PARTICIPATION AGREEMENT
Among
SMA LIFE ASSURANCE COMPANY
PIONEER VARIABLE CONTRACTS TRUST
And
PIONEER FUNDS DISTRIBUTOR, INC.
THIS AGREEMENT, made and entered into this 22nd day of December 1994 by and
among SMA LIFE ASSURANCE COMPANY, a Delaware corporation ("Company"), on its own
behalf and on behalf of each separate account of the Company named in Schedule 2
to this Agreement as in effect at the time this Agreement is executed and such
other separate accounts that may be added to Schedule 2 from time to time in
accordance with the provisions of Article XI of this Agreement (each such
account referred to as the "Account" and collectively as "Accounts"), PIONEER
VARIABLE CONTRACTS TRUST, a Delaware business trust ("Fund"), and PIONEER FUNDS
DISTRIBUTOR, INC., a Massachusetts corporation (the "Distributor").
WHEREAS, the Fund is engaged in business as an open-end management investment
company and wishes to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively referred to as "Variable Insurance Contracts" and the owners of
such products being referred to as "Contract Owners") to be offered by insurance
companies which have entered into participation agreements with the Fund
("Participating Insurance Companies"); and
WHEREAS, the shares of the Fund (the "Fund shares") consist of separate classes
or series of shares, each designated a "Portfolio" and each series of shares
("Portfolio shares") representing an interest in a particular managed portfolio
of securities and other assets; and
WHEREAS, the Fund has filed a registration statement (referred to herein as the
"Fund Registration Statement" and the prospectus contained therein, or filed
pursuant to Rule 497 under the 1933 Act, referred to herein as the "Fund
Prospectus") with the Securities and Exchange Commission (the "SEC") on Form
N-1A to register itself as an open-end management investment company (File No.
811-8786) under the Investment Company Act of 1940, as amended (the "1940 Act"),
and the Fund shares (File No. 33-84546) under the Securities Act of 1933, as
amended (the "1933 Act"); and
WHEREAS, the Company has filed or will file a registration statement with the
SEC to register under the 1933 Act certain variable annuity contracts described
in Schedule 1 to this Agreement, as may be amended from time-to-time (the
"Contracts"), each such registration statement for a class or classes of
contracts listed on Schedule 1 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of such contracts,
WHEREAS, each Account is a validly existing separate account duly authorized and
established by resolution of the Board of Directors of the Company on the date
set forth on Schedule 2, and sets aside and invests assets attributable to the
Contracts; and
WHEREAS, the Company has registered or will have registered each Account with
the SEC as a unit investment trust under the 1940 Act before any Contracts are
issued by the Account; and
WHEREAS, the Distributor 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
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WHEREAS, the Distributor and the Fund have entered into a Distribution Agreement
(the "Fund Distribution Agreement") dated December 22, 1994 pursuant to which
the Distributor will distribute Fund shares; and
WHEREAS, Pioneering Management Corporation and Pioneer Winthrop Advisors (the
"Investment Managers") are registered as investment advisers under the 1940 Act
and any applicable state securities laws and serve as investment managers to the
Fund: and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company intends to purchase Portfolio shares on behalf of the Accounts to
fund the Contracts and the Distributor is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the Fund
and the Distributor agree as follows:
ARTICLE I. Transactions in Fund Shares
1.1. The Fund agrees to sell to the Company those shares of the Fund which the
Company orders on behalf of the Accounts, executing such orders on a daily basis
in accordance with Section 1.4 of this Agreement.
1.2. The Fund agrees to make the shares of its Portfolios available for purchase
by the Company on behalf of the Accounts at the then applicable net asset value
per share on Business Days as defined in Section 1.4 of this Agreement, and the
Fund shall use reasonable efforts to calculate such net asset value on each such
Business Day. Notwithstanding any other provision in this Agreement to the
contrary, the Board of Directors of the Fund (the "Board") may suspend or
terminate the offering of Fund shares of any Portfolio, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Board acting in good faith and in light of its fiduciary
duties under Federal and any applicable state laws, suspension or termination is
necessary and in the best interests of the shareholders of any Portfolio.
1.3. The Fund agrees to redeem, upon request, any full or fractional shares of
the Fund held by the Accounts or the Company, executing such requests at net
asset value on a daily basis in accordance with Section 1.4 of this Agreement
and applicable provisions of the 1940 Act. Notwithstanding the foregoing, the
Fund may delay redemption of Fund shares to the extent permitted by the 1940
Act, or any rules, regulations or orders thereunder.
1.4. (a) For purposes of Sections 1.1, 1.2 and 1.3, the Company shall be the
agent of the Fund for the limited purpose of receiving redemption and purchase
requests from the Account (but not from the general accounts of the Company),
and receipt on any Business Day by the Company as such limited agent of the Fund
by the time prescribed in the current Contracts Prospectus (which as of the date
of execution of this Agreement is expected to be 4 p.m.). shall constitute
receipt by the Fund on that same Business Day, provided that the Fund receives
notice of such redemption or purchase request by 11:00 a.m. Eastern Time on the
next following Business Day. For purposes of this Agreement, "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading or
as otherwise provided in the Fund's then currently effective Fund Prospectus.
(b) The Company shall pay for shares of each Portfolio on the same day
that it places an order with the Fund to purchase those Portfolio shares.
Payment for Portfolio shares will be made by the Account or the Company in
Federal funds transmitted to the Fund by wire to be received by 11:00 a.m.
on the day the Fund is notified of the purchase order for Portfolio shares
(unless sufficient
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proceeds are available from redemption of shares of other Portfolios). If
Federal funds are not received on time, such funds will be invested, and
Portfolio shares purchased thereby will be issued, as soon as practicable.
(c) Payment for Portfolio shares redeemed by the Accounts or the Company
will be made in Federal Funds transmitted to the Company by wire on the day the
Fund is notified of the redemption order of Fund shares (unless redemption
proceeds are applied to the purchase of shares of other Portfolios), except that
the Fund reserves the right to delay payment of redemption proceeds, but in no
event may such payment be delayed longer than the period permitted under Section
22(e) of the 1940 Act. The Fund shall bear no responsibility whatsoever for the
disbursement or crediting of redemption proceeds.
1.5. Issuance and transfer of Fund shares will be by book entry only. Stock
certificates will not be issued to the Company or the Accounts. Purchase and
redemption orders for Fund shares will be recorded in an appropriate ledger for
the Account or the appropriate SubAccount of the Account.
1.6. The Fund shall furnish notice as soon as reasonably practicable to the
Company of any income dividends or capital gain distributions payable on Fund
shares. The Company hereby elects to receive all such dividends and
distributions as are payable on any Portfolio shares in the form of additional
shares of that Portfolio. The Company reserves the right to revoke this election
and to receive all such dividends in cash. The Fund shall notify the Company of
the number of Portfolio shares so issued as payment of such dividends and
distributions.
1.7. The Fund shall use its best efforts to make the net asset value per share
for each Portfolio available to the Company by 7 p.m. Eastern Time each Business
Day, and in any event, as soon as reasonably practicable after the net asset
value per share for such series is calculated, and shall calculate such net
asset value in accordance with the then currently effective Fund Prospectus.
Neither the Fund, the Distributor, nor the Investment Managers nor any of their
affiliates shall be liable for any information provided to the Company pursuant
to this Agreement which information is based on incorrect information supplied
by the Company to the Fund, the Distributor or the Investment Managers.
1.8. While this Agreement is in effect, the Company agrees that all amounts
available for investment under the Contracts shall be invested only in the Fund
and/or allocated to the Company's general account, provided that such amounts
may also be invested in an investment other than the Fund if:
(a) such other investment company is advised by the Fund's investment
managers;
(b) the Fund and/or the Distributor, in their sole discretion, consents to
the use of such other investment company;
(c) this Agreement is terminated pursuant to Article X of this Agreement.
The Company also agrees that it will not take any action to operate the Accounts
as management investment companies under the 1940 Act without the Fund's and
Distributor's prior written consent.
1.9. The Fund and the Distributor agree that Fund shares will be sold only to
Participating Insurance Companies, their separate accounts, and to certain
qualified pension plans, as may be permitted by Section 817 of the Internal
Revenue Code of 1986, as amended. The Fund and the Distributor will not sell
Fund shares to any insurance company, separate account, or qualified pension
plan unless an agreement containing provisions substantially the same as Article
VII of this Agreement, as it may be amended from time to time, is in effect to
govern such sales. No Fund shares of any Portfolio will be sold to the general
public.
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ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants:
(a) that the Contracts are registered under the 1933 Act or will be so
registered before the issuance thereof;
(b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws; and
(c) that the Company will require of every person distributing the
Contracts (i) that the Contracts be offered and sold in compliance in all
material respects with all applicable Federal and state laws and (ii) that
at the time it is issued each Contract is a suitable purchase for the
applicant therefor under applicable state insurance laws.
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 authorized each of its Accounts as a separate account under the
insurance law of its state of domicile, and has registered or, prior to the
issuance of any Contracts, will register the Accounts as unit investment trusts
in accordance with the provisions of the 1940 Act to serve as separate accounts
for the Contracts, and that such registration will be maintained for as long as
any Contracts are outstanding.
2.2. The Fund represents and warrants that Fund shares sold pursuant to this
Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is a business trust
duly organized and in good standing under the laws of Delaware.
2.3. The Fund represents that each series currently qualifies and will make
every effort to continue to qualify as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
to maintain such qualification (under Subchapter M or any successor or similar
provision), and that the Fund will notify the Company immediately 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. The Fund represents that each series currently complies with and will make
every effort to continue to comply with Section 817(h) (or any successor or
similar provision) of the Code, and all regulations issued thereunder, and that
the Fund will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.
2.5. The Company represents that the Contracts are currently and at the time of
issuance will be treated as annuity contracts or life insurance policies,
whichever is appropriate, under applicable provisions of the Code. The Company
shall make every effort to maintain such treatment and shall notify the Fund and
the Distributor 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.
2.6. The Fund represents that the Fund's investment policies, fees and expenses
and operations are and shall at all times remain in material compliance with
federal laws and the laws of Delaware and of Massachusetts, to the extent
required to perform this Agreement. The Fund, however, makes no representation
as to whether any aspect of its operations (including, but not limited to, fees
and expenses and investment policies) otherwise complies with the insurance laws
or regulations of any states.
2.7. The Distributor represents and warrants that the Distributor is duly
registered as a broker-dealer under the 1934 Act, is a member in good standing
with the NASD, and is duly registered as a broker-dealer under applicable state
securities laws; its operations are in compliance with applicable law, and it
will distribute the Fund shares according to applicable law.
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2.8. The Distributor, on behalf of the Investment Manager, represents and
warrants that the Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940 and is in compliance with applicable
federal and state securities laws.
ARTICLE III. Prospectuses and Proxy Statements;
Sales Material and Other Information
3.1. The Distributor shall provide the Company with as many copies of the
current Fund Prospectus as the Company may reasonably request. If requested by
the Company in lieu thereof, the Fund shall provide the Fund Prospectus
(including a final copy of the new prospectus as set in type at the
Distributor's expense) and other assistance as is reasonably necessary in order
for the Company to have a new Contracts Prospectus printed together with the
Fund Prospectus in one document (the cost of such printing to be shared equally
by the Company and the Distributor).
3.2. The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Distributor (or, in the Fund's
discretion, the prospectus shall state that such Statement is available from the
Fund), and the Distributor (or the Fund) shall provide such Statement free of
charge to any outstanding or prospective Contract Owner who requests such
Statement.
3.3. The Fund shall provide the Company with copies of its proxy material,
shareholder reports and other communications to the Company in such quantities
as the Company may reasonably request.
3.4. The Company shall not, without the prior written consent of the Distributor
(unless otherwise required by applicable law), solicit, induce or encourage
Contract Owners to (a) change the Fund's investment adviser or contract with any
sub-investment adviser, or (b) change, modify, substitute, add or delete the
Fund or other investment media.
3.5. The Company shall furnish each piece of sales literature or other
promotional material prepared by the Company, in which the Fund or the
Investment Manager or the Distributor is named, to the Fund or the Distributor
prior to its use. No such material shall be used, except with the prior written
permission of the Fund or the Distributor. The Fund and the Distributor agree to
respond to any request for approval on a prompt and timely basis. Failure to
respond shall not relieve the Company of the obligation to obtain the prior
written permission of the Fund or the Distributor.
3.6. The Company shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund other than the
information or representations contained in the Fund Registration Statement or
Fund Prospectus, as such Registration Statement and Prospectus 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 by
the Distributor, except with the prior written permission of the Fund or the
Distributor. The Fund and the Distributor agree to respond to any request for
permission on a prompt and timely basis. Failure to respond shall not relieve
the Company of the obligation to obtain the prior written permission of the Fund
or the Distributor.
3.7. The Fund and the Distributor shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Accounts
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract Owners, or in sales
literature or other promotional material approved in
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writing by the Company, except with the prior written permission of the Company.
The Company agrees to respond to any request for permission on a prompt and
timely basis. Failure to respond on any given item shall not relieve the Fund or
the Distributor of the obligation to obtain the prior written permission of the
Company on subsequent items.
3.8. The Fund will provide to the Company at least one complete copy of all Fund
Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, promptly after the filing of such
document with the SEC or other regulatory authorities.
3.9. The Company will provide to the Fund at least one complete copy of all
Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Contracts or those Sub-Accounts of the Account to
which Contract purchase payments and value are allocable, promptly after the
filing of such document with the SEC or other regulatory authorities.
3.10. Each party will provide to the other party copies of draft versions of any
registration statements, prospectuses, statements of additional information,
reports, proxy statements, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.
3.11. For purposes of this Article IV, 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, or 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, registration statements,
prospectuses, Statements of Additional Information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under NASD rules, the 1940 Act or the 1933 Act.
ARTICLE IV. Voting
Subject to applicable law, the Company shall:
(a) solicit voting instructions from Contract Owners;
(b) vote Fund shares of each Portfolio attributable to Contract Owners in
accordance with instructions or proxies timely received from such Contract
Owners;
(c) vote Fund shares of each Portfolio attributable to Contract Owners for
which no instructions have been received in the same proportion as Fund
shares of such Portfolio for which instructions have been timely received;
and
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(d) vote Fund shares of each Portfolio held by the Company on its own behalf
or on behalf of the Account that are not attributable to Contract Owners
in the same proportion as Fund shares of such Portfolio for which
instructions have been timely received.
The Company shall be responsible for assuring that voting privileges for the
Account are calculated in a manner consistent with the provisions set forth
above and with other Participating Insurance Companies.
ARTICLE V. Fees and Expenses
5.1. The Fund and Distributor 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 under the 1940 Act to finance
distribution expenses, then the Distributor may make payments to the Company in
amounts agreed to by the Company and the Distributor in writing. Currently, no
such payments are contemplated. The Fund currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the 1940
Act or in contravention of such rule, although it may make payments pursuant to
Rule 12b-1 in the future.
5.2. All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Sections 1.4 and 3.1 of this Agreement (or Article VII,
as it may be amended), the Company shall not bear any of the expenses for the
cost of registration and qualification of the Fund shares under Federal and any
state securities law, preparation and filing of the Fund Prospectus and Fund
Registration Statement, Fund proxy materials and reports, setting the Fund
Prospectus in type, setting in type and printing and distributing the Fund proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all statements
and notices required by any Federal or state securities law, all taxes on the
issuance or transfer of Fund shares, and any expenses permitted to be paid or
assumed by the Fund pursuant to a plan, if any, under Rule 12b-1 under the 1940
Act.
ARTICLE VI. Compliance Undertakings
6.1. The Fund undertakes to comply with Sub-chapter M and Section 817(h) of the
Code, and all regulations issued thereunder.
6.2. The Company shall amend the Contracts Registration Statement under the 1933
Act and the Account's Registration Statement under the 1940 Act from time to
time as required in order to effect the continuous offering of the Contracts or
as may otherwise be required by applicable law. The Company shall register and
qualify the Contracts for sale to the extent required by applicable securities
laws of the various states.
6.3. The Fund shall amend the Fund Registration Statement under the 1933 Act and
the 1940 Act from time to time as required in order to effect for so long as
Fund shares are sold the continuous offering of Fund shares as described in the
then currently effective Fund Prospectus. The Fund shall register and qualify
Fund shares for sale to the extent required by applicable securities laws of the
various states.
6.4. The Company shall be responsible for assuring that any prospectus offering
a Contract that is a life insurance contract where it is reasonably probable
that such Contract would be a "modified endowment contract," as that term is
defined in Section 7702A of the Code, will identify such Contract as a modified
endowment contract (or policy).
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6.5. To the extent that it decides to finance distribution expenses pursuant to
Rule 12b-1, the Fund undertakes to have a Board of Trustees, a majority of whom
are not interested persons of the Fund, formulate and approve any plan under
Rule 12b-1 to finance distribution expenses.
ARTICLE VII. Potential Conflicts
7.1. The Company, the Fund and the Distributor acknowledge that the Fund may
file an application with the SEC to request an order granting relief from
various provisions of the 1940 Act and the rules thereunder to the extent
necessary to permit Fund shares to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
Participating Insurance Companies. The parties agree that the Fund may amend
this Agreement to include provisions, including the imposition of conditions and
undertakings applicable to the Company, that may be required by the order so
issued by the SEC.
ARTICLE VIII. Indemnification
8.1. Indemnification by the Company
The Company agrees to indemnify and hold harmless the Fund, the Distributor and
each person who controls or is associated with the Fund or the Distributor
within the meaning of such terms under the Federal securities laws and any
officer, trustee, director, employee or agent of the foregoing, against any and
all losses, claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they or any of them may become subject under any
statute or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Contracts Registration
Statement, Contracts Prospectus, sales literature for the Contracts or the
Contracts themselves (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 in light of the
circumstances in which they were made; provided that this obligation to
indemnify shall not apply if such statement or omission or such alleged
statement or alleged omission was made in reliance upon and in conformity
with information furnished in writing to the Company by the Fund or the
Distributor (or a person authorized in writing to do so on behalf of the
Fund or the Distributor) for use in the Contracts Registration Statement,
Contracts Prospectus or in the Contracts or sales literature (or any
amendment or supplement) or otherwise for use in connection with the sale
of the Contracts or Fund shares; or
(b) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact by or on behalf of the Company (other than
statements or representations contained in the Fund Registration
Statement, Fund Prospectus or sales literature 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
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Fund Registration Statement, Fund
Prospectus or sales literature 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 in light of the circumstances in which
they were made; or
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(d) arise out of any material breach by the Company to provide the
services and furnish the materials required under the terms of this
Agreement, including but not limited to any failure to transmit a request
for redemption or purchase of Fund shares on a timely basis in accordance
with the procedures set forth in Article I.
This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the wilful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
8.2. Indemnification by the Distributor
The Distributor agrees to indemnify and hold harmless the Company and each
person who controls or is associated with the Company within the meaning of such
terms under the Federal securities laws and any officer, director, employee or
agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they or any of them may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities:
(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Fund Registration
Statement, Fund Prospectus (or any amendment or supplement thereto) or
sales literature of the Fund, 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 in light of the circumstances in which they were made; provided
that this obligation to indemnify shall not apply if such statement or
omission or alleged statement or alleged omission was made in reliance
upon and in conformity with information furnished in writing by the
Company to the Fund or the Distributor for use in the Fund Registration
Statement, Fund Prospectus (or any amendment or supplement thereto) or
sales literature for the Fund or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
(b) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact by the Distributor or the Fund (other than
statements or representations contained in the Fund Registration
Statement, Fund Prospectus or sales literature of the Fund not supplied by
the Distributor or the Fund or persons under their control) or wrongful
conduct of the Distributor or persons under its control with respect to
the sale or distribution of the Contracts or Fund shares; or
(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in the Contracts Registration Statement, Contracts
Prospectus or sales literature for the Contracts (or any amendment 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 in light of the circumstances in which
they were made, if such statement or omission was made in reliance upon
information furnished in writing by the Distributor of the Fund to the
Company (or a person authorized in writing to do so on behalf of the Fund
or the Distributor); or
(d) arise as a result of any material breach by the Distributor or the
Fund to provide the services and furnish the materials required 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).
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This indemnification will be in addition to any liability which the Distributor
may otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the wilful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.
8.3. Indemnification Procedures
After receipt by a party entitled to indemnification ("indemnified party") under
this Article VIII of notice of the commencement of any action, if a claim in
respect thereof is to be made against any person obligated to provide
indemnification under this Article VIII ("indemnifying party"), such indemnified
party will notify the indemnifying party in writing of the commencement thereof
as soon as practicable thereafter, provided that the omission to so notify the
indemnifying party will not relieve it from any liability under this Article
VIII, except to the extent that the omission results in a failure of actual
notice to the indemnifying party and such indemnifying party is damaged solely
as a result of the failure to give such notice. The indemnifying party, upon the
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.
8.4. Limitation of Liability
Notwithstanding anything to the contrary above, the Company, the Underwriter,
and their respective officers, directors, employees and agents shall not be
responsible for, and the Fund and the Distributor shall indemnify and hold
harmless the Company, the Underwriter, and the Accounts, from and against any
and all losses, damages, charges, costs, reasonable attorney's fees, payments,
expenses and liabilities arising out of or attributable to the reasonable
reliance on information, records or documents furnished by or on behalf of the
Underwriter or the Fund. Without limiting the generality of the foregoing, the
Company shall not be liable for any error, delay, or failures to provide
services under this Agreement attributable, in whole or in part, to the error,
delay, or failure of the Underwriter, the Fund or their agents in making the
daily net asset value per share of the Portfolios available to the Company.
ARTICLE IX. 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 Massachusetts, without
giving effect to the principles of conflicts of laws.
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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, and
the terms hereof shall be limited, interpreted and construed in accordance
therewith.
ARTICLE X. Termination
10.1. This Agreement shall terminate:
(a) at the option of any party upon six months advance written notice to
the other parties, such termination to be effective no earlier than one
year following the date on which the first Contract is issued to the
public; or
(b) at the option of the Company if shares of any or all Portfolios are
not reasonably available to meet the requirements of the Contracts as
determined by the Company. Prompt notice of the election to terminate for
such cause shall be furnished by the Company, said termination to be
effective ten days after receipt of notice unless the Fund makes available
a sufficient number of Fund shares to meet the requirements of the
Contracts within said ten-day period; or
(c) at the option of the Fund upon institution of formal proceedings
against the Company by the NASD, the SEC, the insurance commission of any
state or any other regulatory body regarding the Company's duties under
this Agreement or related to the sale of the Contracts, the operation of
the Account, the administration of the Contracts or the purchase of Fund
shares, or an expected or anticipated ruling, judgment or outcome which
would, in the Fund's reasonable judgment, materially impair the Company's
ability to meet and perform the Company's obligations and duties
hereunder; or
(d) at the option of the Company upon institution of formal proceedings
against the Fund by the NASD, the SEC, or any state securities or
insurance commission or any other regulatory body; or
(e) upon requisite vote of the Contract Owners having an interest in the
affected Portfolio and the written approval of the Distributor (unless
otherwise required by applicable law), to substitute the shares of another
investment company for the corresponding Portfolio shares of the Fund in
accordance with the terms of the Contracts; or
(f) at the option of the Fund in the event any of the Contracts are not
registered, issued or sold in accordance with applicable Federal and/or
state law; or
(g) by either the Company or the Fund upon a determination by a majority
of the Board, or a majority of disinterested Board members, that an
irreconcilable material conflict exists among the interests of (i) all
Product owners or (ii) the interests of the Participating Insurance
Companies investing in the Fund; or
(h) at the option of the Company if any series of the Fund or the Fund
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 based on an opinion of counsel satisfactory to the
Fund that the series or Fund may fail to so qualify and the Fund does not
take reasonable steps to ensure qualification; or
(i) at the option of the Company if the Fund fails to meet the
diversification requirements specified in Article VI hereof; or
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(j) at the option of the Fund if the Contracts cease to qualify as annuity
contracts or life insurance policies, as applicable, under the Code, or if
the Fund reasonably believes that the Contracts may fail to so qualify; or
(k) at the option of either the Fund or the Distributor if the Fund or the
Distributor, respectively, shall determine, in their sole judgment
exercised in good faith, that either (1) the Company shall have suffered a
material adverse change in its business or financial condition or (2) the
Company shall have been the subject of material adverse publicity which is
likely to have a material adverse impact upon the business and operations
of either the Fund or the Distributor; or
(l) at the option of the Company, if the Company shall determine, in its
sole judgment exercised in good faith, that the Fund or the Distributor
shall have been the subject of material adverse publicity which is likely
to have a material adverse impact upon the business and operations of the
Company; or
(m) upon the assignment of this Agreement (including, without limitation,
any transfer of the Contracts or the Account to another insurance company
pursuant to an assumption reinsurance agreement) unless the non-assigning
party consents thereto or unless this Agreement is assigned to an
affiliate of the Distributor; or
(n) at the option of Company, as one party, or the Fund and the
Distributor, as one party, upon the other party's material breach of any
provision of this Agreement.
10.2. Notice Requirement
Except as otherwise provided in Section 10.1, 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:
(a) In the event that any termination is based upon the provisions of
Article VII or the provisions of Section 10.1(a) of this Agreement, such
prior written notice shall be given in advance of the effective date of
termination as required by such provisions; and
(b) 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; and
(c) in the event that any termination is based upon the provisions of
Section 10.1(e) of this Agreement, such prior written notice shall be
given at least sixty (60) days before the date of any proposed vote to
replace the Fund's shares.
10.3. Except as necessary to implement Contract Owner initiated transactions, or
as required by state insurance laws or regulations, the Company shall not redeem
Fund shares attributable to the Contracts (as opposed to Fund shares
attributable to the Company's assets held in an Account).
10.4. Effect of Termination
(a) Notwithstanding any termination of this Agreement pursuant to Section
10.1 of this Agreement, the Fund and the Distributor may, at the option of
the Fund, continue to make available additional Fund shares for so long
after the termination of this Agreement as the Fund desires pursuant to
the terms and conditions of this Agreement as provided in paragraph (b)
below, for all Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing Contracts").
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Specifically, without limitation, if the Fund or Distributor so elects to
make additional Fund shares available, the owners of the Existing
Contracts or the Company, whichever shall have legal authority to do so,
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.
(b) In the event of a termination of this Agreement pursuant to Section
10.1 of this Agreement, the Fund and the Distributor shall promptly notify
the Company whether the Distributor and the Fund will continue to make
Fund shares available after such termination. If Fund shares continue to
be made available after such termination, the provisions of this Agreement
shall remain in effect except for Section 10.1(a) and thereafter either
the Fund or the Company may terminate the Agreement, as so continued
pursuant to this Section 10.4, upon prior written notice to the other
party, such notice to be for a period that is reasonable under the
circumstances but, if given by the Fund, need not be for more than six
months.
(c) The parties agree that this Section 10.4 shall not apply to any
termination under Article VII and the effect of such Article VII
termination shall be governed by Article VII of this Agreement.
ARTICLE XI. Applicability to New Accounts and New Contracts
The parties to this Agreement may amend the schedules to this Agreement from
time to time to reflect changes in or relating to the Contracts and to add new
classes of variable annuity contracts and variable life insurance policies to be
issued by the Company through Separate Accounts investing in the Fund. The
provisions of this Agreement shall be equally applicable to each such class of
contracts or policies, unless the context otherwise requires.
ARTICLE XII. 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:
Xxxxxxx X. Xxxxx
Treasurer
Pioneer Funds Distributor, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
If to the Distributor:
Xxxxxx Xxxxxxxx
Senior Vice President
Pioneer Funds Distributor, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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If to the Company:
Xxxx X. Xxxxx
Director
SMA Life Assurance Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ARTICLE XIII. Miscellaneous
13.1. The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
13.2. This Agreement may be executed simultaneously in two or more counterparts,
each of which together shall constitute one and the same instrument.
13.3. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
13.4. 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.
13.5. Each party represents that the execution and delivery of this Agreement
and the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate or trust action, as applicable, by such
party, and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized officer on the date
specified below.
SMA LIFE ASSURANCE COMPANY
Date: December 22, 1994 By: /s/ Xxxxxxx X. Xxxxxx
----------- ------------------------------
Name: XXXXXXX X. XXXXXX
Title: VICE PRESIDENT
PIONEER VARIABLE CONTRACTS TRUST
Date: December 27, 1994 By: /s/ Xxxxxxx X. Xxxxx
----------- ------------------------------
Name: XXXXXXX X. XXXXX
Title: TREASURER
PIONEER FUNDS DISTRIBUTOR, INC.
Date: December 22, 1994 By: /s/ Xxxxxx X. Xxxxxx
----------- ------------------------------
Name: XXXXXX X. XXXXXX
Title: PRESIDENT
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