Exhibit 99.(h)(2)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the ___ day of ___________, 200_,
by and among _______________________________ ("Insurance Company"), a life
insurance company organized under the laws of the State of ________________,
_______________ ("Contract Distributor"), LAZARD ASSET MANAGEMENT ("XXX"), a
division of Lazard Freres & Co. LLC ("LF & Co."), and LAZARD RETIREMENT SERIES,
INC. ("Fund"), with respect to the Fund's Portfolios named on Schedule 1, as it
may be amended from time to time (each a "Portfolio").
ARTICLE I.
DEFINITIONS
The following terms used in this Agreement shall have the meanings set
forth below:
1.1 "1933 Act" shall mean the Securities Act of 1933, as amended.
1.2 "1940 Act" shall mean the Investment Company Act of 1940, as amended.
1.3 "Board" shall mean Fund's Board of Directors.
1.4 "Business Day" shall mean any day for which the Portfolios calculate
net asset value per share as described in the Portfolio Prospectuses.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6 "Commission" shall mean the Securities and Exchange Commission.
1.7 "Contract" shall mean a variable annuity or variable life insurance
contract that uses a Portfolio as an underlying investment medium and
is named on Schedule 1.
1.8 "Contract Portfolios" shall mean investment companies, other than the
Portfolios, used by a Contract as an underlying investment medium.
1.9 "Contract Prospectus" shall mean the currently effective prospectus and
statement of additional information or other offering documents with
respect to a Contract (such as a written description of a Contract not
registered under the 1933 Act), including any supplements or amendments
thereto.
1.10 "Contractholder" shall mean any person that is a party to a Contract
with a Participating Company.
1.11 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of Fund, as defined in
the 0000 Xxx.
1.12 "General Account" shall mean the general account of Insurance Company.
1.13 "IRS" shall mean the Internal Revenue Service.
1.14 "NASD" shall mean the National Association of Securities Dealers, Inc.
1.15 "Notice" shall mean the notice related to the Order.
1.16 "Order" shall mean Fund's mixed and shared funding exemptive order of
the Commission pursuant to Section 6(c) of the 0000 Xxx.
1.17 "Participants" shall mean individuals who participate under a group
Contract.
1.18 "Participating Company" shall mean any insurance company, including
Insurance Company, that offers variable annuity and/or variable life
insurance contracts and that has entered into an agreement with Fund
for the purpose of making Portfolio shares available to serve as the
underlying investment medium for Contracts.
1.19 "Parties" shall mean Insurance Company, Contract Distributor, XXX and
Fund, collectively.
1.20 "Portfolio Prospectus" shall mean the currently effective prospectus
and statement of additional information with respect to a Portfolio,
including any supplements or amendments thereto.
1.21 "Separate Account" shall mean a separate account duly established by
Insurance Company that invests in a Portfolio and is named on Schedule
1.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
2.1 Insurance Company represents, warrants and covenants that:
(a) it is and shall remain an insurance company duly organized and in good
standing under applicable law;
(b) it has legally and validly established and shall maintain each
Separate Account pursuant to applicable insurance laws and
regulations;
(c) it has registered and shall maintain the registration of each Separate
Account as a unit investment trust under the 1940 Act to serve as a
segregated investment account for the Contracts, or, alternatively, it
has not so registered the Separate Accounts in proper reliance upon an
exclusion from such registration (which exclusion shall be
communicated to Fund);
(d) each Separate Account is and at all times shall be eligible to invest
in shares of a Portfolio without such investment disqualifying Fund as
an investment medium for insurance company separate accounts
supporting variable annuity and/or variable life insurance contracts;
(e) each Separate Account is and at all times shall be a "segregated asset
account" and interests in each Separate Account that are offered to
the public shall be issued exclusively through the purchase of a
Contract that is and at all times shall be a "variable contract," in
each case within the meaning of such terms under Section 817 of the
Code and the regulations thereunder; Insurance Company agrees to
notify Fund and XXX immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they
might not be met in the future;
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(f) the Contracts are and at all times shall be treated as life insurance,
endowment or annuity contracts under applicable provisions of the
Code, and it shall notify Fund 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; and
(g) all of its employees and agents who deal with money and/or securities
of Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage, which shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company, in an amount not less than that required to be maintained by
Fund; Insurance Company agrees to hold for the benefit of Fund and to
pay to Fund any amounts lost from larceny, embezzlement or other
events covered by said bond to the extent such amounts properly belong
to Fund pursuant to the terms of this Agreement.
2.2 Insurance Company and Contract Distributor represent, warrant and
covenant that: (a) units of interest in each Separate Account
available through the purchase of Contracts are registered under the
1933 Act, or are not so registered in proper reliance upon an
exclusion from such registration; (b) the Contracts shall be issued
and sold in compliance in all material respects with all applicable
federal and state laws, including state insurance suitability
requirements; and (c) Insurance Company and Contract Distributor will
otherwise comply in all material respects with all applicable federal
and state laws, including state insurance laws and regulations, in the
performance of this Agreement. Insurance Company agrees to inform Fund
promptly of any investment restrictions imposed by state insurance law
and applicable to Fund.
2.3 Contract Distributor represents and warrants that it is and at all
times shall be: (a) registered with the Commission as a broker-dealer;
(b) a member in good standing of the NASD; and (c) duly organized,
validly existing and in good standing under applicable law, with full
power, authority, and legal right to execute, deliver and perform its
duties and comply with its obligations under this Agreement.
2.4 Fund represents and warrants that:
(a) it is and shall remain registered with the Commission as an open-end,
management investment company under the 1940 Act;
(b) Portfolio shares are registered under the 1933 Act;
(c) it possesses and shall maintain all legal and regulatory licenses,
approvals, consents and/or exemptions required for it to operate and
offer its shares as an underlying investment medium for the Contracts;
(d) each Portfolio is or will be qualified as a regulated investment
company under Subchapter M of the Code, it shall make every effort to
maintain such qualification, and it shall notify Insurance Company
promptly upon having a reasonable basis for believing that any
Portfolio invested in by a Separate Account has ceased to so qualify
or that it might not so qualify in the future; and
(e) all of its directors, officers, employees, investment advisers, and
other individuals/entities who deal with the money and/or securities
of Fund are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage, which shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding
company, for the benefit of Fund in an amount not less than that
required by Rule 17g-1 under the 1940 Act.
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2.5 Fund makes no representation as to whether any aspect of is operations,
including without limitation, investment policies, fees and expenses,
complies with the insurance laws of any state.
2.6 Each Portfolio's assets will be managed and invested in a manner that
complies with the requirements of Section 817(h) of the Code and
Treasury Regulation ss.1.817-5, relating to the diversification
requirements for variable annuity, endowment or life insurance
contracts. If a Portfolio fails to comply with Section 817(h) of the
Code, Fund will take all reasonable steps to adequately diversify the
Portfolio so as to achieve compliance within the grace period afforded
by Treasury Regulation ss.1.817-5. If Fund does not adequately
diversify the Portfolio during the grace period, it will take
reasonable steps to notify Insurance Company that the Portfolio has
failed to so comply. In the event the IRS asserts in writing in
connection with any governmental audit or review of Insurance Company
or, to Insurance Company's knowledge, of any Contractholder, that any
Portfolio has failed or allegedly failed to comply with the
diversification requirements of Section 817(h) of the Code or the
regulations thereunder or Insurance Company otherwise becomes aware of
any facts that could give rise to any claim against Fund or its
affiliates as a result of such a failure or alleged failure, Insurance
Company shall promptly notify Fund and XXX of such assertion or
potential claim and shall permit Fund and XXX and its affiliates and
their legal and accounting advisers to participate in any conferences,
discussions or proceedings with the IRS, any Contractholder or any
other claimant regarding such claims.
2.7 Each Party agrees that it will comply with all applicable laws and
regulations relating to consumer privacy ("Privacy Law") and that it is
prohibited from using or disclosing any nonpublic personal information
(as defined in Regulation S-P, or any similar term or terms as defined
in other applicable Privacy Law, "Customer Information") received from
another Party other than (a) as required by law, regulation or rule;
(b) as permitted in writing by the disclosing party; (c) to its
affiliates; or (d) as necessary to perform this Agreement or to service
Contractholders, in each case in compliance with the reuse and
redisclosure provisions of Privacy Law. Each Party shall use its best
efforts to (i) cause its employees and agents to be informed of and to
agree to be bound by Privacy Law and the provisions of this Agreement
and (ii) maintain physical, electronic and procedural safeguards
reasonably designed to protect the security, confidentiality and
integrity of, and to prevent unauthorized access to or use of, Customer
Information.
ARTICLE III.
FUND SHARES
3.1 Fund agrees to make the shares of each Portfolio available for purchase
by Insurance Company and each Separate Account at net asset value,
subject to the terms and conditions of this Agreement and the Portfolio
Prospectus. Fund may refuse to sell the shares of any Portfolio to any
person, or suspend or terminate the offering of the shares of any
Portfolio, as permitted 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 such Portfolio.
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3.2 Fund agrees that it shall sell shares of the Portfolios only to
Participating Companies and their separate accounts, the general
accounts of Participating Companies and their affiliates and to
qualified pension and retirement plans. No shares of any Portfolio will
otherwise be sold to the general public.
3.3 Except as noted in this Article III, Fund and Insurance Company agree
that orders and related payments to purchase and redeem Portfolio
shares shall be processed in the manner set out in Schedule 2 hereto.
3.4 Fund shall confirm each purchase or redemption order made by Insurance
Company. Transfer of Portfolio shares shall be by book entry only. No
share certificates shall be issued to Insurance Company. Shares ordered
from Fund shall be recorded in an appropriate title for Insurance
Company, on behalf of each Separate Account or the General Account.
3.5 Fund shall promptly notify Insurance Company of the amount of dividend
and capital gain, if any, per share of each Portfolio to which each
Separate Account is entitled. Insurance Company hereby elects to
reinvest all dividends and capital gains of any Portfolio in additional
shares of that Portfolio at the applicable net asset value per share,
until Insurance Company otherwise notifies Fund in writing.
ARTICLE IV.
STATEMENTS AND REPORTS
4.1 Fund shall provide Insurance Company with monthly statements of account
for each Separate Account's Portfolio accounts as of the end of each
month by the fifteenth (15th) Business Day of the following month.
4.2 (a) At least annually, Fund or its designee shall provide Insurance
Company with as many copies of Portfolio Prospectuses as Insurance
Company may reasonably request for distribution by Insurance Company
to existing Contractholders and Participants with respect to Separate
Accounts invested in the relevant Portfolios.
(b) If requested by Insurance Company, Fund or its designee shall provide
Portfolio Prospectuses in "camera ready" copy or, at the request of
Insurance Company, in the electronic format sent to the financial
printer and other assistance as is reasonably necessary in order for
the Parties once a year (or more frequently if the Portfolio
Prospectuses are supplemented or updated) to have the Contract
Prospectuses and the Portfolio Prospectuses printed together in one
document. The expenses of such printing will be borne by Insurance
Company.
(c) Fund or its designee shall provide Insurance Company, at Insurance
Company's expense, with as many copies of Portfolio Prospectuses as
Insurance Company may reasonably request for distribution by Insurance
Company to prospective purchasers of Contracts.
(d) The form of the Portfolio Prospectuses provided to Insurance Company
shall be the final form of Portfolio Prospectus as filed with the
Commission, which form shall include only those Portfolios identified
on Schedule 1.
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4.3 Fund shall provide Insurance Company with at least one complete copy of
all registration statements, periodic reports and proxy statements and
all applications for exemptive orders and requests for no-action
letters that relate to a Separate Account.
4.4 Fund shall provide Insurance Company with copies of each Portfolio's
periodic reports, proxy statements and other printed materials (which
the Portfolio customarily provides to its shareholders) in quantities
as Insurance Company may reasonably request for distribution by
Insurance Company to each Contractholder and Participant with respect
to Separate Accounts invested in that Portfolio.
4.5 Insurance Company shall provide Fund with at least one complete copy of
all registration statements, periodic reports, proxy statements,
applications for exemptive orders, requests for no-action letters, and
all amendments to any of the above, that are material to a Portfolio
promptly after the filing of such document with the Commission or other
regulatory authorities or, if such materials are not filed,
contemporaneously with first use. Insurance Company shall provide to
Fund and XXX any complaints received from Contractholders pertaining to
Fund or a Portfolio.
ARTICLE V.
EXPENSES
5.1 Except as otherwise specifically provided herein, each Party will bear
all expenses incident to its performance under this Agreement.
5.2 LF & Co. may pay Contract Distributor for distribution and/or other
services relating to Portfolio shares pursuant to any distribution plan
adopted by Fund in accordance with Rule 12b-1 under the 1940 Act,
subject to the terms of an agreement between Contract Distributor and
LF & Co. related to such plan.
ARTICLE VI.
EXEMPTIVE RELIEF
6.1 Insurance Company acknowledges that it has reviewed a copy of the Order
and, in particular, has reviewed the conditions to the relief set forth
in the Notice. As required by the conditions set forth in the Notice,
Insurance Company shall report any potential or existing conflicts
promptly to the Board. In addition, Insurance Company shall be
responsible for assisting the Board in carrying out its
responsibilities under the Order by providing the Board with all
information necessary for the Board to consider any issues raised
including, without limitation, information whenever Contract voting
instructions are disregarded. Insurance Company, at least annually (but
more frequently if requested by Fund), shall submit to the Board such
reports, materials, or data as the Board may reasonably request so that
the Board may carry out fully the obligations imposed upon it by the
Order. Insurance Company agrees to carry out such responsibilities with
a view only to the interests of existing Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists with
regard to Contractholder investments in Fund, the Board shall give
prompt notice to all Participating Companies. If the Board determines
that Insurance Company is a Participating Company for whom the conflict
is relevant, Insurance Company shall at its sole cost and expense, and
to the extent reasonably practicable (as determined by a majority of
the Disinterested Board Members), take such action as is necessary
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to remedy or eliminate the irreconcilable material conflict. Such
necessary action may include, but shall not be limited to:
(a) withdrawing the assets allocable to some or all Separate Accounts from
Fund or any Portfolio and reinvesting such assets in a different
investment medium (which may include another Portfolio);
(b) submitting the question of whether such segregation should be
implemented to a vote of all affected Contractholders and, as
appropriate, segregating the assets of any appropriate group (i.e.
variable annuity or variable life insurance Contractholders) that
votes in favor of such segregation; and/or
(c) establishing a new registered management investment company or managed
separate account.
6.3 If a material irreconcilable conflict arises as a result of a decision
by Insurance Company to disregard Contractholder voting instructions
and that decision represents a minority position or would preclude a
majority vote, Insurance Company may be required, at the Board's
election, to withdraw the investments of its Separate Accounts in Fund.
6.4 For the purpose of this Article, a majority of the Disinterested Board
Members shall determine whether any proposed action adequately remedies
any material irreconcilable conflict, but in no event shall Fund or XXX
or any other investment adviser of Fund be required to bear the expense
of establishing a new funding medium for any Contract. Insurance
Company shall not be required by this Article to establish a new
funding medium for any Contract if an offer to do so has been declined
by vote of a majority of the Contractholders materially and adversely
affected by the material irreconcilable conflict.
6.5 No action by Insurance Company taken or omitted, and no action by a
Separate Account or Fund taken or omitted as a result of any act or
failure to act by Insurance Company pursuant to this Article VI shall
relieve Insurance Company of its obligations under, or otherwise affect
the operations of, this Article VI.
ARTICLE VII.
VOTING OF FUND SHARES
7.1 Insurance Company shall provide pass-through voting privileges to all
Contractholders and Participants so long as and to the extent the
Commission continues to interpret the 1940 Act as requiring
pass-through voting privileges or to the extent otherwise required by
law. Accordingly, Insurance Company, where applicable, shall vote
shares of a Portfolio held in each Separate Account in a manner
consistent with voting instructions timely received from its
Contractholders and Participants. Insurance Company shall be
responsible for assuring that the Separate Account determines voting
privileges in a manner consistent with other Participating Companies.
Insurance Company shall vote shares for which it has not received
timely voting instructions, as well as shares it owns, in the same
proportion as it votes those shares for which it has received voting
instructions.
7.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) under the 1940 Act are
amended, or if Rule 6e-3 is adopted, to provide exemptive relief from
any
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provision of the 1940 Act or the rules thereunder with respect to
mixed and shared funding on terms and conditions materially different
from any exemptions granted in the Order, then Fund, and/or the
Participating Companies, as appropriate, shall take such steps as may
be necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such Rules are applicable.
7.3 Insurance Company agrees that it shall not, without the prior written
consent of Fund and XXX, solicit, introduce or encourage
Contractholders or Participants to (a) change or supplement Fund's
investment adviser or (b) change, modify, substitute, add to or delete
a Portfolio from the current investment options under the Contracts.
ARTICLE VIII.
MARKETING
8.1 Fund or its designee shall periodically furnish Insurance Company with
sales literature or other promotional materials for each Portfolio, in
quantities as Insurance Company may reasonably request, for
distribution to prospective purchasers of Contracts. Expenses for the
printing and distribution of such documents shall be borne by Insurance
Company.
8.2 Insurance Company shall designate certain persons or entities that
shall have the requisite licenses to solicit applications for the sale
of Contracts.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
Fund each piece of sales literature or other promotional material in
which Fund, XXX, XX & Co. or Fund's investment adviser or administrator
is named, at least five (5) Business Days prior to its use. No such
material shall be used unless Fund and XXX or their respective
designees approve such material in writing.
8.4 Fund shall furnish, or shall cause to be furnished, to Insurance
Company each piece of Fund's sales literature or other promotional
material in which Insurance Company or a Separate Account is named, at
least five (5) Business Days prior to its use. No such material shall
be used unless Insurance Company approves such material in writing.
8.5 Insurance Company shall not give any information or make any
representations or statements on behalf of Fund, XXX or LF & Co. or
concerning Fund or any Portfolio other than the information or
representations contained in a Portfolio Prospectus, periodic reports,
proxy statements or in sales literature or other promotional material
approved by Fund.
8.6 Fund shall not, in connection with the sale of Portfolio shares, give
any information or make any representations on behalf of Insurance
Company or concerning Insurance Company, a Separate Account, or the
Contracts other than the information or representations contained in a
Contract Prospectus, in published reports for each Separate Account
that are in the public domain or approved by Insurance Company for
distribution to Contractholders or Participants, or in sales literature
or other promotional material approved by Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, 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 (such as 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
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published article), educational or training materials or other
communications distributed or made generally available to some or all
agents or employees, prospectuses, statements of additional
information, shareholder reports and proxy materials, and any other
material constituting sales literature or advertising under the rules
of the NASD, the 1940 Act or the 1933 Act.
ARTICLE IX.
INDEMNIFICATION
9.1 Insurance Company and Contract Distributor each agree to indemnify and
hold harmless Fund, XXX, any investment adviser of a Portfolio, and
their affiliates, and each of their respective directors, trustees,
general members, officers, employees, agents and each person, if any,
who controls any of the foregoing entities or persons within the
meaning of the 1933 Act (collectively, the "Indemnified Parties" for
purposes of this Section 9.1), against any and all losses, claims,
damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with or any
amounts paid in settlement of, any action, suit or proceeding or any
claim asserted and any income taxes, penalties or toll charges)
(collectively, "Losses") for which the Indemnified Parties may become
subject insofar as such Losses (or actions in respect thereof):
(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration
statement, Contract Prospectus, Contract or sales literature or other
promotional material relating to a Separate Account or the Contracts
(collectively, "Account documents") or arise out of or are based upon
the omission or the alleged omission to state in any Account documents
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading; provided, however, that neither Insurance
Company nor Contract Distributor shall be liable in any such case to
the extent that any such Loss arises out of or is based upon any such
materially untrue statement or material omission made in any Account
document which materially untrue statement or material omission was
made in reliance upon and in conformity with written information
furnished by or on behalf of Fund specifically for use therein;
(b) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration
statement, Portfolio Prospectus or sales literature or other
promotional material relating to Fund or a Portfolio (collectively,
"Portfolio documents") or arise out of or are based upon the omission
or the alleged omission to state in any Portfolio documents a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading, provided such materially untrue statement or material
omission was made in reliance upon and in conformity with information
furnished to Fund or XXX by or on behalf of Insurance Company or
Contract Distributor specifically for use therein;
(c) arise out of or as a result of statements or representations (other
than statements or representations contained in any Portfolio document
on which Insurance Company or Contract Distributor have reasonably
relied) or wrongful conduct of Insurance Company or Contract
Distributor or their respective agents and persons under their
respective control with respect to the sale and distribution of
Contracts or Portfolio shares;
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(d) arise out of any material breach of any representation, warranty
and/or covenant made by Insurance Company or Contract Distributor in
this Agreement, or arise out of or result from any other material
breach of this Agreement by Insurance Company or Contract Distributor;
(e) arise out of Insurance Company's incorrect calculation and/or
incorrect or untimely reporting of net purchase or redemption orders;
or
(f) arise out of or are related to any tax liability under Section 851 of
the Code arising from purchases or redemptions by the General Account
or the accounts of Insurance Company's affiliates.
9.2 Fund and XXX each agree to indemnify and hold harmless Insurance
Company and Contract Distributor and each of their respective
directors, trustees, general members, officers, employees, agents and
each person, if any, who controls Insurance Company or Contract
Distributor within the meaning of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 9.2), against Losses
for which Indemnified Parties may become subject insofar as such Losses
(or actions in respect thereof):
(a) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Portfolio documents or
arise out of or are based upon the omission or the alleged omission to
state in any Portfolio documents a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided,
however, that neither Fund nor XXX shall be liable in any such case to
the extent that any such Loss arises out of or is based upon any such
materially untrue statement or material omission made in any Portfolio
document which materially untrue statement or material omission was
made in reliance upon and in conformity with information furnished by
or on behalf of Insurance Company or Contract Distributor specifically
for use therein;
(b) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in Account documents or arise
out of or are based upon the omission or the alleged omission to state
in any Account documents a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, provided such
materially untrue statement or material omission was made in reliance
upon and in conformity with written information furnished to Insurance
Company or Contract Distributor by or on behalf of Fund specifically
for use therein;
(c) arise out of or as a result of statements or representations (other
than statements or representations contained in any Account document
on which Fund or XXX have reasonably relied) or wrongful conduct of
Fund or XXX or their respective agents and persons under their
respective control with respect to the sale and distribution of
Portfolio shares;
(d) arise out of any material breach of any representation and/or warranty
made by Fund or XXX in this Agreement, or arise out of or result from
any other material breach of this Agreement by Fund or XXX; or
(e) arise out of Fund's failure to correct in a timely manner any
incorrect calculation and/or reporting of the daily net asset value,
dividend rate or capital gain distribution rate of a
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Portfolio; provided, however, that Fund shall have no obligation to
indemnify and hold harmless the Indemnified Parties if the incorrect
calculation or reporting was the result of incorrect information
furnished by or on behalf of Insurance Company or Contract Distributor
or otherwise as a result of or relating to Insurance Company's or
Contract Distributor's negligence or breach of this Agreement.
9.3 In no event shall Fund or XXX be liable for any consequential,
incidental, special or indirect damages resulting to Insurance Company
or Contract Distributor hereunder.
9.4 Notwithstanding anything herein to the contrary, in no event shall
Fund or XXX be liable to any individual or entity including, without
limitation, Insurance Company, Contract Distributor or any
Contractholder or Participant, with respect to any Losses that arise
out of or result from a breach of any representation, warranty, and/or
covenant made by Insurance Company or Contract Distributor hereunder
or by any Participating Company under an agreement containing
substantially similar representations, warranties and covenants.
9.5 (a ) Promptly after receipt by a Party that may be entitled to
indemnification under this Article ("Indemnified Party" for purposes
of this Section) of notice of the commencement of any action which may
result in Losses, such Indemnified Party shall, if a claim in respect
thereof is to be made against the indemnifying party under this
Article ("Indemnifying Party" for purposes of this Section), notify
Indemnifying Party of the commencement thereof. The failure to so
notify shall not relieve Indemnifying Party from any liability under
this Article IX, except to the extent that Indemnifying Party is
damaged as a result of the failure to give such notice. If Indemnified
Party notifies Indemnifying Party of the commencement of any such
action, Indemnifying Party shall be entitled to participate therein
and, to the extent that it may wish, assume the defense thereof, with
counsel reasonably satisfactory to Indemnified Party, and to the
extent that Indemnifying Party has given notice to such effect and is
performing its obligations under this Article, Indemnifying Party
shall not be liable for any legal or other expenses subsequently
incurred by Indemnified Party in connection with the defense thereof,
other than reasonable costs of investigation. Notwithstanding the
foregoing, 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 its expense unless (a) Indemnifying Party and
Indemnified Party shall have mutually agreed to the retention of such
counsel or (b) the named parties to any such proceeding (including any
impleaded parties) include both Indemnifying Party and Indemnified
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent.
(b) No Party shall be liable under any of the foregoing indemnification
provisions with respect to any Losses or litigation to which an
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith or gross negligence
in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
9.6 A successor by law of any Party to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article IX.
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ARTICLE X.
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall continue in force until terminated in accordance
with the provisions herein.
10.2 This Agreement shall terminate without penalty as to one or more
Portfolios:
(a) at any time from the date hereof upon 60 days' written notice;
(b) at the option of Insurance Company if it determines that shares of any
Portfolio are not reasonably available to meet the requirements of the
Contracts; Insurance Company shall furnish prompt written notice of
election to terminate and termination shall be effective ten days
after receipt of written notice unless Fund makes available a
sufficient number of shares to meet the requirements of the Contracts
within such ten day period;
(c) at the option of Insurance Company upon the institution of formal
proceedings against Fund or XXX or their respective affiliates by the
Commission or any other regulatory body, the expected or anticipated
ruling, judgment or outcome of which would, in Insurance Company's
reasonable judgment, materially impair the other's ability to meet and
perform its obligations and duties hereunder; prompt written notice of
election to terminate shall be furnished with termination to be
effective as specified therein;
(d) at the option of Fund upon the institution of formal proceedings
against Insurance Company or Contract Distributor or their respective
affiliates by the Commission, the NASD or any other regulatory body,
the expected or anticipated ruling, judgment or outcome of which
would, in Fund's reasonable judgment, materially impair the other's
ability to meet and perform its obligations and duties hereunder;
prompt written notice of election to terminate shall be furnished with
termination to be effective as specified therein;
(e) upon termination of the Investment Management Agreement between Fund,
on behalf of its Portfolios, and XXX or its successors unless
Insurance Company specifically approves the selection of a new
investment adviser for the Portfolios;
(f) at the option of Fund upon a determination by the Board in good faith
that it is no longer advisable and in the best interests of
shareholders for Fund to continue to operate pursuant to this
Agreement; termination shall be effective upon notice by Fund to
Insurance Company of such termination;
(g) at the option of any Party, upon another's breach of any material
representation, warranty or other provision of this Agreement; or
(h) upon assignment of this Agreement, unless made with the written
consent of the non-assigning Parties.
Any such termination pursuant to this Article X shall not affect the
operation of Articles V or IX of this Agreement. The Parties agree
that any termination pursuant to Article VI shall be governed by that
Article.
10.3 Notwithstanding any termination of this Agreement, Fund and XXX may,
at the option of Fund, continue to make available additional Portfolio
shares for so long as Fund desires pursuant to the
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terms and conditions of this Agreement as provided below, for all
Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as the "Existing Contracts").
Specifically, without limitation, if Fund so elects to make additional
Portfolio shares available, the owners of the Existing Contracts or
Insurance Company, whichever shall have legal authority to do so,
shall be permitted to reallocate investments among the Portfolios,
redeem investments in the Portfolios and/or invest in the Portfolios
upon the making of additional purchase payments under the Existing
Contracts. In the event of a termination of this Agreement pursuant to
Section 10.2 hereof, Fund, as promptly as is practicable under the
circumstances, shall notify Insurance Company as to whether Fund shall
continue to make Portfolio shares available after such termination. If
Portfolio shares continue to be made available after such termination,
the provisions of this Agreement shall remain in effect and thereafter
either Fund or Insurance Company may terminate the Agreement, as so
continued pursuant to this Section 10.3, upon prior written notice to
the other Parties, such notice to be for a period that is reasonable
under the circumstances but, if given by Fund, need not be for more
than six months.
10.4 In the event of any termination of this Agreement, the Parties agree
to cooperate and give reasonable assistance to one another in taking
all necessary and appropriate steps for the purpose of ensuring that a
Separate Account owns no shares of a Portfolio beyond six months from
the date of termination. Such steps may include, without limitation,
substituting other investment company shares for those of the affected
Portfolio.
ARTICLE XI.
AMENDMENTS
11.1 Any changes in the terms of this Agreement shall be made by agreement
in writing by the Parties hereto, except as otherwise specified
herein.
ARTICLE XII.
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate Parties at the
following addresses:
Insurance Company:
Contract Distributor:
Fund: Lazard Retirement Series, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
XXX: Lazard Asset Management
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
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with a copy to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Notice shall be deemed to be given on the date of receipt by the
addresses as evidenced by the return receipt.
ARTICLE XIII.
MISCELLANEOUS
13.1 If any provision of this Agreement is held or made invalid by a court
decision, statute, rule, or otherwise, the remainder of this Agreement
will not be affected thereby.
13.2 The rights, remedies, indemnities and obligations contained in this
Agreement are cumulative and are in addition to any and all rights,
remedies, indemnities and obligations, at law or in equity, to which
the Parties are entitled.
13.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and
the same instrument.
ARTICLE XIV.
LAW
14.1 This Agreement shall be construed in accordance with the internal laws
of the State of New York, without giving effect to principles of
conflict of laws.
IN WITNESS WHEREOF, this Agreement has been executed and attested on behalf of
the Parties as of the date first above written.
[INSURANCE COMPANY]
By:___________________________
Attest:_____________________
[CONTRACT DISTRIBUTOR]
By:___________________________
Attest:_____________________
LAZARD RETIREMENT SERIES, INC.
By:___________________________
Attest:_____________________
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LAZARD ASSET MANAGEMENT,
a division of Lazard Freres & Co., LLC
By:___________________________
Attest:______________________
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SCHEDULE 1
PORTFOLIOS
SEPARATE ACCOUNTS AND CONTRACTS
SCHEDULE 2
PORTFOLIO SHARE ORDER PROCESSING
PRICING
1. Each Business Day, Fund shall use its best efforts to make each
Portfolio's closing net asset value per share ("NAV") available to
Insurance Company by 6:30 p.m. Eastern time.
2. At the end of each Business Day, Insurance Company shall calculate
each Separate Account's unit values. Using this unit value, Insurance
Company shall process that Business Day's Contract and Separate
Account transactions to determine the net dollar amount of each
Portfolio's shares to be purchased or redeemed.
3. Fund hereby appoints Insurance Company as its agent for the limited
purpose of receiving orders for the purchase and redemption of
Portfolio shares for the Separate Accounts. Fund will execute orders
at the applicable net asset value per share determined as of the close
of trading on the New York Stock Exchange (the "close of trading") on
the day of receipt of such orders by Insurance Company acting as agent
("effective trade date"), provided that Fund receives both the notice
of the order and any related purchase payments in accordance with this
Schedule. With each communication of orders, Insurance Company
represents and warrants that orders submitted by Insurance Company for
execution on the effective trade date represent purchase or redemption
orders received from Contractholders prior to the close of trading on
the effective trade date.
4. Insurance Company shall transmit net purchase or redemption orders to
Fund or its designee by 9:30 a.m. Eastern time on the Business Day
next following the effective trade date. For informational purposes
only, Insurance Company shall separately describe the amount of shares
of each Portfolio that are being purchased, redeemed, or exchanged
from one Portfolio to the other. In addition, Insurance Company shall
use its best efforts to notify Fund in advance of any unusually large
purchase or redemption orders.
5. Fund shall execute purchase and redemption orders for a Portfolio's
shares that relate to Insurance Company's General Account, or that do
not relate to Contract transactions, at that Portfolio's NAV next
determined after Fund (not Insurance Company) receives the order and
any related purchase payments in accordance with this Schedule.
6. Fund shall execute purchase and redemption orders for a Portfolio's
shares that relate to Contracts funded by Separate Accounts either
registered under the 1940 Act or not so registered in the same manner,
but only to the extent that Insurance Company represents and warrants
that it is legally or contractually obligated to treat such orders in
the same manner. Each order for Portfolio shares placed by Insurance
Company that is attributable, in whole or in part, to Contracts funded
by an unregistered Separate Account shall be deemed to constitute such
representation and warranty by Insurance Company unless the order
specifically states to the contrary. Otherwise, Fund shall treat
orders attributable to unregistered Separate Account Contracts in the
same manner as orders for the General Account.
7. Fund shall execute purchase or redemption orders for a Portfolio's
shares that do not satisfy the conditions specified in this Schedule
at the Portfolio's NAV next determined after such conditions have been
satisfied.
8. If Fund provides Insurance Company with materially incorrect net asset
value per share information through no fault of Insurance Company,
Insurance Company, on behalf of the Separate Account, may be entitled
to an adjustment to the number of shares purchased or redeemed to
reflect the correct net asset value per share in accordance with
Fund's current policies for correcting pricing errors. Any material
error in the calculation of net asset value per share, dividend rate
or capital gain distribution rate information shall be reported
promptly upon discovery to Insurance Company.
PAYMENT
9. Insurance Company shall pay for any net purchase order by wiring
Federal Funds to Fund or its designated custodial account by 4:00 p.m.
Eastern time on the same Business Day it transmits the order to Fund.
If Fund does not receive such payment by 4:00 p.m., Insurance Company
shall promptly, upon Fund's request, reimburse Fund for any charges,
costs, fees, interest or other expenses incurred by Fund in connection
with any advances to, or borrowings or overdrafts by, Fund, or any
similar expenses incurred by Fund, as a result of portfolio
transactions effected by Fund based upon such purchase request.
10. Fund shall pay for any net redemption order by wiring the redemption
proceeds to Insurance Company, except as provided below, within two
Business Days after Insurance Company transmits such order to Fund or,
upon notice to Insurance Company, such longer period as permitted by
the 1940 Act or the rules, orders or regulations thereunder. In the
case of any net redemption order valued at or greater than $1 million,
Fund shall wire such amount to Insurance Company within seven days of
the order. In the case of any net redemption order requesting the
application of proceeds from the redemption of one Portfolio's shares
to the purchase of another Portfolio's shares, Fund shall so apply
such proceeds the same Business Day that Insurance Company transmits
such order to Fund.
