEMNIFICATION.
8.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund and each of
its Directors and officers and each person, if any, who controls the Fund
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts
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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, regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and: (i) arise out of or
are based upon any untrue statements or alleged untrue statements of any
material fact contained in the registration statement or prospectus or
statement of additional information (if applicable) for the Contracts or
contained in the Contracts or sales literature or other promotional
material 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 or such alleged 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 or
prospectus or statement of additional information (if applicable) for the
Contracts or in the Contracts or sales literature or other promotional
material (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or (ii) arise out
of or as a result of statements or representations (other than statements
or representations contained in the registration statement, prospectus or
statement of additional information (if applicable) or sales literature or
other promotional material of the Fund not supplied by the Company, or
persons under its control) or wrongful conduct of the Company or persons
under its control, with respect to the sale or distribution of the
Contracts or Fund Shares; or (iii) arise out of any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement, prospectus or statement of additional information (if
applicable) or sales literature or other promotional material of the Fund
or any amendment thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such a statement
or omission was made in reliance upon information furnished to the Fund by
or on behalf of the Company; or (iv) arise as a result of any failure by
the Company to provide the services and furnish the materials under the
terms of this Agreement; or (v) arise out of or result from any material
breach of any representation and/or warranty made by 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 Section 8.1(b) and 8.1(c) hereof.
(b) The Company shall not be liable under this Section 8.1 with respect to
any losses, claims, damages, liabilities or litigation to which an
Indemnified Party would otherwise be subject if such loss, claim, damage,
liability or litigation is caused by or arises out of such Indemnified
Party's willful misfeasance, bad faith or gross negligence or by reason of
such Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Fund, whichever is applicable.
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(c) Each Indemnified Party shall notify the Company of any claim made
against an Indemnified Party 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 under this
indemnification provision unless the Company's ability to defend against
the claim shall have been materially prejudiced by the Indemnified Party's
failure to give such notice and shall not in any way relieve the Company
from any liability which it may have to the Indemnified Party against whom
the action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against one or more
Indemnified Parties, 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 each
Indemnified 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. An Indemnified Party shall not
settle any claim involving a remedy other than monetary damages without the
prior written consent of the Company.
(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.
8.2 Indemnification by MetLife
(a) MetLife 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 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of MetLife) or litigation (including legal and
other expenses) to which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the
Fund's shares or the Contracts and: (i) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in the registration statement, prospectus or statement of additional
information, or sales literature or other promotional material 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
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or omission was made in reliance upon and in conformity with information
furnished to MetLife or Fund by or on behalf of the Company for use in the
registration statement, prospectus or statement of additional information
for the Fund or in sales literature or other promotional material (or any
amendment or supplement) or otherwise for use in connection with the sale
of the Contracts or Fund shares; or (ii) arise out of or as a result of
statements or representations (other than statements or representations
contained in the registration statement, prospectus or statement of
additional information or sales literature or other promotional material
for the Contracts not supplied by MetLife or the Fund or persons under
their control) or wrongful conduct of MetLife or the Fund 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 any registration statement,
prospectus or statement of additional information or sales literature or
other promotional material 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
statements therein not misleading, if such statement or omission was made
in reliance upon information furnished to the Company by or on behalf of
MetLife or the Fund; or (iv) arise as a result of any failure by MetLife or
the Fund 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 diversification requirements
specified in Article VI of this Agreement); or (v) arise out of or result
from any material breach of any representation and/or warranty made by
MetLife or the Fund in this Agreement or arise out of or result from any
other material breach of this Agreement by MetLife or the Fund; as limited
by and in accordance with the provisions of Sections 8.2(b) and 8.2(c)
hereof.
(b) MetLife shall not be liable under this Section 8.2 with respect to any
losses, claims, damages, liabilities or litigation to which an Indemnified
Party would otherwise be subject if such loss, claim, damage, liability or
litigation is caused by or arises out of such Indemnified Party's willful
misfeasance, bad faith or gross negligence or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement
or to the Company or each Account, whichever is applicable.
(c) Each Indemnified Party shall notify each of MetLife and the Fund of any
claim made against the Indemnified Party 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 each of MetLife and the Fund of
any such claim shall not relieve MetLife from any liability which it may
have to the Indemnified Party against whom such action is brought under
this indemnification provision unless MetLife's ability to defend against
the claim shall have been materially prejudiced by the Indemnified Party's
failure to give such notice and shall not in any way relieve MetLife from
any liability which it may have to the Indemnified Party against whom the
action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against one or more
Indemnified Parties, MetLife will
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be entitled to participate, at their own expense, in the defense thereof.
MetLife shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from MetLife to
such party of the election of MetLife to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional
counsel retained by it, and MetLife 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. An Indemnified Party shall not settle
any claim involving any remedy other than monetary damages without the
prior written consent of MetLife.
(d) The Company agrees promptly to notify MetLife and the Fund 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 each Account.
9. APPLICABLE LAW.
9.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York.
9.2 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 (including, but not limited to, the Exemptive Order) and the terms
hereof shall be interpreted and construed in accordance therewith.
10. TERMINATION.
10.1 This Agreement shall terminate:
(a) at the option of any party upon 180 days' advance written notice to the
other parties; provided, however, that such notice shall not be given
earlier than one year following the date of this Agreement; or
(b) at the option of the Company to the extent that shares of a Series are
not reasonably available to meet the requirements of the Contracts as
determined by the Company, provided however, that such termination shall
apply only to those Series the shares of which are not reasonably
available. Prompt notice of the election to terminate for such cause shall
be furnished by the Company; or
(c) at the option of the Fund in the event that formal administrative
proceedings are instituted against the Company by the NASD, the SEC, any
state insurance department or commissioner or similar insurance regulator
or any other regulatory body regarding the Company's duties under this
Agreement or related to the sale of the Contracts, with respect to the
operation of any Account or the purchase by any Account of Fund shares,
provided, however, that the Fund determines in its sole judgment, exercised
in good faith,
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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
(d) at the option of the Company in the event that formal administrative
proceedings are instituted against the Fund or MetLife by the NASD, the SEC
or any state securities or insurance department or commissioner 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 MetLife to perform its obligations under this Agreement; or
(e) with respect to any Account, upon requisite authority (by vote of the
Contract owners having an interest in such Account or any subaccount
thereof, or otherwise) to substitute the shares of another investment
company (or separate series thereof) for the shares of any Series in
accordance with the terms of the Contracts for which shares of that Series
had been selected to serve as the underlying investment medium. The Company
will give 90 days' prior written notice to the Fund of the date of any
proposed vote to replace the Fund's shares or of the filing by the Company
with the SEC of any application relating to any such substitution; or
(f) at the option of the Company, in the event any shares of any Series 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 medium of the Contracts issued or to be issued by the Company;
or
(g) at the option of the Company, if any Series ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code or under any
successor or similar provision, or if the Company reasonably believes that
any Series may fail to so qualify; or
(h) at the option of the Company, if the Fund fails to meet the
diversification requirements specified in Section 6 hereof; or
(i) at the option of the Fund or MetLife, if (1) the Fund or MetLife, as
the case may be, shall determine, in its sole judgment reasonably exercised
in good faith, that the Company has suffered a material adverse change in
its business or financial condition or is the subject of material adverse
publicity and such material adverse change or material adverse publicity
will have a material adverse impact on the business and operations of the
Fund or MetLife, as the case may be, (2) the Fund or MetLife shall notify
the Company in writing of such determination and its intent to terminate
this Agreement, and (3) after considering the actions taken by the Company
and any other changes in circumstances since the giving of such notice,
such determination of the Fund or MetLife shall continue to apply on the
sixtieth (60th) day following the giving of such notice, which sixtieth day
shall be the effective date of termination; or
(j) at the option of the Company, if (1) the Company shall determine, in
its sole judgment reasonably exercised in good faith, that the Fund or
MetLife has suffered a
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<PAGE> 15
material adverse change in its business or financial condition or is the
subject of material adverse publicity and such material adverse change or
material adverse publicity will have a material adverse impact upon the
business and operations of the Company, (2) the Company shall notify the
Fund and MetLife in writing of such determination and its intent to
terminate the Agreement, and (3) after considering the actions taken by the
Fund and/or MetLife and any other changes in circumstances since the giving
of such notice, such determination shall continue to apply on the sixtieth
(60th) day following the giving of such notice, which sixtieth day shall be
the effective date of termination; or
(k) in the case of an Account not registered under the 1933 Act or 1940
Act, the Company shall give the Fund 90 days' prior written notice if the
Company chooses to cease using any Series as an investment vehicle for such
Account.
It is understood and agreed that the right of any party hereto to terminate this
Agreement pursuant to Section 10.1(a) may be exercised for any reason or for no
reason.
10.2 Notice Requirement. No termination of this Agreement shall be effective
unless and until the party terminating this Agreement gives prior written
notice to all other parties to this Agreement of its intent to terminate
which notice shall set forth the basis for such termination. Furthermore,
in the event that any termination is based upon the provisions of Article
7, or the provision of Section 10.1(a), 10.1(i) or 10.1(j) of this
Agreement, such prior written notice shall be given in advance of the
effective date of termination as required by such provisions; and
10.3 In the event that any termination is based upon the provisions of Section
10.1(c) or 10.1(d) of this Agreement, such prior written notice shall be
given at least ninety (90) days before the effective date of termination.
10.4 Effect of Termination. Notwithstanding any termination of this Agreement,
the Fund and MetLife shall, at the option of the Company, continue to make
available additional shares of each Series pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties
agree that this Section 10.4 shall not apply to any terminations under
Section 10.1(b) or Section 7, and in the case of terminations under Section
7 terminations, the effect of such terminations shall be governed by
Section 7 of this Agreement.
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11. 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 Fund or to MetLife:
One Madison Avenue
New York, New York 10010
Attention: Christopher P. Nicholas, Associate General Counsel
If to the Company:
New England Life Insurance Company
501 Boylston Street
Boston, Massachusetts 02116
Attention: Anne M. Goggin, Senior Vice President
12. MISCELLANEOUS.
12.1 A copy of the Articles of Incorporation establishing the Fund is on file
with the Secretary of the State of Maryland, and notice is hereby given
that this Agreement is executed on behalf of the Fund by officers of the
Fund as officers and not individually and that the obligations of or
arising out of this Agreement are not binding upon any of the directors,
officers or shareholders of the Fund individually but are binding only upon
the assets and property belonging to the Series.
12.2 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 until such time as it may
come into the public domain without the express written consent of the
affected party.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
12.5 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.
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12.6 Each party hereto shall 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.
12.7 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.
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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.
NEW ENGLAND LIFE INSURANCE COMPANY
By: /s/ Anne M. Goggin
-------------------------------
Name: Anne M. Goggin
Title: Senior Vice President
Date: May 1, 2000
METROPOLITAN SERIES FUND, INC.
By: /s/ Christopher P. Nicholas
-------------------------------
Name: Christopher P. Nicholas
Title: President and Chief Operating Officer
Date: May 1, 2000
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Barbara A. Hume
-------------------------------
Name: Barbara Hume
Title: Vice President
Date: May 1, 2000
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PARTICIPATION AGREEMENT
Among
METROPOLITAN SERIES FUND, INC.
METROPOLITAN LIFE INSURANCE COMPANY
and
NEW ENGLAND LIFE INSURANCE COMPANY
SCHEDULE A
With respect to each Account, all shares of each Series attributable to such
policies and contracts for which no owner instructions have been received by the
Company and all shares of the Series attributable to charges assessed by the
Company against such policies and contracts will be voted for, voted against, or
withheld from voting on any proposal in the same proportions as are the shares
for which owner instructions have been received by the Company with respect to
policies or contracts issued by such Account. To the extent the Company has so
agreed with respect to an Account not registered with the SEC under the 1940
Act, all shares of each Series held by the Account will be voted for, voted
against or withheld from voting on any proposal in the same proportions as are
the shares of such Series for which contract owners' voting instructions have
been received. If the Company has not so agreed, the shares of each Series
attributable to such unregistered Account will be voted for, voted against, or
withheld from voting on any proposal in the same proportions as are all other
shares for which the Company has received voting instructions.
19
