EX.99-B.8.16
FUND PARTICIPATION AGREEMENT
BETWEEN
FUND AND ALIAC
Aetna Life Insurance and Annuity Company (the "Company"), the Xxxxxxx
Funds, Inc. (the "Fund") and The Xxxxxxx Co. (the "Distributor") hereby agree
to an arrangement whereby the series of the Fund listed on Schedule A attached
hereto shall be made available to serve as underlying investment media for
Variable Annuity Contracts ("Contracts") to be issued by the Company.
1. ESTABLISHMENT OF ACCOUNTS; AVAILABILITY OF FUND.
The Company represents that it has established Variable Annuity Accounts
B, C and D and may establish such other accounts as may be set forth in
Schedule B attached hereto and as may be amended from time to time with
the mutual consent of the parties hereto (the "Accounts"), each of which
is a separate account under Connecticut Insurance law, and has registered
or will register each of the Accounts (except for such Accounts for which
no such registration is required) as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"), to serve as an
investment vehicle for the Contracts. Each Contract provides for the
allocation of net amounts received by the Company to an Account for
investment in the shares of one of more specified open-end management
investment companies available through that Account as underlying
investment media. Selection of a particular investment management company
and changes therein from time to time are made by the participant or
Contract owner, as applicable under a particular Contract.
2. PRICING INFORMATION; ORDERS; SETTLEMENT.
(a) The Fund will make Fund shares available to be purchased by the
Company, and will accept redemption orders from the Company, on
behalf of each Account at the net asset value applicable to each
order on those days on which the Fund calculates its net asset
value (a "Business Day"). Fund shares shall be purchased and
redeemed in such quantity and at such time determined by the
Company to be necessary to meet the requirements of those
Contracts for which the Fund(s) serve as underlying investment
media, provided, however, that the Board of Directors of the
Fund (hereinafter the "Directors") may upon reasonable notice to
the Company, refuse to sell shares of any series of the Fund to
any person, or suspend or terminate the offering of shares of any
series if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of
the Directors, acting in good faith and in the best interests of
the shareholders of any series and is acting in compliance with
their fiduciary obligations under federal and/or any applicable
state laws.
(b) The Fund will provide to the Company closing net asset value,
dividend and capital gain information at the close of trading
each day that the New York Stock Exchange (the "Exchange") is
open (each such day a "Business Day"). The Fund will use its
best efforts to provide such information by 6:30 p.m. Eastern
Standard time and will provide such information in no event later
than 7:00p.m. Eastern Standard time on such Business Day. The
Company will send via facsimile or electronic transmission to the
Fund or its specified agent orders to purchase and/or redeem Fund
shares by 10:00 a.m. Eastern Standard Time the following business
day. Payment for net purchases will be wired by the Company to
an account designated by the Fund to coincide with the order for
shares of the Fund.
(c) The Fund hereby appoints the Company as its agent for the limited
purpose of accepting purchase and redemption orders for Fund
shares relating to the Contracts from Contract owners or
participants. Orders from Contract owners or participants
received from any distributor of the Contracts (including
affiliates of the Company) by the Company, acting as agent for
the Fund, prior to the close of the Exchange on any given
business day will be executed by the Fund at the net asset value
determined as of the close of the Exchange on such Business Day,
provided that the Fund receives written (or facsimile) notice of
such order by 10 a.m. Eastern Standard Time on the next following
Business Day. Any orders received by the Company acting as agent
on such day but after the close of the Exchange will be executed
by the Fund at the net asset value determined as of the close of
the Exchange on the next business day following the day of
receipt of such order, provided that the Fund receives written
(or facsimile) notice of such order by 10 a.m. Eastern Standard
Time within two days following the day of receipt of such order.
(d) Payments for net redemptions of shares of the Fund will be wired
by the Fund to an account designated by the Company on the same
Business Day the Company places an order to redeem Fund Shares.
Payments for net purchases of the Fund will be wired by the
Company to an account designated by the Fund on the same Business
Day the Company places an order to purchase Fund shares. Payments
shall be in federal funds transmitted by wire.
(e) In lieu of applicable provisions set forth in paragraphs 2(a)
through 2(d) above, the parties may agree to provide pricing
information, execute orders and wire payments for purchases and
redemptions through National Securities Clearing Corporation's
Fund/SERV system in which case such activities will be governed by
the provisions set forth in an Exhibit to this Agreement.
(f) Each party has the right to rely on information or confirmations
provided by the other party (or by any affiliate of the other
party), and shall not be liable in the event that an error is a
result of any misinformation supplied by the other party
(g) The Fund and Distributor shall indemnify and hold the Company
harmless, from the effective date of this Agreement, against any
amount the Company is required to pay to Contract owners or
participants due to: (i) an incorrect calculation of a Fund's
daily
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net asset value, dividend rate, or capital gains distribution
rate or (ii) incorrect or late reporting of the daily net asset
value, dividend rate, or capital gain distribution rate of a
Fund, upon written notification by the Company, with supporting
data, to Distributor. In addition, the Fund or the Distributor
shall be liable to the Company for systems and out of pocket
costs incurred by the Company in making a Contract owners's or a
participant's account whole, if such costs or expenses are a
result of the Fund's or the Distributor's failure to provide
timely or correct net asset values, dividend and capital gains or
financial information and if such information is not corrected by
4:00 p.m. Eastern Standard time of the next business day after
releasing such incorrect information provided the incorrect NAV
as well as the correct NAV for each day that the error occurred
is provided. If a mistake is caused in supplying such
information or confirmations, which results in a reconciliation
with incorrect information, the amount required to make a
Contract owner's or a participant's account whole shall be borne
by the party providing the incorrect information, regardless of
when the error is corrected.
(h) The Company agrees to purchase and redeem the shares of the series
of the Fund named in Schedule A offered by the then current
prospectus and statement of additional information of the Fund in
accordance with the provisions of such prospectus and statement of
additional information.
3. FEES.
In consideration of services provided by the Company under this
Agreement, the Fund or Distributor shall pay fees to the Company as set
forth in Schedule C.
4. EXPENSES.
(a) Except as otherwise provided in this Agreement, all expenses
incident to the performance by the Fund under this Agreement
shall be paid by the Fund, including the cost of registration of
Fund shares with the Securities and Exchange Commission (the
"SEC") and in states where required. The Fund and Distributor
shall pay no fee or other compensation to the Company under this
Agreement, and the Company shall pay no fee or other compensation
to the Fund or Distributor, except as provided herein and in
Schedule C attached hereto and made a part of this Agreement as
may be amended from time to time with the mutual consent of the
parties hereto. All expenses incident to performance by each
party of its respective duties under this Agreement shall be paid
by that party, unless otherwise specified in this Agreement.
(b) The Fund or the Distributor shall provide to the Company, at the
location designated by the Company, periodic fund reports to
shareholders and other materials that are required by law to be
sent to Contract owners or participants. In addition, the Fund or
the Distributor shall provide the Company with a sufficient
quantity of its prospectuses, statements of additional information
and any supplements to any of these materials, to be used in
connection with the offerings and transactions contemplated by
this Agreement.
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(c) The Fund or Distributor shall provide the company with a
sufficient quantity of its proxy material that is required to be
sent to Contract owners or participants. The cost associated with
proxy preparation, group authorization letters, programming for
tabulation and necessary materials (including postage) will be
paid by the Fund or Distributor.
5. REPRESENTATIONS.
(a) The Company agrees that it and its agents shall not, without the
written consent of the Fund or the Distributor, make
representations concerning the Fund, or its shares except those
contained in the then current prospectuses and in current printed
sales literature approved by the Fund or the Distributor.
(b) The Fund and Distributor represent and warrant that (i) they have
examined and tested their systems and made reasonable inquiry of
their business partners and other entities with whom they conduct
business with respect to Year 2000 problems and (ii) their ability
to perform their obligations under this Agreement will not be
materially interrupted or disrupted as a result of any business
interruptions or other business problems relating to specific
dates or days before, during and after the Year 2000. This
representation and warranty does not extend to any interruption or
disruption caused solely by any act or omission of the Company.
6. TERMINATION.
This agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of either the Company, the Distributor or the Fund,
upon sixty days advance written notice to the other parties;
(b) at the option of the Company, upon one week advance written notice
to the Distributor and the Fund, if Fund shares are not available
for any reason to meet the requirement of Contracts as determined
by the Company. Reasonable advance notice of election to terminate
shall be furnished by Company;
(c) at the option of either the Company, the Distributor or the Fund,
immediately upon institution of formal proceedings against the
broker-dealer or broker-dealers marketing the Contracts, the
Account, the Company, the Fund or the Distributor by the National
Association of Securities Dealers, Inc. (the "NASD"), the SEC or
any other regulatory body;
(d) upon the determination of the Accounts to substitute for the
Fund's shares the shares of another investment company in
accordance with the terms of the applicable Contracts. The Company
will give 60 days written notice to the Fund and the Distributor
of any decision to replace the Fund's shares;
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(e) upon assignment of this Agreement, unless made with the written
consent of all other parties hereto;
(f) if Fund shares are not registered, issued or sold in conformance
with Federal law or such law precludes the use of Fund shares as
an underlying investment medium for Contracts issued or to be
issued by the Company. Prompt notice shall be given by the
appropriate party should such situation occur.
7. CONTINUATION OF AGREEMENT.
Termination as the result of any cause listed in Section 6 shall not
affect the Fund's obligation to furnish its shares to Contracts then in
force for which its shares serve or may serve as the underlying medium
unless such further sale of Fund shares is prohibited by law or the SEC
or other regulatory body.
8. ADVERTISING MATERIALS; FILED DOCUMENTS.
(a) Advertising and sales literature with respect to the Fund prepared
by the Company or its agents for use in marketing its Contracts
will be submitted to the Fund or its designee for review before
such material is submitted to any regulatory body for review,
distributed to the public, or used in connection with any Account
or Contract. No such material shall be used if the Fund or its
designee reasonably object to such use in writing, transmitted by
facsimile within five business days after receipt of such
material.
(b) The Fund will provide additional copies of its financials as soon
as available to the Company and at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements and
all amendments or supplements to any of the above that relate to
the series of the Fund named in Schedule A promptly after the
filing of such document with the SEC or other regulatory
authorities. At the Distributor's request, the Company will
provide to the Distributor at least one complete copy of all
registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements,
and all amendments or supplements to any of the above that relate
to the Account promptly after the filing of such document with
the SEC or other regulatory authority.
(c) The Fund or the Distributor will provide via Excel spreadsheet
diskette format or in electronic transmission to the Company at
least quarterly portfolio information necessary to update Fund
profiles within seven business days following the end of each
quarter.
9. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges on Fund
shares held by registered separate accounts to all Contract owners
and participants to the extent the
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SEC continues to interpret the 1940 Act as requiring such
privileges. The Company shall provide pass-through voting
privileges on Fund shares held by unregistered separate accounts
to all Contract owners.
(b) The Company will distribute to Contract owners and participants,
as appropriate, all proxy material furnished by the Fund and will
vote Fund shares in accordance with instructions received from
such Contract owners and participants. If and to the extent
required by law, the Company, with respect to each group Contract
and in each Account, shall vote Fund shares for which no
instructions have been received in the same proportion as shares
for which such instructions have been received. The Company and
its agents shall not oppose or interfere with the solicitation of
proxies for Fund shares held for such Contract owners and
participants.
10. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Fund and
the Distributor, and its directors, officers, employees, agents
and each person, if any, who controls the Fund or its Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act")
against any losses, claims, damages or liabilities to which the
Fund or any such director, officer, employee, agent, or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement,
prospectus or sales literature of the Company 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, or arise
out of or as a result of conduct, statements or representations
(other than statements or representations contained in the
prospectuses or sales literature of the Fund) of the Company or
its agents, with respect to the sale and distribution of
Contracts for which Fund shares are the underlying investment.
The Company will reimburse any legal or other expenses reasonably
incurred by the Fund or any such director, officer, employee,
agent, investment Distributor, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, however, that the Company
will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon
(i) an untrue statement or omission or alleged omission made in
such Registration Statement or prospectus in conformity with
written materials furnished to the Company by the Fund
specifically for use therein or (ii) the willful misfeasance, bad
faith, or gross negligence by the Fund or Distributor in the
performance of its duties or the Fund's or Distributor's reckless
disregard of obligations or duties under this Agreement or to the
Company, whichever is applicable. This indemnity agreement will
be in addition to any liability which Company may otherwise have.
(b) The Fund and the Distributor agree to indemnify and hold harmless
the Company and its directors, officers, employees, agents and
each person, if any, who controls the Company within the meaning
of the 1933 Act against any losses, claims, damages or
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liabilities to which the Company or any such director, officer,
employee, agent or controlling person may become subject, under
the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, prospectuses 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
material fact required to be stated therein or necessary to make
the statements therein not misleading. The Fund will reimburse
any legal or other expenses reasonably incurred by the Company or
any such director, officer, employee, agent, or controlling
person in connection with investigating or defending any such
loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
the Fund will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or omission or alleged omission
made in such Registration Statement or prospectuses which are in
conformity with written materials furnished to the Fund by the
Company specifically for use therein.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party of
the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under this
Section 10. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish to,
assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party
to such indemnified party of its election to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party under this Section 10 for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation.
11. MISCELLANEOUS.
(a) AMENDMENT AND WAIVER. Neither this Agreement, nor any provision
hereof, may be amended, waived, discharged or terminated orally,
but only by an instrument in writing signed by all parties hereto.
(b) NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or
sent by telex, telecopier or registered or certified mail, postage
prepaid, return receipt requested, or recognized overnight courier
service to the party or parties to whom they are directed at the
following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company:
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Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To the Fund:
The Xxxxxxx Fund, Inc.
World Trade Center Baltimore, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx Xxxx
To the Distributor:
The Xxxxxxx Co.
World Trade Center Baltimore, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx Xxxx
Any notice, demand or other communication given in a manner prescribed in
this subsection (b) shall be deemed to have been delivered on receipt.
(c) SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any party hereto may execute this Agreement by
signing any such counterpart.
(e) SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
(f) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and understanding between the parties hereto and supersedes all
prior agreement and understandings relating to the subject matter
hereof.
(g) GOVERNING LAW. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Connecticut.
(h) NON EXCLUSIVITY. It is understood by the parties that this
Agreement is not an exclusive arrangement in any respect.
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(i) CONFIDENTIALITY. The terms of this Agreement and the Schedules
thereto will be held confidential by each party except to the
extent that either party or its counsel may deem it necessary to
disclose such terms.
12. LIMITATION ON LIABILITY OF DIRECTORS, ETC.
This agreement has been executed on behalf of the Fund by the undersigned
officer of the Fund in his or her capacity as an officer of the Fund. The
obligations of this agreement shall be binding upon the assets and
property of the Fund only and shall not be binding on any Director,
officer or shareholder of the Fund individually.
IN WITNESS WHEREOF, the undersigned have executed this Agreement by their
duly authorized officers effective as of the 1st day of May, 2000.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxx X. XxXxxxx
Name: Xxxxxx X. XxXxxxx
Title: V.P.
THE XXXXXXX FUND, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
THE XXXXXXX CO.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
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SCHEDULE A
LIST OF SERIES AVAILABLE
XXXXXXX DEM EQUITY (INSTITUTIONAL SHARES)
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SCHEDULE B
(For any future separate accounts--See Section 1)
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