EX-99 B. 8.(i)
PARTICIPATION AGREEMENT
Among
MET INVESTORS SERIES TRUST,
MET INVESTORS ADVISORY CORP.,
METLIFE INVESTORS DISTRIBUTION COMPANY
and
FIRST METLIFE INVESTORS INSURANCE COMPANY
This AGREEMENT is made and entered into as of the 12th day of
February, 2001, by and among MET INVESTORS SERIES TRUST, a business trust
organized under the laws of the State of Delaware (the "Fund"), FIRST METLIFE
INVESTORS INSURANCE COMPANY (the "Company") on its own behalf and on behalf of
each of its separate accounts set forth on Schedule A hereto, as amended from
time to time (each an "Account"), MET INVESTORS ADVISORY CORP. (the "Adviser")
and METLIFE INVESTORS DISTRIBUTION COMPANY (the "Underwriter").
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 insurance companies ("Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
portfolios of shares, each representing the interest in a particular managed
portfolio of securities and other assets; and
WHEREAS, the Fund has applied for 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 both
affiliated and unaffiliated life insurance companies (hereinafter the "Shared
Funding Exemptive Order"); and
WHEREAS, the Adviser acts as the investment adviser to each portfolio
of the Fund 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 certain variable
life and/or variable annuity contracts under the 1933 Act, if required;
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act, if required;
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WHEREAS, the Underwriter 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 one or more portfolios of
the Fund (the "Portfolios") on behalf of each Account to fund certain variable
life and variable annuity contracts (each, a "Contract") and the Underwriter 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 the Underwriter agree as follows:
1. Sale of Fund Shares.
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1.1 Subject to the terms of the Distribution Agreement in effect from time
to time between the Fund and the Underwriter, the Underwriter agrees
to sell to the Company those shares of each Portfolio 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
Portfolios. The Company shall use commercially reasonable efforts to
communicate notice of orders for the purchase of Shares of each
Portfolio 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 Trustees of the
Fund (hereinafter the "Board" or the "Trustees") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio, if such action is required by law
or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, in the
best interests of the shareholders of such Portfolio.
1.3 The Fund and the Underwriter 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 Portfolio will be in accordance with the provisions of
the then current prospectus and statement of additional information of
the Fund for the respective Portfolio and in accordance with any
procedures that the Fund, the Underwriter or the Fund's transfer agent
may have established governing purchases and redemptions of shares of
the Portfolio 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
Portfolio. The Company hereby elects to receive all such income
dividends and capital gain distributions as are payable on the
Portfolio shares in additional shares of that Portfolio. 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 Portfolio
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.
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2.1 The Company represents and warrants that each Contract shall be either
(i) registered, or prior to the purchase of shares of any Portfolio 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 duty 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
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such Account and that each 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
Delaware 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 the Underwriter.
2.3 The Fund represents that each Portfolio is currently qualified or will
elect to qualify 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 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 the Underwriter 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 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.
2.7 The Underwriter 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 ▇▇▇▇ ▇▇▇.
2.8 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Delaware and that it does and will
comply in all material respects with the 1940 Act.
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2.9 Each of the Fund, the Adviser and the Underwriter represent and
warrant that all of their directors, officers and employees 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
in an amount, in the case of the Adviser and the Underwriter, of not
less than $5,000,000 and, in the case of the Fund, not less than 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. Each
aforesaid bond shall include coverage for larceny and embezzlement of
Fund assets 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 or similar coverage in an amount not less than
$5,000,000. The aforesaid Bond shall include coverage for larceny and
embezzlement of Fund assets 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 the Adviser, purchase Fund
shares with Account assets derived from the sale of Contracts to
individuals or entities which would cause the investment policies of
any Portfolio to be subject to any limitations not in the Fund's then
current prospectus or statement of additional information with respect
to any Portfolio.
3. Prospectuses and Proxy Statements; Voting.
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3.1 The Underwriter (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, the
Underwriter (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 The Underwriter (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.
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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 proportion as Fund shares
of such Portfolio 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 with respect to each Account
participating in the Fund, all shares of each Portfolio attributable
to policies and contracts for which no owner instructions have been
received by the Company and all shares of the Portfolio 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 Portfolio 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
Portfolio for which contract owners' voting instructions have been
received. If the Company has not so agreed, the shares of each
Portfolio 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. Such foregoing standards will also be applied to
the other Participating Insurance Companies. The Fund shall pay for
the costs of soliciting and tabulating such voting instructions.
4. Sales Material and Information.
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4.1 The Company shall be solely responsible for sales literature or other
promotional material, in which the Fund, a Portfolio, the Adviser, any
subadviser to any Portfolio, or the Underwriter (in its capacity as
distributor 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
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other promotional material approved by the Fund or its designee or by
the Underwriter, except with the approval of the Fund or the
Underwriter or the designee of either.
4.3 The obligations set forth in Section 4.1 herein shall apply mutatis
mutandis to the Fund and the Underwriter 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 the Underwriter 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.
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, semiannual 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
Portfolio, 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, semiannual 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.
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5. Fees and Expenses.
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5.1 The Fund, the Adviser and the Underwriter shall pay no fee or other
compensation to the Company under this agreement, except that if the
Fund or any Portfolio adopts and implements a plan pursuant to Rule
12b-1 to finance distribution expenses, then the Underwriter may make
payments to the Company or to the underwriter. Each party acknowledges
that the Adviser may pay service or administrative fees to the Company
and other Participating Insurance Companies pursuant to separate
agreements.
6. Diversification.
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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.
7. Potential Conflicts.
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7.1 To the extent required by the Shared Funding Exemptive Order or by
applicable law, the Board of Trustees of the Fund (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 Portfolio 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 Shared Funding 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.
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7.3 If it is determined by a majority of the Board, or a majority of its
disinterested trustees, 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 Portfolio and reinvesting such
assets in a different investment medium, including (but not limited
to) another Portfolio 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 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
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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 Shared Funding
Exemptive Order) on terms and conditions materially different from
those contained in the Shared Funding 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.
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8.1 Indemnification by the Company
(a) The Company agrees to indemnify and hold harmless the Fund and each of
its Trustees 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
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
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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.
(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.
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(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 the Adviser and the Underwriter
(a) The Adviser and the Underwriter agree 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 the
Adviser and the Underwriter) 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 or omission was made in reliance upon and in
conformity with information furnished to the Adviser, the Underwriter,
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 the Adviser,
the Underwriter or the Fund or persons under their control) or
wrongful conduct of the Adviser, the Underwriter 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 the Adviser,
the Underwriter, or the Fund; or (iv) arise as a result of any failure
by the Adviser, the Underwriter 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
12
breach of any representation and/or warranty made by the Adviser, the
Underwriter, or the Fund in this Agreement or arise out of or result
from any other material breach of this Agreement by the Adviser, the
Underwriter, or the Fund; as limited by and in accordance with the
provisions of Sections 8.2(b) and 8.2(c) hereof.
(b) Neither the Adviser nor the Underwriter shall 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.
(e) Each Indemnified Party shall notify each of the Adviser, the
Underwriter, 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 the Adviser, the Underwriter, and the
Fund of any such claim shall not relieve the Adviser or the
Underwriter from any liability which it may have to the Indemnified
Party against whom such action is brought under this indemnification
provision unless the Adviser or the Underwriter'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 Adviser or the Underwriter 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 Adviser and the Underwriter will be entitled to participate, at
their own expense, in the defense thereof. The Adviser and/or the
Underwriter shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice
from the Adviser and/or the Underwriter to such party of the election
of the Adviser and/or the Underwriter to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Adviser and/or 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. An Indemnified Party shall not
settle any claim involving any remedy other than monetary damages
without the prior written consent of the Adviser and/or the
Underwriter.
(d) The Company agrees promptly to notify the Adviser, the Underwriter
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.
13
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
Delaware.
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 Shared
Funding 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
Portfolio 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 Portfolios 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, 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, the
Adviser or the Underwriter 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, the Adviser or the Underwriter 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 Portfolio thereof) for the shares of
14
any Portfolio in accordance with the terms of the Contracts for which
shares of that Portfolio 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
Portfolio 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 Portfolio 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 Portfolio 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, the Adviser or the Underwriter, if (1)
the Fund, the Adviser or the Underwriter, 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, the Adviser or the Underwriter, as the case
may be, (2) the Fund, the Adviser or the Underwriter 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, the Adviser or the
Underwriter 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, the Adviser or the Underwriter 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 upon
the business and operations of the Company, (2) the Company shall
notify the Fund, the Adviser and the Underwriter in writing of such
determination and its intent to terminate the Agreement, and (3) alter
considering the actions taken by the Fund, the Adviser and/or the
Underwriter 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
15
(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 Portfolio 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 VII, 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 the Underwriter shall, at the option of the
Company, continue to make available additional shares of each
Portfolio 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.
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 the Adviser:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. Forget, President
16
if to the Company:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Underwriter:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
12. Miscellaneous.
-------------
12.1 A copy of the Agreement and Declaration of Trust establishing the Met
Investors Series Trust is on file with the Secretary of the State of
Delaware, 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 trustees, officers or
shareholders of the Fund individually but are binding only upon the
assets and property belonging to the Portfolio.
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.
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.
17
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.
12.8 At the request of any party to this Agreement and no less than
annually, each other party will make available to the requesting
party's Board, independent auditors and/or representatives of the
appropriate regulatory agencies, all records, reports, materials,
data, and access to operating procedures that may be reasonably
requested in connection with compliance and regulatory requirements
related to this Agreement or any party's obligations under this
Agreement.
18
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 first
set forth above.
FIRST METLIFE INVESTORS INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board
MET INVESTORS SERIES TRUST
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇. Forget
------------------------
▇▇▇▇▇▇▇▇▇ ▇. Forget
President
MET INVESTORS ADVISORY CORP.
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇. Forget
------------------------
▇▇▇▇▇▇▇▇▇ ▇. Forget
President
METLIFE INVESTORS DISTRIBUTION COMPANY
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Co-Chief Executive Officer
19
PARTICIPATION AGREEMENT
Among
MET INVESTORS SERIES TRUST,
MET INVESTORS ADVISORY CORP.,
METLIFE INVESTORS DISTRIBUTION COMPANY
and
FIRST METLIFE INVESTORS INSURANCE COMPANY
SCHEDULE A
ACCOUNTS AND ASSOCIATED VARIABLE INSURANCE CONTRACTS
Name of Account MetLife Insurance Contracts Funded By Account
--------------- ---------------------------------------------
First MetLife Investors Variable Series
Account One First Cova VA
672
First Cova Custom Select VA
672
Currently Offered - New Sales Will Cease 5/1/01
First ▇▇▇▇ ▇▇▇▇▇▇▇ VA
672
Plus any additional products that, in the
future, are funded through Variable
Account One.
20